Category Archives: News

Is Russia’s Google Finished?

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Yandex NV dominates the Russian market, with a majority of all Russians visiting its platforms every month. It offers the nation’s most popular search engine, an e-commerce portal, and even ride sharing.

But now Russia’s premiere tech company’s days may be numbered.

Yandex’s stock is down 75% from its peak last fall. Partnerships with Uber and Grubhub are being wound down since Russia invaded Ukraine.

Yandex’s ambitious expansion overseas is dead in the water. A plan to offer cloud computing in Europe has been shelved.

Indeed, it will be hard to do any business overseas with the banks Yandex relies on within Russia facing crippling sanctions.

But the most immediate threat to Yandex may lie in obscure covenants on its debt.

The Securities and Exchange Commission has suspended trading in its Nasdaq-listed shares. A long enough suspension may trigger a requirement for Yandex to immediately repay $1.25 billion to owners of its convertible bonds.

Yandex does not have the money.

Meanwhile, the company’s staff are nervously eyeing the exits.

Yandex employees’ compensation is largely in stock, which has lost most of its value. This will make it hard to motivate and retain employees.

Those who can are likely to move abroad. In a red hot market for engineers, finding a new position should be easy for them.

In all, Yandex is losing key markets, dealing with staff panic, and facing imminent insolvency. Absent help from the Kremlin, it’s hard to see how this company survives.

Yandex’s woes spell trouble for Russia as a whole.

The nation is heavily dependent on resource extraction. Companies like Yandex represented a chance to diversify and join the lucrative tech industry dominated by the West.

But Russia’s authoritarianism is making that transition harder and harder.

Oil prices are high right now, but as the world transitions to renewable energy, Russia may be left with resources the world no longer wants.

And not much else.

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More on tech:

Hedge Funds Pull Back from Tech Amid Big Losses

VADE: The Future of Parking

How China’s Tech Industry Dies

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Help Ukraine Fight for Freedom

I had a whole post written for you today, all about startups, founders, fundraising, yada yada yada.

But the war in Ukraine made that seem pretty insignificant. So today, I’d like to talk briefly about how we can help.

People in Ukraine are fighting for freedom, and for their lives. A tyrant is trying to enslave them and kill anyone who resists.

Ukrainians need our help.

Please join me in donating to the cause. Here are some great options to easily send a donation:

I pray the brave Ukrainians can fight off Russia and restore peace and democracy. Glory to Ukraine!

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China Hacked Microsoft With Data from Previous Infiltrations

Microsoft Corp. and U.S. government officials are still working to understand how a network of suspected Chinese hacking groups carried out an unusually indiscriminate and far-reaching cyberattack on Microsoft email software, more than a month after the discovery of an operation that rendered hundreds of thousands of small businesses, schools and other organizations vulnerable to intrusion.

A leading theory has emerged in recent weeks, according to people familiar with the matter: The suspected Chinese hackers mined troves of personal information acquired beforehand to carry out the attack.

More here.

Microsoft Exchange servers run Microsoft Outlook, which is used almost universally for e-mail in corporate America. Having access to that is having the keys to the kingdom at almost any company in the country and many abroad.

So where did they get all this personal information? The evidence indicates that it came from prior hacks:

Among the potential sources of the personal data is China’s vast archive of likely billions of personal records its hackers stole over the past decade. The hackers may have mined that to discover which email accounts they needed to use to break into their targets, according to people familiar with the matter.

Chinese hacking is starting to operate like a flywheel: hack target A, get information, use it to hack target B, get more information, then hit C.

The Biden administration provided some wise guidance to Microsoft:

Microsoft has pushed its customers to install security patches over the past month, releasing a blizzard of more than 25 patches that covered the wide array of Exchange versions. At the Biden administration task force’s urging, the company also simplified the updating process for customers, releasing a “one-click patch” option.

I can’t help but think that this level of sophistication would’ve eluded the Trump administration.

With China increasingly aggressive in numerous ways, this could be a big opportunity for American security companies to step up and provide better protection. I’ll definitely be on the look out for network security startups that look promising.

