Money Priorities

Gizmodo: WeWork Delaying Mass Layoffs Because It Can’t Afford Severance:

WeWork, the company that is either a transformative way of life or a dangerously overleveraged real estate company posing as a cultish tech firm, is planning on laying off thousands of employees.

… Just as soon as it can scrape up the cash for severance costs, anyhow.

Earlier on Monday, reports indicated that WeWork investor SoftBank was preparing a $5 billion bailout package that may give it 70 percent or higher control of the company at a valuation of $8 billion, a catastrophic fall from WeWork’s prior claims to be worth $47 billion. (As of just a few weeks ago, WeWork was still hoping for a valuation in the $20 billion range.) Business Insider later reported that staff received emails indicating there will soon be layoffs at the company; according to another report from the Wall Street Journal, sources say that thousands of people are slated to lose jobs but that the decision had been delayed because WeWork has only “weeks” of money left and can’t afford to pay severance. The paper noted that SoftBank’s offer would cover buying “more than $1 billion of stock from existing investors and employees.”

But wait! What about founder Adam Neumann, the CEO dude who was asked to step down in September? Does he get anything?

I’m glad you asked:

However, the details around Neumann’s payoff were dramatically under-reported as the journal reports that Softbank will provide the former CEO with around $1.7 Billion as part of the deal (and extend a $500 million line of credit to the kabbalah follower).

SoftBank can’t scrounge up the severence cash, but they sure as shit can get founder Adam Neumann $1.7 billion. Got it. Thanks.

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Business, Finance

American capitalism is broken

David Leonhardt writing for The New York Times on American capitalism and Elizabeth Warren’s proposed bill in the Senate:

In the years that followed, corporate America largely followed this prescription. Not every executive did, of course, and management and labor still had bitter disputes. But most executives behaved as if they cared about their workers and communities. C.E.O.s accepted pay packages that today look like a pittance. Middle-class incomes rose faster in the 1950s and 1960s than incomes at the top. Imagine that: declining income inequality.

And the economy — and American business — boomed during this period, just as Benton and his fellow chieftains had predicted.

Things began to change in the 1970s. Facing more global competition and higher energy prices, and with Great Depression memories fading, executives became more aggressive. They decided that their sole mission was maximizing shareholder value. They fought for deregulation, reduced taxes, union-free workplaces, lower wages and much, much higher pay for themselves. They justified it all with promises of a wonderful new economic boom. That boom never arrived.

Even when economic growth has been decent, as it is now, most of the bounty has flowed to the top. Median weekly earnings have grown a miserly 0.1 percent a year since 1979. The typical American family today has a lower net worth than the typical family did 20 years ago. Life expectancy, shockingly, has fallen this decade.

Income inequality is too real.

Free market capitalism sounds great to some, and so does not having speed limits for automobiles, but the truth is we need regulations. They exist for a reason and they serve a real purpose.

Donald Trump, self-made liar and thief.

A solid piece of investigative journalism from The New York Times on the “self-made” empire of Donald Trump:

President Trump participated in dubious tax schemes during the 1990s, including instances of outright fraud, that greatly increased the fortune he received from his parents, an investigation by The New York Times has found.

Mr. Trump won the presidency proclaiming himself a self-made billionaire, and he has long insisted that his father, the legendary New York City builder Fred C. Trump, provided almost no financial help.

But The Times’s investigation, based on a vast trove of confidential tax returns and financial records, reveals that Mr. Trump received the equivalent today of at least $413 million from his father’s real estate empire, starting when he was a toddler and continuing to this day.

Just another reminder that Donald Trump is a liar and a thief.

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Business, Finance, Tromp

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“I sell my soul, but at the highest rates.”

Science fiction author Harlan Ellison has died:

The science fiction genre has lost one of its greatest — and most controversial — authors. Harlan Ellison, who wrote and edited groundbreaking sci-fi anthologies, short stories, and television episodes, died at the age of 84, according to his wife, via an associate.

Ellison was born in Cleveland, Ohio in 1934, and published his first short stories in 1949, before moving to New York City to focus on writing science fiction. Throughout the 1950s, he wrote hundreds of short stories, and served in the US Army for two years. In the 1960s, he relocated to California, where he began to write scripts for television shows such as The Outer Limits, The Man from U.N.C.L.E., and Star Trek. He later served as a consultant for shows such as The Twilight Zone and Babylon 5. Ellison also worked briefly for Walt Disney Studios, only to get fired after a day when co-founder Roy Disney overheard him joking about making a porn film with the company’s characters.

