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We have a vision for where this kind of partnership can go, when governments begin educating themselves on the power of bitcoin and blockchain. That vision can be summed up in two words: Kendall Square. |
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Kendall Square, then.
The Kendall Square neighborhood lies next to the Massachusetts Institute of Technology, stretching along the Charles River that separates Cambridge from Boston. (Here's a map.) Although you’d think this would be valuable real estate, a series of unfortunate events led this area into decay and decline from the 1970s through the 1990s. Residents avoided the area after dark.
I remember it vividly, because I got my first job there.
When I stepped off the Kendall Square subway line for my job interview as a fresh-faced college student, it was a concrete wasteland. I walked through empty parking lots, the wind whipping whirling dervishes of dust around me. The area felt so desolate and lonely that I expected to see a tumbleweed roll by.
The job, it turned out, was a weird one. Located within one of those crumbling brick buildings in Kendall Square was a company that specialized in telephone-based chat rooms, and they needed college students to serve as operators.
Before the Internet, a phone-based chat room – also known as a “party line” – was a kind of special number that you could call to chat with other strangers. Unlike 1-800 toll-free numbers, "1-900 numbers" were "toll-full," with a per-minute fee to call in (“20 cents for the first minute, 10 cents for every other minute,” as we had to remind callers several times an hour). Based on what the operators got paid, it must have been a a wildly profitable business.
This line was marketed to teens, so huge numbers of bored teenagers would call in just to chat with other teenagers. The conversation was usually innocuous – in fact, we had strict orders to disconnect anyone using inappropriate language – but some kids would really get hooked on the service, spending weeks on the chat line. Then their parents would get the phone bill, and we’d never hear from them again.
As an operator, I sat behind an enormous digital switchboard, with little LEDs representing each person connected to the chat line. Friday and Saturday nights were crazy, with easily a hundred callers at a time. They were grouped into chat rooms of 10 callers each, and I had godlike powers to disconnect troublemakers, or speak with them one-on-one in a private room.
As college jobs go, it was a pretty good one. I often worked the overnight shift (which paid more). It was totally unsupervised, although they hired auditors to occasionally listen in and make sure you hadn’t fallen asleep on the job. (Apparently this was a problem.)
I also had a window view of the vacant lots of Kendall Square, and I would stare out at the lonely streetlights as I listened to teenagers talk about Dawson’s Creek, or discuss how awesome they were at doing skateboard tricks. There was another company that ran 1-900 sex lines out of the office down the hall, so occasionally I would hear them through the thin walls. Their job sounded a lot more exciting.
It was a good college job, there in the wasteland of Kendall Square, and I left with my virtue intact. At sunrise, I would clock out, walking back through the asphalt jungle to my dorm room. If a traveler from the future had dropped in and said to me, “In 25 years, this will be the life sciences hub of the world! Genetic engineering! Drug development! Fabulous technology companies!”, then I would have had only one question.
"How?" |
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How to Build an Innovation Economy
The story of how Kendall Square went from dystopia to dream world is chronicled in the documentary From Controversy to Cure: Inside the Cambridge Biotech Boom. (Watch the trailer here.)Long story short: it took a lot of commitment from government – and that commitment started with communication.
The communication started at the local level, in Cambridge City Council meetings during the 1970s, about the ethics of genetic engineering. Cambridge was seeing MIT researchers and startup companies exploring new frontiers in molecular biology, and a small group of residents became concerned. Through these early public discussions, the city eventually took it upon itself to regulate this growing industry.
Far from scaring off new biotech firms, that regulation began to welcome this new industry: not only did citizens and government leaders better accept and understand the science, but Cambridge became more attractive for biotech firms to set up their headquarters, since the city had a clear regulatory framework.
(Similarly, today’s blockchain industry is a confusing mishmash of conflicting regulations. The city or country that is able to clearly develop this kind of regulatory framework will win.)
Thus, city-level government played a big role in rolling out the red carpet that transformed Kendall Square. But so did state-level government: in 2008, Gov. Deval Patrick rolled out a 10-year, $1 billion life sciences plan. It offered tax incentives for startups and established firms. It awarded grants for projects to treat blood diseases, bone grafts, and kidney failure. It made life sciences a "thing."
Lured by the incentives, not to mention easy access to fresh talent from MIT and Harvard, biotech companies flocked to Kendall Square, which was transformed from a desert of parking lots into an oasis of sleek glass office buildings. |
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Kendall Square, today.
Patrick’s 2008 plan was followed by an additional $500 million from his successor, Gov. Charlie Baker, to keep the pipeline of jobs and innovation flowing. Now with the race for a COVID-19 vaccine in full-on sprint mode, Kendall Square-based companies like Moderna may become ground zero for the cure.
Kendall Square is now a leading example of the “innovation economy,” not a zero-sum game of producers and consumers, but a rapidly expanding pie based on continual innovation. And Cambridge is not the only U.S. city: Raleigh-Durham, N.C. has developed its Research Triangle; Madison, Wis. has become a hub for tech entrepreneurship; and cities like Denver, Salt Lake City, and Charleston are all growing an innovation economy.
