No. 264 – Building a World with a Broader Set of Defaults

Tristan Walker Wants Black Businessmen to Taste Financial Freedom – This is a great interview with Walker and Company Brands’ CEO. His statement about the power of defaults sat me down. 

In my house right now, there are no other products other than Bevel and Form Beauty, which is also one of our brands. I have a five-year-old son and a nine-month-old son, and I care very deeply about the power of defaults and precedents. Think about a world where my son is growing up exclusively with a beautiful brand that serves his needs.

Creating a world where black folks can exist without having to prove deserve to be served or present is what this work is all about.

An Update on JPMorgan Chase’s Response to COVID-19 – The last section of this letter Jamie Dimon put out caught my eye. He highlights how the pandemic has highlighted the inequalities that already existed in this country. He stresses how we need to “confront the structural obstacles that have inhibited inclusive economic growth for years” as we emerge from this pandemic. Confrontation is uncomfortable. It could get you fired. He says they’ll be putting out their ideas for how to move forward later. I guess my question would be, “What’s one thing you think you need to do that requires a confrontation of how JP Morgan has done business en route to its $278B market cap?

Government Buildings in Africa Are a Likely Vector for Chinese Spying – I don’t like articles that talk about African leaders as if they aren’t in the room listening. This feels like that.

The End of ‘Who Me? For V.P.?’ Politics – This is an interesting piece. The way Stacey Abrams has approached positioning herself for vice president has been both refreshing and weird. I wonder whether you can say too many times that you want the VP job as opposed to working the machine in the background. I hope she isn’t overplaying her cards. I’m a big fan.

What’s next for journalists? – My mind often goes back to Benjamin Franklin when I think about the journalism world and what it’s future could look like. In a lot of ways, Franklin was the original TMZ. He told everybody’s business while writing under a pseudonym. He used another pseudonym to write an incredibly popular almanac. Writing helped Franklin build a nice life for himself. Perhaps there’s a lesson in his approach for today’s media, save the tea spilling.

No. 263 – The Federal Reserve Hasn’t Emptied Its Clip

Fed Chair Jerome Powell’s 60 Minutes interview on economic recovery from the coronavirus pandemic – Federal Reserve chair Jerome Powell gave an interview on 60 Minutes this past Sunday and the conversation was quite interesting. Early in the conversation, when the question of unemployment came up, Chair Powell talked about how heartbreaking it was and then immediately pointed to how African American unemployment had been at its lowest point and how the US economy was benefiting from a tight labor market where there was lots of opportunity. I couldn’t help but notice that the report the Federal Reserve released on the economic health of U.S. households didn’t break out the data by race, though it did account for race in its sampling. I wonder what data the Federal Reserve has seen on the impact this pandemic is having on the black community. It can’t be good. 

The other interesting thing was his response to whether we’re entering a second Great Depression. He highlighted how the financial system is strong due to the 10 years of work that has gone into strengthening our financial system. Dodd-Frank and other regulations helped ensure that financial institutions were more sound. It’s refreshing to have a government official acknowledge that the strength of this country doesn’t happen in a vacuum but on a continuum.  

Chair Powell’s conversation on the path forward was fascinating as well. His statement on the scale of the tools the Federal Reserve has to keep the economy moving was kind of jaw dropping:

Well, there’s a lot more we can do. We’ve done what we can as we go. But I will say that we’re not out of ammunition by a long shot. No, there’s really no limit to what we can do with these lending programs that we have. So there’s a lot more we can do to support the economy, and we’re committed to doing everything we can as long as we need to.

Look at the line on Federal Reserve Treasury purchases in the chart above. It’s incredible to consider the Fed can do more.

The last thing that caught my eye was how he stressed the importance of building a more inclusive economy on the other side of this pandemic. Earlier, he said the economy was fine before this pandemic. The reality is that it wasn’t. While unemployment in the black community was decreasing, income inequality was surging. As we come out of this pandemic, we need as many people as possible maximizing their abilities, not just being employed. 

