Lessons Learned, Maybe

July 26, 2024
Leyendecker Executive Search

Welcome to This Week’s Leyendecker View

Was there anything more exciting in life than seeking answers?
Isaac Asimov

THINKING OUT LOUD

Lessons Learned, Maybe

In the last week or so, we had three unrelated events that are, in their significance, related. 

AT&T announced that hackers stole text and call log records (time stamps and phone numbers) of almost every single AT&T customer from a six-month period. While no text message or call content was stolen, it seems only a matter of time.

Google decided it wants to buy cybersecurity software firm Wiz, a company that was founded only four years ago, for $23 billion. WTF? From $0 to $23 billion in four years? What’s going on here? Wiz even turned down their offer.

And then came the big “oops” last Friday. One CrowdStrike software upgrade gone wrong shut down all manner of commerce, including air travel.

Just how fragile is our technology world, which is really our world? Are there lessons to learn here? Let’s ruminate.

For one, today’s bad guys are working overtime to be bad. Have you seen the movie, The Beekeeper? If not, I suggest you do.

There are trillions of dollars out there to steal. That’s a really good incentive for bad guys.

The bad guys are constantly playing offense. They can hack for hours upon hours, far beyond the eight-hour workday, and far into the night. Whereas the good guys trying to play defense are likely working an eight-hour workday and then living their lives. The bad guys are way ahead of the good guys, and this likely won’t change.

Not long ago, pretty much all crooks could do was rob a local bank. But today, the bad guys have access to the whole world and can steal and create chaos from anywhere, with just a laptop.

Wiz’s cybersecurity software must be some kind of wiz if, in just four years, Google was willing to pay $23 billion for it. Its 2023 revenue was $350 million. Now that’s some kind of multiple Google was willing to pay.

So what does Google know that we don’t know, that Washington doesn’t know, that the largest companies in the world don’t know?

AT&T doesn’t have $23 billion to protect itself from hackers. So it looks like they and many companies will soon be paying Wiz hundreds of millions or more to protect themselves…to protect YOU!

And, of course, those costs will get passed down to you.  More inflation, anyone?

AT&T got hacked. Google and Wiz see billions in profit potential from cybersecurity. And then there was “the glitch” that brought much of global commerce to its knees.

There seems to be one very important lesson to learn from the CrowdStrike outage—

The larger and more complex any system gets, the more systemic risk builds.

This should be a foregone conclusion.

So what’s the fix to all this?

Is it time to backtrack to the analog world? That might be a nice idea, but the online/cloud-based—and now AI-powered—train left the station a long time ago.

A few decades ago, publicly-held conglomerate companies used to practice what we may call an “ebb and flow” process. When a company became too centralized, bureaucracy would thwart productivity, efficiency, and adaptability.  Time to decentralize. But the reverse was also true. Once a company became too decentralized, operations would become disjointed, and the company would lose the productivity and financial benefits of scale as a result. Time to centralize.

Ebb and flow is how many things in the world work naturally. For this context, let’s call it “economic homeostasis.”

This approach generally works, so long as people can identify the moment when an ebb must flow or a flow must ebb. The problem is that people in leadership positions often miss the signals that it’s time to decentralize or centralize. They can’t recognize it because they are too buried in the day-to-day details of their professional lives. As the old saying goes, they can’t see the forest for the trees. 

As I like to remind everyone, old sayings get old for a reason—they stand the test of time

Maybe last week’s events are exposing the systemic vulnerabilities about which we need to know.

Technology may be too centralized—too concentrated in the hands of too few. Maybe it is time to break up the technology behemoths that control our world, as the scope and scale of their technologies might be making our world more fragile.

Now should we also apply this thinking to our current situation in government, too?

THE ECONOMIC VIEW

The US is about to set a record!
The largest budget deficit in history

UPS earnings release suggests slower economy
Ford’s earnings release suggests it too
Other automakers stumble
But GDP growth exceeded expectations

Home prices hit another record
Affordability gets tougher.

Americans are on shaky ground
Many 60 year olds are in financial peril

INFLATION, DEFLATION OR BOTH?

