Although Fed Chairwoman Janet Yellen said nothing new in her carefully manicured semi-annual testimony to Congress last week, her performance there, taken within the context of a lengthy profile in the New Yorker (that came to press at around the same time), should confirm that she is very different from any of her predecessors in the job. Put simply, she is likely the most dovish and politically leftist Fed Chair in the Central Bank’s history. While her tenure thus far may feel like a seamless extension of the Greenspan/Bernanke era, investors should understand how much further Yellen is…

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Maybe there is some natural fidelity to history in John Locke’s return to England from exile in the company of the future Queen Mary. It certainly contrasts with his ignominious flight many years earlier from the Catholic James I, though history itself has been rewritten on the occasion of his strife with the ruling regime. While Locke has been synonymous with the founding of true liberalism, authoring the basis by which the principles have been largely set, he had years before written an absolutionist piece defending the monarchy.
To reconcile Locke’s intellectual journey from Hobbesian…

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Corporate America’s latest public-relations disaster comes under the banner “tax inversion,” where a U.S. company shifts its legal headquarters to a country with a lower tax rate.
Just last week, U.S. drugmaker AbbVie agreed to buy a foreign firm, Shire PLC, in part to reduce its corporate tax rate, which is expected to drop from 22% to 13%. In most inversions, companies keep their headquarters’ physical activities - the people, the buildings - in the U.S., as would AbbVie. Still, the practice has understandably provoked a furious backlash.
These companies “have deserted our country to avoid…

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Editor’s Note: This article was originally published at 5 p.m. EDT on Real Money on July 22. Sign up for a free trial of Real Money.
The Organisation for Economic Co-operation and Development (OECD) this month published a 60-page economic policy paper titled “Policy Challenges for the Next 50 Years.”
For traders, the subject matter is largely irrelevant and most probably confusing. For professional investors and advisers to them, along with accountants, attorneys and public officials, it is a must-read.
The paper’s principal point is that the nominal and real economic growth rates that were…

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If the amount of press ink used to report a study is any indicator of its contribution to public understanding, the National Institute on Retirement Security’s (NIRS) 2013 report, “The Retirement Savings Crisis: Is It Worse than We Think?” might be the gold standard on the subject of retirement security. The report concludes that 84% of Americans are falling short of reasonable retirement savings targets and, even when total net worth is considered, two-thirds are at risk of an inadequate retirement income. The total “retirement savings gap,” NIRS claims, may reach trillion. According to…

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Last night Fiona and I watched Her, a kind and sensitive film about love between a human and an artificial intelligence. I’ve embedded the trailer above in case you want to take a look.

It’s a great film on two levels. Firstly as a modern era human love story and secondly for the way it shows what artificial intelligence will bring to society. Her shows how powerful artificial intelligences will be, the range of emotions they will have and how they will evolve and explores issues of mutual dependency. All of this is played out without the usual ‘machines vs humans’ narrative which allows for a more nuanced investigation of the issues. It’s powerful stuff. I’d love to say more, but won’t for fear of ruining the film.

We will most likely have a $1,000 computer with the power of a human brain before the end of the next decade so the stuff of science fiction could be with us very soon. It’s impossible at this stage to say how it will play out, but I’m excited to see it. Will the machines have personalities? Will they have soul’s? Will they treat us well?

For better or worse we will have answers to all these questions inside the next twenty years or so.



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As Congress mulls over a temporary patch for the Highway Trust Fund, President Obama is addressing infrastructure construction with his Build America Investment Initiative. The initiative is not the ordinary big government program. Instead, the Build America Investment Initiative is intended to be a “public-private partnership” or “PPP” for the acronym-loving Washington crowd. A “public-private partnership” may sound like an oxymoron to individuals who work in the private sector. Partnership is an ancient and venerable institution. For millennia, individuals have formed partnerships to…

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In congressional testimony last week, newly minted Fed Chairman Janet Yellen ably revealed why the central bank she runs is often such an imposing barrier to economic progress. While it will be explained later in the piece why Yellen will ultimately have a successful Fed tenure in a debased, “soft bigotry of low expectations” sense, her testimony makes clear that she’ll succeed despite her impressive weakness as an economic thinker.
Responding to Sen. Tom Coburn’s skepticism about the Fed’s zero rate policies, Yellen said “The reason we have low interest rates is to deal with a very real…

