Facebook’s Recent Big Hack Was Reportedly Caused by Spammers

Facebook’s recent hack that affected around 30 million people may have been caused by spammers, rather than entities tied to certain nation states.

That’s according to a report on Thursday by The Wall Street Journal citing anonymous sources familiar with the social networking giant’s investigation of the hack. The report said that the group responsible for the attack on Facebook’s software infrastructure was a collection of spammers that Facebook security members have been following for an unspecified amount of time.

The spammers posed as an unnamed digital marketing company, the report said.

Facebook declined to confirm if the hack was caused by spammers.

“We are cooperating with the FBI on this matter.” Facebook vice president of product management Guy Rosen said in a statement to Fortune. “The FBI is actively investigating and have asked us not to discuss who may be behind this attack.”

Facebook first revealed the hack, likely the company’s biggest in its history, in late September and originally said that around 50 million people may have been affected. A few weeks later, however, Facebook lowered the number of people it believed were impacted to 30 million, many of whom had sensitive data like email addresses, phone numbers, relationship status, and birth-dates compromised.

Executives at the company told reporters that the attackers were likely sophisticated because they were able to discover three separate bugs within Facebook’s large software infrastructure. After discovering how the software flaws were interrelated, the hackers were able to launch an attack.

Facebook said it discovered the attack on Sept. 14 and remedied the situation on Sept. 27.

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The major hack came just months after Facebook’s Cambridge Analytica scandal, which also compromised user data but was not technically a hack. That data blunder had to do with an academic who built a Facebook quiz app to collect user data, and then sold that information, against Facebook’s data policies, to the Cambridge Analytica political consulting firm.

Facebook’s security researchers typically say that much of the company’s work safeguarding its systems is intended to help reduce the prevalence of spam and related malicious activities on the social network. With the plague of fake news generated by bad actors allegedly trying to influence the U.S. and other world elections, Facebook has said that much of its security efforts are also being heavily directed at preventing propaganda from spreading on its various services.

Here's What Really Happened To Sears And How Your Business Can Avoid It

Richard Sears was brilliant. He took the personal relationship that customer had with local general store keepers and scaled it beyond anyone’s wildest dreams. 

In 1931, while the USA was in the midst of the Great Depression, Sears made the equivalent of 2.5 billion dollars in profits. Over the next ten years it contributed an astounding one percent of US GDP. Fast forward 87 years and this week Sears filed for bankruptcy protection. 

Yet another industrial era dinosaur claimed by Amazon? That’s the easy way to explain it. The truth is a bit more interesting and it holds lessons for every brand.

So Much For Loyalty

Clearly, if you were to rebuild Sears today from the ground up the company that you’d be most likely to model it after is obviously Amazon. So, why couldn’t Sears, which has now descended into the same inevitable fate as Kodak, Blockbuster, and so many other industrial era dinosaurs, do that? You’re thinking, “Well, of course they could. After all they have access to all of the same technologies as Amazon.” And yet, the same could have been said of Kodak, Blockbuster, and Borders. 

The reason that all of these companies, and virtually every industrial era company, were held hostage by the past is the same. It’s what made each one of them an icon in their respective space–their brand, or more specifically, the loyalty customers had to their brands. That makes no sense, right. Hear me out.

Providing only what your existing customers, or members, want, while your business is failing, is like offering cabin upgrades, instead of lifeboats, to passengers aboard the Titanic. 

Sears had built brand loyalty that spanned a century and five generations. If you’re a boomer, you undoubtedly have fond memories of the Sears catalog, which often occupied a place of reverence as the largest and most in-demand book in most homes. 

Ultimately that brand loyalty turned into an immutable set of expectations about what Sears was. And it held Sears hostage to its legacy. It insulated Sears from threats that should have been obvious. It cocooned it in the expectations of the past. 

In a Fortune 2016 article, “Why Sears Failed,” journalist Geoff Colvin talks about how an article he wrote in 1991 about Walmart’s potential to pull ahead of Sears triggered an indignant response from Sears executives who called his article irresponsible and misleading.

This sort of denial has its roots directly in what we call “brand loyalty.” When a company starts to sense its market potential slow, it instinctively attempts to hold onto its best customers. In many ways the company will start doing what any good company should do: develop a closer bond with its most loyal customers. Sears did this by putting in place a loyalty program called Shop Your Way. The program provides point incentives for what Sears CEO, and hedge fund manager, Eddie Lampert calls “members” and not customers or consumers. It was also intended to give Sears a better understanding of members’ behaviors. 

In a 2013 Ad Age article, a spokesman for Sears said, “Shop Your Way is at the core of everything we’re doing. We’re focused on our most loyal customers, and building relationships with them is something that will drive our company to profitability.”

According to another Sears’ spokesperson, “Shop Your Way is more than a loyalty program…It transforms customer transactions into relationships and allows us to know our members better and to serve them better.”

In some ways it seemed to be a huge success. Shop Your Way accounted for over 75 percent of Sears’ sales.[v]

And that was precisely the problem; your most loyal customers will anchor you to what your brand was at its most successful.

Loyalty programs can be a powerful draw, but they can also further isolate a company from new opportunities. Providing only what your existing customers, or members, want, while your business is failing, is like offering cabin upgrades, instead of lifeboats, to passengers aboard the Titanic

The challenge for Sears, and for any brand, is the ability to understand customers at the level of the individual. You can’t do that with broad-based loyalty programs which inevitably reinforce relationships with customers who are the most brand loyal. This only builds a confirmation bias loop in which customer behavior reinforces the current business model which then reinforces the customer behavior.

Congratulations, you’ve not only further strengthened your brand’s legacy image in the eyes of “members,” but you’ve also done a great job of convincing the rest of the marketplace that you really are stuck in time. 

But wait, isn’t that exactly what Amazon is doing with Prime member? No. Amazon is using Prime to understand individuals not just markets. Markets are anonymous entities that are categorized by broad demographics such as gender, age, purchasing power, geography, and ethnography. Individuals defy those categorizations. 

The same is true of Netflix, which knows your viewing habits so well that it can customize the color palette of an online ad to suite your individual preferences.

Turn The Brand Around

Establishing a relationship between a brand and its customers is more important than ever, but brand loyalty is at best only half of the equation. The other half is something that hasn’t been possible since the general store that Richard Sears eclipsed over a century ago.  That’s the loyalty that a brand expresses to the customer, what I call a “loyal brand ” in my book Revealing The Invisible.

Simply put, a loyal brand is one that understands your behaviors and their context well enough to be able to anticipate and respond to your preferences and build meaningful and personalized experiences. Most importantly, loyal brands can act proactively to serve new needs and expectations before they’ve been expressed. This goes beyond just making the promise that a product or service will meet your known expectations. 

