This weeks Note will talk about:
📈 NO YIELD FOR YOU 📈
I imagine you have heard the stories about zero yield government bonds. They are a necessary policy to stimulate the economy jaddi jadda. Some journalist call these ZIRP policies (Zero-Interest Rate Policy) but don’t be fooled the rate is usually negative and is very negative if you account for inflation. While your smartphone might be cheaper, food, taxes and education are not getting cheaper at all. Hence if you are a saver,
NO FUTURE FOR YOU.
Central bank Policy is a rabbit hole that even if you enter I have the feeling you don’t exit with a better understanding of how things work.
It doesn’t help economics that there is constantly someone that will make the point that the policies do not work while the people in charge are obviously incentivized to bend perceptions that what they do is working.
Then there is the beautiful trick of “We can’t possibly know how the world would look like if the central banks would have used a different policy”. It complicated and it has become very political (because now central bankers have themselves become so public). I have tried to understand it over the years but I must say it hasn’t been the best use of my time.
Anyway, it is still interesting and government interests rates form the basis of almost all financial transactions. So, for those interested here is an overview of the impact of Zero (or well negative) interest rates.
In case you can’t read the above see here.
I don’t remember if I read it or if I heard someone say this. Basically, the idea was that tech companies talk a lot about users and not that much about customers. Why is that?
Well what the other person was arguing is that is was because big tech invests a lot of its design and data science efforts in making their products more addictive (“more user friendly” I guess they call it).
Last week I wrote about blowing up financially. In it, I briefly told the story about the young man that took his life because of bad user interface design in the Robinhood App. This weekend Professor Galloway meshed the same story into a story about the addition
He highlighted the following:
Technological change is vastly outpacing our species’ ability to adapt to an endless barrage of stimuli. This discrepancy in modulation has exploded our levels of teen depression and social chaos. We are in a Supermarine Spitfire, accelerating every day, hoping the fuselage holds together as we approach the sound barrier — streaming 31 seasons of The Simpsons, lifelike video games, ubiquitous porn of increasing extremes, high-def documentation in real time of the party your 15-year-old daughter wasn’t invited to, social media algorithms fueled on emotion vs. veracity."
Technology software has out hacked our biological software. Even though AI still lacks our abilities it has already won a battle of intelligence by exploiting our own craving for Dopamine extremely well. Most of us, I include myself, are addicted to something we consume through a screen.
And our addiction has real-world consequences. Some people have been raising the alarm for a long long time but as good junkies, we have ignored them.
A list of unintended consequences of us being addicted to our mobile consumption:
Rise is teenage self-harm
People consume way too mush Porn
Unrealistic body expectations
Widening Gyre (increasing distance) in politics between Left and Right.
Elections being manipulated
Here is a list of things I am aware of that are used by the designers of apps to make you “a happy engaged user”.
Rewards, like badges and status (example Reddit)
Recommender systems based on what you liked.
You liking something is a confirmation to the system they fed you a dopamine hit.
Recommender systems get better (at giving you dopamine) the more info they have about you.
Positive Notifications (Big reason for never having a dislike button at FB, only positive stimuli allowed)
Make it social by allowing interaction between users
YouTube’s comment section is a world of its own.
Natural Language Processing helps ensure the best messages come on top.
Lots of psychology about what makes us tick and what we find stimulating.
There is probably more but these are the most obvious, visible and discussed methods.
I guess what I would like myself to take away from this is to consciously slow down my use of twitter. Writing these notes has helped me because at least I need to reflect on all the stimulating ideas I read. The subject of addiction is quite fascinating in itself and I think should be thought in schools in a different context than just “Drugs”. Because we humans can become addicted to many different things. Most of them do not involve drugs, but I think all of them involve our brains creating more Dopamine. So we should talk about Dopamine.
Scams have been with humanity for a long long time. Perhaps all the regulation we have now creates an illusion that there is no more Scamming but there is. Last week Germanies big FinTech promise Wire Card had trouble finding $2 Billion. Very strange indeed.
For those interested here are some lessons from Wirecard that I think will always be true for any scam:
Some 📚 on scams:
Con Men: A History of Financial Fraud and the Lessons You Can Learn
very quick read, I would rather take it from a library than buy. Provides a useful overview of scams you probably heard about.
Things I didn’t have the time to unpack but are worth reading:
“Few men realize that their life, the very essence of their character, their capabilities and their audacities, are only the expression of their belief in the safety of their surroundings.” - Joseph Conrad
Wisdom of the crowd in markets:
Politics and basically haves VS have nots, left VS Right:
Thanks for reading all the way to the end!
Have a good rest of the week and as always remember:
The mere existence of millions of books on love, parenting, Business and self-help is proof that there is NO ONE ANSWER. ~ Josh Wolfe
P.S Feel free to forward this to anyone you like, or don’t like.
I love hearing back from so if you have any feedback just send a replay or a tweet.
P.P.S: List of past recommended 📚