Read the Economist. Full stop. It’s well-written, free-market, slow-news, and entirely useful. If you pick up a copy from 6 months ago, it’s still relevant because they talk about trends, and key drivers. Not the day-to-day gyrations of public opinion, demagoguery, and lizard-brain stories about violence. No, it’s British, definitely libertarian, and measured.  Like I said, it’s British.

You’ll find that they are fiscally conservative, and socially liberal. Just how I like my news. Don’t fight the market – Adam Smith had a lot of things right, but also don’t treat capitalism like a philosophy.  There is a lot of hurt in the world, and it’s up to humans, to be – well – human. Here’s a few stories:

Australia’s economy is doing great, but not the environment

• The Australian economy is doing great here; 27 years without a recession.  Yes, they have lots of resources, but they are also super-productive, fiscally conservative, located close to China, and fairly enlightened when it comes to immigration.
• Public debt (as a % of GDP) is 41%, less than half of Britain (uh, Japan is 250%+).
• 29% of inhabitants were born in another country (2x that of the USA, the immigrant country); Australia admits 190K immigrants, 3x that of the US.
• Australia gets $6.4B in tourism dollars (64,000 jobs), and yet, their coal consumption is doing a lot of damage to the environment and great barrier reef.

Yet Australia still gets more than 60% of its power from coal, the fuel that does the most damage to the climate. It is also the world’s biggest exporter of coal. Per person, it generates more emissions than any other big economy bar America and Saudi Arabia. And unlike most rich countries, its emissions are growing.

California is rich, and poor

• California is the 5th largest economy in the world, and yet, 19% of Californians are poor here; they have the largest number of people under the poverty level in the USA: 7.4M.
• This is the working poor. Shockingly, 80% of the poor have at least 1 person working full time; by the time they are 18 years old, 50% of students will have used food stamps or the food bank.
• The economy is doing well; it rose 78% over the last twenty years – but during that time the rich got richer, and the poor stayed the same. In 1963, the top 10% earned 6.5x the lowest 10%, in 2017, they were earning 14x their poorer neighbors. Yes, free market taken to the extreme.
• Housing is expensive. More than 1/2 under the poverty line spent more than 1/2 of their income on housing. Between 2013 and 2017, the median rent went up 32%, 2x the national average.
• There are structural issues. California has onerous zoning and housing laws which make it difficult to build affordable housing. Also, the prison-industrial complex is an issue.

A staggering 4,800 laws prevent former felons getting public housing, or licences to work as anything from a car mechanic to a nurse.

Yes, there is famine in 2018

• Yes, there is still famine in the world here. Apparently, there 6M people in the Sahel (the southern part of the Sahara) cannot feed themselves.
• Yes, there is not a lot of rainfall – but it’s also erratic. No rain, no rain, no rain, then flood.
• The Sahara is creeping in; it grew 10% from 1920 to 2013. Lake Chad lost 90% of its surface area over the last century. Yes, climate change is real.
• There is a lack of irrigation; in Niger, less than 1% is irrigated.
• Yes, relief aid helps, but it’s a bandage on a large wound.

The global 1% is still rich

• The top 1% own 50%+ of the worlds equity, and bottom 50% own less than 1%

To be a member of the 1%, a person now needs over $870,000 in net assets. Two-fifths of this happy bunch can be found in America.

Bulletproof cars in Mexico vs. Brazil

• Bulletproofing cars is big business here. Yes, crime is up, but it’s also a status symbol.
• In Mexico, the # of cars which were made bulletproof grew from 2,200/yr to 3,000/yr.  They expect another 15% increase requesting this 1 month-long, $50,000+ upgrade service.
• In Mexico, the assailants use AK-47 and paramilitary gear. The kit in Mexico requires “type IV” armor and it costs 30% more than the stuff in Brazil.  In Brazil, there is more robbery, but it is more roadside robbery. Also, in Brazil it’s a bit of a status symbol. I am worth robbing.

Amazon is digital advertising #3

• Amazon will likely have $8 billion from digital advertising revenue in 2018 here – not bad for a retailer, right?  They displaced Microsoft from the #3 spot.
• Some analysts predict that advertising profit could exceed AWS cloud business profits by 2021.
•  Amazon is still small fry at 4% of the digital ad market vs. Google 37% and Facebook 21%; however, let’s remember that 50%+ of Americans start their product searches at Amazon.
• Amazon has lots of information on you (think: Prime, Echo, Whole Foods). That’ll be useful.

IBM buys RedHat (Blue buys Red)

• IBM paid $34 Billion for RedHat here, the biggest vendor of open-source software.
• IBM had fallen behind Amazon Web Services and Microsoft’s Azure cloud business.
• Open source is the winner. Mulesoft was bought by Salesforce for $6.5B, and GitHub was purchased by Microsoft for $7.5B.

Not bad for a type of code whose pioneers saw themselves as rebels fighting “evil” proprietary-software makers. Such origins were the inspiration for Red Hat’s name, as Bob Young, the company’s co-founder, once explained: 18th-century revolutionaries in America and France wore red caps during their uprisings. Now, open-source firms look more like the establishment.

General Electric has had a tough ride

• I am a believer in GE, yes, I bought some shares at the beginning of the year.  Bad move.
• Yet, they have a LOT to fix. They sacked their Jeff Immelt replacement after only 13 months.
• They had a $22B loss in Q3, and wrote down $22B in the Power Division.
• They cut the dividend to 1 penny. While they paid $150B in dividends since 2000, no more.

AT&T vs. Netflix: Game of Phones

• Love the British puns, right?  AT&T purchased Time Warner, which owns HBO here.
• Netflix surpassed HBO in subscribers, R&D, and Emmy nominations.
• HBO invested $2.3B in programming in 2017; Netflix will invest $12B in 2018.
• HBO plans to ramp up quickly, doubling programming; can they maintain quality?

China’s prejudice against GMO foods

• Surprisingly, China does not plant a lot of GMO foods. The reasons vary from 1) behind in technology innovation 2) paranoid about US intentions 3) public sentiment.
• This seems to be changing, as the Chinese government wants more self-sufficiency; this will likely be good news for all the multinational food companies (Monsanto, Cargill, ADM etc).