March 08, 2020

A Year of Million Robotaxis and a ‘V for Vendetta’​ Moment Decade!



First Published in March, 2020 on LI

Welcome to a new year and a new decade!

I know it’s a bit late. We are already half way through the third month of the new decade and year. I was busy with few things. There are few other things that need my focus more and I have been cutting down on my time on Linkedin due to that.

I started writing on Linkedin last year and a half , to share whatever I have learnt- whether its in Machine Learning, “AI”, Data Science or on normal economy and the things happening around the world. This latter part took a bit prominence last few months as I believed the way I am seeing things it’s imperative for me to speak out if it can help that normal person who has done no wrong but would be the most impacted in the end.

We finished a decade. While there are lot of experiences I have had last decade which probably one day would see the light of a book, there are few things I have always believed in, imbibed and learnt that has made me how I think and see things around me. These principles define my mental models and approach to seeing data points around me:

These are the same principles which have helped me in seeing things on WeWork or Uber and similar such tech news of last one year.

Using the above principles, I felt compelled to write on things the way I am seeing it now. I know most of the people won’t agree to most of it as has been the case in the past. Thats ok. Most of what I write is contrarian and it’s difficult to agree to something where the majority consensus is not there. But I still wish and urge you to read till the end. As usual I am very confident on my conviction and feel most of the things below will come true. If that happens, I want you to be prepared.

Lets start off with the most pressing topic of the moment- Coronavirus:

Since Jan’20 when the news first broke out of this virus impacting China, especially Wuhan area, I have been quietly watching and reading news and data points coming around this. Lot of ppl said many things- it’s not worse than the common cold as 100s of thousands of deaths happen every year due to normal flu, self proclaimed “world renown” virologists claiming it’s not deadly at all:



I read and watched all the news coming out on media from the govts. After 2 months I decided to break my silence as I felt it had become obligatory for me to write what I feel is the correct thing for normal public to know:


As usual I got a few unfollows as most things which are contrarian and different from what the majority or consensus is saying is seldom liked by many.

Since then, we now know how “pandemic” the situation has become.



In fact, as I mentioned that the “physical hardware” of the global economy in the form of supply chain would be broken with this virus spread, we just got Feb PMI numbers from China.


It was an astonishing 35.7. That is an all time low even beating the 2008 financial crisis, when it was 38.


This was exactly in line of my Mental Models when I wrote the “physical hardware” of Supply Chain is going to get broken.

Not only that, as I feared and suggested ppl to keep a supply of food, the hoarding and rush to get food from stores has apparently started in the States.


So what’s going forward?

I believe the spread is going to worsen in the States. Based on data and actions of ppl on that data, I believe US healthcare system is not at all equipped to handle such an outbreak.

Many hospitals are not even permitted to test Cornonavirus as CDC and FDA do not permit them to do all tests. And if you can’t test patients, you risk spreading the infection even more. This is the main reason why US has still not yet reported huge numbers of infected patients- you can’t get infection numbers if you don’t test a lot!

Don’t believe me? Hear it out from one of the premier docs of one of the premier medical care in America.


This is exactly what I also heard from my doctor during a conversation at Kaiser when I went in for the common cold a few days ago. Not that I needed the test, but since I brought up such topic with her, it transpired they don’t have testing ability for that. Even a hospital like Kaiser, one of the premier medicare facility in California does not have the permit to test patients for Coronovirus.

Expect the real count of Infected Patients for Coronavirus to jump big in the coming weeks.

However, the biggest risk to business from the Black Swan of Coronavirus is not just the airlines.

It’s the sharing economy.

Uber, Lyft, Airbnb. With work from home for many offices and events, concerts, large social gathering being cancelled all over the world, you won’t use Uber, Lyft or Airbnb that much.

The fear and paranoia for traveling is going to remain unfortunately for many quarters going forward even if this situation improves. That makes Airbnb and airlines/hotels industry strongly hit.

I strongly doubt Airbnb would go IPO this year as they claimed last year. That is unfortunate for many employees who have got their all options vested but no liquidity event now.

These companies which are already vulnerable for not having a business model which can produce some cash for the last 10 years are going to be hit big when the actual revenues fall now.

