Good morning. Hello. How are you? #766
More election stuff more Elon stuff more FTX stuff gawd sorry
Good morning. Hello, there. How are you? All well? Man. Lot going on in the world, huh? I have a robust interior life! I am dying to give you exciting updates on my sock lint collection or something. I know you guys love that stuff. But boy, the outside world is really rearing its head.
Sold an Oblivion 4K Blu Ray this morning, though. That’s exciting. Someone’s gonna have a good time watching that film. Just re-watched it a few weeks ago. It is far, far better than anyone remembers. Really ranks as a top-tier sci-fi film if you ask me. Maaaaybe — and this might be a controversial opinion here — the (stellar in its own right) soundtrack by M83 dates the film a little bit and endeavors to apply a bombast to the film that is slightly off tone. But still. Fantastic film.
Just checking over the election returns, once again, looks like things are mostly where I left them last night. Looks like we’re almost certainly going to keep the senate, quite possibly without Warnock’s runoff being the deciding factor. Oh yeah, and Warnock’s gotta go to a run-off in Georgia that is a shame. I’m confident he’ll win it, though, imagine all those normal Republicans who voted for Kemp but not Walker heading out to a run-off election. Especially if we already kept the Senate. Which comes down to Nevada, where things are looking tiiiiight. I’m not 100% convinced Cortez Masto is gonna pull it out, but the Twitter pundits seem confident and, hey, four days ago the Twitter pundits were telling us that the Democrats were going to lose lose lose so nice to see them changing their tune I suppose. Mark Kelly looks safe in AZ.
Arizona governor looks close, though, uncomfortably close. Hobbs caryrying Maricopa County (look at me I’m a regular Kornacki over here) by only four points when Kelly carried it by 8 could be all the difference. I do not like Kari Lake one bit nope no siree she freaks me out and the only people who should routinely put themselves in soft focus are 70’s porn stars, Korean tik tokers and a very specific sort of comedian committed to a bit. She scares me so much.
Seems we also killed it in Minnesota, took the trifecta, just like we did in Michigan. No wackadoodle election-denying Secretary of State candidates got elected. Just so much good news.
And here it needs to be said that my wife was right! Be optimistic! Have hope! I thought she was NUTS telling our neighbors, just, like, an hour before the polls closed, that it was gonna be a great night. It made me so profoundly uncomfortable to be that optimistic. But in the end, her optimism paid off.
I will say though, that she’s having a harder time accepting our miserable results here in NC. The loss of the Supreme Court to a partisan Republican majority is profoundly concerning. She’s definitely a bit upset that Cooper avoided a Republican veto by a single vote. And of course, she’s very sad about Cheri Beasley.
But I, on the other hand, I’m happy about North Carolina. I assumed we’d lose the court. Not based on anything rational but just good old fashioned unhealthy pessimism. And I knew Beasley had an uphill battle. But I’m ecstastic that we kept the Republicans from a supermajority. We are gerrymandered to all hell. It is insane. But we did it. We kept it from them.
And! We turned two US House seats blue! Two! Okay, well, we flipped one and we delivered a new one (congratulations, Jeff Jackson!). But that is huge! If the dems lose the house in this environment it’s 100% New York’s fault, specifically Cuomo’s, but if we keep it, well, you have North Carolina to thank as much as anyone. When we moved here, we had a Republican governor, a Republican supermajority in the state legislature, and a 10-3 Republican-led delegation to the US House. Now we have a Democratic governor, no Republican supermajority, and a 7-7 US House delegation. North Carolina is not a Georgia, yet, but we’re also definitely not a Florida. We will get there. And this is with insane gerrymandering! Maybe a good time to remind you all that the Supreme Court is hearing a case about NC’s gerrymandering that could, you know, completely explode elections in the United States if the Republicans win.
