American subprime lending is back on the road

Gillian Tett:

A few short years ago, “subprime” was almost an expletive. During the financial crisis, mortgages linked to subprime borrowers – or those with poor credit history – caused devastating losses; so much so that many asset managers declared they would never touch subprime again.
 But the financial world has a short memory, particularly when easy money and innovation collide. In recent months subprime lending has quietly staged a surprisingly powerful return, not in relation to real estate, but another American passion – cars. Some wonder how long it will be before this new boom causes another wave of casualties, not just among naive consumers, but investors too.
 The historical echoes are uncanny. During most of the past decade the amount of car-related debt grew only modestly. Yet outstanding car loans, which totalled $700bn in 2010, have jumped by a quarter in the past three years. This has led to a sharp increase in car sales, benefiting groups such as General Motors.

Digital advertising hits $43B, passing broadcast TV for the first time ever

John Koetsier:

This past year, digital advertising online and via mobile crossed the $40 billion mark for the first time ever, according to the Internet Advertising Bureau. Since 2004, the average growth rate has been 18 percent. And this year, digital ad revenues surpassed broadcast television for the first time.
 Not shockingly, mobile is leading the charge.
 Search remains the largest overall category, at $18.4 billion, and display hit $7.9 billion, according to the IAB’s numbers, but those categories are growing much slower than mobile and digital video ads. Search is “only” growing at 8.6 percent, while mobile ad revenue jumped 110 percent last year, and digital video ad revenue has tripled over the past few years to $2.8 billion.

The Big Shift in Business Strategy

John Hagel III:

Business strategy has evolved dramatically over the past four decades in response to the Big Shift that is re-shaping our global business landscape. We’re on the cusp of yet another shift that will determine who wins and who loses in the years ahead.
 We’ve recently been exploring some key elements required to escape from the dark side of technology: passion, institutional innovation and movements shaped by narratives.
 Today, we’ll look at the importance of new approaches to strategic advantage. These new approaches offer the potential to learn faster in ways that will be very difficult for others to copy. In a world of mounting performance pressure, this is a powerful advantage.
 A brief history
 Business strategy emerged in full force in the 1970’s and 1980’s with a strong focus on structural advantage. The essence of structural advantage was simple: find barriers to entry that will protect a company from competition. These barriers could take many forms: for example, geographic, economic, technological (patents) or regulatory. This made sense in a push based world: the key was to build walls to prevent others from pushing you out of your leadership position.
 But here’s the problem. The Big Shift is ultimately about the convergence of two powerful forces: digital technology infrastructures and long-term shifts in public policy towards economic liberalization. These two forces together are systematically and significantly reducing barriers to entry and barriers to movement on a global scale. The structural advantages that used to provide safe havens became less and less effective. If you’re an incumbent, welcome to the dark side!

How mobile is taking over the web

Gilles Raymond:

The latest Comscore figures reveal people are using the web less and less. Total Internet audience is stable in the US with 222 million unique monthly visitors. But from February 2013 to February 2014, the average time spent on the web per visitor went down by a scary 17 percent from 35 hours per month (2108 minutes) to 29 hours per month (1741 minutes).
 News Websites are Shrinking. Quickly.
 News websites are especially suffering from this dramatic shift. Yahoo News, the number one news website in US with 73 monthly million unique visitors, dropped by 25 percent to 54 million unique visitors over the last year. Even worse, the average time a user spends on the site went down 14 percent. Usually when the base decreases, the average number of minutes remains relatively constant because the site retains its core users. In this case, both users and time decreased dramatically, signaling a sea change in user behavior. In another example, saw a decrease in users by only 6 percent but the total number of minutes spent on the site fell by 41 percent. What Yahoo! And The New York Times are experiencing is a global trend, as illustrated in the graph below. The web news industry isn’t just losing users, but time spent on their sites at an impressive speed.

Facebook for Android and Why Zuckerberg Now Owns Your Ass

Danny Brown:

The Calendar I’d seen on previous Permissions, and the Calls (while annoying) I’m pretty sure had been there too. But check out the exact wording of the SMS/MMS Permission, and that of the Contacts one.
 Doesn’t that alarm you as a user? Read that wording again, especially this statement:
 This allows the app to read all SMS messages, regardless of content or confidentiality.
 Wow. Just… wow. Not even my wife gets access to my SMS messages (and no, Jacki, I have nothing to hide!). What honest and useful reason can Facebook have to get access to my texts? Seemingly they’re running with the “It will help us target better” message.

The Financial Vulnerability of Americans

Atif Mian & Amir Sufi::

Excessive household debt was crucial in explaining the severity of the Great Recession. So where are we now? Have households strengthened their financial position since 2009? Are household balance sheets strong enough to prevent another massive pull back in spending if there are significant job losses?
 To answer to these questions, we look at evidence from the 2012 National Financial Capability Study by FINRA. (We are grateful to Annamaria Lusardi, an expert on financial literacy, for pointing us to the data used in this post.) This survey is a representative sample of 25,000 individuals who were asked mostly qualitative questions about their finances. The survey was put into the field three years after the worst of the Great Recession.
 The survey responses are shocking, and should put fear into all of us about the financial vulnerability of U.S. households.

