Tag Archives: Amazon

Big Tech firms march to the beat of Pentagon, CIA despite dissension, by Tim Johnson

As SLL said in “The Friendly Faces of Fascism,” Big Tech has crawled into bed with the government. From Tim Johnson at mcclatchydc.com:

A funny thing has happened to Google and Amazon on their path toward high-tech success: They have become crucial cogs in the U.S. national security establishment.

Both companies are expanding teams of employees with security clearances to work on projects that include deploying artificial intelligence and building digital “clouds” to offering law enforcement facial recognition tools that can even read the mood of people caught on camera.

The security establishment’s embrace of Big Tech has ruffled the feathers of traditional defense contractors and roiled employee ranks, in Google’s case, over whether the company is being drawn into what disguntled employees called “the business of war.”

Defense industry analysts say the Pentagon views Big Tech, and particularly Google with its deep bench of artificial intelligence researchers, as vital to the nation’s future safety.

In some ways, the evolution of companies born to disrupt the status quo into business giants with a broad array of clients, including the security establishment, is a result of the profits to be made doing business with the federal government.

The Pentagon currently is testing a customized Google AI surveillance engine that sifts through massive amounts of footage from tactical drones to produce what it calls “actionable intelligence and insights at speed.” The tests are under way at six locations in Africa and the Middle East. Such drone footage has been used in the past to target and kill ISIS extremists.

The pilot, known as Project Maven, spurred nearly 4,000 of Google’s 88,000 employees to sign a petition in April demanding that the project be cancelled because it would “irreparably damage Google’s brand.” The petition added: “Building this technology to assist the U.S. government in military surveillance – and potentially lethal outcomes – is not acceptable.”

The internal protest about Project Maven appeared to be taking a toll. The tech website Gizmodo, citing three unnamed sources, reported Friday afternoon that a Google executive told employees earlier in the day that the backlash over Project Maven had been severe and that the company would not pursue further artificial intelligence work with the Pentagon.

Google declined to answer questions about Project Maven, and a spokeswoman for the Mountain View, Calif., company did not answer broader queries about the company’s activities in the national security sphere.

To continue reading: Big Tech firms march to the beat of Pentagon, CIA despite dissension

Opinion: How Seattle’s new tax to fight homelessness could ruin its economy, by Travis H. Brown

There’s nothing like punishing success to drive successful people and businesses away. From Travis H. Brown at msn.com:

In a shortsighted effort to fight homelessness, Seattle’s city council has approved a new employee “head tax” on companies based in the city. The policy pits growth and progress against each other in a zero-sum game that will do far more harm than good.

The head tax is exactly what it sounds like: a straight levy of $0.14 per hour per employee—about $275 a year for a full-time worker—targeting every business in Seattle with revenues of $20 million or more. The proposal’s backers aim to raise around $48 million per year to fund various affordable housing initiatives in order to combat homelessness and provide low-income families with affordable options in the city.

These are laudable aims, but it’s hard to imagine a more destructive strategy for realizing them. The potential damage to Seattle’s economy from this blunt instrument runs into the billions of dollars. Some may believe that California businesses could still flee their high-tax environment for Seattle, but in reality, Seattle is competing with many other cities for this income. One example is Phoenix, which has posted the best income growth of any Metropolitan Statistic Area (MSA) since 1992. Phoenix has capitalized on its proximity to California by luring businesses and people with a low-tax environment that nets them $1,539 in income every single minute. Compared to Seattle, this is nearly $1,200 more per minute, or $70,348 more per day. The numbers are staggering, and Seattle can’t risk putting itself further behind.

Seattle’s $20 million benchmark for the new tax refers to gross receipts, not income, meaning it will hit high-volume, low-margin businesses (think grocery stores or construction wholesalers) just as hard as more lucrative counterparts, promising price increases for consumers as businesses pass along costs. Service industries with big headcounts are firmly in the crosshairs, threatening this key employment category for young and low-skilled workers. The list includes Starbucks — no surprise, there are quite a few coffee shops in Seattle — as well as big retailers like Walmart and grocery store chains, both national and regional. Other big, low-margin employers, including logging and agricultural cooperatives, are also on the hook. And the relatively low cutoff means hundreds of medium-sized enterprises are on the hook too.