Everything you do, from how you design the customer experience to how you communicate with customers to how you build a brand that looks and feels the way each customer will best respond to it has to first ask the questions, “How am I expressing loyalty to my customer?” This does not lock you into the past because now each customer has his or her own individualized experience with your brand. In many ways we are reverting to the sort of personal relationship customers had with the local shopkeeper a century ago

Sears never made the transition to a loyal brand. It continued to use industrial era marketing and customer relationships to succeed in a post-industrial era of hyperpersonalized experiences.

For example, Amazon has explored predictive sales where a product arrives at your doorstep without your having ordered it. At first blush this may sound outlandishly creepy. But stop and think about what’s actually going on. 

Do You Know Who I Am?

If you had a personal shopper on monthly retainer who knew your tastes and behaviors intimately and you happened to be going on vacation to a warm weather climate in the middle of winter, what might she or he do? Look at what you had for warm weather clothing, what still fits, the particulars of styles worn at your destination, and then, naturally, buy you what you needed. 

That’s exactly the value of a loyal brand; it understands you well enough to deliver value you may not have asked for, which in turn encourages you to disclose more of your behavior to the brand. 

Hyperpersonalization and the anticipation of unexpressed needs is the hallmark of a loyal brand. We value most those companies and people who invest the time and energy to think ahead and deliver products or services before we ask for it. Ultimately nothing creates a greater bond of loyalty than knowing the customer at that level. 

Clearly, even the companies best positioned to understand your digital behaviors and to build experiences that understand and respect them are just starting down that path. For example, the company that makes you enter your customer account number to route your call to a human being who then asks you what your customer account number is! 

It’s nothing less than dumbfounding that a company you’ve been loyal to for so long hardly knows you

That was pretty much the model of customer relationship that Sears used. And its why, no matter how hard Sears tried to reshape its brand by appealing to its most loyal customers, it never stood a chance of surviving in a world where customers expect to be treated like individuals with unique needs and preferences–something that Richard Sears would have easily recognized 87 years ago.

5 Strategies Mentally Strong People Use to Keep Their Feelings in Check

A father came into my therapy office with his son and said, “He’s so strong. He hasn’t even cried once since his grandmother passed away.”

Being mentally strong isn’t about stifling your emotions and ignoring your pain. After all, it takes strength to allow yourself to feel sad, anxious, and scared.

You don’t want to stay stuck in a place of pain, however. It’s important to be able to shift your emotions when they aren’t serving you well. Here are five ways mentally strong people manage their emotions:

1. They schedule time to worry.

Whether you’re a natural worrier who worries about everything or there’s something specific that you can’t seem to get off your mind, all of those “what if…” questions can consume your mental energy. What if something goes wrong? What if I end up broke?

Set aside 20 minutes a day to worry and put it in your schedule. Then, when your worrying time rolls around, worry up a storm. When your time is over, go back to doing something else.

When you find yourself worrying outside your scheduled worrying time, remind yourself that it’s not time to worry and you’ll have plenty of time to do that later.

The goal is to contain your worrying to a specific portion of the day so it isn’t all-consuming. With practice, you’ll be able to spend your day focusing on the task right in front of you, rather than ruminate about what happened yesterday or worry about what might happen tomorrow.

2. They label their emotions.

Your emotions affect how you perceive events and how you decide to take action. When you’re anxious about something–even something completely unrelated to your current task–you’ll likely avoid risks.

When you’re sad, you’re more likely to agree to a bad deal (never negotiate when you’re sad). When you’re excited, you’ll overlook the challenges you’re likely to face.

Despite the major influence of emotions, most people spend very little time thinking about their feelings. In fact, most adults struggle to name their feelings.

But labeling your feelings is key to making the best decisions. When you understand how you’re feeling and how those feelings might cloud your judgment, you can make better choices.

Labeling your emotions can also take the sting out of uncomfortable feelings like sadness, embarrassment, and disappointment. So check in with yourself a few times each day and identify how you’re feeling.

3. They determine whether their feelings are a friend or an enemy.

Emotions aren’t either positive or negative. All emotions can be helpful sometimes and harmful at others.

Sadness is helpful when it reminds you to honor something or someone you lost. But it can be harmful if it tries to keep you from getting out of bed and tackling your day.

Anger is helpful when it gives you energy to take a stand for a cause you believe in. It can be harmful if it encourages you to do or say things that hurt people.

Anxiety is helpful when it talks you out of doing something dangerous. But it’s not helpful when it keeps you from stepping outside your comfort zone in a positive manner.

So after you label your feelings, take a minute to identify whether that emotion is a friend or an enemy to you right now. If it’s helpful, allow yourself to embrace that feeling fully. If it’s not helpful, change how you feel by either changing the way you think (or what you’re thinking about) or how you’re behaving.

4. They engage in mood boosters.

Behaving contrary to the way you feel can shift your emotional state. For example, smiling can evoke feelings of happiness when you’re feeling down. Or taking a few slow deep breaths can calm you when you’re feeling anxious.

It’s important to have a few activities in mind for boosting your mood on a bad day. The easiest way to do that is by creating a list of things you enjoy doing when you’re in a good mood, like going for a walk, listening to upbeat music, or having coffee with a friend.

Then, when you’re in a bad mood (and your emotions aren’t your friend), engage in a mood booster. Changing your behavior can shift your internal state and help you to feel happier.

5. They embrace discomfort.

Ask yourself, “What emotion is most uncomfortable?” For one person, it might be embarrassment. For another, it might be anxiety.

You likely go to great lengths to avoid the emotion you find least tolerable. Perhaps you don’t try for a promotion because you think you can’t handle rejection. Or maybe you pass up an invitation to give a toast at a wedding because you fear public speaking.

Many people go through life working really hard to avoid discomfort. Ironically, however, they end up feeling uncomfortable almost all the time because they’re wasting all their energy running away from things that may cause discomfort.

Embrace a little bit of discomfort. The more you expose yourself to uncomfortable feelings (as long as you do it in a healthy way), you can gain confidence in your ability to tolerate distress.

Build Your Mental Muscle

The stronger you become, the better equipped you’ll be to face the challenges that will help you reach your greatest potential.

In addition to creating healthy habits that will build mental muscle, however, it’s important to give up the bad habits that are robbing you of the mental strength you need to be your best. When you give up the things that are holding you back, you can become the strongest and best version of yourself.

Lyft selects JPMorgan, Credit Suisse for IPO in 2019: source

(Reuters) – Ride-hailing company Lyft Inc has chosen JPMorgan Chase & Co, Credit Suisse and Jefferies as underwriters for its initial public offering, slated for the first half of 2019, according to a person familiar with the matter.

FILE PHOTO: An illuminated sign appears in a Lyft ride-hailing car in Los Angeles, California, U.S. September 21, 2017. REUTERS/Chris Helgren/File Photo

The source did not want to be identified because Lyft’s plans were still private.