Softbank Group Earnings Results – Softbank, the holding company controlled by billionaire Masayoshi Son, reported earnings yesterday morning and they were tough. The company lost nearly $18B from losses in its Softbank Vision Fund 1. Over the past several years, the company invested $88 billion in tech companies like WeWork, Uber, and Doordash. WeWork and Uber, in particular, have not done well due in large part to the behavior of their founders. Son has this vision of building an altruistic future full of artificial intelligence. These losses are forcing him to pump the brakes on pushing towards that vision. The company had been working on raising a second fund, but he announced this morning that they had failed in that effort so will be making future investments off of Softbank’s balance sheet for the time being. Masayoshi Son has been going big since 1995 and this isn’t the first time he’s had blood in the mouth from taking a hit. Let’s see if he’s able to fight his way back from these losses. It would be a shame for Softbank Vision Fund 1 to be known as Softbank Vision Fund Only.

Black doesn’t mean criminal. Conservatives should know that by now. – Imagine a world where the minority and majority leaders in the Senate and House are all black. That would be a healthy thing for this country. Last week there was debate within the black Republican community around Ahmaud Arbery and provocateur Candace Owen trying to smear him. You had Candace trying to paint him as a criminal, insinuating that he deserved death. Darrell Scott, Shermichael Singleton, and others went after her for doing that. 

Hopefully, that conversation within the black Republican community continues. This thread of black Republicans who see themselves as free-minded just for being Republican makes no sense, and I’m not really seeing their influence in the party. 

Across the political spectrum of where black folks are, we see how important it is for black folks to ensure the way we’re playing this political game is tight. Joe Biden wouldn’t be the Democratic nominee were it not for the black vote, yet black candidates for that job somehow don’t come up in too many conversations. More comfortable names come up like Klobuchar and Warren. Comfortable can’t happen.

COVID-19 and ‘Locust-19’ threaten perfect storm for Africa – African Development Bank president Akinwumi Adesina gave an interview to the Financial Times last week where he talked through the economic impacts of the COVID-19 pandemic across Africa. The bank is estimating that GDP declines countries are seeing total anywhere between $150B-$212B. In order to work its way out of this, President Adesina estimated the continent will need $115B-$154B in financial assistance. The AfDB has a $10B facility to contribute to closing that gap. Further, he pointed out that if G20 countries cancelled debt owed by least developed countries that would free up $130B-$150B across Africa. 

He also talked about locust swarms across East Africa. It hasn’t gotten a lot of coverage in U.S. media, but the devastation is real bad. President Adesina worries that 30 million people could be pushed to hunger due to the invasions.

African leaders have their hands full in navigating the COVID-19 pandemic, and several have the added burden of locust swarms. More vim to them navigating this situation well.

China injects US$2.25b into local chip firm – My post on Sunday highlighted how there’s this race going on in the world of chip development. China is putting serious money into quickly ramping up its domestic chip development now that the U.S. is putting restrictions on Huawei’s ability to source from U.S. companies.  It’s going to be interesting to see what kind of chips come out of China after this investment and the extent to which they push artificial intelligence development and other technologies. 

No. 261 – 40% of People Earning Below $40K Lost Jobs

Federal Reserve Chair Jerome Powell Remarks on Current Economic Issues – The Federal Reserve chair spoke at an event hosted by the Peterson Institute for International Affairs. Before I get into Jerome Powell’s remarks, it’s worth dwelling a bit on the Peterson Institute. The place is named after Pete G. Petersen, an investor who became a billionaire after The Blackstone Group, the private equity firm he founded with Steve Schwarzman, went public. While a massive windfall, that was not his first taste of professional success. He had been CEO of Lehman, Secretary of Commerce, CEO of other companies, and more long before launching Blackstone. Before he passed away, I remember watching interviews he did and the man was all about fiscal responsibility. Apparently, he was known for that over the course of his career. I wonder what he’d have to say about the money being spent to deal with this pandemic.

Pandemic — the impact COVID-19 is having is hard to wrap my mind around. In his prepared remarks, Jerome Powell said that about 40% of people earning below $40,000 have lost their jobs in the past two months. Sit with that. According to the Brookings Institution, whose building sits across the street from the Peterson Institute, reported that median income for Black households had risen to $41,511 as of 2018. Tomorrow, the Federal Reserve is releasing the rest of the survey results from which they got this data. If they have job losses broken about by race, I venture a guess it will be heartbreaking.

Later in his remarks, Chairman Powell describes how the Federal Reserve has essentially thrown everything tool it has available to address the pandemic. Yet, the Federal Reserve may need to do more. Digest that while processing that a whole lot of vulnerable people still lost their jobs. Like I said, it’s hard to wrap my mind around the impact of this pandemic. When we’re finally able to after this pandemic has passed, we’ve got real work to do to ensure vulnerable folks aren’t this vulnerable anymore.