To continue reading: Opinion: How Seattle’s new tax to fight homelessness could ruin its economy

Big Refrigerator

https://www.theburningplatform.com/2018/05/06/big-refrigerator/

Jumping The Great White Shark Of Bubble Finance, by David Stockman

David Stockman has hated Amazon all the way up. Nevertheless, he’s got some pertinent things to say about what he calls “bubble finance.” From Stockman at davidstockmanscontracorner.com:

Wall Street has now truly jumped the shark—the one jockeyed by Jeff Bezos.

Last night Amazon reported a whopping 41% plunge in free cash flow for the March 2018 LTM period compared to prior year. Yet it was promptly rewarded by a $50 billion surge in market cap—-with $10 billion of that going to the guy riding topside on the Great White Shark of Bubble Finance.

That’s right. Amazon’s relatively meager operating free cash flow for the March 2017 LTM period had printed at $9.0 billion, but in the most recent 12 months the number has slithered all the way down to just $5.3 billion.

And that’s where the real insanity begins. A year ago Amazon’s market cap towered at $425 billion—meaning that it was being valued at a downright frisky 47X free cash flow. But fast forward a year and we get $780 billion in the market cap column this morning and 146X for the free cash flow multiple.

Folks, a company selling distilled water from the Fountain of Youth can’t be worth 146X free cash flow, but don’t tell the giddy lunatics on Wall Street because they are apparently just getting started.

Already at the crack of dawn SunTrust was out with a $1900 price target—meaning an implied market cap of $970 billion and 180X on the free cash flow multiple.

At this point, of course, you could say who’s counting and be done with it. But actually it’s worse—-and for both Amazon and the US economy.

That’s because Amazon is both the leading edge of the most fantastic ever bubble on Wall Street and also a poster boy for the manner in which Bubble Finance is hammering growth, jobs, incomes and economic vitality on main street.

Moreover, soon enough a collapsing Wall Street bubble will bring the already deeply impaired main street economy to its knees. So Amazon is a double-destroyer.

In this context, Bezos e-Commerce juggernaut racked up $174 billion of sales during the March LTM period, which represented a massive $45 billion or 35% gain over prior year (both figures exclude AWS). By way of comparison, that one-year gain is nearly double Macy’s total annual sales!

Even when you adjust for the Whole Foods acquisition that was not in the 2017 LTM numbers, the sales gain was about $35 billion or 27%.

Either way, the robo-traders got damn excited, scooping up AMZN’s shares hand-over-fist on the back of its “great sales momentum”. But as we said yesterday, headline reading algos don’t get far below the surface, and in this case they didn’t even break the skin.

Fully 96% of Amazon’s $5.0 billion of  LTM operating income was accounted for by its cloud services business (AWS).

To continue reading: Jumping The Great White Shark Of Bubble Finance

The Blowback Against Facebook, Google and Amazon Is Just Beginning, by Charles Hugh Smith

Don’t tell the stock market, but the pendulum may swing against the internet giants for a while. From Charles Hugh Smith at oftwonminds.com:

This is how we end up with a neofeudal society that benefits the Protected Few at the expense of the powerless, exploited Many.

Blow-out earnings from Facebook and Amazon have cheered Wall Street, but institutional owners might want to focus not just on blow-out earnings but rising blowbackagainst the tech superpowers (Facebook, Google and Amazon).

The blowback is social and political: people are starting to question the social and political costs of these tech darlings’ dominance and the billions in profits they reap.

The typical corporation can buy political influence, but Facebook and Google are manipulating the machinery of democracy itself. That’s a much more dangerous type of power than buying political influence or manipulating public opinion by openly publishing biased “news.”

We all understand how Corporate Media undermines democracy: recall how every time Bernie Sanders won a Democratic primary in 2016, The New York Times and The Washington Post “reported” the news in small typeface in a sidebar, while every Hillary Clinton primary win was trumpeted in large headlines at the top of page one.

