Public companies can change their depreciation schedules at any time and accountants use that fact to change their "losses" in a way that is most beneficial to the company. Too much profit so have to pay taxes? Depreciate things faster. Not enough profit to appease the investors? Depreciate things more slowly.
This is clearly false. None of Nvidia, AMD, or Qualcomm manufacture their own chips. These companies are valuable despite not having in-house manufactures, perhaps because of it.
Correctness of this statement also depends on the type of chips.
Not everything needs the latest and greatest process node (which is predominately a fabless industry) except for advanced microprocessors, SoCs, or storage. On the other hand, 65 nm is perfectly fine for 90% of chips in existence, even 0.18 microns is still often used. You don't need EUV for a good LED driver, a serial port, or a battery charger controller. If we talk in this context, indeed, companies like Texas Instruments, NXP, ONSemi, Analog Devices, Microchip, etc, usually make chips in-house.
This is not new. Safari has been blocking third-party cookies for a while. Even Chrome offers this setting now. With that setting turned on, Chrome will also block Google Analytics when you are not on a google.com page.
Loss ratio is a specific measure in the insurance industry. You don't need to get to 0% loss ratio for the company to be profitable and ~70% loss ratio isn't bad for a relatively new company. Typical P&C insurance companies have loss ratios ~ 50%.
Do you gain more in expense reduction than you lose in loss increases?
By itself, the loss ratio tells you nothing because the pitch here is really that they can reduce expenses, not that they can reduce losses.
And I think the way they present this is slightly misleading. They only handle 1/3 of claims by computer in their entirety. The innovation is really on the front-end. And whilst this is probably a big part of costs, it isn't exactly huge. In addition, this is something that is fairly easy to replicate.
The specific claim made is: we have a "flywheel" (as ever, every company has one of these in 2020) whereby we use data to reduce costs and losses. This seems, from what I can see, false.
You still have to support the policy, process claims, customer support, etc. The biggest expense on a unit-economics level, post claims paid, is marketing -- acquisition and retention costs.
If you look at the auto insurers, it's incredibly competitive and everyone is trying to balance those unit costs with the loss ratio. They are all moving targets but premium pricing is heavily regulated meaning your pricing will 100% come under scrutiny from some states (this must be done individually for every state in the U.S.) so any changes to pricing tends to be a complex process that could take months, if not a year+ (in some states) to take effect.
So when you get pricing wrong and are taking a big claims loss, it takes some time to dig out of that and you'll also piss off lots of customers who got in "cheap" and are now getting a rate increase. And when you get pricing wrong and you're loss ratio starts looking better, your competitors may be out-pricing you, making you uncompetitive until your adjustments are improved.
Losses + “Loss adjustment expense” are your costs. Loss adjustment expense is broken into Allocated Loss Adjustment expense - expenses tied to a particular claim (Typically lawyers); Unallocated Loss Adjustment Expense - overhead.
Theoretically two companies with the same policies will pay out the same losses but will differentiate themselves in expense ratios.
In some lines it’s not bad to have loss + expense ratios > 100% because the average time of premium is very far from the average date of loss, so while there is an underwriting loss it is offset by the investment gain.
I'm not so sure. Insurance companies exist based on probabilities. How much margin do you need to make a given profit worth the risk? What about that dollar you brought in where you ended up paying out $10?
> I suppose it helps to see precisely who is paying for an advertisement, but I don’t think this is actually useful in a real sense.
Think from the perspective of an advertiser. Earlier, an advertiser could pay for any ad anonymously. Now any ad you want to show can be traced back to you. This is a meaningful difference. Even if you as a viewer can't pinpoint the specific person behind an ad, they are not completely anonymous anymore (to Google, to law enforcement that may have a warrant, etc). Of course, this change comes at the cost of a reduction in freedom from the lack of anonymity.
Ad targeting still allows you to fly under the radar of someone who could investigate by only targeting the ad to the idiots that would swallow it whole and not ask questions while everyone else is completely oblivious to the ad's existence.
In fact I'm pretty sure this is happening already regardless of these changes. I recently saw on Reddit that YouTube is promoting ads for very obvious gift card scams, even though I've personally never seen any of those in the few times my ad blocker let me down. Presumably this is because those ads are only targeted to a certain subset of people to both maximise ROI as well as avoid being shown to someone smart enough to identify it as a scam and potentially report it and blow up the whole operation.
A good start (besides banning the cancer that is advertising) would be to have all advertising platforms publish a searchable archive of every ad, who paid for it and the targeting criteria. This means people can at least look behind the curtain and see which ads are out there that they wouldn't normally see due to the targeting criteria not matching them.
> (besides banning the cancer that is advertising)
Not all advertising (especially in the broad sense of the word) is bad. There is one ad in particular in the last year that I'm very glad I saw, because it alerted me to the existence of a product that has provided a lot of value to me. Of course, most advertising nowadays is trash and the web is barely usable without an ad-blocker, but in principle, I think having unobtrusive ads for vetted products isn't such a bad thing.
