nettime Ippolita Collective, In the Facebook Aquarium Part One, section #8,
Ippolita Collective, In the Facebook Aquarium Part One, section #8, 1 Free Markets and Financial Bubbles The radical transparency of Facebook users finds no equivalent in the firm's own financial dealings, which are singularly opaque and openly flout every rule of the market economy, despite the latter's regulatory minimalism and arbitrariness. This dangerous game has resulted of late in developments heralding an even larger speculative bubble than the 'dot-com' one at the Millenium's beginning. In discussing them we will use, on purpose, only unimpeachably pro-market sources, such as the /Wall Street Journal/ and the /Financial Times/. Here is a story that almost beggars belief. On January 3, 2011, it is discovered that Goldman Sachs is, together with the Russian company Digital Sky technologies, in the process of investing 500m $ in Facebook [39], while giving its richest clients the opportunity to invest in their turn (Goldman Sachs is, as risk accessor one firm which is among the main actors answerable for the financial crisis). The Security and Exchange Commission (SEC), the body that is supposed to supervise the financial markets, goes on red alert: one of the few rules it strictly enforces being that no more than 500 separate investors are allowed in off-exchange deals, and that above that number resorting to the primary market becomes mandatory, meaning Wall Street. But in order to enter an IPO (initial Public Offering) companies need to make their accounts public, so as to enable investors and potential shareholders to arrive at an informed business decision. Goldman Sachs' route around this 'obstacle' was to create a special vehicle for a few selected ueber-rich clients, while making 1,7bn $ profit in the process. This clearly bypasses the rules of the market, enabling Facebook's shares to continue being traded on the secondary market, and hence avoid the need to make the firm's balance sheet public. By a strange coincidence, the firm's valuation is multiplied in the next twelve month by a factor five, and then doubles again in the following half-year: at the end of 2009, Facebook was esteemed to weigh $ 10 billion, rising to $ 25bn in July 2010, and to a further $ 33bn in August. There was talk of $ 50bn by the end of december 2010 [40]. Meanwhile, post-dotcom Google's valuation was $ 23bn in August 2004 (when it IPO-ed), but Google is at least an innovative technology firm, whereas Facebook merely offers a cocktail of already existing technologies. And then, surprise: on January 20, 2011, it was announced that the Facebook IPO won't happen, as Goldman Sachs got cold feet at the prospect of a tussle with the SEC, with American small investors furious to be kept out of this juicy deal, while ueber-rich speculators who went onboard with Goldman Sachs' offer were already laughing all the way to the bank at the prospects of fat profits [41]. Facebook manages to skirt even the most minimal of financial controls. The firm's valuation is six times profits (only two times for Google), and it has accumulated half a billion dollars in cash so it can indulge in new, fancy take-overs. Fact is, that Goldman Sachs was able to finance Facebook out of its own debts (just six month before investing, Goldman Sachs had to fork out $ 550m on settling a case of fraudulent misconduct), and this by luring investors with a prospective IPO of Facebook. When Facebook finally came to Wall Street, it was valued at $ 115bn. Call it a great bargain for those early investors, who're bound to cash in big time, but it is less likely to be a sweat deal for the small investors, as such astronomic valuations are fast on their way to cause a phenomenal financial bubble. Early financing for Twitter, Groupon, and all other technological start-ups was a matter of millions, not billions Dollars. Yet all the same, the mechanism which made it possible to milk colossal profits out of 2.0 start-ups' IPOs has begun showing serious structural strains. This is well illustrated in the analysis of post-IPO transactions in Linkedin (May 2011) and Groupon (November 2012) shares, which (we take as) early signs of the impending collapse of Facebook (##*). The two afore-mentionned firms had something of a rocky round on the stock exchange, especially Groupon, which had carried out the most important financial operation in the technology sector since Google's IPO in 2004. And soon after the 180 days anti-speculation delay before which trades were not allowed, Linkedin shares also went South, big time. Meanwhile, Groupon shares' devaluation had started right after the IPO, as if the boom-bust (or creation-evaluation-investment-profit-taking) cycle had suddenly accelerated yet again. Surely, these firms do not rely on virtual profits only, and in any case, they are totally dependent on the data they have massively collected from their users. As a consequence, investors have started to have second thoughts about these firms' growth potential.