But this sort of manipulation is visible; what Google and Facebook do is invisible. I recently addressed these invisible (but oh-so profitable) mechanisms in a series of essays:

How Far Down the Big Data/’Psychographic Microtargeting’ Rabbit Hole Do You Want to Go?

Is Profit-Maximizing Data-Mining Undermining Democracy?

Should Facebook, Google and Twitter Be Public Utilities?

Should Facebook and Google Pay Users When They Sell Data Collected from Users?

Here’s a selection of recent articles on related topics:

Research Shows Google’s Search Manipulations Tried To Rig Election For Hillary

Google’s File On You Is 10 Times Bigger Than Facebook’s – Here’s How To View It

Don’t Fix Facebook. Replace It. (New York Times)

The Infuriating Innocence of Mark Zuckerberg (The New Yorker)

Amazon is the embodiment of numerous destructive dynamics:

1. Zero-sum cannibalism being passed off as “growth.” Amazon is growing its sales by cannibalizing the retail, distribution, transport, computer services and advertising sectors. How many jobs have been lost as Amazon has consumed its victims? Shall we guess that Amazon’s 560,000 employees replaced 1,000,000+ retail/distribution employees who lost their jobs?

To continue reading: The Blowback Against Facebook, Google and Amazon Is Just Beginning

The Big Tech Backlash of 2018, by Raúl Ilargi Meijer

There’s a revolt brewing against the tech titans that have been stock market darlings the last few years. From Raúl Ilargi Meijer at theautomaticearth.com:

Something must be terribly wrong with the world. A few days ago Elizabeth Warren agreed with Trump on China, now Bernie Sanders agrees with him about Amazon. What’s happening?

Bernie Sanders Agrees With Trump: Amazon Has Too Much Power

Independent Vermont senator and 2016 presidential hopeful Bernie Sanders echoed President Donald Trump in expressing concern about retail giant Amazon. Sanders said that he felt Amazon had gotten too big on CNN’s “State of the Union” Sunday, and added that Amazon’s place in society should be examined.

“And I think this is, look, this is an issue that has got to be looked at. What we are seeing all over this country is the decline in retail. We’re seeing this incredibly large company getting involved in almost every area of commerce. And I think it is important to take a look at the power and influence that Amazon has,” said Sanders.

A backlash against Facebook, a backlash against Amazon. Are these things connected? Actually, yes, they are connected. But not in a way that either Trump or Sanders has clued in to. Someone who has, a for now lone voice, is David Stockman. Here’s what he wrote last week.

The Donald’s Blind Squirrel Nails An Acorn

It is said that even a blind squirrel occasionally finds an acorn, and so it goes with the Donald. Banging on his Twitter keyboard in the morning darkness, he drilled Jeff Bezos a new one – or at least that’s what most people would call having their net worth lightened by about $2 billion:

“I have stated my concerns with Amazon long before the Election. Unlike others, they pay little or no taxes to state & local governments, use our Postal System as their Delivery Boy (causing tremendous loss to the U.S.), and are putting many thousands of retailers out of business!” You can’t get more accurate than that. Amazon is a monstrous predator enabled by the state, but Amazon’s outrageous postal subsidy – a $1.46 gift card from the USPS stabled on each box – isn’t the half of it.

To continue reading: The Big Tech Backlash of 2018

The Donald’s Blind Squirrel Nails An Acorn, by David Stockman

Would Amazon stock trade anywhere near $1000 a share in a world of honest money? David Stockman says no. From Stockman, at davidstockmanscontracorner.com:

It is said that even a blind squirrel occasionally finds an acorn, and so it goes with the Donald. Banging on his Twitter keyboard in the morning darkness, he drilled Jeff Bezos a new one—or at least that’s what most people would call having their net worth lightened by about $2 billion:

I have stated my concerns with Amazon long before the Election. Unlike others, they pay little or no taxes to state & local governments, use our Postal System as their Delivery Boy (causing tremendous loss to the U.S.), and are putting many thousands of retailers out of business!