Reuters had earlier reported that Lyft was in talks with JPMorgan to lead its IPO, after rivals Goldman Sachs and Morgan Stanley decided not to pursue such a role out of loyalty to another IPO hopeful and Lyft’s larger competitor, Uber Technologies Inc.

Earlier on Tuesday, the Wall Street Journal reported that Uber could be valued at $120 billion in its IPO, expected in 2019.

JPMorgan declined to comment. Credit Suisse did not immediately respond to Reuters’ request for comment, while Jefferies was not available for a comment.

Lyft also declined to comment.

The two IPOs are widely seen as a litmus test for investor tolerance for lack of profitability when it comes to iconic technology unicorns.

Uber and Lyft have taken hits to their bottom lines in order to attract drivers and enter new markets, although they have made strides in recent years in narrowing their losses.

Like Uber, Lyft offers an app that lets passengers request rides on their smartphones. It was founded in 2012 by technology entrepreneurs John Zimmer and Logan Green, three years after Uber.

Reporting By Aparajita Saxena in Bengaluru and Liana Baker in New York; Editing by Shailesh Kuber

3 Vanguard ETFs To Consider Right Now

I’m penning this article the evening of October 11, 2018. The market has just completed two of the most severe convulsions since early-February, when the Dow suffered a 600-point decline followed by two 1,000-point declines over a span of 4 trading days.

Over the past two days, the Dow has dropped 1,377 points, the Nasdaq 409 points, and the S&P 500 some 152 points, declines of 5.21%, 5.29%, and 5.28%, respectively. When you look at those 3 averages, you quickly sense that the decline was widespread.

Clearly, if one is looking to pick up some bargains, one could look to snap up any one of a number of ETFs. A good total-market ETF, for example, might not be a bad bet. Might you, though, be able to do even better than that? Might there be options that, viewed over the course of 2018 as a whole, present even better bargains?

I spent a little time looking at that question, and have come up with 3 ETFs I’d like to propose for your consideration. Here they are.

  1. Vanguard FTSE All-World ex-US ETF (VEU)
  2. Vanguard Consumer Staples ETF (VDC)
  3. Vanguard Real Estate ETF (VNQ)

First, here’s a quick peek at what our 3 candidates did over the past couple of days. You’ll notice a slight divergence. VEU slumped fairly consistently both days. VDC and VNQ held up decently on Day 1 of the decline, but then got hit hard on Day 2. Long story short, however, they fell hard just like pretty much everything else.

Chart

VEU Price

data by

YCharts

Next, though, let’s step back and take a look at how the 3 ETFs have performed year-to-date. In this graphic, I’ve overlaid the S&P 500 average to put things in perspective.

Chart

^SPX

data by

YCharts

The action in the S&P 500 is pretty dramatic. In two days, the average dropped from a YTD return of almost 7.5% to 2.05%. However, this is still between roughly 9% and 13% better than VEU, VDC, and VNQ.

One by one, let’s take a quick look at each of these 3 ETFs. I’ll briefly consider how each got to the point it is today, a little about the ETF itself, and the possibilities moving forward.

Vanguard Consumer Staples ETF

As you can quickly gather from its name, VDC focuses on the consumer staples sector. As it turns out, this sector is particularly helpful in protecting your portfolio in the event of a market downturn. In brief, Consumer Staples is the term given to products, and the companies which produce these, that are considered essential, such as food, beverages, household items, and tobacco. These are the sorts of items that people need to function each and every day, and therefore, are generally unable to cut out of their budget even in bad times.

Take a look at VDC’s Top-10 holdings.

VDC Top 10 Holdings

Source: VDC Profile Page

Just the other evening, I went to my local Costco (COST) and, among other items, picked up a multi-pack of Crest toothpaste, a Proctor & Gamble (PG) product. My neighbor is a huge Diet Coke fan, and I see empty cartons from cases of this Coca-Cola (KO) product in his garbage on a regular basis. Lastly, I recently got a great price on a few pairs of jeans at Walmart (WMT). And I am far from alone.

Why, then, have consumer staples stocks struggled in 2018? Analysts suggest several factors. Established companies are facing competition from smaller, nimbler upstarts. Energy costs are rising. Finally, ongoing trade wars may not be doing this segment any favors.

It may prove folly, however, to discount these established companies. Think, for example, about Coca-Cola’s massive and efficient distribution network. Think about things such as economies of scale. Lagging the overall S&P 500 by some 9% this year, this segment may deserve a second look.

VDC contains 93 stocks, and has Assets Under Management (AUM) of $4.6 billion. It carries an expense ratio of .10% and sports an SEC yield of 2.85% as of 9/30/18.

Vanguard Real Estate ETF

When I first featured VNQ in a comparison of 3 REIT ETFs, the name of the ETF was Vanguard REIT Index ETF. A REIT is a corporate entity that invests in real estate. You might be surprised to discover that much of the real estate you see as you move about your daily life is owned by REITs. This can include everything from downtown Manhattan office buildings to suburban outlet malls to high-quality apartment complexes to mobile home parks.

What makes REITs somewhat unique from other entities that might invest in real estate as part of their business is their tax status. To qualify as a REIT, a company must agree to distribute at least 90% of its earnings to its investors in the form of dividends. As a practical matter, many REITs distribute 100% of their income to investors such that they owe no corporate tax.

The change to its present name was no accident. Beginning in late-2017, Vanguard gradually transitioned the index tracked by this ETF to the MSCI US Investable Market Real Estate 25/50 Index. According to a statement from Vanguard, the sector “includes real estate management and development companies in addition to real estate investment trusts (REITs).”

So, for example, VNQ now counts American Tower Corporation (AMT) as one of its Top-10 holdings. As you might have guessed from the name, among other things American Tower owns and/or operates some 40,000 cellular towers in the United States.

Here’s a look at VNQ’s sector breakdown:

VNQ Sector Weightings

Source: VNQ Profile Page

Not surprisingly, since REITs tend to hold large amounts of debt, they are very interest-rate sensitive. In the current environment, this forms a large part of their relative underperformance. At the same time, they offer stability and, by their very charter, a solid stream of dividend income. VNQ’s yield currently stands at approximately 3.29%.

VNQ currently has AUM of some $33.0 billion and carries an expense ratio of .12%.

Vanguard FTSE All-World ex-US ETF

VEU is a venerable ETF in the international total-market asset class. With an inception date of 3/2/07 and AUM of $22.9 billion, it stands head and shoulders above the competition. No wonder it carries an enviable (for a foreign ETF) .02% average spread to go along with its competitive .11% expense ratio.

VEU tracks the FTSE All-World ex-US Index. This index focuses on large-cap and medium-cap companies outside the U.S., but shies away from small-cap companies. Its fact sheet lists the index as having 2,712 constituents covering 46 different countries, in both developed and emerging markets.

Here’s a quick peek at VEU’s Top 10 holdings.