A messy legacy: Lawrence in Arabia

William Dalryample:

Lawrence of Arabia is one of those figures, like Mahatma Gandhi, who tends to generate biographies more or less every year. With the centenary of the First World War already upon us – and with the anniversary of Lawrence’s Arab Revolt in 2016 – Scott Anderson’s gripping new study, subtitled War, Deceit, Imperial Folly and the Making of the Modern Middle East, is only the forerunner of what is likely to be a very long caravan of new Lawrence books to come lolloping over the desert horizon over the next couple of years. Anderson’s version of the story is a brilliantly pulled-off piece of narrative history that demonstrates both why Lawrence continues to grip our imagination and why he can be a deeply problematic lens through which to examine the tensions of the Middle East.
 At the time, Lawrence’s dashingly cinematic raids on the Hejaz railway and his camel-borne attacks on Wejd and Aqaba during the First World War were regarded, as Lawrence wrote, as “the sideshow of a sideshow”. All eyes were on Ypres and the trenches of the Somme, where half the youth of Europe were being slaughtered on the Western Front. But the desert campaigns have become as iconic as they are because Lawrence provides a familiar face with which historians and biographers can tell one of the most complex and important stories of the war: the tale of the break-up of the Ottoman empire and the creation of the ongoing political train crash that is the modern Middle East.
 For it is Lawrence’s eastern theatre that has left by far the more important and messy legacy of that war. It is a legacy that we are still trying to contain today as Egypt undergoes its multiple revolutions and counter-revolutions, as Syria burns, as Israel remorselessly settles Palestinian land and as the Palestinians displaced in 1948 continue to rot in refugee camps.

Istanbul Is What Every Arab City Should Aspire To Be

Aboud Dandachi:

As a Syrian in Istanbul, watching the campaigning for the recently concluded 2014 Turkish local elections made me feel like a kid looking into a sumptuous candy store. For the first time in my life, I experienced first-hand the end-result and ideals the Syrian revolution was supposed to have bought to my own country; the democratic process in all its glory.
 Multiple political parties and candidates with banners and posters filling every area. The campaign offices with tables overflowing with electioneering pamphlets, staffed by volunteers sporting their respective party’s distinct colors. And roving vans blaring out campaign music. I loved hearing those vans in my neighborhood. They exemplified the very essence of a civilized society, one that resolves its differences not through guns, but at the ballot box. To a refugee who had left his own country in the midst of a devastating war, those campaign vans represented a veritable miracle; a functioning pluralistic, democratic society in the Middle East.
 Having lived my adult life in no less than fourteen cities in the Gulf and Levant, I moved to Istanbul in September 2013. After six months, I can unequivocally say that this metropolis is the standard by which Arab countries should be measuring themselves. Without a doubt, Istanbul is the city all Arab cities should have aspired to be.

Thank You for Shopping: Customer Loyalty Programs

Autumn Whitefield-Madrano:

Yesterday, I was informed that I’d “unlocked” the “VIB Level” of Sephora’s customer reward program. What this means in Sephoraspeak is that by “earning” 350 “points” at the store, I will receive seasonal VIB-only gifts—presumably along the lines of the free lip gloss I received whilst shopping during my birthday month, back when I was merely a Sephora “Beauty Insider”—that I will have advance access to sales, and that I get “dibs” on new products, so that I will be the first lady on the block to have NARS’s newest nail polish in Quivering Otter, or whatever the color of the season is.
 What this means in you-and-me-speak is that I have spent more than $350 at Sephora—not, as the company would put it, “earned” more than 350 “points” at Sephora—since this time last year.
 It was a shock to realize that I’d spent $350 at Sephora in the past 12 months, to be sure, but my financial navel-gazing is another post altogether. What “unlocking” this “VIB Level” made me think about was customer reward programs, and what we’re supposed to get out of them. With many customer loyalty programs, you actually save money. You might do this immediately/directly, as in my drugstore’s practice of advertising “specials” that are only “specials” if you are literally a card-carrying member of the drugstore’s loyalty program, or it might be savings down the line, as with frequent-flier miles. But the point is: You save money, as in cash, as in you have a compelling financial interest to use the loyalty program (which, of course, means that to some degree you’re loyal to the vendor, though of course consumers can belong to multiple loyalty programs, making them not loyal at all).

A 3D-printed house is being built right now in Amsterdam

Adi Robertson:

Architects in Amsterdam have begun construction on what they’re calling the first full-sized 3D-printed house. Using what’s essentially a large-scale version of a desktop 3D printer, Dus Architects is building what will eventually be a 13-room Dutch canal house made of interlocking plastic parts. The project was announced earlier this year — part proof of concept, part art project. After about three weeks of work, The Guardian reports, one three-meter-high corner segment has been produced. The interior and facade are printed as part of the same brick, and spaces are left for wiring and pipes; for now, the walls are later filled with concrete for insulation and reinforcement. The entire process of printing and assembling the house is slated to take three years.
 The 3D Print Canal House, as it’s called, is conceived as an improvement to current architectural practice on several levels. Designers at Dus say that by printing series of blocks instead of building with conventional materials, they can eliminate waste and reduce transportation costs; the plastic itself can be made with recycled materials. Individual rooms and design elements could be remixed and reordered by non-architects, allowing people to design their own ideal home and then hire a printing contractor to build it. And the rooms themselves can “fairly easy be disconnected” to move the house. The pieces are made with an oversized printer called the KamerMaker (or “room builder”), designed specially for Dus. The site itself is open to tourists, who can visit on most weekdays; President Barack Obama paid a visit earlier this month.