Not all supply chains have been fixed.
According to engine maker Rolls-Royce

There’s worker unrest in the chips world
Which could make chips more expensive.

“Upflation” is the newest retail trend
As brands look for ways to raise prices.

THE LABOR VIEW

The post-Covid job boom is over
The world is getting back to ordinary.

More CFOs are getting CEO jobs
Are challenging financial conditions why?

The job market shrinks for college grads
Another reason to cancel student debts, right?

MEANWHILE IN EUROPE

Sabotage hits French rail lines as Olympics begin
The world is tense, to say the least.

A spate of ATM bombings
Is plaguing Germany.
German business sentiment darkens

Investing in the UK is a joke.
Bureaucrats roadblock everything
Public services are also broken
UK blows $900MM on four people

THE GLOBAL GAME

Japan’s population is collapsing
Maybe that’s good, if AI destroys jobs.

World Economic Forum has a toxic culture
What does that say about its leadership?

Argentina’s economy is growing again
Good job, Milei!

THE UKRAINE FIRE

Russia has an inflation problem
Sanctions are gradually squeezing them.

Russia uses malware against Ukraine.
To mess up their infrastructure

Ukrainian drones hit Russian airfield
Drones, the new war must-have.

THE GAZA FIRE

Netanyahu addresses US Congress
Complete victory is his goal.

Israel’s next war.
Fighting Hezbollah won’t be easy

Israel is illegally occupying Gaza
Says we’re-in-charge-of-everyone UN.

THE SLIPPERY SLOPE

Russia and China fly together
In joint maneuvers near Alaska
Chinese warship arrives in St. Petersburg

China is stockpiling commodities
What are they preparing for?

We have three years to prepare for war.
Says UK military chief

FINANCE

The IPO market gains momentum
Investment banking is back, baby!

The tangled world of PE debt
Does it present a systemic risk?
Private equity gets creative
What will inspire more liquidity events?

Greatest bubble is nearing its peak
Suggests successful Black Swan predictor.

REAL ESTATE

Homebuilder stocks are hot
In anticipation of a rate cut.
Get your $1MM starter home here

Office building debt is toxic
Who wants to own any of it?

What’s the best city for renters?
Pack your bags for Charleston, SC.

TECHNOLOGY

CrowdStrike crash
Will cost insurers billions
CrowdStrike warns of hacking threat
Amid ongoing outage.

Wiz turns down Google’s giant offer
They want to go public instead.

Samsung ups its wearables game
Can they beat the Apple Watch?
iPhone keeps losing market share in China

THE CHAT ON AI

Zuckerberg announces newest Llama AI
But it comes with no guardrails
Will AI be friend or foe to humanity?

OpenAI wants to replace Google
The AI gloves are off, people be damned!

AI is taking away video gaming jobs
More future Starbucks workers!!!

We’re quickly running out of data
To train AI.

OUR GOOD FRIEND, FAILURE

MEI: merit, excellence and intelligence
To counter DEI: diversity, equity, and inclusion.

UBI is tech’s solution to AI killing jobs.
But recent study says it’s no panacea

Silicon Valley dude embraces failure
My kind of guy!

THE NEXT NORMAL

Why Americans aren’t having babies
They’re too expensive and too much work.

UK climate activists jailed
They were a public nuisance.

The future belongs to American companies.
But maybe not to American workers

THE WAR ON CARBON

The airport experience is no fun.
Climate protesters may make it worse

Is global cooling coming?
The sun is losing mass

Leonardo DiCaprio-backed green company
May have been a giant scam

THE ENERGY TRANSITION

Global electricity demand to soar
Where will this power come from?

CO2 makes great butter!
You can’t taste the difference.

Next-gen nuclear keeps improving
Will it ever get Washington’s support?
Korea improves its nuclear development skills

THE EV DREAM—OR DELUSION

EVs are cheaper than ever
Especially used EVs
Mercedes walks back EV commitment
GM stalls their EV effort

Tesla’s profits fall again
Is Tesla really a robotics company?
Elon pivots quickly.

THE CHINA SYNDROME

China’s malaise dents luxury markets
Is peak luxury behind us?