What it takes, however, is government commitment. And commitment starts with communication. Which leads us to this week’s announcement. (Read it here.) |
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The MIT Stata Center, designed by architect Frank Gehry.
How to Build an Innovation Economy
As you can read in the press release, our parent company Media Shower has partnered with the Innovation Institute at Massachusetts Technology Collaborative to create a Blockchain Education for Government Innovators series.
In plain language, this means we’re meeting with people on the leading edge of Massachusetts government – the same type of forward thinkers who built the innovation economy of Kendall Square – to discuss how blockchain might offer the next leap forward.
It’s something like those early Cambridge City Council meetings, where everyone got educated on this new field called biotechnology. That understanding allowed a thousand flowers to bloom, digging up those concrete parking lots and planting a thriving biotech hub. It brought life sciences to life.
The need to educate our government leaders about blockchain has never been greater. As we’ve discussed over the past few months, the coming changes to the global economy will require governments to find new ways of creating and managing money, and blockchain technology offers future-thinking governments a way to think about the future.
It is easy, in these times, to fall into cynicism about the state of our government, to think that no one decent or honest is left in the system. My experience has been the opposite: I have been encouraged by the smart, thoughtful people working with us in this blockchain education series. They understand a good deal about bitcoin and blockchain, and they're eager to learn more.
Working with the government, has actually restored my faith in government. That’s good news. And next time you’re in Cambridge, take a walk through Kendall Square. It’s living proof that good government can make a difference. |
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Health, wealth, and happiness, |
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John Hargrave Publisher Bitcoin Market Journal |
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Hi Everyone,
Ok, so here's a rather unfortunate headline. ... |
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Seriously?! I didn't even know he had a TikTok account. It kind of makes sense though. We're dealing with a president who likes to take executive action through social media.
After Facebook and Twitter blocked his campaign accounts, he's gonna need some way to get his message out, along with his sweet, sweet dance moves.
Oh wait, no. Sorry. That headline should read "President Trump Issues Executive Order Against TikTok." And WeChat, too.
Looks like the U.S.-China trade war is in a new phase, the social media phase. By my count, that would make this phase four. Good thing we've already locked down phase one. Only three more phases to go, unless new phases come up in the meantime, of course. |
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Stimulating Jobs
Enough of that though, it's jobs day on Wall Street, and we got a whopper of a report this morning. |
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One question that we asked last month, and I still have not heard a reasonable explanation, is how the monthly jobs numbers seem to conflict with the weekly data we're receiving.
In this graph, we can see that about 1 million new Americans are filing for unemployment on a weekly basis. So how is it that 1.8 million jobs were added in July?? |
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In any case, the jobs data only seems to be relevant to the markets these days in that it may have an impact on the amount of stimulus provided to the markets.
The Federal Reserve has already made it clear that they're putting their money printing on hold for the time being, and that it's up to the president and Congress to hash out some fiscal stimulus for the people.
Indeed, the hour for this is getting late. The provisions from the original CARES Act ran out a week ago, and yet it seems that talks between Republicans and Democrats are beginning to stall. They're just too far apart.
The Democrats want to throw about $3.5 trillion or more into the economy, whereas the Republicans are looking for something like $1.5 trillion or less. That's a really wide gap to cover.
The president has stated that if Congress doesn't get its act together, he will issue an executive order, hopefully without a dance this time. But jokes aside, there's really a very limited amount that Trump can accomplish with such an order.
The power of the purse belongs to Congress, and the U.S. Treasury can only override them in emergency cases.
So sure, the president can reallocate funds from the CARES Act, but as we mentioned above, it's already mostly gone anyway. What a mess. |
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Enter the Buck
With all that going on in the background, we do need to keep a sharp eye on the U.S. dollar. The slide over the last 10 weeks has been sharp, and it does look like the greenback is looking to form a bottom at these levels. |
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A quick glance at the chart might confirm that the technicals are in place for a bounce at this point. Here's the Dollar Index since mid-May. Check out the neat double-bottom formation, which often signals the end of a strong movement. |
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With that, if indeed this is the end of a trend, we can probably expect some retracements out there. Gold, silver, the Nasdaq, and even cryptocurrencies have all been riding this U.S. dollar weakness. Hang ten, everyone.
Personally, I've pulled back ever so slightly on my long positions and allocated a bit more to cash. Not that anything is certain, but the winds of change don't usually give any better indication, so if the trend does change I want to be ready for it.
Holding cash is never a very attractive prospect though, and even doubly so, in the face of these pandemic-skewed markets. Fortunately, the wild volatility we have experienced lately has produced some compelling opportunities, for example, sharply reduced oil prices.
So at least with some of those funds, I've managed to position for dollar strength in the form of short WTI Crude oil at an entry of $41.50.
Let's wish me, as well as any of you taking this trade, good luck and a fantastic weekend!
May your path be clear and the sunshine bright. May you know great love and your heart be light. May you share this message with all you know and bring great success to friend and foe.
Best regards, |
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Mati Greenspan Analysis, Advisory, Money Management |
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