Doggone! Dick gone.

“Twitter’s subscriber growth has slowed, the company recorded subscriber growth of 18 percent in the first quarter of the year, on the conference call Costolo indicated that April had been slow. Meaning that subscriber growth had slowed further. I think the problem that new Twitter followers have is that they do not understand what it is useful for.”


To market to market to buy a fat pig. The Greek talks have made zero progress. In fact I get the sense that the grandstanding era and importance that the whole Eurozone placed on the area that contributes 1.8 percent to total GDP is waning somewhat. The leader of Syriza is losing friends back home, being too friendly it seems for their liking, more importantly losing friends in Brussels. Those are the people with the money however. It is OK to stand there and suggest that one should do X or Y, in reality however you have to be nicer to the people who are there to effectively keep you solvent.

I am still of the opinion that the Greek ordinary peoples opinion matter just as much as politicians, whenever your hand is incredibly weak, you can only bluff so much before someone actually calls your bluff. Athens has been told, go back and come back with a better set of proposals before you get any more money. This seems like the toughest stance that the EU has taken towards the beleaguered country in the last half a decade. I think that it is a case of enough is enough. Hey, I am there in a couple of weeks time. I will ask ordinary people in Athens what they think about all of this, I guess a generalised question, a real question nonetheless. And tell me what you want, that part is important.

The Fed last night releases a quarterly Financial Accounts of the United States, or a Z.1 release, it is the health of the US economy. Household wealth in the US grew to 84.925 trillion Dollars. Holy smokes, that is an all time record! At this pace, 100 trillion in wealth should be eclipsed by some time around 2020. Net debt? “Domestic nonfinancial debt outstanding was $41.7 trillion at the end of the first quarter of 2015, of which household debt was $13.6 trillion, non-financial business debt was $12.2 trillion, and total government debt was $16.0 trillion.” Net debt to net worth, 49 percent. Is that a huge problem? I guess not, it sounds better than any other country that I am hearing about, and to be very honest, I would rather the debt be backed by that wealth.


Company corner

Twitter CEO Dick Costolo has resigned after five years on the job. Twitter’s subscriber growth has slowed, the company recorded subscriber growth of 18 percent in the first quarter of the year, on the conference call Costolo indicated that April had been slow. Meaning that subscriber growth had slowed further. I think the problem that new Twitter followers have is that they do not understand what it is useful for. For me Twitter is a customisable news feed. You can follow people who are awesome aggregators, you can follow your favourite sportspeople, actors, politicians and so on.

Moving into the void is Twitter co-founder (and current chairman) Jack Dorsey. Dorsey will not be in the team that is going to hunt down a new CEO. As this WSJ article points out: Twitter CEO Dick Costolo Stepping Down, Costolo took the business from a startup to a listed business. Since the listing however, “things” have gone badly for the share price. Perhaps the pace of subscriber growth has not been as high as investors would hope. The “proprietor” of Lowercase Capital, a fun guy by the name of Chris Sacca penned this post a few weeks ago: I Bleed Aqua. As he said: “At one point I had even exhausted all of my savings purchasing Twitter shares and was technically insolvent.”

Sacca was inside of the first 140 users he says. I think he is right in suggesting that there is no natural ceiling on the revenue Twitter can generate. Extinction in hardware and software happens in front of your eyes. BBM, Blackberry was crushed by WhatsApp, Samsung, Android, Apple. Done for. Twitter is however one of the big 5, in my mind. Facebook, WhatsApp, Instagram, Twitter and Pinterest. There is of course Google plus, Tumblr and Flikr, let me not forget LinkedIn. Missed anything? Sorry if I have.

According to Alexa, who rank the most visited sites in the world, the current order is Reddit, News.Yahoo.com, CNN.com, Huffingtonpost.com and Nytimes.com. Reddit is a mess and the users fund the site. Yahoo? There is a surprise. Most of the sharing options are Twitter and Facebook, in the old days it was to email it to your colleagues. Although that seems front and centre, the email option. Twitter is fast news, Facebook is topical news. That is my sense. No offence to Facebook, I think the platforms are great, Twitter is where the higher brow conversations happen {hides}.

If you read the NY Times piece titled: Twitter’s C.E.O., Dick Costolo, Is Set to Exit, Feeling Heat of Criticism, you can see all the high profile folks coming and going. The company obviously needs something fresh, someone to drive advertising, perhaps the co-founder is not the right person. I suspect however that Sacca is right. I really, really like Periscope, I think that the sorting function needs to be better. The market is rejoicing, quarteritis is contagious, Wall Street needs and wants it. I hope that the company just ignores the needs and pleas of Wall Street and just focuses on building a better platform for their committed users. The share price is up nearly 4 percent, the market enjoys this outcome. Sigh.


Stat of the day

This is an interesting “fact” that Johann Rupert, the chairman of Richemont put forward in the Opening Keynote of the FT Business of Luxury Summit 2015, earlier this week. Fast forward to 11:15 minutes and then you hear about global warming, then he talks about if you had to vacuum pack each and every individual and stick them in a can (like sardines, says Rupert), how much space would that fill? He says that you will fit three times the worlds population into a 1 km cube. Imagine that? He says he checked it, checked it and checked it, calling his son to make sure that he wouldn’t make a fool of himself. And then the awesome South Africanism came through: “Yet we manage to stuff the world up.”

Put differently, from this National Geographic Quiz: “Standing shoulder-to-shoulder, the entire world’s population could fit within the 500 square miles (1,300 square kilometers) of Los Angeles.” Rupert is right, how is it possible that we “stuff the world up” with so much space. Fast forward to 18:45 minutes segment, you see the stuff that everyone is talking about, Rupert is worried that we will have an abundance of resources, yet they will belong to the richest of the rich. Not only does Rupert cite the rise of robots and machines as a concern, so does Elon Musk. Makes you think about all the progress that we have made in AI and robotics, yet all of us only fit into one third of a 1 kilometre cube.


Linkfest, lap it up

This goes to the heart of that line that I often use, rich people problems will be solved by rich people. What Italy and Germany Show us about the future of social security. Loads of people in countries that you think would believe that the government is forever, are actually not that confident about government in the future. This may be a perfect moment for Germany, the US, Italy to implement longer dated policies with hard decisions today.

What are your thoughts on Organic farming? The land yields less crops which means that the produce is then more expensive, which is great if you can afford to pay more for the food. What about the people who cant afford to pay extra for food? – Organic farming can actually be more profitable than using fertilizers and pesticides. Here is a reason why more farmers are not going Organic, “It takes three years of organic farming before a farmer can label his produce “organic” and cash in on that surcharge.”

Energy usage patterns wont change until costs of fossil fuels rise and renewable energy costs coming down. The prices are moving in the right direction – India’s diesel-guzzling railways are testing coaches with solar panels

It is great to see how renewable energy is being used for the benefit of the community – Maasai women lead a solar revolution

These stats show how important renewable energy is to the African continent – How electricity problems are limiting growth in many African countries. It is scary to see the number of people who are still without electricity.

Cars talking to each other is what will most likely happen in the future, it should make roads safer and if coordinated correctly, less congested – Land Rover wants its cars to warn drivers about potholes


Home again Our markets are flat here today. Commodities are lower here, the Rand is weaker as the Dollar gathers momentum again. The Euro is lower of course, this Greek message is hardly exciting, people are starting to get used to the idea. A favourite comparison doing the rounds is that of Obama only focussing on the state of Tennessee for 5 years. Greece is to Europe what Tennessee is to the US overall economy.


Sent to you by the Vestacters, Sasha, Michael, Byron and Paul.

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