For more on technology, check out these posts:

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Photo: “Xi Jinping at the EP” by European Parliament is licensed under CC BY-NC-ND 2.0

Americans Are Using Their Stimulus Checks to Get Out of Debt

Stimulus checks for $1,400 went out this month to most Americans. I found myself wondering today, did they save it, invest it, or just blow it?

Data indicates that the biggest use of stimulus funds has been to pay down debt. A Census Bureau survey found 52% of people mostly used their checks to pay off debt, while only 28% mostly spent them.

Repeated rounds of stimulus have left households with the lowest debt levels on record:

Households finished 2020 with $14.1 trillion combined in checking and savings accounts, compared with $11.4 trillion in 2019, according to Federal Reserve data. Their debt-service burden—the percentage of after-tax income used to pay off debt—fell to its lowest level in records going back to the early 1980s.

Nonetheless, the impact of stimulus funds on consumption has been notable. Bank of America found a huge spending spike among its customers:

As the latest round of federal stimulus payments reached bank accounts, credit and debit card spending soared 45% overall last week on a year-over-year basis and 23% over two years, according to data aggregated by Bank of America.

I strongly advise people with debt to pay it off before they do anything else. If you owe money on a loan at 10%, for example, when you pay it off, you are automatically guaranteed a 10% return on your investment! And that’s exactly what it is, an investment in your future.

As someone who invests for a living, if I could get a guaranteed 10% return anywhere on earth, I’d be singing Hallelujah and dancing a jig. Take the easy win!

For more on markets and finance, check out these posts:

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Photo: “Monopoly Guy Graffiti – Rich Uncle Pennybags” by Indrid__Cold is licensed under CC BY-SA 2.0

When the Suez Canal Was Blocked for Eight Years

As the Suez Canal, chokepoint for 15% of world shipping, was cleared today, I thought of another time it was blocked. Not for a week, but for 8 years.

Following the Six Day War in 1967 between Egypt and Israel, Egypt blocked the canal to prevent Israel from using it. They placed old ships, debris, and even explosives in the canal. And it stayed that way, for eight years.

Thousands of workers rotated on and off the ships over the years to protect these valuable pieces of equipment. They organized joint social events and even created their own postage stamps, which have since become hot items for collectors.

The closure also had a serious effect on world trade, especially for countries that relied heavily on the canal. Seventy-nine country pairs saw the effective distance between them increase by 50% or more:

For these pairs, the closure caused an average fall in trade of over 20% with a three to four year adjustment period. Trade between these pairs recovered completely after the canal reopened eight years later with a similar adjustment period.

By the time the canal reopened, most of the ships in the Yellow Fleet could no longer make the trip:

The canal had remained closed so long that most of the Yellow Fleet ships had decayed and needed to be towed. But two of them—the German ships Münsterland and Nordwind—made it out on their own steam.

We had the benefit of peace this time, so the canal could be unblocked quickly. These episodes really emphasized to me the importance of peace and the free flow of goods to our prosperity.

For more on current events and the world economy, check out these posts:

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Photo: “File:Israeli Tanks Cross the Suez Canal – Flickr – Israel Defense Forces.jpg” by Israel Defense Forces is licensed under CC BY-SA 2.0

How Alex Jones Lost Bitcoin Worth $563 Million

Ten years ago, when bitcoin was worth only $5 each, cryptocurrency proponent Max Keiser gave conspiracy theorist Alex Jones a laptop. It contained 10,000 bitcoin, which would now be worth over $500 million.

That laptop has gone missing:

Alex Jones, the founder of the right-wing media group Infowars, has revealed that he has lost the laptop containing 10,000 bitcoins given to him by television personality and bitcoin proponent Max Keiser. During the Flagrant 2 show with Andrew Schulz and Akaash Singh on Tuesday, he said that Keiser gave him 10K BTC on a laptop 10 years ago.

This highlights a real problem with cryptocurrencies. Unless you use an application to manage and store your crypto, you can lose the USB or laptop, forget the password, etc. Do that and the money is gone forever.

Better starting looking, Alex!

For more on the latest in cryptocurrencies, check out these posts:

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Photo: “Alex Jones” by seanpanderson is licensed under CC BY 2.0

Texas Is Suing Itself To Stop Mask Mandates As Essential Workers Are Thrown Under the Bus

The state of Texas lifted its mask mandate recently. As if this dangerous policy weren’t enough, it is now suing the city of Austin for choosing to keep a mandate and protect its citizens:

The Attorney General for Texas is suing officials in Austin after they refused to enforce an order that ended a statewide mask mandate, he said on Thursday.

