BING: Is Donald Trump an Angel?

• May I Make a Recommendation, Sir?
• Under Armour’s Aggressive Sales Tactics Are a Masterclass in Shooting Yourself in the Foot
• Amazon Accuses Trump of “Unmistakable Bias”
• U.S. Stocks Overvalued, With Little Room to Grow in 2020

 TECH 

May I Make a Recommend the eBay, sir?

Google has been tampering with its algorithms to change your search results, according to an investigation by the Wall Street Journal. (Which is what I’m going to tell my wife if she ever looks at my browser history.)

For years, Google has claimed its search algorithms are objective and free from human bias. Which nobody ever really believed but we all needed it for academic research and looking up scantily clad hot bods and stuff.

The company that probably knows more about you than your own spouse refuses to divulge the specifics of its algorithm. But on its blog, the company states, “We do not use human curation to collect or arrange the results on a page.”

However, a month’s long investigation by the WSJ involving more than 100 interviews and the Journal’s own testing (just kinda sitting there googling stuff), uncovered rampant tampering behind the scenes.

The WSJ turned in a monster of a report this morning, and we don’t have time to go over it all, so here are some of the highlights (lowlights?):

• Google tweaked its algorithm to favor big companies and advertisers like eBay, Amazon, and Facebook.

• Engineers (who qualify as “human” the last time I checked) make behind-the-scene adjustments to search features like auto-complete suggestions and featured snippets.

• The company keeps a blacklist of websites that it prevents from surfacing to the top of search results. (Which I someday hope to be on.)

• Google hired independent contractors to rank and review search results.

• The company manual edits auto-complete results to offer less incendiary suggestions. (Meanwhile, Bing is happily writing Biblical prophesies.)

The claims of auto-complete tampering are probably the easiest to test. So we took Bing and Google out for a spin this morning and compared the results.

The test phrase we used was [Donald Trump is].

First up, here’s Bing’s BUCK WILD auto-complete in action:

And here’s Google’s sterilized version:

The WSJ spoke to Kevin Gibbs, who created autocomplete when he worked for Google in 2004. He says he maintained a list of words that wouldn’t be suggested by autocomplete.

Gibbs says that the unfiltered autocomplete results were “kind of horrible.” If you typed Britney Spears into the search bar it just would dump a load of body parts and sex acts on you.

According to the WSJ’s sources, that list is maintained, updated, and adhered to this day (and, as far as we know, Britney’s butt is still on there).

So obviously, this kind of tweaking and tampering has been there since the beginning. But the Journal’s investigation found that Google has really ramped up its efforts since the 2016 election, in response to increased pressure from lawmakers around the world to regulate its platform.

Google no longer has the carte blanche to do whatever it likes. From here on out it’s going to be in a three-way tug-of-war between the interests of the user, government regulation, and its many (often conflicting) business interests.

And tech prophet George Gilder says it’s only a matter of time before this entire empire of cards comes crashing down.

Not just for your favorite porn finding machine, but for Amazon, Facebook, and all the big tech companies who carved up the internet in the early 2000s and pushed out all the competition.

George is the fella who predicted the iPhone 13 years before its release. He forecast the rise of Netflix more than a decade before it existed. And he tipped off President Ronald Reagan that the microchip would change the world.

His next prophecy, which he will make in six days’ time, will transform our civilization and could make you as much as $1 million over time.

Click here to sign up for this free event and reserve your spot before it’s too late.

 BUSINESS 

Under Armour’s Aggressive Sales Tactics Are a Masterclass in Shooting Yourself in the Foot

Former executives at Under Armour say the company borrowed business from future quarters to maintain growth and cover-up slowing demand for shirts that are just way too tight. (I mean, sure I could shed a few extra pounds here and there but I feel like a god damn beach ball in this thing.)

Under Armour, which is based right here in Baltimore (go team), is currently under investigation by the FTC for shady accounting practices (never mind). But industry insiders maintain that this kind of financial monkey business, tomfoolery, and shenanigans is typical in the retail business.