Last year or so, I started writing about the global economy as for me it was the real test bed of using your ability to see myriads of data floating around you and finding signal amongst the noise. It’s Doing Data Science in Wild.

Sometime last year, I also wrote a post on how everyone needs to understand Demographics and Interest Rates- two very important things which impact all our lives.


If you understand Demographics, you will understand most of the things happening around you. This is what spurs demand, brings about change in attitude of generation and causes material impact in the economy and real physical world.

So I spent some time in understanding that last year luckily.

After the World War II, we had a generation which happened to become the richest generation of all times.

Baby Boomers, those born between 1946 and 1964, refers to a member of the demographically large generation born between the end of WWII and the mid-1960s.

Baby Boomer phenomenon most likely involved a combination of factors: people wanting to start the families that they put off during World War II and the Great Depression, and a sense of confidence that the coming era would be safe and prosperous. Indeed, the late 1940s and 1950s generally saw increases in wages, thriving businesses, and an increase in the variety and quantity of products for consumers.

An average Boomer was born around 1961 and hit working age in 1979. The first of the cohort began working in 1964.

The average Boomer turned 30 sometime in early 90s. That is around the time companies started putting ppl on their pension and 401k plans led by Wall Street. Result? An equity bubble


Then late 2000s/early 2001, many Boomers got hit on the wrong side by the same Wall St during the dot com bubble burst and lost a huge amount of their wealth. This led to some scare amongst many Boomers as an average Baby Boomer turned 50.

The Birth of Housing Bubble…

The resulting dot com scare also brought chills to Alan Greenspan who was then heading the Federal Reserve. He felt the system might go to deflation and to spur inflation the rates were cut drastically. The rates were kept low for 3+ years (below).

This led to Housing Bubble as it became cheaper to re-finance or take out a mortgage with low rates. Boomers who were “wronged” on the equity market in dot com and with growing age felt the final safe haven for their decades of work is the real estate.


Low rates, aging Baby Boomer, led to money piling into real estate and we got our Housing Bubble in mid 2000s. Wall St. greed with their shady derivatives products just made it a global gangrene.

It all collapsed in 2008. But to prevent the whole global financial system from breaking, Federal Reserve printed trillions of dollars of money in the form of Quantitative Easing (QE) and also ended up with rates to Zero for 6 years.

Zero Interest Rates Policy (ZIRP) and QE was the drug which led to binge borrowing and huge asset inflation of last 10 years. Last decade was the decade of inflating a bubble in all assets in economy to prevent the previous bubble crashing the global financial system.

Pension funds which needs a yearly ROI ~ 7-8% for them to be able to meet their liabilities, started taking more risk since the low interest rate environment wasn’t enough to get the required yield. Money started pouring from big pension and Sovereign Wealth Funds all over the world into private equity and Corporate Debt, which nearly doubled.


Welcome to the Silicon Valley VC bubble of last decade!

Private Equity ended up being the big beneficiary of the massive money at Pension and Sovereign Funds disposal. VC ponzi investments started cropping up. Invest in startups seeking the “Greater Fool” who would put money at even a higher ridiculous valuation. That Greater Fool we all know ended up being Softbank while all the early stage VCs/angels who ran their own ponzi investment thesis bailing out rich while dumping their stake on Softbank or to the normal public via IPO.

I used the same framework to call this out months before Softbank’s “reputation” as an astute tech investor started dwindling after WeWork fiasco.


Since then we know how many startups Wag, Zume, OYO all backed by Softbank at a lofty valuation has seen the air blowing out.


But the biggest sad part of the last decade of bubble in asset class is that it made rich richer and poor poorer. Quantitative Easing, ZIRP policy crushed the savings. Interest on US Treasury bonds for 10 yr period is just now fallen to 0.5%. Dec 2019, it was 1.9%. In just mere 2 months the Bond market is screaming that the world economy is heading for deflation, a very big one.


However, if you put your money in a 10yr US govt. bond, you get sub 1%. But credit card interest rates are still above 15%. This is the rip off scam normal public has been made to undergo.

Poor is taking out more credit with even more interest while rich just see their stock prices driven by QE bubble soar to record highs.