VEU Top 10 Holdings

Source: VEU Profile Page

To give you some small sense of the sorts of companies that constitute the largest portions of the fund, here are extremely brief synopses of two of these companies, Nestle SA (OTCPK:NSRGY) and Novartis AG (NYSE:NVS):

  • Nestle SA – Nestle is the largest food company in the world, measured by revenues. Encompassing baby food, bottled water, coffee & tea, dairy products, frozen food, pet food, snacks and more. The list of brands is made up of legendary names that you will instantly recognize, and Wikipedia states that 29 of these brands each have annual sales of over $1 billion. The company operates in 189 countries.
  • Novartis AG – Novartis is the 6th-largest largest pharmaceutical company in the world, measured by revenues. According to its latest annual report, its R&D group received 16 major approvals, made 16 major submissions, and received six breakthrough therapy designations from the US Food and Drug Administration (FDA). Novartis’ products are available in more than 155 countries worldwide.

In a recent article on emerging markets, I briefly outlined some of the reasons for the underperformance of this asset class compared to the U.S. market. Developed international markets have also not been exempt from many of these factors, hence the roughly 13% YTD underperformance of VEU as compared to the S&P 500.

Summary and Conclusion

By the time you read this article, Friday’s market session will have likely come and gone. While, based on activity in futures, the expectation is that there will be a positive bounce, we’ll just have to wait and see.

However, I can all but promise that the YTD underperformance of these 3 ETFs will not be remedied in any one day. If you have been dutifully stashing some extra cash away, here are three possible places you can put some of it to work.

Bonus: A Peek Into ETF Monkey’s Personal Portfolio

In late 2016, after writing for Seeking Alpha for a little over a year, I for the first time offered readers a peek into my personal portfolio. It had been awhile since I had updated this, and a few things have changed. On my personal blog, I recently posted an update as of September 30, 2018. If you’re curious to see how I have allocated my own money, you’re welcome to take a peek!

Disclosure: I am/we are long VEU, VNQ.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Additional disclosure: I am not a registered investment advisor or broker/dealer. Readers are advised that the material contained herein should be used solely for informational purposes, and to consult with their personal tax or financial advisors as to its applicability to their circumstances. Investing involves risk, including the loss of principal.

You're About to Drown in Streaming Subscriptions

You’ve got your Netflix subscription and Amazon Prime. You’ve got HBO Now, at least when Game of Thrones is on, and maybe pay up for a more specialized service too, like Crunchyroll or the WWE Network. It’s already lot! Bad news: It’s about to get worse.

The notion that streaming services might someday totally supplant the monolithic cable package has glittered on the horizon for years now. But as that future becomes increasingly the present, an uncomfortable reality has set in: There’s too much. To Netflix, Amazon Prime, Hulu, and HBO Now, add WarnerMedia, Disney, and Apple as omnibus, general interest streaming destinations. Investors have poured a billion dollars into something called Quibi, which has an unfortunate name but exclusive Guillermo del Toro content. And the niche options continue to proliferate as well, whether it’s DC Universe or College Humor. If we’re not at the breaking point yet, we’re surely about to find it.

“Everybody wants to talk about how much money’s being spent on content. But as a consumer, don’t you already feel like you have enough content choices out there?” says Dan Rayburn, a streaming media analyst with Frost & Sullivan. “Our eyeballs and the time that we have to consume media of any kind is being challenged.”

There’s nothing wrong, of course, with choice. That’s especially true if your interests run more niche, outside the relatively anodyne confines of a cable package, or even the relatively mainstream offerings of Netflix and Amazon. “The abundance of programming and commercial viability of smaller audiences is making it possible for storytelling from a much wider range of experiences to finally be available,” says Amanda Lotz, a professor of media studies at the University of Michigan and author of Portals: A Treatise on Internet-Distributed Television.

But while tailored, a la carte services have long been the promise of streaming TV, it’s starting to look more like a series of pricey buffets. Competing megacorporations are all pumping billions into original content, much of it designed for mass appeal. (Apple has reportedly mandated no “gratuitous sex, profanity or violence” on its incoming streaming service.) And even if each also produces more experimental or idiosyncratic options, you’ll be hard pressed to access all or even most of them. The show that scratches your itch won’t necessarily be on a platform you can afford to pay for.

“Realistically you’re not going to have a consumer with more than two or three services per month,” says Rayburn. Especially when you consider that these streaming services still largely supplement, rather than replace, traditional cable packages. There’s only so much disposable income to go around, no matter how much you care for The Marvelous Mrs. Maisel.

“In a lot of ways it’s an extension of the narrowcasting that began in the 1980s, with cable,” says Jennifer Holt, a media studies professor at the University of California, Santa Barbara. But by advancing that trend, it also exacerbates the fragmentation of culture that came with it. Again, that has plenty of potential benefit, giving otherwise marginalized perspectives more opportunities for representation. But it paradoxically may also make those shows increasingly hard to find.

“There was a time, the ’70s or the ’80s, when you knew what channel your show was on,” says Holt. “That kind of got lost in a lot of ways, with certain streaming services. Now maybe the idea of branding this content will take on different dimensions. You’re going to have to know where to find it. It becomes more work.”

Meanwhile, the splintering of services also threatens to hasten the decay of a broader, shared cultural conversation. “It starts to evacuate the potential for any real communal, cultural touchstone when we’re all watching completely different services,” says Holt.

All else being equal, one might expect all of this to be a blip, a temporary flash of exuberance that will subside once good old fashioned market forces clear away the rabble. But the untimely death of net neutrality, along with a merger-friendly Justice Department, have left all else quite explicitly unequal.

“I think the bigger issue is what happens in the aftermath of net neutrality’s elimination,” says Lotz, who argues that allowing ISPs to enforce paid prioritization is “more likely to change the marketplace for the services in profound ways.”

AT&T owns WarnerMedia, for instance, and so can not only potentially offer its impending streaming service at a discount—or for free—to its mobile or cable customers, but could prioritize its performance on its network, and downgrade that of rivals. (WarnerMedia hasn’t announced pricing yet, but if any of this seems far-fetched, note that AT&T already offers DirecTV Now discounts for mobile customers, and doesn’t count DirecTV Now streaming against data caps.) Comcast, meanwhile owns NBCUniversal, which gives it a sizable stake in Hulu; it also recently acquired Sky, which operates Now TV, a popular streaming service internationally.

The cable-content hybrid companies, in fact, win no matter what. Even if you pass on their streaming service, they can always make up the difference by charging more for broadband.

And then there are the companies for whom a streaming platform is a means to a greater end. Apple isn’t an ISP, but it does want to sell iPhones and iPads and Apple TVs, and will reportedly make at least some aspects of its streaming service free for hardware customers—just as, Holt notes, the early radio programs only existed to help radio companies sell more radios. Likewise, Amazon attempting to drive Prime subscriptions. All of which is to say, the field will stay crowded for longer than you might expect.