The African Legal Support Facility holds 11th Governing Council meeting – It’s good to see the African Development Bank continues its effort to support countries in negotiating large, complex transactions. Countries really need the agreements they enter to be rock solid considering the economic situation we’re in and how hard it is to come by money these days.

This Is How Hard It Is to Invest in Black Neighborhoods – This is an excellent excerpt from Andre Perry’s book “Know Your Price: Valuing Black Lives and Property in America’s Black Cities.” It’s worth every word to understand how it’s going to take more than buying the block to change the trajectory of black wealth creation in this country. In my view, unless more black folks are in position to reshape how we determine what is valuable and what’s not, we’re only pushing incremental measures that won’t really work.

Loon signs deal to expand commercial internet service to Mozambique – While this is a welcome move, I hope local players push to figure out ways to build out their own internet networks.

China Seen Joining Debt Relief Effort for Poorest Nations – Right now, no one really knows how much countries owe China. If the country follows through on joining other lenders in pausing payments, there could be a good bit more clarity on the scale at which China has lent around the world. Getting clarity on those numbers and term could be scary.

No. 255 – Thursday Reads

Source: Niche and Realtor.com

Pittsburgh-Based Niche Secures $35M For School Search Platform After 100% ARR Growth In 2019 – niche is a platform that allows parents to search for schools ranging from kindergarten all the way up to college. what concerns me about this platform is just where we’re headed more broadly in education. A tool like this is more beneficial to the wealthy family that has options in terms of where they can send their children to school. I worry that platforms like this further inequities in education. Look at the map above from Niche’s site where they’ve graded the schools across DC. Guess where the majority of the multimillion dollar homes are?

Another thing that comes to mind is this pandemic has shed more light on our education system – areas where it’s weak, the ability of kids to study from home, the stress kids are under in school, and more. Over the next ten years, where does Niche see its growth coming from to justify a $35M raise? They’re a lot more bullish than I am.

‘Burn. It. The. F#&!. Down.’: The metamorphosis of former hedge fund manager and Epsilon Theory founder Ben Hunt – My buddy Myles Wynn introduced me to Ben Hunt a month or so ago when he wrote a provocative piece questioning the numbers China was reporting on deaths due to COVID-19. This piece does a nice job profiling him. He’s definitely somebody I’m going to be paying more attention to moving forward.

Why Hip-Hop and Gaming are Still Scratching the Surface – Per usual, Dan Runcie does a nice job teasing out opportunities for hip hop artists. In this piece he looks at gaming and how hip hop artists could find an additional revenue stream through partnerships with game development companies in order to put on concerts. He qualifies his analysis by saying that these platforms will need to effectively reach a broader demographic than they currently do in order for artists to maximize the opportunity. Unfortunately, the game development industry is quite monolithic—very white and male. Delane Parnell has built a nice platform on top of the gaming industry facilitating competition through PlayVS, but what black entrepreneurs out there are building new game development businesses?

Ghana’s economy resilient enough to fund healthcare infrastructure – Minister – Earlier this week, I shared my concern with how Ghana was paying for the 88 hotels it planned to start construction on this year. Sure enough, the country is betting on the Sinohydro deal in which China will construct infrastructure in the country in exchange for bauxite. I can’t say that I’m a fan.

Oil Slump, Coronavirus Create a Perfect Storm for Nigeria’s Economy – Back in 2014 or 2015, then Central Bank of Nigeria governor Sanido Lamido Sanusi caused a lot of commotion by claiming that Nigeria’s National Petroleum Corporation had $20B unaccounted for. He eventually lost his job. Around the same time, then finance minister Dr. Ngozi Okonjo-Iweala highlighted how Nigeria needed to meaningfully wean itself off of oil dependence and was ridiculed for her stance. It’s unfortunate to see the tough situation the country is in right now due to this mix of oil prices bottoming out because folks are not moving around. Hopefully, the country emerges from this with a focus on reinventing itself.

No. 252 – Monday Reads

Source: First Republic Bank

COVID-19 Edition: What is venture sentiment today? – First Republic Bank published interesting results from a survey they conducted of 427 venture capital firms. Over the past month or so, there have been a lot of VCs posting on Twitter that they’re open for business. The data here tell a different story.

