Random gleanings from the world of business, investments and economics: April 15 – 22, 2016
“The biggest trick the devil ever pulled was convincing the world that he didn’t exist.” Keyser Söze, “The Usual Suspects”
By the time you read these words, you may already know the answer. The “big reveal” may already have occurred. We’re referring to the revelation of one of the biggest mysteries in recent financial history: who invented the Bitcoin?
The Bitcoin was invented in late 2008 by a guy – or possibly a group of people – using the pseudonym Satoshi Nakamoto. Ever since, Satoshi’s true identity has remained a mystery.
Until now. Maybe. According to the Financial Times, the person hiding behind the name “Satoshi Nakamoto” will come out of the Bit-closet and reveal his identity to the world, sometime between now and April 14.
Many experts believe he is Craig Wright, an Australian cryptocurrency expert. Dr. Wright does have the credentials. But skepics abound.
Other possible Satoshi’s include Martii Malmi, a developer living in Finland, Jed McCaleb, who invented the Bitcoin trading exchange called Mt. Gox and Michael Clear, a graduate cryptography student at Dublin’s Trinity College. Up until now all of these guesses have been denied or refuted.
Why should we care? Because part of the Bitcoin’s allure is the mystery, and also because the creator owns the encrypted key that can unlock more than $400 million worth of Bitcoins. Should he (or they) start cashing in their Bitcoins, the currency could become unstable.
We may know who it is this week.
Comment: Two years ago Newsweek found a guy in California actually named Satoshi Nakamoto, and erroneously “broke” the story that he was the creator of Bitcoin. The poor guy, an unemployed engineer, says the story ruined his life.
Mortgage rates sank to a 14-month low last week, according to data provided by Freddie Mac. The 30 year fixed-rate mortgage averaged 3.59%. The 15-year rate averaged 2.88%.
Comment: More fuel for the real estate market.
Amazon is becoming a major player in the grocery business. According to data compiled by Cowen and Company and quoted in Bloomberg and Barron’s, Amazon is likely to grab a lot of market share from your neighborhood grocery store over the next few years.
Millennials, who are glad to order anything online, are leading the shift away from big box grocery shopping.
Amazon’s grocery business is expected to grow at a rate of 22% a year for the next five years, and Cowen predicts Amazon will be one of the top ten grocery companies in America by 2019.
Comment: Amazon hopes someday to deliver groceries with drones.
Just Don’t Call Them “Drones” Anymore.
A memo from the three-letter-acronym department (otherwise known as the TLA) tells us to call no longer use the term “drones”. From now on those things buzzing over our heads shall be known as “UAS” (Unmanned Aerial Systems). Whatever we call them, they will soon be a big part of our everyday lives. In a report released April 1, the FAA announced that UAS sales are expected to triple over the next four years. 2017 will be the biggest year for drones, er, UAS growth.
According to FAA forecasts, 42% of UAS will be used for industrial inspection (for example, electric utilities inspecting powerlines), 22% for real estate photography, 19% for agriculture, 15% for insurance, and 2% for government use.
The Association for Unmanned Vehicle Systems International (AUVSI) sees the future a little differently, predicting agriculture will be the most prevalent use of UAS.
Comment: Neither organization mentioned Amazon’s grocery business.
Last week Taco Bell announced the new “TacoBot”. You might say they spilled the beans. (This story reminds us of a third-grade joke: What did the depressed tortilla say? I don’t want to taco ‘bout it.)
TacoBot is an artificial intelligence app that will fill your to-go orders without help from a real person. TacoBot customers will place their orders through a supportive, creative, fun, conversational computer. Last week’s Taco Bell press release noted that TacoBot will process transactions with “the same sharp and witty personality you’d expect from Taco Bell”.
Comment: Competitors don’t want to TacoBot it.
Tesla Model 3 – $35,000 (Source: Tesla Motor Company)
Tesla CEO Elon Musk’s name has appeared in the news almost every day lately. He’s on a roll. Following his company’s announcement of the new Tesla Model 3 (to be released in 2017) Tesla received 325,000 pre-orders. At almost the same time, his SpaceX Falcon 9 rocket made history by successfully landing on a barge in the Atlantic Ocean.
How would you like to work for Elon Musk? To get the job, you would have to answer a riddle he typically asks job applicants. See if you can solve it.
“You’re standing on the surface of the Earth,” Musk begins. “You walk one mile south, one mile west, and one mile north. You end up exactly where you started. Where are you?”
- The North Pole. You walk a triangle to get back to your starting point. If you figured this out, you’re pretty smart.
- One mile north of the South Pole. If you figured this out, you’re bordering on genius.
- The Big Answer: infinity x infinity. If you place an imaginary circle around the world one mile north of the South Pole, there are an infinite number of points around the South Pole that will solve the riddle.
Comment: You didn’t want to work for Tesla anyway.
The Week Ahead
Friday, April 15: Industrial Production, Consumer Sentiment
Monday, April 18: Housing Market Index
Tuesday, April 19: Housing Starts
Wednesday, April 20: Existing Home Sales
Thursday, April 21: Jobless Claims, Philadelphia Fed Business Outlook
Friday, April 22: PMI Manufacturing Index
Friday, April 15: Citigroup, Chemical Financial, Regions Financial, Charles Schwab
Monday, April 18: WW Grainger, IBM, Morgan Stanley, Netflix, Pepsico
Tuesday, April 19: TD Ameritrade, Gannett, Genuine Parts, Goldman Sachs, Harley-Davidson, Intel, Johnson and Johnson, Omnicom, Philip Morris, Synovus, UnitedHealth Group, Yahoo! Inc
Wednesday, April 20: Abbott Labs, Chicago Bridge, EMC, Fortune Brands, Kinder Morgan, Mattel, Coca Cola, New York Community Bankshares, Qualcomm, Yum! Brands
Thursday, April 21: BB&T, Biogen, Crown Castle, Danaher, Fifth Third Bank, General Motors, Alphabet Inc (Google), Norfolk Southern, Nucor, PPG, Schlumberger, Sonoco Products, Under Armour, Unisys, Visa, Verizon
Friday, April 22: American Airlines, Caterpillar, Daimler AG, General Electric, Honeywell, Kimberly Clark, McDonald’s, Suntrust