There are some bright spots in all of this, especially when you think small. “The services that work very well are the niche services, the ones that are targeting a specific type of user with a specific type of content,” says Rayburn. Those more targeted services have also forged new business models; Rayburn points to CuriosityStream, which recently embraced sponsors to help lower prices for viewers.

And Holt notes that most popular streaming services currently have fairly liberal password-sharing policies; as long as that holds true, she says, piracy could be the tie that binds us.

As more megaservices fill the landscape, though, one wonders how long before the niche upstarts feel the squeeze. And as your streaming options continue to kaleidoscope, what’s coming next looks promising, sure, but also daunting. Especially given who it’s coming from.

“The combination of the digital distributor, whether it’s the mobile phone or the ISP, and the content delivery, to me that’s the bleak future we’re headed toward,” says Holt. “I don’t think it’s going to work out for consumers.”


More Great WIRED Stories

Forget Banning Phones and Laptops at Meetings. Here's What We Should Ban Instead

Imagine you just walked into a meeting with your banker.

The main goal: To figure out how to pay for a new house.

You’re a little nervous, and you know this meeting will determine your future. You sit down and listen intently to what the banker is saying as he or she covers all of the financial details. Obviously, you are clued in to the discussion, but at one point the banker mentions something a bit odd. It’s a minor point about capital gains tax, and the year the rule changed. So, you scratch your head and pull out your phone.

A quick Google search reveals that he’s wrong about that specific tax law.

You argue the point, and resolve the issue.

The wonders of technology, right?

Sadly, a new school of thought has emerged, likely propagated by people who did not grow up with phones or tend to stick with a desktop computer during work hours.

A few years ago, an expert on this topic suggested to me that no one would ever bring a phone to a meeting with a banker. You need to stay focused and intent.

I’ve pondered that discussion a few times over the years.

Initially, I agreed and it made sense. In fact, I’ve repeated the story several times. I’ve also repeated the word “phubbing” (e.g., to phone snub) and explained how it’s a bad, terrible, no good thing. A more technical phrase is “continuous partial attention” which is one of the scariest concepts of our age. It means people are always in a state of partial attention because they are either on a phone or thinking about being on a phone.

Here’s my problem with all of this.

I don’t think phones and laptops should be banned from meetings.

I think boring topics should be banned from meetings.

I once heard a phrase, attributed to the musician David Crowder, that you should do something so cool that you don’t need to look at your phone. The same concept should apply to meetings. As someone who frequently mentors college students, I know that the minute a meeting becomes boring and routine, people tend to pull out phones or mindlessly surf on a laptop–suddenly, Fortnite is more interesting. Who can blame them? It’s not the laptop’s fault. It’s the meeting topic and the meeting presenter.

My view is that gadgets can help us verify information, they can help us add to the conversation, to look up interesting facts. Distraction is a bad thing, but there are other ways to solve that problem instead of banning our devices altogether.

In my example of the mortgage meeting, of course you would never mindlessly surf Instagram during the chat. Should you ban phones? Not at all, because they can serve a purpose, especially if you stop someone in mid-sentence and ask politely if you can check on some details. In my meetings with college students, I rarely see people surfing or looking at cat videos because we tend to keep meetings short and lively. And, every meeting is a “working” meeting. Laptops help at meetings, they don’t hinder. No one ever focuses on a laptop or phone during a meeting that is lively and engaging.

If someone does start phubbing, it reveals a much deeper problem. If the meeting is important and the discussion is good, and someone still phone surfs, it’s a sign that maybe there’s a problem with engagement on a project. Sometimes, it’s a sign of depression or some other difficulty in life. Or, it’s a sign of an unruly employee revealing many other issues for you to worry about other than using a gadget instead of paying attention.

My view is simple: Let the devices stay, but figure out how to make them part of the meeting and not a distraction. Don’t use rules and dictums. Make the meeting incredibly worthwhile, engaging, and valuable. Gadgets won’t distract people for long.

S&P 500 Weekly Update: Irrationality Isn't Always Associated With 'Exuberance' And 'Euphoria'

Corrections only are considered “natural, normal, and healthy” until they actually happen. Tony Dwyer, Canaccord Genuity

Many like to take past economic and market environments and use them to forecast what will happen next. While I do employ past market seasonality and statistics to form an opinion, I also try to keep in mind that each economic cycle will have its own nuances and challenges.

The past can afford us an idea of the risks involved when investing in the markets, but it doesn’t tell you where and when those risks will come from going forward. Trying to predict the future is impossible. What is then left forces every investor to analyze the present, while understanding the past. You have to make high probability decisions in the face of uncertainty, but those probabilities aren’t etched in stone.

That sounds like a maddening challenge for market participants. Hence the wide spectrum of opinions that are handed out daily. This bull market cycle has perplexed many experienced investors. That is confirmed by the continued skepticism being shown for the better part of this cycle, and it continues today.

It is my conclusion that too many analysts have been trying to use their historical notes and theories for how they assumed the markets should react. Their signals and patterns haven’t worked as well as they once did in markets that have evolved in the past. Many are calling that this is the end of the bull market. In their view, it will coincide with the end of the business cycle.

What they have failed to see for years now is that there are no time limits imposed by these cycles. Ahh, but now they believe they have the Fed in their corner to deliver the knockout punch to the equity market. A rising rate environment. Maybe they do. The typical U.S. business cycle is ended by the Fed, which hikes rates to levels that are too high in response to inflation. Then again maybe these analysts are wrong again.

Seems to me the Fed is raising rates in response to an improving economy. While inflation may be lurking, it isn’t here to the point of concern just yet. Of course, those that have their minds set on the Fed spoiling the party will always tell us the Fed is already behind the curve. Problem is it was supposedly behind the curve in 2014!

The ability to remain flexible and evolve with the environment is key. I have concluded that the best way to do that is to follow what THIS market is telling you. Those who have been the most wrong seem to be the people or firms who are the most entrenched in their own views.

It might be better to take the view of how you would handle the market in the future than speaking to how you would have handled it in the past. Any issue that one wants to bring up and debate surely does matter, but only to the extent of what the stock market is telling us.

A PhD can write four pages on the negative aspects that can be seen now with the Fed, economy, interest rates and inflation, and if I see an uptrend that is firmly in place, I’ll put that article aside.

No matter how certain you are in your market views, no one really knows how things will play out. It is all about probabilities. In my experience, I can draw a profile and rate the probability of how a particular situation may or may not play out based on price action.

Now before any reader believes I have lost touch with reality and buried my head in the sand dismissing what is happening around me during the recent selling stampede, think again. In times of stress and irrationality, the place to look is the LONG-TERM trend. Otherwise you will be whipsawed just like many others who then let emotion rule the day.