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Paul Samuelson, in a long ago policy debate, noted that a cat that jumps on a hot stove once never jumps on a hot stove again; of course, it never jumps on a cold stove either. Today, Samuelson’s image applies to the long running complaint that expansionary policies are courting dangerous inflation.Apart from the years immediately following World War II, when wartime controls on wages, prices and production were lifted, the one notable period of inflation in the modern US economy came in the 1970s. CPI inflation reached double digit rates in the mid-70s and again in the late-70s and…

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In Congressional testimony this week, Federal Reserve Chair Janet Yellen pointed to several economic maladies warranting continued activism by the central bank. But what ails the U.S. economy cannot be fixed by monetary policy.
This has been an exceptionally weak recovery when gauged by the labor market. About half of the decline in the unemployment rate can be accounted for by “discouraged workers,” who have dropped out of the labor force and are no longer actively seeking jobs. For that reason, the unemployment rate is increasingly becoming a misleading gauge of the labor market.
In…

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Across his remarkably successful presidency, Ronald Reagan repeatedly made the link between the U.S. economy and U.S. international security and defense. He consistently argued that weakness at home leads to weakness abroad.
Reagan was aiming at the dismal Carter years. But he understood for all times that economic strength at home sends a powerful signal for international security overseas.
When Reagan went to Reykjavik to meet with Gorbachev, he believed the resurgent American economy would hammer the nails on the coffin of Soviet communism. And he explained to Gorbachev that if the Soviets…

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Kieran O’Neill, founder of our portfolio company Thread likes to quote Paul Graham saying ‘if you make something easier for people to do, they will do more of it’. At Thread Kieran is making it easier to buy fashion and as a result the majority of his customers report that they spend more on clothes after becoming Thread customers than they did before. Amazon’s ‘One click purchase’ is another great example of a service that gets people to buy more by making it easier.

Yesterday Twitter and Facebook made separate but similar announcments that customers will be able to buy stuff directly from Tweets and their Facebook newsfeeds. Here’s how Facebook described their ‘Buy button’:

With this feature, people on desktop or mobile can click the “Buy” call-to-action button on ads and Page posts to purchase a product directly from a business, without leaving Facebook.

The purchase will be made using credit card and presumably shipping address data stored by Facebook. It sounds like it could be as easy as buying something on Amazon.

Twitter’s announcement was that they have acquired a company called Cardspring which has payment technologies, and they have outlined how merchants will be able to interact more with customers within Tweets, although they have stopped short of announcing a ‘Buy button’ of their own. I suspect it’s just a matter of time before they do though.

All of this is similar to a ‘buy in the page’ service offered to media companies by Lyst that allows people to buy items they are reading about without clicking to a different site.  (Lyst was one of my portfolio companies when I was at DFJ.)

For me these services which take a step or two out of the process of buying stuff online represent an important evolution. Ecommerce is slated for massive growth and making it easier to buy will be one of the drivers.



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Janet Yellen has been in the spotlight for much of this past week, only perhaps removed one step from the brightest center by events yesterday in the Ukraine. On an economic whirlwind, her goal over the past few months has been to convince anyone and everyone that the economy has nearly healed, the trajectory thus brightened enough to allow the Fed to gracefully exit and take full credit for it. While that is certainly the broad stroke of what looks to be “forward guidance”, for now, there is more than a little complication between here and there - without even factoring the here and…

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Google has upped the intelligence of it’s mobile search and now indicates when sites won’t render well on a mobile device. It’s a short step from there to not putting those sites in the top search results. This comes in the year when Google expects mobile search volume to pass desktop search volume, and makes it clear to me – responsive design is the only option for startups now. That can be difficult when resources are tight but without responsive design half of search queries won’t find you. The result: your V1 website is much less likely to get the traffic you need and you will have a hard time knowing whether your idea is working.

I’m sure that many of you have been building responsive sites for some time, but we have now reached the point where for the vast majority of startups there is no sensible alternative – and that includes B2B startups.



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Most people want to help the poor, but that doesn’t mean intentions yield results. To illustrate, let’s take two Californians, Ashley and Betsy. Ashley is 18, working retail, about to go off to UCLA, and both of her parents are educated professionals living in Santa Monica. Then, there is Betsy, a 32-year old single mother from San Bernardino, who only has a high school diploma and works full-time as a waitress.
Both Ashley and Betsy are earning the minimum wage and on July 1, they received a raise, not because of their employers’ generosity or because they are doing better at their job, but…

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