nettime rules for the pre-digital world [digest x3: medosch, mp, ippolito]
Re: Hans Magnus Enzensberger: Rules for the digital world Armin Medosch ar...@easynet.co.uk mp m...@aktivix.org Jon Ippolito jippol...@maine.edu - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Date: Tue, 11 Mar 2014 16:17:32 + Subject: Re: nettime Hans Magnus Enzensberger: Rules for the digital world From: Armin Medosch ar...@easynet.co.uk try Karl Marx and Friedrich Engels for a start best Armin On Tue, Mar 11, 2014 at 2:16 PM, mp m...@aktivix.org wrote: On 11/03/14 13:27, Armin Medosch wrote: Hi MP, it is not so difficult. There's capital, and its not homogenous. There are capitals of a different era and of a different kind - such as industrial, agro-business, and financial capital. There are different modes of production and social relations that go with it. It is not about 'for' or 'against' or naive versions of 'good' and 'bad' but if we want to understand the world we live in - and to preempt any questions, I think to some degree this is possible - then we need to engage with such concepts that great social scientists have developed I don't get it. Sounds strangely abstract/academic to me, or maybe I am just stupid. ... - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Date: Tue, 11 Mar 2014 18:56:57 +0100 From: mp m...@aktivix.org Subject: Re: nettime Hans Magnus Enzensberger: Rules for the digital world On 11/03/14 17:17, Armin Medosch wrote: try Karl Marx and Friedrich Engels for a start I feared that. I tried them. I tried listening to their followers - although I don't appreciate followship, I still listened - and then I had to run for the bog. But I hear that serious capitalists read them, apparently they produced some sort of manual for the advance of capital interests. On the other hand, I also noted that literacy in their stuff has been very useful for the advancement of elitist careers in the knowledge industry. So all in all, not really my cup of tea. But thanks for the tip. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - From: Jon Ippolito jippol...@maine.edu Subject: Re: nettime Hans Magnus Enzensberger: Rules for the digital world Date: Wed, 12 Mar 2014 23:04:36 -0400 One only needs to ponder what the Hitler government would have been able to pull off...if it had had access to the kind of personal data that is now stored at Google, Facebook and the NSA There's an interesting book called IBM And The Holocaust that describes the use of IBM punchcard systems and census data to aid in the Holocaust. Not only to to crunch census data, but also cross referencing records of governments and churches throughout occupied Europe and solving difficult logistics problems to increase the efficiency of deportation to concentration camps. http://monoskop.org/log/?p=3076 Google and punchcards are handy, but not absolutely necessary for state operatives with a lot of time on their hands. The Stasi created an artisanal Facebook in the 1970s--check out this hand-drawn social network graph from their archive. http://www.techdirt.com/articles/20140228/15025026393/you-know-who-else-collected-metadata-stasi.shtml jon - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - # distributed via nettime: no commercial use without permission # nettime is a moderated mailing list for net criticism, # collaborative text filtering and cultural politics of the nets # more info: http://mx.kein.org/mailman/listinfo/nettime-l # archive: http://www.nettime.org contact: nett...@kein.org
nettime MoneyLab material #5: Interview with Stephan Musoke on Mobile Money in Uganda
I met Stephan Musoke in the office of the i-network (http://www.i-network.or.ug/), a Ugandan ICT for development NGO in Kampala where he told me about his mobile money research. I am happy that he will present his insights at the MoneyLab event next week, here in Amsterdam. Stephan is a self-taught software engineer with experience in the design, development and delivery of custom software solutions to customers in government, finance and agriculture sectors (http://www.ssmusoke.com). In his latest engagement Musoke worked with an non-profit to build sustainable models in which farm and crop management tools and financial services are ‘bundled’ in affordable, unified platforms on mobile phone channels to promote commercially viable mass uptake. GL: You have written a report about mobile money in Uganda. Can you tell something about your findings? SM: I have been very interested and watching mobile money from a distance both as a techie and a user - through a social lens of how it has transformed the lives of people in Uganda starting out as a nice to have to a necessary part of day-to-day life. This is evidenced by people’s reactions when the systems are down or not functioning as expected. So I take this to be more than a report, it is a futurespective of what it would take for Mobile Money to move to the next level of usage, where it becomes a core platform for commerce. I have been a developer/software engineer in Uganda for the last 12 years focusing on custom web based solutions for clients across various sectors of finance, agriculture, eduction and government. A common pattern of problems always involved how to handle payments, without the overhead of cash or integration with banking systems to streamline information management. When Mobile Money first started it was not very clear how it would work, and what benefits, which only became clear once I started using it regularly only then did I start hitting the boundaries of the available usage scenarios. Later I worked with a non-profit which was seeking to bundle agricultural information with financial services via the mobile phone in Uganda, and mobile money as an existing platform looked viable. The baseline surveys showed that 85% of farmers have access to a phone within their households, yet their challenges were how to pay for inputs and get paid for their produce in addition to knowing what to plant and where to sell it. Analysing the agricultural value chains which form 80% of GDP, found that the major constraints in improving efficiency was the difficulty in making and receiving payments. That research exercise and experience helped validate my thinking in what does it take to move a payment system to the next level, despite the regulatory, competitive and economic constraints around it. GL: If I understood the origins well mobile money is not coming from the NGO-sector and its ICT for Development rhetoric. Needless to say, it is not coming from banks either. Do we have to situate inside the telecom sector? From a 1990s internet perspective, these are conservative forces, to put it mildly, dominated by either large global players or (privatised) state firms. Why