You can’t get more accurate than that. Amazon (AMZN) is a monstrous predator enabled by the state, but Amazon’s outrageous postal subsidy—-a $1.46 gift card from the USPS stabled on each box—-isn’t the half of it.

The real crime here is that Amazon has been exempted from making a profit, and the culprit is the Federal Reserve’s malignant regime of Bubble Finance. The latter has destroyed financial discipline entirely and turned the stock market into the greatest den of speculation in human history.

That’s why Bezos can kill established businesses with impunity. The casino allows him to run a pernicious business model based on “price to destroy”, rather than price for profit and a return on capital.

Needless to say, under a regime of sound money and honest capital markets Amazon would be a far more benign economic creature. That’s because no real investors would value AMZN’s money-loosing e-Commerce business at $540 billion—-nor even a small fraction of that after 25-years of profitless growth.

As we observed a few weeks ago,

AMZN is allegedly a tech company owing to its cloud business (AWS). But that’s exactly the skunk in the woodpile.

When you set aside AWS’ sales and operating income during 2017, Amazon’s e-Commerce business generated $160 billion of sales, but posted operating income of negative $200 million.

That’s right. The monster of the retail midway posted no profit whatsoever last year!

And it’s getting worse. During 2016 the e-Commerce business posted $1.1 billion of operating income on $124 billion of sales; and the year before that (2015) operating income was $2.6 billion on e-Commerce sales of $99 billion.

Stated differently, incremental annual sales of $61 billion over the past three years resulted in a $2.8 billion reduction in operating profit.

There you have it. As the third great bubble of this century has accelerated towards its blow-off top, the robo-machines and momo traders have turned absolutely rabid, thereby enabling Bezos to go flat-out berserk in pursuit of growth at any cost.

To continue reading: The Donald’s Blind Squirrel Nails An Acorn

Amazon Announces “AWS Secret” Service For The CIA, US Intelligence, by Tyler Durden

As noted in “The Friendly Faces of Fascism,” the technology giants are in bed with the government, perhaps none more so than Amazon. From Tyler Durden at zerohedge.com:

Shortly after Wired first profiled the NSA’s new super spycenter in Bluffdale, Utah (one year before Snowden confirmed that much of the agency’s activity involved spying on US citizens and soon to be presidents), speculation emerged as to how much data storage capacity this brand new US spy hub would have. According to a then-estimate by Forbes, the storage capacity at the Bluffdale facility was between 3 and 12 exabytes ( 1 exabyte is 1 billion gigabytes) based on analysis of unclassified blueprints, although some had vastly greater estimates ranging from yottabytes (in Wired) to 5 zettabytes (on NPR), a.k.a. words that most probably can’t pronounce but translate to ‘a lot.

And, in retrospect, it appears to not have been enough, because on Monday, Amazon Web Services announced it was now offering a commercial cloud service to the US Intelligence Community (i.e. spies on both foreign targets and US presidential campaigns) called, directly enough “Secret Region” that can operate workloads up to the Secret U.S. security classification level.

“Today we mark an important milestone as we launch the AWS Secret Region,” said Teresa Carlson, Vice President, Amazon Web Services Worldwide Public Sector. “AWS now provides the U.S. Intelligence Community a commercial cloud capability across all classification levels: Unclassified, Sensitive, Secret, and Top Secret. The U.S. Intelligence Community can now execute their missions with a common set of tools, a constant flow of the latest technology and the flexibility to rapidly scale with the mission. The AWS Top Secret Region was launched three years ago as the first air-gapped commercial cloud and customers across the U.S. Intelligence Community have made it a resounding success. Ultimately, this capability allows more agency collaboration, helps get critical information to decision makers faster, and enables an increase in our Nation’s Security.”

To continue reading: Amazon Announces “AWS Secret” Service For The CIA, US Intelligence

AMAZONOPOLY: Jeff Bezos May Be About To Control $53 Billion In Federal Government Spending, by Brian McNicoll

As noted in “The Friendly Faces of Fascism,” the recent National Defense Authorization Act has a nice little present for Amazon. From Brian McNicoll at dailycaller.com:

Getty Images/David Ryder, Shutterstock/urbanbuzz

Getty Images/David Ryder, Shutterstock/urbanbuzz

Jeff Bezos spends a lot of time directing the newspaper he owns, The Washington Post, to criticize President Donald Trump in every way imaginable. But for some reason, the federal government cannot stop giving Amazon — the retail empire Bezos also owns — a slew of taxpayer-subsidized subsidies. Now, Congress is considering a new federal purchasing plan that could result in Amazon’s most lucrative government handout yet.