In 2016, the company redirected goods intended for its own stores to discount outlet TJX. This may have been less profitable in the long run but allowed Under Armour to book instant sales and juice quarterly profits, all in the name of maintaining a 26-quarter streak of 20% sales growth. (Which is a pretty good growth streak. If it’s real.)

The company also leaned on retailers to take products early so they could be recorded in an earlier quarter, which just made it even harder to meet their targets next quarter. (We call these Peter/Paul economics.)

“Problem is once this starts it doesn’t seem to stop,” a sales executive told the WSJ. “We found ourselves pulling forward every quarter.”

When retailers refused to take their tiny tight products early, UA sweetened the deal by offering stock at a deep discount. (Ohhh. I understand now. They’re not criminals. They’re just idiots.)

The company’s kick-the-can economics caught up with it at the start of 2017, when sales growth dropped below 20% and Under Armour’s (UAA) stock tumbled 23% in a single day. Since its market high of $51.30 per share in July of 2015, the company’s stock has plummeted to just $17.

 POLITICS 

Amazon Accuses Trump of “Unmistakable Bias”

Amazon accused the Trump administration of “unmistakable” bias for awarding a $10 billion contract to its rival Microsoft. (And as it is known, all things must belong to great and powerful Amazon.)

Jeff Bingbong’s Everything Store said it would appeal the decision on the grounds that President Trump manipulated the process to harm Amazon founder Jeff Bezos (or as the President of the United States calls him: Jeff Bozo).

The JEDI (yes, really) cloud-computing contract was awarded to Microsoft last month after the president (who, for the record, definitely does not like Jeff Bezos) intervened at the last moment in the negotiating process.

“We believe it’s critical for our country that the government and its elected leaders administer procurements objectively and in a manner that is free from political influence,” said a spokesperson for Amazon. (Won’t someone please protect the poor little second-biggest company in the world?)

“Numerous aspects of the JEDI evaluation process contained clear deficiencies, errors, and unmistakable bias — and it’s important that these matters be examined and rectified.”

Amazon (a website where you can buy expired baby food on discount) is at the top of the cloud computing game and many expected the company to walk away with this contract. But according to a new book by a former Pentagon official, the president wanted to “screw” Amazon by denying it the JEDI contract.

As the winner of the $10 billion JEDI contract, Microsoft will be in charge of unifying all of the Pentagon’s disparate networks and training the younglings how to use a lightsaber.

I question the wisdom of giving babies deadly weapons, blindfolding them, and having them stand two feet away from each other.

ONE LAST THING

U.S. Stocks Overvalued, With Little Room to Grow in 2020

Before you go off to enjoy your weekend, I have one last spoonful of doom and gloom to force-feed you.

Global forecasting firm Oxford Economics says that U.S. stocks are massively overvalued.

According to these little rays of sunshine, we’re looking at returns of peanuts percent on U.S. stocks in 2020, or a loss of 35% or more if there’s a recession.

“The twin pressures of weak pricing power and low productivity imply a bleak outlook for margins – warning signs of a market that seems to have got ahead of itself,” says Oxford Economics.

The team at Oxford Economics is pegging the expected return for U.S. stocks next year at a measly 1%, and nothing for bonds.

And unfortunately, that’s the best-case scenario.

According to Innes McFee, the managing director of macro and investor services (and, judging by his name, a flighty wood elf), U.S. stocks are overvalued by almost 35%.

This means if we enter a recession period next year (which, as we discussed yesterday, is very likely) a correction could tank those stocks by 35% or more.

Innes also pointed out that the central banks typically cut interest rates by 300 basis points when we enter a recession.

Which, considering the average interest-rate level is currently sitting at 75 basis points, won’t be happening.

“There’s not a lot of room to maneuver,” said Innes stating the obvious.

MARKET MOVEMENTS

Closing Data for 11/14/19

• U.S. retail sales rose in October, signaling solid consumer spending.

• Shareholders approve New Media Investment Group’s acquisition of Gannett, creating the largest newspaper publisher in the U.S.

• The U.S. Commerce Chief says that U.S.-China trade talks will continue today to secure a phase one trade deal.

Cheers,

Shane Ormond
Editor, One Last Thing

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