Chart courtesy of FreeStockCharts.com

At the close of trading on Friday, the S&P closed 5% below its all-time high. I’m not sure what some pundits use to define a bear market, but that isn’t it. All we hear now is that it is the start of something more serious. There is ZERO evidence to support that claim. Drawing conclusions from any SHORT-TERM chart or any of the negative rhetoric is a fatal mistake.

Didn’t we just witness that at the beginning of this year? It’s easier to embrace that idea because it is based on fear. For most of this week, our fears were heightened because we are seeing the values of portfolios decline. When we are afraid, we act irrationally.

Remaining in control coincides nicely with the other important factor in forming my investment strategy. Keep it simple. Complex strategies may be fine for some, but the average Joe and Mary investor will have a hard time keeping it all together when the situation gets tumultuous.

After that is accomplished, you have to be willing to accept the old adage that it’s better to be roughly right than precisely wrong. Following the “fear” rhetoric has been a recipe for disaster.

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Economy

The economy clearly is performing at a higher level with the recent positive economic reports. In my view, that is the catalyst for the recent run-up in 10-year Treasury yields. With inflation stable, the bond market seems to be focused on re-rating U.S. economic growth higher. There is little credit risk present as high-yield spreads are making new cycle lows vs. Treasuries. Lower tax and regulatory burdens are also contributing to economic strength.

It’s all about what trade will do to everything we touch. It seems that many have already lost sight of the fact that a pro-growth business environment is very much in place here in the U.S.

The headline PPI decelerated again last month down to 2.73% year over year from 2.83% the month before. This continues a trend over the past few months of the headline measure surprising lower.

Core PPI which removes food and energy accelerated slightly to 2.48% year over year from 2.4%. A more refined measure of PPI excluding foods, energy, and trade services increased the most, up 3.02% year over year compared to 2.84% in August. This is the first time this measure of core PPI has been higher than the headline number since June 2017.

CPI rose 0.1% in September with the core rate up 0.1% too. CPI rose 0.059% and the core increased 0.116%. There were no revisions to August’s respective gains of 0.2% and 0.1%. The 12-month pace on the headline slowed to 2.3% y/y versus 2.7% y/y, and the core was steady at 2.2% y/y.

Michigan sentiment fell to 99 from 100.1 in September, but left the measure still above its 7-month low of 96.2 in August, and at an historically high level that lies below the 14-year high of 101.4 last March and the 100.7 peak in October of 2017, but above the peak before that of 98.5 in January of 2017.

A solid employment picture is removing a huge thorn on the side of the taxpayers.

Other programs like food stamps and welfare are also on the decline. These were issues that were not sustainable, and the reduction that we are seeing is a plus for the government, the average taxpayer and the economy. Funny how that doesn’t make the headlines.

Earnings Observations

The banks started off this earnings season, and as expected, there were positive reports. Consumer banking was solid at JPMorgan (JPM) as it beat on both the top and bottom line.

Citigroup (C) also reported a positive quarter as well. If investors want “value,” the banking sector represents the best value in the stock market today.

FactSet Research Weekly Earnings insight for Q3 2018:

  • Earnings Scorecard: With 6% of the companies in the S&P 500 reporting actual results for the quarter, 86% of S&P 500 companies have reported a positive EPS surprise and 68% have reported a positive sales surprise.

  • Earnings Growth: The blended earnings growth rate for the S&P 500 is 19.1%. If 19.1% is the actual growth rate for the quarter, it will mark the third highest earnings growth since Q1 2011 (19.5%).

  • Valuation: With the rout in stock prices this week, the forward 12-month P/E ratio for the S&P 500 is 15.7. This P/E ratio is below the 5-year average (16.3) but above the 10-year average (14.5).

Unless the earnings forecasts coming into this earnings season are totally wrong, corporations are making a lot of money because of the pro-growth backdrop that suddenly is being forgotten.

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The Political Scene

You wouldn’t know it with all of the focus on China these days, but in reality the tensions in the geopolitical environment have eased amid a reconfigured NAFTA. The EU negotiations are ongoing on the trade front with positives being reported. Analysts remain focused on the negatives, while dismissing the positives.

It fits nicely with the other negative commentary that is concerning investors.

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The Fed and Interest Rates

For those that think bond yields are “telling you something,” the same was said a month ago, when the UST 10-yr yield was declining to 2.8% and people were calling for disappointing data that could be a harbinger of economic weakness.

I have been adamant during this entre bull run that the bond market isn’t telling me anything at all. These comments are simply rolled out to fit the interest rate story of the day.

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Sentiment

From the AAII survey of individual investors, bullish sentiment had its largest one week drop since mid-November 2017, falling 15.05 percentage points. Bullish sentiment is now down to 30.6% from 45.66% last week. This is the lowest level for bullish sentiment since the first week of August, but it’s still pretty far from the lowest level on the year that we saw in April when it fell to 26.09%. Bull markets don’t end with this type of pessimism.

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Crude Oil

The EIA weekly inventory report posted a larger-than-expected build in inventories of 6 million barrels for the week. Two large increases in a row totaling 14 million barrels. At 410.0 million barrels, U.S. crude oil inventories are at the five-year average for this time of year. Total motor gasoline inventories also showed an increase. Rising by 1 million barrels last week and remaining about 7% above the five-year average for this time of year.

The five straight weeks of gains came to an end as WTI closed the week at $71.51, down $2.83. Profit taking, bearish inventory numbers, or the fear of a global slowdown are all reasons for the selling, take your pick. Then again, perhaps it is just normal trading activity after five weeks of gains.

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The Technical Picture

October has not started out like many had envisioned. Initially we saw plenty of carnage under the hood as the indices were holding their own. That is not the case anymore. The market has narrowed. Since late August, even the strongest of the market breadth measures, the NYSE Daily Advance/Decline Line, has failed to confirm highs, while the weakest, 52-week highs and lows, has continued to erode.

Meanwhile, all of the cumulative Advance/Decline (A/D) lines were negative on a short-term trading basis. As we have seen in other major selling events, key support levels were taken out as if they weren’t really there at all. There remains a lot of negative energy out there, and it still could be released on the downside.

However, we are at an oversold level that usually indicates the selling is about to abate. Of interest is that the NASDAQ’s A/D line closed last week below its 200-DMA, which historically has signaled a short-term trading bottom.

The DAILY chart shows just how much short-term damage has been done. It also reveals how scary the price action looks compared to the S&P WEEKLY chart displayed earlier.

Just look over to the left of this chart. We have been here before, a wicked selling stampede, and the 200-day moving average is once again in play. This one is more of a surprise to me because the market was NOT wildly overbought like it was in January. I added another point on the chart indicating a severely oversold condition. These are points in time where we have seen rebounds.

