The Lede, Tuesday, Feb. 6, 2018
By David Royse
I have to say good bye this week to a faithful companion of many, many years, my 2000 Toyota Four Runner. It’s been with me at five houses in two states, drove my son home from the hospital after he was born, and been on adventures around the country. Sadly, I’m having it towed to a junk yard.
Even more sad is that I don’t have the option Elon Musk has for getting rid of his old ride. Musk happens to also have a rocket ship at his disposal – (I, as of this writing, do not.) Musk is strapping his old Tesla roadster (cherry red in color) to the top of the Falcon Heavy rocket and launching it off into space.
You wanted flying cars? You got it.
The guy in the car is a dummy. Sending a real person into space in a convertible just seems like a terrible idea, but it’s not just that – this is very much a test, and Musk has acknowledged it might not even work. “Just bear in mind that there is a good chance this monster rocket blows up,” Musk said back in December.
It’s the most closely watched tech story of the day, for sure. Space buffs have been waiting for this launch for a number of reasons – not least of which is the desire to see the launch of a car into space. But it’s also a key milestone in the private effort to take over the world of space travel, and a technological marvel. Musk and his SpaceX company may be our best shot at getting to Mars. (Matt Damon’s trip was not real).
The Falcon Heavy rocket is the most powerful rocket, with twice the lifting capacity of any other rocket ship.
“With the ability to lift into orbit nearly 64 metric tons (141,000 lb) – a mass greater than a 737 jetliner loaded with passengers, crew, luggage and fuel – Falcon Heavy can lift more than twice the payload of the next closest operational vehicle, the Delta IV Heavy, at one-third the cost,” SpaceX says. The rocket is about 230 feet tall, and has more than 5 million pounds of thrust.
In other news today, the stock market started out in wild undulation this morning, opening lower a day after the Dow Jones had its worst percentage drop since 2011 and its worst point drop in history before reversing itself. Analysts are broadly shouting “Correction!” Here’s the latest from Bloomberg
We like to say that at LedeTree, we put the new back into news – so when it comes to watching Wall Street, we’re most interested in new industries and startups doing new things – and that means we watch a lot of tech companies.
Several big tech companies reported strong earnings this past week but they weren’t immune from Monday’s big drop. Amazon was down nearly 3 percent. Microsoft was down over 4 percent. Google down more than 5 percent! RealNetworks down more than 8 percent.
Fears of an interest rate hike thanks to lower unemployment are partly at work.
BITCOIN ALSO DOWN
Just like the more mainstream investment vehicles plummeting on Wall Street, Bitcoin continued its plunge on (whatever the virtual street where Bitcoin is traded is). The value of Bitcoin fell below $6,000 on Tuesday, its lowest price since November. The fall, in lockstep with the stock market drop, throws some cold water on the idea that Bitcoin could serve as haven if stocks plummet into oblivion.
BBC USA Today
Also, a Swiss think tank is calling on central banks to crack down on cryptocurrencies. Axios
HOW WE WILL LIVE
INTEL is the maker of today’s most interesting new product (still under development). They’re a product you thought was a bust – smart glasses. Remember Google Glass?
Well, Intel’s Vaunt is smart glasses 2.0 – and looks much more practical.
Dieter Bohn, executive editor at The Verge, has a really good preview of the Vaunt smart classes, which The Verge says, won’t make you look like a Glasshole.
How will we pay for all this cool new stuff?
LedeTree’s weekly Tuesday look at tax policy news
Today, a look at tax incentives for luring business. It’s not really an innovative new idea – been around for decades. But with tons of attention on the big dogs of the new economy, disruptive companies like Amazon, and the cache of getting those types of companies to move to a particular area, it’s worth a quick run through of some of the stories on what it might take to get these companies, and whether it’s worth it.
Last week, a report emerged from Missouri that the Show Me State offered to show Amazon billions in incentives if it would put its new HQ in St. Louis or Kansas City. Not enough, presumably – because neither made the cut. Some of the pitch wasn’t for concessions – but offers to build some of the infrastructure officials thought would help make the state attractive.
“Missouri’s pitch included an innovation corridor that would have linked St. Louis, Columbia and Kansas City and a high-speed tube-like transportation network, such as Hyperloop. The futuristic mode of transportation would get people from Kansas City to St. Louis in 31 minutes, with a pitstop in Columbia.”
Maryland has offered $3 million in tax breaks and $2 million in transportation upgrades.
Are these a good idea? Eternal debate territory there, and few change their minds based on new information. Most economists say they don’t end up with a net gain for the community – though the trouble is it is very hard to define what a gain is. Is there value in prestige? In bolstering an image of being a “tech town?” In luring the “Creative Class?” Maybe.
“The stakes are getting higher and the deals are getting worse for the taxpayer,” Amy Liu, director of the Metropolitan Policy Program at the Brookings Institution and a longtime critic of tax incentives, told the New York Times last week.
Politicians obviously disagree – or they wouldn’t offer the big incentives.
Amazon’s second headquarters, HQ2, “is the single greatest economic development opportunity in a generation,” said Maryland’s Gov. Larry Hogan.
The question: Are such big tax incentives a good deal for cities?
On a related note – a recent study found something sort of interesting when looking not at Amazon headquarters, but the big warehouses – called fulfillment centers – from which Amazon fills orders.
A new study found that when one opens, there’s an uptick in the number of warehouse jobs in the community (obvious) but that overall employment doesn’t go up (doesn’t go down either).
ON THE ROAD – WHAT’S UP WITH YOUR COMMUTE TODAY
FlightStats is reporting pretty smooth conditions at most airports today. The delay status at mid-day was very low and decreasing.
We already got a few inches of snow here in Chicago last night and more is on the way, so if you connect at O’Hare tomorrow, check with your airline. Thunderstorms tonight in Dallas and Memphis. Louisville, Cincinnati and Pittsburgh, watch out for ice on Wednesday.
Florida state Sen. Jeff Brandes pointed this story out on Twitter this morning. Ridership is down on traditional public transit, and it looks like the main reason is exactly what you’d think. We all have plenty of cars and we use them.
“Southern California added 2.3 million people and 2.1 million vehicles from 2000 to 2015, or an average of 0.95 vehicles per new resident.” Read the full story from Governing Tech
Also from Governing Tech today, a look at Brightline, the first privately funded passenger rail since people regularly wore cowboy hats.
“For many transportation and infrastructure advocates, Brightline is exactly the right project for the current political and financial environment. Congress has repeatedly balked at raising new taxes or finding long-term sources of money to pay for existing infrastructure needs, and most states don’t have the financial wherewithal to launch ambitious new public works projects. That leaves deep-pocketed private investors as a crucial source of funding to build much-needed infrastructure….
“But before Brightline can serve as a model for infrastructure development elsewhere, All Aboard Florida needs to prove its trains can make money. There are many doubters. They point to lawsuits, angry neighbors, construction delays, safety questions and political interference. All Aboard Florida has so far struggled to show it can put together a financing package that will attract investors, operate in the black and provide Floridians with a new transportation option that could reshape the state for years to come. Read the full story from Governing Tech
NOTES FROM THE AGE OF DISRUPTION:
Earnings This Week:
Snap and Walt Disney report today, Yelp reports Wednesday. Twitter reports earnings on Thursday.
Net Neutrality News
New Jersey Gov. Phil Murphy made his state the latest to try to force internet service companies to abide by net neutrality principles, even though they’re no longer federally required to. Murphy signed an executive order Monday saying that state agencies in the Garden State will now only purchase internet services from ISPs that practice net neutrality. The full story from LedeTree
That’s all for today. Have a good Tuesday
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