Starting to lose count of these fucking recessions since I last had a real job

benfell

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Gig economy (neoliberal wet dream)

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When the dot-com era was going bust, I had a sense that I knew what was going on, at least at the company, Linuxcare, I worked for.

Linuxcare, a technology service company focusing on what is now called “free software,” had made a point of being Linux distribution-neutral: It didn’t matter if you were working with Red Hat, Suse, or something else. We were aiming to serve.

But all of a sudden, a merger was announced with Turbolinux, a poor quality distribution from Asia. The rationale for this merger was opaque, to say the least. It obviously compromised our distribution-neutrality and no one seemed to have even the beginning of an idea what Turbolinux would add to Linuxcare, except, perhaps—I’m not sure that anyone was clear on this either—cash, which Linuxcare had been burning. It was a merger that didn’t make any sense.

And it fell through. Then the layoffs began.

Linuxcare wasn’t laying off people like me who were marginally talented in the Linux space. Instead, Linuxcare was laying off its most talented (read, expensive) people. This really didn’t make any sense and so I jumped ship, unfortunately to another venture capital-funded startup that soon after laid off its entire information technology department, including me. That was in 2001. Though I returned to school and finished a Bachelor’s degree, a Master’s degree, and a Ph.D., I haven’t recovered since.[1] (Linuxcare had another layoff shortly after I changed jobs that might well have included me; the company has been defunct for most of the time since.)

So I’m watching Uber and Lyft go through their gyrations. I don’t have near the quality of job I had then:[2] I’m signed up to drive for both but actually drive almost exclusively for Uber these days. I don’t have near the sense of knowing what’s going on that I had with Linuxcare.

And I’m every bit as vulnerable now as I was then, if not more so.

When asked what he would say to someone about to lose their job or wasn’t seeing their pay increase, [Jerome] Powell said: “I would say that we fully understand and appreciate how painful inflation is, and that we have the tools and the resolve to get it down to 2%, and that we’re going to do that.[3]

It isn’t Jerome Powell who’s worried about losing his job.

In fact, if the Fed does all it is pledging to do, with higher rates and a shrinking balance sheet, the de facto tightening will come to around 400 basis points. This compares to 180 basis points in 2018 and 315 basis points for the entire 2015-2018 cycle—85 basis points more this time and all lumped into one year! This compares to 175 basis points of rate hikes in 1999-2000 (ahead of that recession), 300 basis points in 1994, and 313 basis points in 1988-89 (ahead of that recession). You have to go back to the early 1980s to see the last time the Fed got so aggressive in such a short timeframe.[4]

I am starting to see that that “‘seismic shift’ in investor sentiment” that Uber Chief Executive Officer Dara Khosrowshahi refers to[5] might indeed be serious and that his reaction to it might not be so outsized at all.

Linuxcare’s business plan had never made much sense to me. Looking back, I think the idea was mostly to amass such a collection of talent and resources that it had to be useful somehow. And I don’t think anyone can question that it did indeed amass such a collection.

I would take Linuxcare’s business plan over Uber’s in a heartbeat. Uber doesn’t even have what I would call a business plan.[6]

Uber’s operations burned $445 million in 2021, but new term loans raised enough money to increase its end of year cash position by $400 million, to $7.8 billion. . . . Lyft’s operations remain cash negative, burning $100 million in 2021.[7]

Hubert Horan doesn’t say here how much cash Lyft has on hand.[8] One question will be how deeply these companies will be willing to dip into their cash reserves to keep afloat over what time period.

Another question will be of the impact a very deep recession, such as, if I understand David Rosenberg correctly,[9] we may very well be about to have, will have on my earnings.

Janet H. Cho, “Powell Warns Soft Landing Could Be ‘Quite Challenging,’” Barron’s, May 12, 2022, https://www.barrons.com/articles/jerome-powell-confirmed-to-second-term-as-fed-chair-51652381402

Megumi Fujikawa and Eliot Brown, “SoftBank Lost $13.2 Billion on Tech Investments Amid Selloff,” Wall Street Journal, May 12, 2022, https://www.wsj.com/articles/softbank-reports-13-billion-annual-loss-hit-by-tech-share-slump-11652339726

Jacky Wong, “SoftBank’s Tech Boom Goes Bust—Again,” Wall Street Journal, May 12, 2022, https://www.wsj.com/articles/softbanks-tech-boom-goes-bustagain-11652357244

Max Chafkin, “Tech Companies Coddled Their Employees. Now They’re Firing Them,” Bloomberg, May 13, 2022, https://www.bloomberg.com/news/newsletters/2022-05-13/tech-companies-coddled-their-employees-now-they-re-firing-them

David Rosenberg, “The Bear Market Is Already In Its Third Inning. Stay Calm and Defensive,” Barron’s, May 13, 2022, https://www.barrons.com/articles/the-bear-market-is-already-in-its-third-inning-stay-calm-and-defensive-51652454842

Ukraine

Christian Esch, Susanne Koelbl, and Fritz Schaap, “Putin’s Disaster and What Could Happen Next,” Spiegel, May 6, 2022, https://www.spiegel.de/international/world/putin-s-disaster-and-what-could-happen-next-a-e8c89bfa-b7a3-4e32-908a-7642a301eda6