Friday’s close was a small victory for the Bulls, a retake of the 200-day moving average (2,866) right at the close. I suspect that will now be the battleground in the next few days. The low that the Bulls will be defending is S&P 2,710.

So depending on your time horizon and station in life, this is as good a time as any to dig out the watchlists and the lists of stocks that were tossed away in the wild selling. Companies that were showing solid earnings growth and raising guidance are the babies that were tossed out with the bathwater in the last few days.

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Individual Stocks and Sectors

One of the best places to start looking for that baby that has been tossed out with the bathwater is to look at those companies that just reported solid earnings results. Take note of any company that raised their guidance last quarter.

Good fundamentals and good earnings will trump all of the issues that the market faces when it runs into one of these emotional selling stampedes.

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We’re now close to one half of the way through October, which has historically been a good month for equities. Not so this year. After watching what developed during the summer, I did have a sense that many pundits had it backwards this year. Far too many were telling investors to get out of stocks for the summer, based on historical patterns. The idea was to sit out the summer and come back on board in October.

That didn’t work. June, July, and August saw the S&P gain 7.7% and the Dow 30 post a 9+% gain. So while October isn’t over, all that believed October HAD to be bullish are getting a nasty surprise.

This bull market has been in force for years, yet some continue to highlight that ONE issue calling it the Achilles’ heel for stocks. Not so today, this time around they have a slew of issues that point to the end of the bull market story.

Each time any or all of these issues surfaced, they presented OPPORTUNITIES. Remember, this is exactly what happens during a bull market. As long as that primary backdrop remains, it will continue to play out that way. Those that abandon the trend before it changes are ALWAYS left in a quandary.

Anyone remember something called Brexit? This isn’t a one trick pony market, no matter what the skeptics try to sell. There are far too many positives, and no need for panic just yet. Remember, just a few short weeks ago, ALL indices were making new highs in sync. A Dow Theory buy signal was just generated. In the past, these signs led to much higher stock prices down the road. It would be unprecedented to have that across the board strength just disappear. So for those telling me that is THE top, I ask where is the evidence when no primary, intermediate- or long-term trend has been broken. While its prudent to remain vigilant and proceed with an open mind, this appears to be just a pause in the primary trend.

There is no playbook for stock market corrections. Every correction doesn’t have to turn into a crash. However, that’s a tough sell to investors watching the violent swings we have seen in the equity markets lately. You could make the case that we are in a different market environment now where the bears have control. Every single trading day seems like we see extreme selling going on in the final hours of trading that takes the major indices out at the lows for the day.

Bouncing off the lows and remaining in a trading range isn’t the worst thing now. Earnings season is on tap, and the economic data is still positive. The earnings picture is the brightest we have seen in a few years.

Of course, it is best to keep all options on the table. No one can predict the future, believe it or not, that includes the naysayers. The game to play is simple. Ask yourself WHAT is the PROBABILITY of an event, or issue that is troubling you, actually occurring? Hanging your hat on pure speculation, supposition, or a hypothetical isn’t the way to manage money.

What I also hear are the retorts from analysts indicating that they are searching for reasons why the stock market can’t go higher. Trust me when they do find them, the market will be higher and may be headed down. Failure to look at ALL of the data, issues, and the investing environment that exists is a recipe for disaster.

The long-term underlying trend is still in control. When that isn’t the case, changes will be made. Strong corporate earnings, and at the moment, low investor expectations, add to the positive outlook. Despite all the turmoil around me, I see no reason to abandon the trend and the Bull market. Therefore I remain invested and adding stocks when I see an opportunity.

I would also like to take a moment and remind all of the readers of an important issue. In these types of forums, readers bring a host of situations and variables to the table when visiting these articles. Therefore it is impossible to pinpoint what may be right for each situation. Please keep that in mind when forming your investment strategy.

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to all of the readers that contribute to this forum to make these articles a better experience for all.

Best of Luck to All!

Disclosure: I am/we are long JPM,C.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Additional disclosure: My portfolios are ALL positioned to take advantage of the bull market with NO hedges in place.

This article contains my views of the equity market and what strategy and positioning is comfortable for me. Of course, it is not suited for everyone, as there are far too many variables. Hopefully it sparks ideas, adds some common sense to the intricate investing process, and makes investors feel more calm, putting them in control.

The opinions rendered here, are just that – opinions – and along with positions can change at any time.

As always I encourage readers to use common sense when it comes to managing any ideas that I decide to share with the community. Nowhere is it implied that any stock should be bought and put away until you die. Periodic reviews are mandatory to adjust to changes in the macro backdrop that will take place over time.

OPEC September Production Data

The below charts were created with data from the OPEC Monthly Oil Market Report and the data through September 2018.

OPEC crude only was up 132,000 barrels per day in September to 32,761,000 bpd. That is still 650,000 barrels per day below their all-time high in October of 2016.

August production was revised up by 63,000 bpd so production was actually up 195,000 bpd from what was reported last month.

Iranian production was down 150,000 barrels per day in September. Sanctions are beginning to have an effect.

Iraqi production was up only slightly in September but they seem to be holding at their new all-time high.

Kuwait was also up slightly in September. I think they will be holding at this level for a while.

Libya was up 103,000 barrels per day in September.

Nigeria was up 26,000 barrels per day in September.

Saudi Arabia was up 108,000 barrels per day in September. They are now only 114,000 bpd below their high in December 2016.

The UAE was up 30,000 bpd in September. They are 86,000 barrels per day below their high in December 2006.

And Venezuela continues to plunge toward total collapse.

OPEC big 5 was flat in September. Declines from Iran was offset by gains from the other four.

The other 10 OPEC producers were up 130,000 barrels per day in September in addition to the 345,000 bpd it was up in August. The lion’s share of this increase came from Libya and Nigeria.

If OPEC’s data is correct then the world reached a new all-time high in total liquids production in September.

I have received data for all the world’s largest fields, created in 2013 by Mike Horn who is now deceased. He used the data of many of the great geologists who worked in the Middle East. His sources are listed below:

Al Shdidi, Saad, Gerard Thomas, and Jean Delfaud, 1995, Sedimentology, diagenesis, and oil habitat of Lower Cretaceous Qamchuqa Group, Northern Iraq: AAPG Bulletin, v. 79, p. 763-778.

Beydoun. Z. R., 1991, SG 33: Arabian Plate Hydrocarbon Geology and Potential-A Plate Tectonic Approach: AAPG Studies in Geology #33, 77p.

Carmalt, S.W., and Bill St. John, 1986, Giant oil and gas fields, in Future Petroleum Provinces of the World: AAPG Memoir 40, p.. 11-53, Table 1. Dunnington, H.V., 1958, Generation, migration, accumulation, and dissipation of oil in Northern Iraq, in Habitat of Oil: AAPG, p. 1194-1251.

