Why Mark Zuckerberg Uses Ironneck - and Why You Shouldn't Fight Him At MMA
...and why the markets are a bit crazy right now...
Macro Snapshot/Current News
Zuckerberg Practices Brazilian Jiu-Jitsu Two Hours Each Day
This one shocked me. I expected to hear Joe Rogan and Mark Zuckerberg discuss content moderation, but I didn’t know Zuckerberg was such a fan of MMA (or Ironneck).
The episode is linked below if you want to listen. It’s worth it - 1.25x speed at least.
Zuckerberg has had a rough week. He announced changes to Meta's content moderation policy.
They will eliminate third-party fact-checkers and move toward a community notes model where users police each other’s content.
Meta has been criticized from both left and right for bias in its content moderation.
We have become accustomed to a narrative where Zuckerberg is seen as an awkward, robotic figure, especially while testifying to Congress.
This is a quote from
on the latest announcement from Meta:Either Zuckerberg, despite his wealth and power, fears what Trump will do to him if he doesn’t fall in line or he has no problem with trolls using his website to convince others that women are “property” and LGBTQ people should be referred to as “it,” “mentally ill” or “abnormal.”
She is attributing the worst motives to Zuckerberg’s policy announcement as if he had just turned on a switch to allow free rein to bad actors.
~3.39 billion people each day use Meta’s platforms. The choice in content moderation is how tight to turn the screws: too broad and it will exclude legitimate posts together with bad actors; too narrow, it risks allowing some bad actors to escape censorship.
If Meta is 99.9% effective in meeting its criteria, that leaves ~3.29 million mistakes - more than enough to generate a barrage of criticism.
Dana White's appointment to the Meta board adds to the hatred. Because of White’s friendship with Trump, this is assumed to be a move to placate the President-elect.
It may be. It may also be because Zuckerberg got to know White through his interest in MMA. White is a fantastic entrepreneur who built the UFC into the behemoth it is today.
There’s lots for them to discuss. Listen to Zuck and Rogan. You may still not like him, but at least you will have better reasons than those advanced by the crowd of haters.
Why Heating Is So Expensive in the North East
I have talked about the Jones Act before:
An article in
’s excellent Energy News Beat points out why this matters for the NorthEast.The US has so much natural gas that it’s cheap: $3.46/MMBTU at the Henry Hub in Louisiana and $17.75 in New England.
The problem/cause is the Jones Act, a federal law that regulates maritime commerce in the United States.
It requires goods shipped between US ports to be transported on ships built, owned, and operated by US citizens or permanent residents.
The problem is that no Jones Act-compliant LNG tankers are in operation, so states such as New England, which are not part of any natural gas pipeline network, cannot receive US gas.
If they want to use gas, importing foreign LNG is cheaper than procuring US gas.
Not only that, but foreign LNG tankers cannot load at two different LNG terminals since at the second terminal, some boil-off may be vented, and this is deemed to be a “shipment” and is therefore prohibited.
Now you know why the Jones Act makes me scream!
Trump may grant a waiver to end this insanity and ensure we can mobilize the cheapest, most abundant energy available. Let’s see.
Take The Stairs - The Elevator Is Broken
Since this week is a long-overdue shoutout to
, I am linking another of his articles to highlight something else the incoming President needs to focus on in his goal to make America great again: infrastructure. Elevators are just one area of discussion:Elevators are a ubiquitous and absolutely necessary piece of infrastructure in a culture that depends on high-rise buildings for much of its living and commercial space. Unfortunately for those who rely on them, the workforce that knows how to fix elevators is aging. In addition, the right parts can be hard to come by for two reasons: 1) The companies that make elevator parts prioritize the biggest customers who are concentrated in places such as China where many new tall buildings are going up and 2) some elevators are so old that no ones makes mass produced parts for them and parts have to be custom-fabricated.
Out-of-order signs on elevators are particularly hard on those with disabilities and the elderly. And, nonworking elevators are thought to be a major cause of 1.1 million yearly accidents on stairs that lead to emergency room visits.
I wonder why - you might too - the ink spilled on Meta’s content moderation is not equaled by ink spilled on two probably more critical, if less glamorous, issues: the Jones Act and aging infrastructure.
In The Markets
Credit spreads continue to be tight, which is good.
-High-yield spreads over short-dated Treasuries are 285 basis points versus 292 last week, but, as this chart from
illustrates, the gap between corporate bankruptcies and credit spreads is wide. Expect it to narrow…Last Friday's non-farm payrolls were expected to be between 150,000 and 165,000 but came in at almost 100,000 higher. The markets hate it when their expectations are disappointed and they react badly, mainly because it makes it less likely that the Fed will cut further this year.
- The 10-year Treasury pushed higher during the early part of the week, touching 4.79%, versus last week’s 4.7%. However, a more benign CPI report calmed markets, and the rate fell back to 4.65% mid-week.
- The S&P also rallied on the news that core inflation declined unexpectedly to 3.2% compared to 3.3% in the prior month. Core inflation is one of the “let’s move the target until we hit the goal” measures the Fed loves to use to disguise the reality consumers find when buying eggs.
The market was also slightly oversold and was due for a modest rally.
Asset managers have also been selling appreciated positions because they know they will not have to pay taxes on the gains until next year.
There is a sense that the market is waiting, treading water right now.
But it’s more than that.
The market is waiting for Trump to be sworn in.
But it’s more than that, too.
With a 10-year rate at 4.65% and a seasonally adjusted 3-month/3-month annual growth rate estimated by S&P Global at 3.48%, the economy is not growing quickly enough to service the interest on its debt.
That’s a problem…
Deep Dive
I am stacking up work here because last week, I promised a deep dive on Bitcoin and renewable energy. I haven’t forgotten.
This week’s promise is significant. In my article from April last year, I discussed the different models of investment advice and asset management.
I said I had a relationship with an advisor I liked. This week, I ended that relationship.
It’s not because they were doing a lousy job. In fact, they were doing the job they were supposed to do.
Unfortunately, that job will not be adequate this year and for the foreseeable future. The reason for making the change is complex and deserves a deep dive.
Great Shares
Two From Stu Turley
One From Joe Rogan
And One From Robert Bryce
On The Horizon
The Inauguration
You may not like it…but it’s happening.
The hopes and fears begin next Monday, depending on your perspective:
Greenland
Canada
The Panama Canal
The Gulf of America
Trump excels at moving the the Overton Window. By putting all these on the front pages, he has done so once again.
Also, Next Week (for a bit of escape)
Quote of the Week (from )
“British columnist Rod Liddle has revealed that Taylor Swift’s lawyers sent him a cease and desist for referring to her music as “banal and life-sapping sub-Kardashian electropop drivel.”
Luckily, we have the First Amendment in this country, so no one, not even Taylor Swift, can stop me from saying her album Evermore is just reheated Lana Del Rey produced for people openly weeping in a Michael’s craft store.”
(For the record, Evermore may be my favorite TS album).