Internet Speech Will Never Go Back to Normal – The Arab Spring and the role technology played in helping folks connect over their desire to restructure their societies feels like ages ago. This piece feels like a complete 180-degree turn from the sentiment around technology as liberator during that time. Now, we live in a world where in the matter of a month or so, Apple and Google have partnered to roll out contact tracing capabilities. Daily, we walk through a web of data points technology companies gather on us. Following this COVID-19 situation, to what extent will we give companies more ability to keep tabs on us?

Martin, Malcolm and the Fight for EqualityThe Sword and the Shield by Peniel Joseph is a fantastic read. The side-by-side treatment of their respective evolutions as readers was so illuminating. I highly recommend the book. This review does it justice as well.

On Fortnite’s Travis Scott Concert – My gaming days were pretty much over after I couldn’t get past the second stages of Sonic the Hedgehog or Shinobi. Gaming today is an entirely different experience I know next to nothing about. While I was in Ghana over the Christmas holiday, I walked up to a TV thinking I was joining cousins in watching a soccer match. It took me more than a few seconds to realize I was watching a video game, not real life. Anyway, over 12 million people watched this concert Travis Scott and Fortnite partnered on last Thursday. That’s wild. What’s even more incredible is that Matthew Ball argues in his analysis that this was part of Epic Games culture of testing to figure out new things the company can build. I’m very curious to see where tests like this lead them.

How China Shut Down African Protests Over Racial Discrimination in Guangzhou – This is a rather discouraging piece, displaying China’s effectiveness in shifting its narrative across Africa. The mix of money, coordination, and speed helped China address the rising anger over how African nationals were being treated in Guangzhou. Not encouraging at all. Not encouraging.

No. 235 – Thursday Reads

Source: Sebastian Horn, Carmen Reinhart, and Christoph Trebesch

How Would You Decide to Restart the Economy? – “There are likely to be unknown unknowns and, with that, a high risk of collateral damage and unintended consequences — whatever decision you make.”

A Reckoning for China’s Opaque Overseas Lending – “With a systemic debt crisis before us, the Chinese government’s willingness to report its data will be essential for any coordinated debt restructuring to go forward. In the absence of transparency from China, other government creditors (European governments, Japan, the United States, etc.) will balk at proceeding amongst themselves.”

Bernie Sanders’s Full Speech on Ending His Campaign – “As many of you will recall, Nelson Mandela, one of the great freedom fighters in modern world history, famously said, ‘It always seems impossible until it is done.’ And what he meant by that is that the greatest obstacle to reach social change has everything to do with the power of the corporate and political establishment to limit our vision as to what is possible and what we are entitled to as human beings.”

Statement From Vice President Biden – “It’s voices like Bernie’s that refuse to allow us to just accept what is — that refuse to accept we can’t change what’s wrong in our nation — that refuse to accept the health and well-being of our fellow citizens and our planet isn’t our responsibility too.”

Our Government Runs on a 60-Year-Old Coding Language, and Now It’s Falling Apart – “There was a period of 20 years where people were sure COBOL was dead, so there was nobody teaching it, nobody learning it…COBOL started before there were disc drives, let alone the internet.”

No. 219: Podcast Interview – AI + Africa

Thanks to Kwabena Sarkodie for having me on his podcast, Insights from the Sahara, to discuss all things artificial intelligence and Africa.

No. 207: China’s AI Exports| A Historian Bot | Trustworthy AI Framework

AI, Foreign Policy, and National Governance Impact: Focus on China (Modern Diplomacy)

Arthur Gwagwa outlines the potential bad effects of China’s inroads throughout the Global South and export of its AI technology particularly to African countries. I share his concern that these technologies could help bad leaders on the continent dig their heels in through ratcheting up a surveillance state.

I disagree with his view that the West should come in and save African nations and other members of the Global South from China’s incursions. I posted yesterday about how the U.S. doesn’t have an AI strategy. Despite US attempts to isolate Huawei, Britain is going ahead to contract with the company to build 5G networks. How are these countries going to counter China in other countries without a strategy and being on the same page?

African countries and other members of the global south have to figure out how to avoid yet another principal-agent table tennis match and figure out how to be stronger and stronger agents on a global scale in shaping AI and its uses.

Metahistory for (Ro)bots: Historical Knowledge in the Artificial Intelligence Era (Historia da Historiographia)

This is a very interesting paper that anticipates the development AI-powered historian bots that serve as our future textbooks on world history. The authors propose a method for developing that technology well, in efforts to avoid any bad effects.