China needs to fix their finances.
These charts show why

China’s economic growth slows
Official calls for “provocative stimulus”
They cut interest rates to stimulate economy

THE WASHING-TONE

Are companies using AI to juice prices?
The FTC wants to know.

US plans more China sanctions
It’s strictly business,” right?

Is Microsoft gouging consumers?
The FTC thinks maybe so

THE ELECTION DISTRACTION

How Kamala Harris views policy
Biden, the sequel and what else?
As the money pours in for her
Is she intellectually capable?
Can she even socialize, let alone with global leaders?
Does it matter?
She had record staff turnover as VP

Zuckerberg calls Trump a “badass”
Did you hear that, Putin, Xi, and Tehran?

“No tax on tips!”
Is a big Trump pitch.

MAKING A BETTER YOU

A 9-minute warm up
That’s better than stretching.

Night owls are smarter than early birds
What????

RIP, Dr. Ruth.
Her tips for a happier life

HOW ABOUT A BREAK

Indigenous Amazon tribe caught on camera at beach
Reminds me of the film, The Emerald Forest.

Buying a car sucks
A former salesman on how to avoid deception.

Those bear-shaped bottles
Helped honey go mainstream

PLANNING VACATION?

America’s next great wine region
Is in Northern Virginia.

Four magical places in France
That few travelers know about.

How about an English lighthouse holiday?
Sounds pretty cool.

MUSIC BOX

World music from…
FM Trölli, Siglufjörður, Iceland.
Cool and groovy.

Morning Pirate
Scott Ballew remembers fathers past.
Lyrics can be poetry, ya know.

CASTING AROUND THE PODS

AI is worse than climate change
Claims ex-Google exec on The Diary of a CEO.

Great, how can anyone be happy these days?

Can happiness stave off dementia?
The Happiness Lab ponders.

VIDEOS OF THE WEEK

It’s creating a box office storm.
The Twisters remake gets traction.

Deadpool & Wolverine trailer.
Let’s f****cking go!

The Conclave trailer.
Big stars play out papal intrigue.

FROM THE HEADHUNTER’S KITCHEN

Tomato, basil and prosciutto pasta
Bring it on!

No-bake lemon cheesecake
Too easy. Too good.

America’s 5 best sandwiches
Oh man oh man oh man!

THE RANDOMS

We have a bit more than three months before the election. You think you’ve got election fatigue now?

China wants to be a global leader. They have brokered a deal for Gaza’s next political leadership. They’ve got their own peace plan for Ukraine. Ukraine’s foreign minister just visited China in search of help. It’s a shrewd strategy for China to grow its geopolitical influence. What’s your play, Washington?

History buffs will remember that, at the end of WWII, General George Patton wanted to invade Russia and defeat the socialists. And that during the Korean War, General Douglas McArthur wanted to invade China to defeat the Communists. Today, Russia and China are stronger adversaries and global meddlers. So why isn’t it obvious that Iran’s current rulers need to be defeated, or else wars will continue in the Middle East and maybe beyond?

Since most people think the Federal Reserve kept interest rates too low for too long, then why do most people now want them to cut rates quickly? Wouldn’t the Fed’s right move be to leave rates higher for longer in order to soak up the investment and consumption excesses that lower-for-longer rates created?

Does the climate change narrative make insuring homes more expensive? What insurance company is going to say they don’t believe in climate change?

A cubic millimeter of the human brain has been mapped. “The 3D map covers a volume of about one cubic millimeter, one-millionth of a whole brain, and contains roughly 57,000 cells and 150 million synapses—the connections between neurons,” Nature reports. “It incorporates a colossal 1.4 petabytes of data.” Good luck, AI!!!

Why do we need to sleep? Plants don’t sleep, or do they?

The story about the dwindling job market for college grads reminds me…

Do we have a minimum wage problem, or do we have a problem not creating enough jobs that pay more than the minimum wage?

If you can’t be good, then just try to be better.

IN CASE YOU MISSED IT

The Longer the Party Lasts…
July 19, 2024

Why We Fall for “The Narrative”
July 12, 2024

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