Let us turn to Twitter cuz (gestures vaguely around)… this. First, I wanted to say something about just how hard layoffs are. Not as a defense of Musk, but rather to illustrate how large the chasm is between Musk and good management. When you’re doing layoffs, the main goal is, presumably, to get the company to the other side of the layoffs with the right number of people. It turns out this is actually extraordinarily hard, in the best of cases. There are a number of second-order effects you have to factor into your layoffs. Because with a large set of layoffs, there’s certainly a good chance that a bunch of additional people are going to quit after the layoffs. And this has to be accounted for. And accounting for this is difficult in the best of times. It is monumentally more difficult when you do a bunch of stupid shit. Some of the factors you can control — are you a decent human being to your employees during the layoffs, are they treated with respect — and Musk, obviously, profoundly exaceerbated the issue there. And of course, some of the issues you can’t control — you can’t especially control the economic or competitive environment in which you’re performing your layoffs, save for delaying them, but presumably if you’re doing layoffs this isn’t much of an option.
At a high level, in Twitter’s case, I can think of at least 5 second-order effects:
First, there are a ton of people who want to get laid off, and are just sticking around to see if they are going to get severence. This is the most predictable batch and while the percentage varies in any company, it’s not too too hard to account for this.
Then there are the ones that now suddenly find themselves wanting to quit, given the new reality. This is a mixed bag, some of these you can impact — some people might be quitting because their particular team is decimated or a popular manager has been lost. You can influence this but it is surgical, difficult, time-consuming and labor-intensive. And it’s probably utterly impossible when you started this whole thing off by decimating the management corps. And of course, some of these you can’t impact. Some people might just not like the vibe anymore, some people might see some people walking out the door and realize they feel some envy and just go walk out with them.
[Edit four hours later:] In my original head-draft of this I had this in there, but i forgot to actually write it into the post, and even though no one reads these in a browser after-the-fact, I’m adding here for posterity and my own completion neurosis: Elon also has to factor in how many people will quit as he ends Twitter’s work-from-home policy. This number is virtually certain to be substantial, but there’s not a lot of historical guidance on it. This, alone, is a nightmare to calculate.
The math here is already insanely complex. And all of those are a best-case scenario! Then you have to factor in the profound screw ups: the fact that he did this right after a stock grant date. I mean in his mind I’m sure he was like “well I have to do it fast” because in his simple mind fast=good but of course, if you lose a bunch of people you didn’t want to lose, and the site goes down, etc., etc., was fast good? The math is clearly more complex than he considered.
The fact that he was so mean about it. The fact that he cut too deep and more people than necessary find themselves disliking their new job. The fact that he keeps saying stupid shit and making employees feel disrespected. All of those were avoidable, sure, but even if you did them intentionally, you gotta account for their effects in the math of your layoffs and lol, yeah, that didn’t happen.
I sat it on Elon’s placating call about advertising yesterday and he probably got off the phone thinking it went well, but, god, it was so bad. It was hosted by a random Twitter sales person. They got the IAB guy to ask the “tough questions,” which consisted of saying “I’m asking tough questions here” while lobbing softballs. No one asked thim the fundamental questions: How do we know we can trust you? How are we supposed to interpret your Tweets? Are you really threatening us with lawsuits? Do you really think we’re against free speech? What should we infer about your judgement by Tweeting out that Paul Pelosi tweet? Not one. To the point I’m not sure why even bother having the call. The ad industry is not interested in your junior-high musing about how ads should be good and hey! I like ads. Telling the ad industry “ads can be good! But when they’re bad we should ban them” is not even remotely placating.
Also at one point he literally said “we will actively suspend accounts engaged in deception or trickery of any kind.” Which is way way more censoring than pre-Elon Twitter. It is way way far away from “all legal speech should be allowed.” This man has no comprehensive theory! It cannot be more obvious he is making shit up as he goes along.
He seems to be developing a theory in his own head that “verified payments” are what are going to save Twitter. His stated blief is that if Twitter has a name, and payment method, from someone, they are less likely to spam. I don’t think this is true for a lot of reasons — $8 is literal pennies to someone who has developed a great stock market manipulation plot that is now a lot easier thanks to the checkmark.