Anthony Faiola, “How millions of Russians are tearing holes in the Digital Iron Curtain,” Washington Post, May 6, 2022, https://www.washingtonpost.com/world/2022/05/06/russia-vpn-putin-censorship-disinformation/

Thomas Latschan, “Mysterious series of deaths among Russian oligarchs,” Deutschewelle, May 7, 2022, https://www.dw.com/en/mysterious-series-of-deaths-among-russian-oligarchs/a-61719107

Jamie Seidel, “Russia-Ukraine War: Putin’s Plan B is failing as Russian troops ‘pushed out’ of Donbas,” New Zealand Herald, May 7, 2022, https://www.nzherald.co.nz/world/russia-ukraine-war-putins-plan-b-is-failing-as-russian-troops-pushed-out-of-donbas/H73PJNRK3TJDUIN7YUCMI4DNM4/

Associated Press, “Russia marks WWII victory overshadowed by Ukraine,” May 9, 2022, https://apnews.com/article/russia-ukraine-europe-world-war-ii-2d4f0f3a1e59cdad92b26c521ed08669

Max Boot, “Putin is trapped in a quagmire and doesn’t know how to get out,” Washington Post, May 9, 2022, https://www.washingtonpost.com/opinions/2022/05/09/putin-victory-day-russia-ukraine-quagmire/

Julia Ioffe, “About a Boy: The Roots of Putin’s Evil,” Puck News, May 10, 2022, https://puck.news/about-a-boy-the-roots-of-putins-evil/

Matthew Lee, “US, Western Europe fret over uncertain Ukraine war endgame,” Associated Press, May 11, 2022, https://apnews.com/article/russia-ukraine-europe-western-nato-a990adcad47a34764d64b03bdcd69f7b

Dominic Nicholls, Joe Barnes, and JohnJo Devlin, “Finland and Sweden joining Nato shows just how terribly Vladimir Putin has miscalculated,” Telegraph, May 11, 2022, https://www.telegraph.co.uk/world-news/2022/05/11/finland-sweden-joining-nato-shows-just-terribly-vladimir-putin/

Sune Engel Rasmussen, “Finland Says It Will Apply to Join NATO in Response to Russia’s Ukraine Invasion,” Wall Street Journal, May 12, 2022, https://www.wsj.com/articles/finlands-leaders-announce-intention-to-apply-for-nato-membership-11652340796

Pjotr Sauer, “‘They were furious’: the Russian soldiers refusing to fight in Ukraine,” Guardian, May 12, 2022, https://www.theguardian.com/world/2022/may/12/they-were-furious-the-russian-soldiers-refusing-to-fight-in-ukraine

Mark Trevelyan, “Russia says Finnish entry to NATO poses threat to which it will respond,” Reuters, May 12, 2022, https://www.reuters.com/world/europe/kremlin-says-finland-joining-nato-is-definitely-threat-russia-2022-05-12/

  1. [1]David Benfell, “About my job hunt,” Not Housebroken, n.d., https://disunitedstates.org/about-my-job-hunt/↩
  2. [2]David Benfell, “About my job hunt,” Not Housebroken, n.d., https://disunitedstates.org/about-my-job-hunt/↩
  3. [3]Janet H. Cho, “Powell Warns Soft Landing Could Be ‘Quite Challenging,’” Barron’s, May 12, 2022, https://www.barrons.com/articles/jerome-powell-confirmed-to-second-term-as-fed-chair-51652381402↩
  4. [4]David Rosenberg, “The Bear Market Is Already In Its Third Inning. Stay Calm and Defensive,” Barron’s, May 13, 2022, https://www.barrons.com/articles/the-bear-market-is-already-in-its-third-inning-stay-calm-and-defensive-51652454842↩
  5. [5]Reuters, “Uber to cut costs, slow down hiring, CEO tells staff,” May 9, 2022, https://www.reuters.com/business/autos-transportation/uber-cut-costs-slow-down-hiring-ceo-tells-staff-cnbc-2022-05-09/↩
  6. [6]David Benfell, “This is not a business plan,” Not Housebroken, May 10, 2022, https://disunitedstates.org/2021/06/20/this-is-not-a-business-plan/↩
  7. [7]Hubert Horan, “Can Uber Ever Deliver? Part Twenty-Nine: Despite Massive Price Increases Uber Losses Top $31 Billion,” Naked Capitalism, February 11, 2022, https://www.nakedcapitalism.com/2022/02/hubert-horan-can-uber-ever-deliver-part-twenty-nine-despite-massive-price-increases-uber-losses-top-31-billion.html↩
  8. [8]Hubert Horan, “Can Uber Ever Deliver? Part Twenty-Nine: Despite Massive Price Increases Uber Losses Top $31 Billion,” Naked Capitalism, February 11, 2022, https://www.nakedcapitalism.com/2022/02/hubert-horan-can-uber-ever-deliver-part-twenty-nine-despite-massive-price-increases-uber-losses-top-31-billion.html↩
  9. [9]David Rosenberg, “The Bear Market Is Already In Its Third Inning. Stay Calm and Defensive,” Barron’s, May 13, 2022, https://www.barrons.com/articles/the-bear-market-is-already-in-its-third-inning-stay-calm-and-defensive-51652454842↩

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