did they start with mobile money? SM: The NGO-sector and ICT4D rhetoric only appeared after the apparent success of mobile money, the banks have no interest in it because they have alternate revenue streams that have lower capital requirements and require less operational investment. The telcos on the other hand are fighting for their survival, in a world which is increasingly regulating them to dumb pipes on which the Internet is built. This is exacerbated by a huge drop in international call rates, through competition from VOIP services and improved technology, plus the rise and ploiferation of social media messaging applications that reduce the need for voice, SMS but gobble up data. What the telcos have however is an existing mass of customers who are a captive audience, therefore by providing a good-enough service to those customers, they can reap economies of scale using existing airtime outlets and 3rd party agents. The penetration of mobile phones was also unprecedented as the costs of phones went down from $1000 in 1990 to under $25 in 2010, and ARPU from $1500 to $3.5 over the same period, even with 10 million customers, the gross revenue is $35million. On the other hand, the mobile money transfers in Uganda in 2013 were $640m, taking 1.5% transaction fee shows a revenue of $10million with lower overhead costs has a higher gross profit margin than voice. The telcos are also consolidating, as seen in Uganda by the Airtel/Warid merger which was all about customers, to compete with MTN. One should remember that telcos were formerly government owned monopolistic entities, so their structure is thus, slow moving but able to crush through the competition. GL: Can you tell us more about the NGO ICT4D rhetoric
nettime Cyberpunk, anarchism, network thinking, and cooperatives - interview
very interesting interview by Neal Gorenflo, from Shareable, Michel Bauwens, from the P2P Foundationand John Robb, from Global Guerrillas, interview las Indias' David de Ugarte Translated/Re-edited * by Stacco Troncoso, edited by Jane Loes Lipton - Guerrilla Translation! Images by Las Indias and Shareable Read the Spanish version here In this interview, Shareable publisher Neal Gorenflo, John Robb of Global Guerrillas, and P2P foundation's Michel Bauwens talk to David de Ugarte, one of the originators of the Spanish cyberpunk scene, about his more recent work developing a multinational worker cooperative, Las Indias, that is a culmination of his community's thinking and work for the last decade. Las Indias is the manifestation of a unique socio-economic philosophy that synthesizes many strains of thinking and culture including cyberpunk, anarchism, network thinking, and cooperatives - all with a Spanish twist. It's important because it points to a possible future for those who think outside of national boundaries, and who desire or need to take control of their own economic destiny. It's a possible future that takes the centuries-old logic of cooperatives and remixes it for the urban-centered, global network society we live in today. Michel Bauwens: Explain to us what Las Indias is, where it comes from, and what makes it distinctive? David de Ugarte: Las Indias is the result of the Spanish-speaking cyberpunk movement. Originally a civil rights group, during the late 90s it became strongly influenced by Juan Urrutia's Economics of Abundance theory. We soon linked abundance with the idea of empowerment in distributed networks. We are very clear on this point: it is not the Internet by itself, it is the distributed P2P architecture that allows the new commons. As one of our old slogans put it: Under every informational architecture lays a structure of power. Re-centralizing structures - as Google, Twitter, Facebook, Megaupload, etc. do around their servers - weakens us all. The blogosphere, torrents, freenet, etc. are tools of empowerment. Cyberpunk was mainly a conversational / cyberactivist virtual community. It became transnational quickly, and contributed some very good discussions and theories that helped us understand the social impact and possibilities of distributed networks. But in 2002, three of us founded Las Indias Society, a consultancy firm focused on innovation and networks dedicated to empowering people and organizations. Our experience soon became very important in understanding the opposition between real and imagined communities, and the organizational bases for an economic democracy. After the cyberpunk dissolution in 2007, the Montevideo Declaration openly stated that our objective will be to construct a phyle, a transnational economic democracy, in order to ensure the autonomy of our community and its members. We define ourselves around five main values: Distributed network architectures as a way of generating abundance, empowerment, and to ensure the widest plurarchy - the maximum of individual liberties - for the members of our community. Transnationality (which means a rejection of national identities as well as universalism) as a consequence of putting the real community of persons who live and work in Las Indias at the center of our work. Economic democracy as the way to build personal and community autonomy through the market. Hacker ethics as a way to foster community knowledge generation, common deliberation, personal passion, and a collective pleasure in learning. Devolutionism: all our production of knowledge - books, software, contents, even recipes - is returned to the commons, generating more abundance. Neal Gorenflo: What is the vision of Las Indias? What would the classic, most developed form be in the future? What are you after in terms of how it can transform individuals, interpersonal relationships, and the world? Neal Gorenflo Our vision is not a universalist one. We don't proselytize and we really believe that diversity is a desirable consequence of freedom. But we have a vision for us - the phyle - and a wish: to see the birth of a wider, transnational space of economic democracies. We imagine networks of phyles generating wealth, social cohesion, and ensuring liberties for real people rather than the governments' power and their borders and passports. We are not naive nor utopian. Distributed networks gave our generation the opportunity to build a new world. But this new world, based on the commons, communities, economic democracy and distributed networks, isn't completely born. And the old world, based on the artificial generation of scarcity, corporations, inequality, and centralized networks, isn't dead. It is very symptomatic that the European crisis manifests as a debt crisis. Governments are suffocating society in order to feed privileged groups - big corporations, some sectors dependent on public money - who have captured state rents or