Unless there is a government identification with photo of a real person associated with the ad, there is no transparency. Shell corporations and complex ownership structures will obscure any attempt at tracking the source otherwise.
Corporate structure should be public data and involve real people with verified identities, yes?
Anything that reduces the difficulty of tracing should be seen as an improvement. It's a long road from here to perfection, but that's no reason not to take a step.
Definitely this policy is an improvement, but many of the worst offenders have more than sufficient resources to avoid any impact from this change. It's already the norm for political organizations to adopt entirely useless names. What's the difference between "People for the American Way" and "Citizens United?" And these are both decades-old organizations, not a modern occurrence.
Various regulations (some hinging on direct involvement in electoral advocacy) require various degrees of disclosure of funding sources and beneficial owners, but the system is uneven and often minimally enforced. In practice I expect a huge number of legal entities running advertising whose operators cannot readily be ascertained. This is already the case with groups like Metric Media Foundation where a good degree of investigative journalism was required to figure out who was pulling the strings.
Compliance rules could be extended to include due diligence on partners, and block contracts and payments to and from entities that have no clear ownership.
It could but realistically it's unlikely to happen. Nobody would ever accept taking responsibility for dozens, hundreds, or thousands of partners, and the expenses involved in validating every last one of them. Not to mention the lost business on either side. Even the IRS or banks can't keep up with long ownership chains or properly identifying customers and they have a more vested interest.
Laws and rules are far slower to adapt than the workarounds that bend them. And clear ownership says little. Everything can simply point to a more or less real identity that nobody will ever find.
Don't get me wrong, I'm not against such rules. I'm just saying that the likelihood of them achieving the results we imagine are slim.
How hard is a policy stating maximum of n-levels depth of nested ownership allowed and any kind of cyclical ownership causes loss of control in both ways?
It's hard because non-fraudulent corporations commonly have very complicated ownership structures. The global corporation owns the US subsidiary which owns the Auto subsidiary which owns Auto Parts subsidiary which owns the Northeast Region Auto Parts subsidiary which owns a subsidiary that makes transmissions which owns a subsidiary that makes warranties for transmissions etc. etc. The level of complexity necessary to confound an external investigation is not inherently less than the level of complexity that exists in legitimate real corporations.
Corporate ownership is also traded as a commodity. The US Auto Parts Northeast Region Transmissions Warranty subsidiary is required to hold assets sufficient to bond the warranties it issues, so instead of keeping a large pile of hundred dollar bills on the coffee table, it holds shares of the parent company and you now have circular ownership. If the parent company is loaded up with debt then you might find that the subsidiaries like that own the majority or entirety of the parent company -- without even necessarily realizing it.
You also have the problem that people willing to commit fraud are willing to commit fraud. Convince some credulous victim that all they have to do is put in $1000 and sign some papers and they can invest in The Next Big Thing and they've not only scammed them out of $1000, now it's the victim's name on the shell corp.
Generally speaking identifying people who don't want to be identified is hard, the methods effective to do so oppress innocent people more than anything, and it is best to look to other solutions. For example, if you discover people are publishing misinformation, show the truth to the same people who saw the misinformation.
I'm just talking about the expectations. Writing the rule is not the difficult part. Enforcing them is because it's extra effort and expense and it leads to losing some business. Shareholders are more than happy to support a company's ethics until they stand in the way of profit.
Finding an appropriate n might be a delicate, many big (legitimate) businesses have really complicated ownership structures. Then you have to task someone with validating all of this. Whose expense is it to do the due diligence and check everything? WHo takes responsibility for failures in this regard? And finally it will mean some business is lost on both sides and it might be a lot of money.
Banks have anti money laundering policies yet still find ways to go around them all the time because they want the business. Banking secrecy wasn't there to protect privacy but to obscure shady activities. As I said, it's good to have the rule and I'm not against it but I have the feeling people have some unrealistic expectations from this. They just raise the bar a bit and filter out the "chaff" while still allowing larger interests to prevail.
> Finding an appropriate n might be a delicate, many big (legitimate) businesses have really complicated ownership structures
It is something between 10 and 13, if you accept that governance structure of an organisation must match its social communication structure. It is something between 14 and 16, if you accept that governance structure of an organisation must match its business divisions. Any n>16 is prone to communication shortcutting.
That could be defeatable by crowdsourced research into a common database non blockchain of course ;-) ) and a chrome extension to ad an info UI to every ad, and a Google feature to show you a restorspective look at id info of all ads they've served you recently.
yes, there's tension between transparency for businesses and privacy for individuals (which is the stance i support). on one hand, you want transparency to elucidate crime and even neglect and aggression. on the other, the people behind companies have the right to privacy as well, lest those people be unfairly attacked (e.g., planned parenthood workers). the best tradeoff is not obvious here.