Until the lion tells his side of the story, the tale of the hunt always glorifies the hunter.

This quote was ringing in my head while working through the paper. The authors outline how the data sets containing all the historical information need to be structured properly so they can be scanned into the database the bot would draw from well. What happens to cultures that still rely on oral history? What about parts of the world where everything hasn’t been digitized yet?

I could see a historian bot being an incredibly powerful tool to surface history that is typically glossed over, but the inputs have to be broad ranging and accurate. I could also see a historian bot baking in poorly informed historical takes that shape biases and lead to the kind of ignorance we see in the world today

Establishing the rules for building trustworthy AI (Nature)

It is time to ‘make haste slowly’ (festina lente) in the development of AI.

Luciano Floridi, a member of the High Level Expert Group put together by the European Commission, outlined a framework for how the EU should shape the development of AI by putting the brakes on its development and asking ethics questions early on.

The amount of compute in AI processes is doubling every three and a half months. I don’t see how the folks building these technologies work well with stakeholders like the High Level Expert Group when the group took a year to develop a 7-point framework for building trustworthy AI. The technology is advancing too quickly.

No. 163: 3AMReads: $1B Cobalt project | South Africa’s Radical Economic Transformation | What is US-Africa Policy?

Bloomberg: Owner of $1 Billion Cobalt Project Says Rally Is Far From Over

Eurasian Resources Group has a pretty massive cobalt mining project in the works in the Democratic Republic of Congo. The company stands to realize a nice return on investment at the rate cobalt prices are skyrocketing. They jumped 71% last year and are expected to increase by 60% this year. Rising demand for electric vehicles and limited cobalt supply is driving these prices.

What concerns me about this project is the supply chain.  Cobalt mining has come under scrutiny due to the health hazards associated with extracting the mineral. Even more concerning is the reality that evidence has been found of children participating in cobalt mining in DRC. Take a look through ERG’s website, and you’ll see it is fairly light on sustainable development and occupational safety.

Chinese cobalt miners have caught the spotlight in terms of not managing their cobalt sourcing well. ERG should get the same level of attention to be sure it keeps things on the up and up.

Fin24: Recession shock knocks volatile rand

Radical economic transformation. Debate over what this means for South Africa reached fever pitch after President Zuma sacked Pravin Gordhan, probably the most respected high-ranking government official at the time. The midnight firing led to two credit agencies giving South Africa junk bond status. Yesterday, the country went into recession. Radical economic transformation. SMH.

Video: Senator Chris Coons Speaks at Council on Foreign Relations

Senator Chris Coons spoke at the Council on Foreign Relations yesterday, discussing US policy in Africa. Best line from the conversation, “On some level, I don’t want it to be a higher priority for the Trump administration.” Agreed.

https://www.facebook.com/plugins/video.php?href=https%3A%2F%2Fwww.facebook.com%2Fsenatorchriscoons%2Fvideos%2F1616437811702819%2F&show_text=0&width=560

No. 159: 3AMReads: Concerned about Cote d’Ivoire | US National Security Interests in Africa | Step Your Outfit Game Up

Cote d’Ivoire’s Military Situation Continues to Concern 

We continue to hear more and more about the cracks widening within Cote d’Ivoire’s Military. The military is a combination of trained career soldiers and rebel fighters who helped President Alassane Outtara oust Laurent Gbagbo when he refused to relinquish the presidency back in 2010/2011. Since that time there have been at least three mutinies, the latest occuring just a couple weeks ago. 

Elections are coming up in a few years and I really hope the government figures out a solution to this problem well in advance. Further, investors have maintained relative excitement about the country with its high growth rates driven by economic reforms. You can’t expect that to continue should this military issue continue. 

Former Obama Official Weighs in On US National Security Interests in Africa 
Karen Attiah, the Global Opinions Editor at the Washington Post, did a nice interview with Grant Harris, former senior director for African Affairs in the Obama administration. 

The main theme is that the US has to invest resources into the continent in order to maintain its engagement with countries as it keeps a pulse on threats around the world. Harris wrote a report on the topic and I look forward to checking it out. 

UBA Group Enjoyed Africa Day
Yesterday was Africa Day and Nigeria’s UBA Group put on a royal affair where everyone wore their best traditional attire to work. Check out who won best-dressed for the men. Per usual, Nigerians never carry last.