This whole thing has led to the latent angst amongst the young generation. Millennials, Gen Z are saddled with tuition debt, they don’t own much assets as housing is all time high, stocks are record high, there is not much job security left. Every other day, companies unceremoniously lay off ppl. On top of that, this generation has seen their grown up stage of life during the time of social media, on demand economy where everything is at a press of a button. Taxi, food, medicine anything is now at a press of a button on your mobile phone. This leads to developing a culture of impatience.

A V for Vendetta Moment…

And the latent angst this new generation is now favoring socialistic ideas of Bernie Sanders or Elizabeth Warren as they resonate with them. Young generation has huge grouse with the system. If you haven’t noticed it, this is the underlying thread why last 2-3 years there are protests and revolts happening all over the world. Yellow Vests in France, Netherlands, Egypt, UK, Hong Kong.

This is my biggest fear, something I mentioned months ago. I believe this decade would bring us a V for Vendetta Moment for the world, especially the developed countries. When the system collapses, the herd would rise. And it will revolt, protest. The huge inequality being created by the Central Banks policies of last decade coupled with the huge changing demographics in this technology age would give in. Social chaos to follow.


I believe even a country like China would lose control over its citizens for the first time in history ever.

This generation would unite together against the system. This will be this decade's V for Vendetta moment, my biggest worry.


Well, I have written a lot about Tesla last 1.5 year. I would encourage you to read my article on this written sometime in summer of 2018.

So I am going to keep thoughts on this topic pretty crisp here. If there is one thing I am willing to bet my entire worth (no matter how small) its my conviction on this story which has been un-flinched no matter what narrative is played out to public. It is also my strongest test of the principles I use above. So to keep things brief on this topic:

Last year sometime in April, the “genius” , Elon Musk gave a 2 hour investor presentation on Autonomy Day where few very bold things were claimed.

Immediately after the presentation, a private meeting of bankers and investors was carried out where Tesla raised $2.35B on the pretext of having a million robo-taxis plying on city streets by 2020. These robo-taxis would work Uber-esque (they even showed a fake mockup design of the app) and would make every Tesla owner 30k/yr as income. The whole private meeting with investors was based on this only- Tesla launching a Million robo-taxis and one-upping Uber/Lyft businesses by 2020.

Not only that, the company also made a claim that they have built the best AI chip, better than Nvidia and Intel and that every Tesla which is being shipped since May 2019 has that hardware.

Its 2020, and the owners in China are now furious as their Chinese made Tesla still do not have those chips.

THAT WAS A GIANT LIE!!

The day it was announced I wrote here it’s a fraud and big lie. There won’t be any robo-taxis in 2020, nor in 2021, nor even the next few years. At least not from Tesla.

Raising money on the pretext of a lie is called as fraud.

Pure and simple. However when the govt. agencies are all quiet and letting someone defraud and cheat public, investors, the fraud ends up becoming bigger and bigger.

The CEO of the company tells gullible public:

All of this doesn't exist and is a fraud.

This is how they are trying to sell hundreds and thousands of defective cars onto gullible public, lying to them and cheating them on the capabilities of the car.

But again, when govt. agencies are quiet, you can only wait.

But Stock Price Bro…

As I have always said, this story is not about building any cars, or “saving any planet”. This story is about selling narratives for stock price.

The actual narrative:

The narrative which is being given around Europe, China, have patience and watch.

When you are kicking the can down the road every time, there comes a time when the road ends and there is no kicking left anymore.

This is not that these countries are not buying EVs. This is that they are not buying Tesla anymore. As I said, the narrative which is being given to public is totally different from the actual reality. Thousands of defective cars have been dumped on gullible public. Completely negligent service and abusing the customers is hidden from the narrative.

All this piles up.

You can “Let the Fires Burn” as Reid Hoffman recommends in his podcast to ppl, but that fraudulent piece of advice works when he was running a business in the 90s with no word of mouth, competition around.

But stock price went up like a bubble?

Every bubble has its poster child

My conviction on this is same, though even more firm.

The stock is headed to zero and the Jesus of 21st century ending up with multiple fraud charges.

There will come a day, when the govt. agencies won’t be able to cover up on this.

The EV Fad

Over the last one year or so, I have stuck to couple of other very contrarian thoughts.




This year is already turning out to be very eventful, but it’s this decade which would shape the world for years to come.

If kindness has never been a virtue for you, now is a good time to start practising it.

Be Kind and Safe!

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