If Austin can’t make a city ordinance to keep its people safe from death in the middle of a pandemic, why does the city government exist? One may as well dissolve it.

These rules are putting essential workers, many of them poorly paid and from minority groups, in an impossible position. They’re at risk from the virus because they’re exposed to so many people, and now they have to enforce their own store’s mask mandate. But the state law gives cover to anti-maskers who violate the store rules and behave like infants when asked to mask up.

I find this totally unacceptable. To be frank, it makes me quite angry. I’m only grateful I live far away.

If the federal government can legally intervene, it should.

For more posts on COVID, check these out:

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Photo: “Greg Abbott” by Gage Skidmore is licensed under CC BY-SA 2.0

Will A Massive Uprising in North Korea Mean the End of Kim Jong-un?

North Korean defector and Youtuber Yeonmi Park is reporting a massive uprising in Musan, North Korea. The uprising began when police cracked down on a market selling Chinese products, which is illegal in North Korea despite them being the only goods available.

Farmers took their farm implements and attacked the police. The backdrop for this is an increasingly hungry population with little to lose. Indeed, the situation is so dire that even Russian diplomats are fleeing the country by railroad handcart, appalled at the lack of basic food and goods.

I haven’t been able to find independent corroboration of this uprising, and Park is unclear on what her sources are, but I assume she is still in contact with people inside North Korea.

Her discussion of the uprising begins here.

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Photo: “Kim Jong-un visiting Berlin.” by driver Photographer is licensed under CC BY-SA 2.0

Texas Failed to Prepare Its Energy System for a Deep Freeze

As many in Texas enter a fifth day without power in freezing temperatures, I searched for information on how such a disaster could’ve happened.

I came upon some excellent perspective from Professor Daniel Cohan at Rice University:

See the entire Twitter thread here. Very much worth reading.

Not preparing the full energy system, from natural gas wells to the electrical grid, for a deep freeze seems to be the culprit.

This makes sense to me as someone who has lived his entire life in the frozen North…northern Maine, Wisconsin, and New Jersey. We’ve had storms and cold even worse than what Texas is experiencing on a regular basis, but I don’t recall the power ever going out. And I’m very grateful for that as I type this in my warm living room.

To me, this calls into serious question the Texas regulatory model, where ERCOT regulates a Texas-only grid that’s exempt from Federal oversight. If they can’t plan for extreme events, why do they exist?

In the mean time, as families resort to making little fires in their homes to stay warm, perhaps Governor Abbott can help. If the Governor’s Mansion has power, why not invite people to come there and warm up? Even a small gesture like that could bring warmth to a few people.

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Photo: “Caricature: Texas Governor Greg Abbott” by DonkeyHotey is licensed under CC BY-SA 2.0

Brazil’s Society is Collapsing as COVID Slams its Economy

There is a huge increase in homelessness in Brazil, per Der Spiegel. Many have lost jobs due to the COVID pandemic, leading to a second humanitarian crisis, this one economic. I found this quote from a factory worker who recently lost his job particularly striking:

“I never thought I would end up in this situation,” he says, “and suddenly …” He snaps his fingers and his eyes fill with tears. The worst, he says, is the hunger and the constant feeling of being dirty. “It is the most terrible experience I have ever had in my life, the biggest humiliation.”

This is a man who worked…he was not lazy. But unfortunately, he has still lost everything. Financial relief from the government, on which one third (!) of society depends, is expiring:

…the government in Brasília ceased paying out an emergency allowance for the poor struck by the crisis as of January. Fully 67 million Brazilians – almost a third of the population – had been relying on the 600 real (around 90 euros) each month. “It helped people in the favelas pay for rent or food,” says Kohara. And they have no savings, he adds. Their situations are now so tenuous that they could end up on the streets from one day to the next.

This drives home the importance of stimulus measures in the US. In addition, perhaps an international poverty relief effort is needed.

More here.

Photo: “Slums in Rio de Janeiro, Brazil” by World Resources is licensed under CC BY-NC-SA 2.0