But what occurred to me last night is that Twitter Blue does not even provide this. He’s outsourced the whole thing to Apple! Apple’s App Store is the only way you can buy Twitter blue. Which means Apple has the payment method, Twitter does not. And Apple requires apps to allow anonymized sign-ups. Apple has a whole (very robust, very well made, very effective) email anonymizing service! It is 100% possible — likely, even — to sign up for Twitter blue and have Twitter not know your name or your payment method. I mean, put aside for a moment that this is a dumb strategy, that it’s not working at all (last night a new Twitter Blue user convinced a bunch of people that LeBron requested a trade, to give one of literally hundreds of examples from yesterday). Never mind the validity of the strategy. It’s not even physically possible!
And of course you can say something like “well, they’re just using Apple for now, and that’ll change” but:
a) that is still hugely stupid since presumably your best customers are the ones that sign up first so you’re losing the chance to ever get their info,
and b) that is hugely stupid because you just made a giant security flaw that did not exist previously. For no reason!
And c) “they’re just using Apple for now, and that’ll change” is still hugely stupid because it’s not true! It’s iOS! It’s Apple! It can’t change! You will always have to accept Apple as a payment method! Giant lawsuits have been faught about this! Billionaire’s have already tilted at that windmill and lost!
Barely anyone is talking about it but Apple is the elephant in the room here. It has long been insanely deferential to Twitter — allowing things on Twitter that it disallows on Tumblr for absolutely no reason — and I’m sure Tim Cook is as scared of the wrath of Elon Musk as anyone, but mark my words, at some point, Apple’s app store guidelines are going to bite Musk in the ass.
Ugh and once again we didn’t really get to the FTX drama. I will say, though, that my prediction yesterday that “there is more to the Binance/FTX story than we’ve heard so far” came true real fast, and Binance has backed out of the deal. That being said, I still think that there’s more to the story. Some friends and I spent some significant time last night trying to parse how much of FTX was “bank-like” accounts vs “trading-like” accounts: i.e. accounts where there was an expectation of an ability to withdrawl all your money, vs. accounts where the user was on the other side of a trade that could conceivably go to zero. Since FTX is not in the US, I actually don’t know this. It’s unclear. But it seems clear that SBF has said they have about $8 bil of liabilities. He’s still worth at least $4 bil from his FTX.US shares, and that’s assuming Alemeda goes to zero. Is $4 bil enough to borrow $8 bil. Maybe? In a bond heyday? But in a sector you just killed off? In this lending market? Iffy.
I still can’t help but think a) still more to the story, and b) SBF is by no means finished. Call his fortune $1 bil. He’s young. Unless he fucks off to Ibiza for the remainder of his days, he’s got plenty of time and money for a comeback. I don’t especially think he’s a huge genius or anything but, you know, just… well, actually I can’t quite explain why I think this, call it a gut instinct.
Also, CZ’s gloating tweet leads me to believe Binance is in peril. Sure he sounds solvent, but:
I know, I know, this is still mostly greek. But if you care, here is a decent explainer.
Two more things about this: 1) Crypto’s worst week ever and, so far, still mostly contained to the crypto world, hasn’t spilled over into the traditional finance world. So, you know, they got that going over them as opposed to, like, the housing market or stock market. And 2) Maybe those NFT people aren’t so dumb after all. I’m in a bunch of NFT discords and this shit is barely effecting them. “Wow crazy about FTX and everything imploding. Oh well, hey who’s in on this mint happening tomorrow?” There are way, way more NFT enthusiasts vs traders than, I think, most people would have guessed.
I will leave you with this photo of my beautiful wife and daughter and my wife wearing a geniune KLF shirt that I procured from KLF directly, having previously belonged to their sound guy. It does not fit me so last week I gave it to her, with some sadness, but whatever, now I have a wife in a shit-hot KLF shirt owned by their sound guy. That’s definitely better than just owning it yourself and it never leaving your closet. Even if bespoke hangar on which it sat is perfectly trimmed.
Moody and quiet mix today. Old and new. Laser Beam by Low. Check out this harrowing video of Mimi explaining what the lyrics of that song are about. God she was amazing. New Skullcrusher is so great, as is that new Caroline Rose song. Listened to the whole Will Sheff yesterday and it is swell. Put a few personal classics on here, especially “Love Songs on the Radio” which really is one of my favorite songs of all time. I’m such a sad sack.
OKAY. Maybe the world will slow down again today and we can return to domestic mundanity I think we’d all like that.