The technology giant is no stranger to sweetheart deals that line its pockets at taxpayer expense. The U.S. Postal Service, for instance — which has lost $60 billion since 2007 — handles last-mile shipping for two-thirds of Amazon’s deliveries. This means overtime for workers and a good incoming revenue number on the USPS’s balance sheet, but it’s a financial bonanza for Amazon.

According to media reports, USPS delivers Amazon packages for $2 per package — even though it costs USPS $3.46 per package to make these deliveries. And that’s before you get into the $200 million three years ago for 270,000 handheld scanners to process the packages or the $5 billion or more to replace USPS vehicles with ones better suited to carry Amazon’s packages.

But even this cozy arrangement pales in comparison to the deal Amazon is now trying to push through Congress.

 Buried deep in this year’s defense spending bill is a provision that would move Defense Department purchases of commercial off-the-shelf products to online marketplaces.

A summary of the proposal, which was inserted into the legislation by House Armed Services Committee Chairman Mac Thornberry, argues it is needed to save money over the burdensome and expensive current system.

It pointed to a report from the Inspector General of the Government Services Administration that found some IT equipment could be purchased more cheaply on the open market than through the GSA’s “schedules.”

In response, the plan calls for developing an online marketplace platform through which federal agencies can buy products such as paper clips, bottled water, computers, office furniture and more — just as any business would do.

To continue reading: AMAZONOPOLY: Jeff Bezos May Be About To Control $53 Billion In Federal Government Spending

The Friendly Faces of Fascism, by Robert Gore

Like flies drawn to steaming manure, tycoons are drawn to politics and government, all in the interests of a better world, of course.

There are two modes of human interaction: voluntary and involuntary. The symbol of the former is the market; the symbol of the latter is government. Historically, the pendulum has swung back and forth. Since the early 1900s the pendulum has swung towards government and the involuntary. Humanity’s future hinges on whether or not it will swing back. Ominously, many of the biggest beneficiaries of voluntary free choice are ideologically opposed to it.

It may seem paradoxical that Mark Zuckerberg, Eric Schmidt, Jeff Bezos, Bill Gates, and Tim Cook, among others, build fortunes on the voluntary choices of billions of customers, then join forces with those aligned against voluntary choice. Silicon Valley used to be almost a libertarian outpost, now it’s a bastion of statism. However, there are skewed rationales for it, lodged in the nature of government and business in the 21st century, psychology, and historical precedent.

Government has become so big and all-pervasive that once a business reaches a certain size, it’s going to run into the behemoth blob. Facebook, Google, Amazon, Apple, and Microsoft are huge, and aside from Apple, they dominate their markets. (Apple had a little under 15 percent of the smart phone market in the first quarter of 2017). Computers and the internet are at the heart of the national security state, and Facebook, Google, Apple, and Microsoft are the heart of social media, search, smartphones, communications, and business computing. Along with Amazon, they all have significant roles in cloud data storage. In its voracious quest for information with which to track, blackmail, and subjugate the citizenry, it was inevitable the government would turn to these treasure troves.

How does a company say no to the FBI, the CIA, the Department of Defense, the NSA, and other intrusive government agencies? With difficulty. The “war on terrorism and drugs” rhetoric probably doesn’t cut any mustard, but as Senator Chuck Schumer said, the agencies, “have six ways from Sunday at getting back at you.” You get along by going along. Large shareholders—hedge, pension, and mutual funds—and the corporate collections of cowards known as boards of directors would take a dim view of a CEO who for ideological reasons fought a quixotic and ultimately unprofitable battle with the federal government over something as trivial as a principle.