I’m not big sci-fi reader, so I only discovered Ellison about 8 years ago from an interview posted on Youtube:

That clip had a profound effect on me as a graphic designer and artist.

All artists would be wise to heed the words of Ellison. Health Ledger’s Joker also said it nicely, “If you are good at something, never do it for free.”

Netflix, HBO, magazines, publishers, they’re all nothing without the creative output of artists. Sure, I’ve bartered, exchanging the services of someone else for mine, but that’s the exception, not the rule (I did a hair salon’s website for free in 2002 in the East Village in exchange for free $60 haircuts for 8 years).

Know what you’re worth and and get paid for it.

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Art, Finance

New York continues to trade a rich culture for a culture of rich.

In a piece for Harper’s Magazine, Kevin Baker writes about the continued rise of affluence in New York, at the expensive of diversity, community, and affordability (via kottke):

New York has been my home for more than forty years, from the year after the city’s supposed nadir in 1975, when it nearly went bankrupt. I have seen all the periods of boom and bust since, almost all of them related to the “paper economy” of finance and real estate speculation that took over the city long before it did the rest of the nation. But I have never seen what is going on now: the systematic, wholesale transformation of New York into a reserve of the obscenely wealthy and the barely here—a place increasingly devoid of the idiosyncrasy, the complexity, the opportunity, and the roiling excitement that make a city great.

As New York enters the third decade of the twenty-first century, it is in imminent danger of becoming something it has never been before: unremarkable. It is approaching a state where it is no longer a significant cultural entity but the world’s largest gated community, with a few cupcake shops here and there. For the first time in its history, New York is, well, boring.

Boring is the wrong word and trivializes all the bad things Baker lists out that have happened in New York. I don’t give a shit if New York boring. What pisses me off about New York in 2018 is that it continues to cement it’s status as a playground for the rich.

A culturally “rich” city is the result of diversity: of income, of ethnicity, of trade, of perspective, and many other things. New York continues to trade a rich culture for a culture of rich.

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Community, Finance

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Lyft or Uber. Pick your poison.

Boycotting Uber is boosting the fortunes of billionaire Trump advisor Carl Icahn:

But the #DeleteUber crew seems to have missed Lyft’s own ties to the Trump administration.

In 2015, financier Carl Icahn made a $100 million investment into Lyft. His interests are represented on its board of directors through John Christodoro of Icahn Capital.

Icahn did a lot more than Kalanick to help get Trump elected. He was an early and vocal supporter of Trump during the campaign, claiming that the businessman would be much better for the economy than Hillary Clinton, and Trump appointed Icahn as a special advisor on regulation in December.

I was just as disappointed in Uber’s actions last week but it seems we’re damned either way.

Pick your poison.

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Finance

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Million Dollar Fixer-Uppers

The average ‘fixer-upper’ in S.F. is now $920,000:

In San Francisco, homes labeled “fixer-uppers” sold at an average of 15 percent above the list price in 2016, with a median sale price of $920,000, according to a new year-end report from Paragon Real Estate. Though the price is high, it is a substantial discount from the 2016 median sales price of all S.F. single-families: $1,325,000.

Paragon looked at several other “special circumstances” in 2016 home sales, including the median home price for a home wth an elevator ($4,869,000), a view of the Golden Gate Bridge ($2,569,000) and a wine cellar ($3,050,000). It also looked at factors that could lower home prices, including a lack of parking ($1,150,000) and probate sales ($952,500). The only factor that lowered prices more than the “fixer-upper” designation was marketing a home as “tenant-occupied,” which sold at “a big discount” of $838,000, due to tenant protection measures, among other things, according to Paragon.

The real estate market in San Francisco, where I live, has been insane for quite some time now.

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Community, Finance

Foxconn replaces ‘60,000 factory workers with robots’

Foxconn replaces ‘60,000 factory workers with robots’:

One factory has “reduced employee strength from 110,000 to 50,000 thanks to the introduction of robots”, a government official told the South China Morning Post.

Xu Yulian, head of publicity for the Kunshan region, added: “More companies are likely to follow suit.” China is investing heavily in a robot workforce.