El Zarka, Mohamed Hossny, Ain Zalah Field-Iraq Zagros folded zone, Northern Iraq, in Structural Traps VIII, AAPG Treatise of Petroleum Geology Atlas of Oil and Gas Fields, v. VIII, p. 57-68.

Halbouty, Michel T., A.A. Meyerhoff, Robert E. King, Robert H. Dott, Sr, H. Douglas Klemme, and Theodore Shabad, 1970, World’s giant oil and gas fields, geologic factors affecting their formation, and basin classification: Part I: Giant oil and gas fields, in Geology of Giant Petroleum Fields: AAPG Memoir 14, p. 502-528, Table 1.

Horn, M.K., 2003, Giant fields, 1868-2003 (databases), in Giant Oil and Gas Field of the Decade 1990-1999, AAPG Memoir (in press).

Ibrahim, M.W., 1983, Petroleum geology of Southern Iraq: AAPG Bulletin, v. 67, p. 97-130.

Konert, G., A.M. Afifi, S.A. Al-Hajri, K. de Groot, A.A. Al Naim, and H.J.Droste, Paleozoic stratigraphy and hydrocarbon habitat of the Arabian Plate, in Petroleum Provinces of the Twenty First Century: AAPG Memoir 74, p. 483-515.

Majid, A. Hamid, and Jan Veizer, 1986, Deposition and chemical diagenesis of Tertiary carbonates, Kirkuk oil field, Iraq: AAPG Bulletin, v. 70, p. 898-913.

St. John, Bill, A.W. Bally, H.Douglas Klemme, 1984, Sedimentary provinces of the world÷hydrocarbon productive and nonproductive: AAPG. map and booklet (35 p.).

Versfelt, Porter, L., Jr., 2001, Major hydrocarbon potential in Iran, in Petroleum Provinces of the Twenty First Century: AAPG Memoir 74, p. 417-427.

There are 1,048 fields listed in this index. They are sorted by country. I list below the Saudi fields and then the fifty largest fields. I will post other data in later posts.

All Saudi Arabia fields:

The Fifty largest fields in the world.

So, Self-Driving Cars Could Make Humans Unhealthier Than Ever

Cars kill people. More than 37,000 over the course of 2017—what would statistically be considered a ‘good year.’ Big tech has a solution: Have the cars drive themselves, free of the distractions, drunkenness, and other human foibles. Flood the roads with autonomous vehicles, and watch collision deaths plummet.

Too bad this lovely narrative has a major plot hole: Blunt force trauma isn’t the only way cars kill. Each year, hundreds of thousands of people die prematurely from breathing exhaust-poisoned air. Even more insidious is how the mere act of sitting in a car for an hour or so each day drastically increases peoples’ risks of developing life-altering—sometimes life-ending—conditions like obesity and heart disease.

A widespread shift to vehicles that drive themselves, some experts say, could weaken humanity’s already slipping stance in a two-front war against pollution and sedentary behavior. They worry that once the stress of traffic and overt dangers of car travel are gone, people will spend more time in their rolling barcaloungers. And just because cars drive themselves doesn’t mean they’ll all be battery-powered, or that they’ll somehow inspire their occupants to get active.

The only way to ensure the chauffeured masses don’t reach their final destinations far too soon is to address the automobile era’s original sins. Sins that aren’t rooted in who’s working the pedals.

Fear and Loafing

If people were rational, top phobias like snakes, sharks, and spiders would be replaced by things like sitting too much, skipping workouts, and living close to freeways. Together, exposure to pollution and sedentary behavior are two of the most common risk factors for heart disease, which accounts for one in four deaths in the US each year. They also put people at risk of developing many types of cancers, lower respiratory diseases, diabetes, stroke, and other lifestyle diseases. (If you’re morbidly curious, car accidents mop up about 1 percent of the nation’s annual death toll, below marginally more prolific killers like suicide, Alzheimer’s, and the flu/pneumonia.)

Now, pollution and sedentary behavior are nebulous things, each with a variety of causal factors. But want to hazard a guess at what is one of the biggest contributors to people breathing bad air and not getting enough exercise? That’s right: spiders.

Seriously, though, it’s cars. Numerous studies have linked traffic to air pollution, in the form of lung-spackling poisons like particulate matter, volatile organic compounds, carbon monoxide, and nitrogen oxide. Not even homebodies are safe, as vehicular belches can waft indoors. Motor vehicle pollution is so bad that EPA warnings about it survived Scott Pruitt’s information purge.

At the same time, car commuters tend to live more sedentary lives, and as a group experience elevated rates of obesity, diabetes, and heart disease. “Although people think these risk factors are individual behavior choices, the reality is that our choices are shaped by our environments,” says Karen Lee, a physician and associate professor of preventive medicine at the University of Alberta in Canada. Over the course of the 20th century, vehicle ownership made it possible for people to work in cities without having to live in them. Personal chariots begat the personal fiefdom, which begat urban cores surrounded by ever-thickening rinds of suburbia.

So, for many people, walking is no longer an option. Sprawl makes public transportation untenable: You’d need too many buses, or too many miles of rail, to service all that acreage. The ironic twist of the personal freedom cars enabled is they required everyone make the same choice: Get a car, or get bent.

“Why do we care about safety?” says Peter Norton, a transportation historian at the University of Virginia. “Because we care about human health.” Norton warns that the autonomous future will result in less walking, more sprawl, and—without dedication to electric propulsion—a huge spike in pollution. “When your car drives itself and you can spend the commute doing whatever you want, who cares if a trip that used to take 20 minutes now takes an hour?” he says.

It doesn’t have to be this way. In November 2017, a British parliamentarian laid out a proposal to clear away any impedimentary regulations, and invest £1 billion in self-driving technology, so the nation could have autonomous vehicles on its roads by 2021. This plan had some notable oversights. Early proposals focused on benefits, like how people would have so much more time to work during their commute, and how that might benefit the economy. “I was concerned about how the supporters of this plan focused on productivity,” says James Harris, a policy and networks manager at the Royal Town Planning Institute in the UK.

Harris encouraged his country’s transportation planners to look at how autonomous transportation might worsen public health. Or, how it would change land use patterns, by encouraging Brits to move farther and farther from the places they work, shop, and recreate.

So, how to deploy a potentially life-saving technology without exacerbating already serious public health problems? Maybe by skipping cities. Allowing vehicles into urban areas in the first place was one of those original sins. Cars foul the air, don’t move enough people, and rob funding and space from transportation modes that make sense here, like buses with dedicated lanes, bicycle infrastructure, and safe-to-cross streets for pedestrians.

Autonomous vehicles might make the most sense in the suburbs and on highways. First of all, because this is where the majority of road fatalities occur. And while they wouldn’t roll back sprawl, they could at least, if connected to public transit, make city-bound suburbanites spend some time on foot—going from the curb to the train, from the train to work—which could make a dent in the epidemic of preventable lifestyle diseases.


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