Let’s not forget that the government has $4 trillion a year to throw around. Amazon received a $600 million dollar contract from the CIA in 2013. Tucked into the latest National Defense Authorization Act is an amendment authorizing $54 billion in online purchases by the government. Amazon will undoubtedly get the lion’s share. The government buys billions of dollars worth of computer and smart phone hardware and software every year. It also buys a lot of advertising, and Facebook and Google are the dominant online advertising platforms. You have to keep a customer that large satisfied.

Beyond payola, there’s publicity, prestige, pride, politics, and power. The first thing you do once you’ve acquired your tens of billions is set up a tax-exempt foundation. Founder and foundation then dive head first into the pool of altruistic goop into which anyone who acquires any measure of fame and fortune in contemporary America dives. It simply won’t do to say you’ve accomplished all you’ve accomplished for yourself. You must find a cause greater than yourself and proclaim your devotion to it.

That incantation serves several purposes. Bill Gates transformed from evil monopolist to philanthropic saint after he established his foundation and retired from Microsoft to devote his efforts full-time to it. Once you’ve acquired the halo, you’re ready to grab the power to which you’re wealth and superior intellect entitle you. Like flies drawn to steaming manure, tycoons are drawn to politics and government, all in the interests of a better world, of course.

There’s nothing new about this. In America, the prototype is John D. Rockefeller. He used state of the art refining technology, ruthless negotiating tactics, industrial consolidation, bribery, and governmental suppression of competitors to become the nation’s first billionaire. Rockefeller was a charter member of the oligarchy that guided the US into central banking, the income tax, foreign interventionism, and its nascent empire in the first few decades of the 1900s. His foundation sheltered his fortune from taxes, gave a bunch of money to worthy causes, burnished his image, augmented his power, and promoted world government organs like the Council on Foreign Relations and, after his death, the Trilateral Commission.

Anyone who gets involved with the behemoth blob wants power, the ability to use force to direct the actions of others. Any shred of a morality that recoils at coercively exacting involuntary compliance is abandoned. Involvement with the corrupt obscenity that is our government means either a conscious or unconscious surrender to the Dark Side paradigm: might makes the only wrong and right.

At the heart of it lies a simple truth: governments can anything they want to you if they claim they’re doing it for you. The altruistic veneer conceals every horror, from history’s bloodthirstiest regimes down to nanny state bureaucrats dictating toilets’ flush capacity. A warm place in hell is reserved for those who covet power under cover of professed good intentions. The hottest fires are reserved for those who give it to them, surrendering without protest control of their own lives.

Once the government has assumed control, the entrepreneurs and executives of ostensibly private businesses toe the government’s line. It’s the only way to survive and indeed thrive under fascism, the correct label for the current system. All under cover of noble aims and approved good causes, of course. In Atlas Shrugged, Ayn Rand drew a sharp distinction between her competent champions of freedom and the incompetent toadies of soul-crushing altruism, collectivism, and statism. In real life freedom’s biggest beneficiaries have become some of its biggest—because of their competence and gargantuan fortunes— enemies.

The gravest threats to the most basic civil liberties—freedom of thought, expression, and transaction—come from the technology giants. Not simply because they’re the dominant commercial, communications and computing platforms, but because they’ve aligned themselves with the government. They’re engaging in creeping censorship, gathering massive amounts of data, cooperating with the surveillance state, and propagating propaganda. Call it the Orwellian or Panopticon state: Facebook, Google, Amazon, Apple, and Microsoft will be invaluable in establishing it. We’re at least halfway there. No surprise that these companies have been stock market leaders. It’s the first rule of fascist investing: buy the companies the government favors.

Italian economist and philosopher Vilfredo Pareto (1848-1923) argued that regardless of the label given to a system of government, a ruling class always emerges and enriches itself. There are no historical counterexamples, certainly not 2017 America. What’s historically unprecedented, however, is the power and control America’s technological oligarchy can potentially exercise, and the relative weakness of those who champion freedom and warn of impending involuntary servitude. The louder the oligarchs proclaim their good intentions and hail tomorrow’s better world, the graver the threat becomes.

The Story of a Man Who

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