In a statement to the BBC, Foxconn Technology Group confirmed that it was automating “many of the manufacturing tasks associated with our operations” but denied that it meant long-term job losses.

Donald Trump likes to talk about how China is kicking our ass and taking our jobs. Hardly. Robots are taking our jobs and those jobs are never coming back.

How are people going to pay for iPhones without jobs?

We’re quickly approaching the point where we’re going to need to pay people to be unemployed.

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Finance

“Silicon Valley Startups Aren’t Really Creating Many Jobs”

“One theory is that companies over the last 10-15 years, unlike in the ’90s, don’t need to hire as many people because the software — loosely described as machines — is doing the work,” he explained. “It’s the classic case of how many people actually work for Facebook versus its market capitalization. Another theory is that a lot of these companies get bought up or they fail — and if you fail, you can’t hire more workers.”

Economists Suggest Silicon Valley Startups Aren’t Really Creating Many Jobs

Technology is absolutely phasing out jobs permanently but you also have many companies that won’t offer to help educate and modernize employees with skill sets and tools they need to be more relevant in today’s job market.

So just learn on your own, right? Sure. For me that’s pretty easy. I can look at code and read books and pick up new technologies pretty quickly, but most people are not that adept with technology. Technology is scary to a lot of people.

I see it firsthand when I go home for the holidays and I become the ‘gadget fixer’ for everyone. I’m also the IT department for my mother-in-law, and occasionally, her boss. My wife also has an aunt who’s solution to maxing out her iPhone with thousands of photos is to just buy a new iPhone with more capacity.

I’m going off on a bit of a tangent but my point is these average, everyday people I’m describing are the same people that are susceptible to being made redundant by technology.

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Career, Finance

This is What the “Sharing Economy” Looks Like

The Verge took a look at Airbnb’s data in light of the New York attorney general’s beef with them:

But a review of the data by The Verge found that Airbnb’s numbers, covering November of 2014 through November 1st of 2015, largely confirmed the attorney general’s accusations. A small number of hosts renting out multiple listings took home a disproportionate amount of the total revenue. And while roughly 71 percent of hosts rented out their home for three months or less, there were still thousands of “whole units,” meaning an entire house or apartment, which were rented for six months or more during the last year.

This, my friends, is what the sharing economy looks like.

A few people at the top making the most the money.

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Business, Finance

“The best way to predict the future is to invent it.”

At Re/code, Noah Kulwin on investor Fred Wilson:

Last week, Silicon Valley freaked out when Fidelity lowered the value in its stake of Snapchat, Zenefits and other startups in which the investment conglomerate holds equity. In Snapchat’s case, it reduced the company’s worth from $16 billion to $12 billion. Zenefits’ $4.5 billion valuation was cut in half.

Union Square Ventures’ Fred Wilson, a longtime venture capitalist known for his early bet on Twitter, says in a blog post that these write-downs are going to keep on coming.

He argues that the “blurring of the lines between the public and private markets” means that as the economy slows down (or the air gets let out of the tech bubble, take your pick), the valuations of unicorns like Snapchat and Zenefits that have taken funding from late-stage growth giants like Fidelity are going to continue going down.

As Alan Kay best put it, “The best way to predict the future is to invent it.”

If angel investors want to pop the bubble, or let air out the bubble or do whatever the fuck they want to do with the bubble, all they need to do change the amount of money they’re putting into these ‘unicorns’.

Also, can we stop using the word, ‘unicorn’?

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Business, Finance

Human Error

Following up on my tech slowdown post from last week, Twitter is indeed laying off over 300 people, or 8% of their staff:

“Product and Engineering are going to make the most significant structural changes to reflect our plan ahead,” CEO Jack Dorsey said in a letter Tuesday morning. “We feel strongly that Engineering will move much faster with a smaller and nimbler team, while remaining the biggest percentage of our workforce. And the rest of the organization will be streamlined in parallel.”

MakerBot is laying off 20% of their staff:

MakerBot is laying off 20 percent of its staff for the second time in the last six months, citing “market dynamics” and a failure to meet “ambitious goals.” The company is also leaving one of the two buildings it occupies in Industry City, a large-scale manufacturing complex in Brooklyn.

Layoffs like this remind me of traffic bottlenecks on the highway when there are no accidents: they’re the result of us stupid humans getting too greedy and not pacing ourselves.

I have side with HAL on this.

The problems can only be attributable to human error.

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Business, Finance

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