Markets Gone Mad

Apple achieved an incredible financial milestone two weeks ago, reaching a market value of over $1 Trillion and that continues to rise.  The NY Times has a really good article about what this means for the economy in terms of income inequality and the consolidation of a significant amount of money in a small handful of companies.  Below are some of the more astonishing excerpts from the story:

This year, five tech companies — Facebook, Apple, Amazon, Netflix and Google’s parent, Alphabet — have delivered roughly half of the gains achieved by the Standard & Poor’s 500-stock index. Apple is the only company with a $1 trillion market value, but Amazon this year has been nipping at its heels. It is currently valued at more than $880 billion.

Apple and Google combined now provide the software for 99 percent of all smartphones. Facebook and Google take 59 cents of every dollar spent on online advertising in the United States. Amazon exerts utter dominance over online shopping and is getting bigger, fast, in areas like streaming of music and videos.

But the trend is not confined to technology.

Today, almost half of all the assets in the American financial system are controlled by five banks. In the late 1990s, the top five banks controlled a little more than one-fifth of the market. Over the past decade, six of the largest United States airlines merged into three. Four companies now control 98 percent of the American wireless market, and that number could fall to three if T-Mobile and Sprint are allowed to merge.

This time two years ago, Apple’s market value was as “low” as $520B. At the time, they were still the most valuable company, but in just two years they have nearly doubled their value.  The last time Apple wasn’t the biggest company was in the 2nd quarter of 2013 when Apple was beat by ExxonMobil for just that one quarter. To show how significantly the landscape has changed, ExxonMobil’s current position is now in 10th place.  To really emphasise how much of the market is contained within a single company, the NYTimes also has a neat interactive feature that shows if you combine the value of 111 S&P 500 companies they would come close to matching Apple.

What are the limits of this incredibly bullish market?  As we’ve seen with Facebook’s market value dropping by $120 Billion in a single day, the problem with these companies having such a lion’s share of the economy is that when they fall, the effects are massive.  One interesting thing that has been noted about Facebook’s drop is that even though the company lost as much money in a single day as some major companies like Nike are worth in total, there were few calls for their CEO or any top executives to step down.  In any other era if a company lost that much money there would be immediate consequences but that isn’t the case today.

Sideshow Act or Actual News?

Trump biographer Timothy O’Brien has a good opinion piece in Bloomberg about the Omarosa story that is currently dominating the news cycle.  O’Brien calls Omarosa and Trump “kindred spirits” and that while he was interviewing Trump for his book “Trumpland” he seemed to be endlessly fascinated by Omarosa, particularly her “self-absorption and nastiness”.

Of the barrage of daily news stories regarding this administration it’s difficult to choose which ones to stay focused on and a lot the time events that seem to not have much merit surprisingly turn into important stories.  At first glance everything about Omarosa’s story seems to be something that could and should be ignored, until it’s not of course. Thinking like that is entirely missing the point. The Omarosa story is the new Stormy Daniels story or Michael Cohen or the endless other ones that are demanding our attention by their sheer absurdity.  O’Brien theorizes that “Trump tweets relentlessly when he feels cornered or obsessed” and by all accounts Trump is definitely obsessed with Omarosa. Trump refuted Omarosa’s claim that he used the n-word during a taping of “The Apprentice” and said that Mark Burnett called to tell him the tapes she alludes to don’t exist.  Then a day later Sarah Huckabee Sanders said she can’t guarantee Trump didn’t say it.  Omarosa said that the Apprentice tape was discussed during the 2016 campaign on a call but his aides denied that ever took place.  The next day Omarosa released a recording of that meeting causing Trump’s aides to walk back their original statements.  Frank Bruni writes that Omarosa’s tapes reflect Trump’s long history of recording or threatening to record conversations, “Imitation isn’t just the sincerest form of flattery. It’s the cleverest kind of revenge.”  Politico reports that there are some similarities between the fear of Trump’s staff worried about what will come out in subsequent recordings to the fears Hillary Clinton’s staff had during the Wikileaks daily release of John Podesta’s emails.  A key difference was spelled out by Jennifer Palmieri, Clinton’s former communications director, “Nobody had to be worried that there was an email where Hillary used the N-word.”

Time will tell how long this story will dominate the news cycle and whether it actually does anything to impact change.  That people are yet again openly wondering what Trump’s views are on race and how it is that he has such a terrible track record of hiring people like Omarosa in the first place is a dialogue worth continuing to have.

 

Gold

For my inaugural piece on this blog I want to write about something that hit me on a personal level – the passing of one my heroes, the writer Jonathan Gold.  There are certain writers that I’ve followed for years and read religiously where often it feels like I am having a long, ongoing one-sided conversation with their writing.  Jonathan Gold was someone who was particularly able to capture that feeling with his distinct second-person writing style.

Through his columns in LA Weekly and the Los Angeles Times Gold was someone who brought the food of the world, most specifically the incredibly diverse cuisines of Los Angeles to his audience.  Reading Gold’s reviews, I was often struck by the immense knowledge that he possessed about some obscure cuisine, and wonder how on earth could this middle-aged man living in Pasadena speak with such authority on such diverse cultures?  The answer of course is that Gold immersed himself in research into whatever he was writing about. In the lovely documentary City of Gold there are various scenes inside the Gold household that is just consumed with books.  There are books all over the place – on the kitchen table, on the floor, on the stairs.  The books serve as an extension of his brain. You get the sense of Gold writing a review for some Senegalese restaurant and remembering an obscure detail about Senegalese culture in some book that he would then hunt down somewhere in that house and along the way find loads of other interesting tidbits to give colour to his piece.  

When I moved to LA in 2011 Jonathan Gold’s writing was my guide into that world.  Like so many others I would explore neighbourhoods that I would never otherwise have even heard of, let alone visit, to stop off at a place he recommended.  Often the restaurants were no-frills places, usually quite cheap and serving incredible food. Since I was new to the area and didn’t have many friends, Gold’s writing was a good way to get to know the city.  It was an excuse to go on an excursion to some random part of town with my girlfriend and slowly get to know the city that way. It’s a philosophy that I’ve since extended to travel. Try to find the most interesting restaurants in a city, particularly ones that are off the beaten path and use that as a conduit to explore those neighbourhoods.  

In a really lovely obituary in the New Yorker, Dana Goodyear wrote, “his greatest accomplishment, the thing that will form his legacy, is that he changed the way that people—Angelenos included—regard Los Angeles. His work coincided with, and in some ways drove, the sloughing off of the old plastic wrapping. As he described the city, its people, food, music, and style, he made it, and it became, real.”  Even though I only ended up living in LA for a year and a half I have such an affection and fondness for it and most of that is because of Jonathan Gold’s writing and how he helped me connect with that city and its people. He managed to show what was so special and unique about the city, while also connecting the diverse cultures and communities to everyone and bridging that gap.