As Rome burns, there’s plenty of money investing in attention aggregation, innovation, and…burgers?

Let the Old Gods bellow and rage in the distance.There are likes to like and pages to page-view. Swipes to swipe. Items to be ordered and thought-leaders to be thought-followed. We’ve got our own temples, up in The Cloud, to be decorated with selfies and festooned with a million paeans to ourselves, our personal brands and our experiences. Our chauffeured chariots to be summoned, literally, on-demand. The app as finger-snap. People are favoriting us as we sleep. At least, they’d better be.Google is doing the work that priests and rabbis used to do. It has answers. Curious children are learning to consult with Alexa and Siri in kindergarten.And our New Gods have found a way to extract tribute from each and every one of these activities.We’re carrying their altars in our pockets.
“American Gods,” Josh Brown

There’s a quandary in there about why the market is up despite all the craziness in DC. The two reasons seem to be: (a.) in this craziness, customers of major companies are escaping into the comfort of the golden arches, Marriott(?), and iPhones, so, (b.) the Pareto minority who actually does all the investing goes to where the customers are going. For the investing group, there’s also some brand-driven devotion to big companies.

Sure: smoke ’em if you got ’em!

Owning half of all advertising is a good business

The Attention Merchants can fill in the gaps of how companies like Google and Facebook are doing so well here: they’re essentially gobbled up the advertising market, this life-blood of most all business, i.e.:

Information cannot be acted upon without attention and thus attention capture and information are essential to a functioning market economy, or indeed any competitive process, like an election (unknown candidates do not win). So as a technology for gaining access to the human mind, advertising can therefore serve a vital function, making markets, elections, and everything that depends on informed choice operate better, by telling us what we need to know about our choices, ideally in an objective fashion.

You could hang a figure on the value of that over 1, 5, 20, 50 years…but, let’s just say it’s a fuck-load lot of money and, thus, valuation in a company. Controlling what people, businesses, and governments spend their attention and money on? Priceless.

Good companies often have good products

Next, you can get the sense with this kind of talk that what’s being valued in companies is “nothing,” just a feeling, a sense. In reality, for example, with companies like Apple and, now, Amazon, long-term strategies (often risky) that result in cash-spewing machines is what’s being valued. The iPhone and it’s software makes a ton of money; AWS throws off cash.

Google has an 88 per cent market share in search advertising. Facebook (including Instagram, Messenger and WhatsApp) controls more than 70 per cent of social media on mobile devices. “Silicon Valley has too much power,” Rana Foroohar

In the pure “dot.com” category, it’s easy to get beguiled and think that “likes” and baby pictures in Facebook, or putting dog-faces on teens, is the thing being valued. Of course they’re not, people’s attention and the ability to keep those people paying attention (“a culture of innovation”) is what’s valued. Advertising is what’s being valued, not whatever “social” is.

Trading on perception…which is built by good products

Now, I don’t actually know how investing works – I’m one of those hoards of Vanguard-drones – but it’s clear that all the interesting stuff is based on predictions about how other buyers will price/value a share. You can sit around and collect dividends (or wait for a company to be bought by another) as your “payout” in equity investing, but that seems to be the boring game (unless you’re an “activist” investor who hype-engineers those two). So, of course, paying attention to people’s perception of a company’s value is what the investing insiders get all worked up about.

But, again, if you look at “the new gods,” most of the companies have actual, valuable businesses. I can speak to the tech companies like Apple, Amazon, Google, and (a bit) Salesforce. They have good things to sell and good strategies backing them.

Netflix, for example

Netflix, which is on the list of “new gods,” is another example. First, it was a better mouse-trap to browse for DVDs online, queue up ones to get, and have them mailed to you rather than going to the rental store. Then, as streaming became technically possible (queue those endless Mary Meeker decks), simply doing that was better than living at the whim of cable companies that seemed like they were over-serving and over-charging. (And meanwhile, TiVo just sort of shit-the-bed on their go at this market-window – maybe the cable companies gleefully starved TiVo with their own DVRs and lack of partnerships).

And, once all of Netflix’s customers had watched that 5% of the streaming catalog that was actually good (I kid! I kid! It’s probably more like 15%, right?), Netflix had to make it’s own original content (and put in exclusive licensing deals). In each round, they had a good product and re-arranged their strategy accordingly (and sometimes it didn’t go well).

(If I knew this industry better, I’d know if my hunch that HBO is the Microsoft here [“fast follower” who was sort of there the whole time with a good product and even evolving, just not getting the glory] was helpful or not.)

“Old Gods” fall


HP(E) and IBM are negative examples here, and Microsoft provides a more positive example. For a long, long time, both HP and IBM were perceived as being rock-solid – their products and services were trusted, worked well, and, thus, were purchased a lot. (I’ll spare you the old IBM adage.)

They had good businesses. But over the past 10 (or even 15) years, each fell behind the times, seemingly willingly: they didn’t evolve their business model, product portfolios, and corporate strategies fast enough. They didn’t change quickly enough, and the worse mistake was that they didn’t realize they needed to change faster and, then, that management didn’t make it happen. HP had got hit up with The Curse of Most M&A Doesn’t Work, But Some of it Really Doesn’t work. In each case, the financials of the company suffered, and so did everyone’s perception of the company.

The point with HP and IBM is: in large, older tech companies you need not only a good product, but you need to a good everything.

Microsoft’s rebirth

Microsoft shows that you can turn that around, and adds more confusion to how investors actually value companies. From what I know, Microsoft has always been a financially good company, but it languished starting in the Internet era, which it barely battled through (to much financial glory after the late 90s).


But as it continued to biff on mobile, SaaS, shoring up desktop sales (I might be wrong on this point), and even cloud (where it’s now considered one of the “top three”), the perception was that Microsoft had lost it, strategically. An early warning sign was screwing up the Danger acquisition, which was a prelude to whatever Nokia was. And, I always found Bing to be overly quixotic: why try? But, really, I suppose you’d want to try to go after that pool of “priceless” advertising money above that Google and Facebook now steel-fist, and analysts would have discounted Microsoft’s share price even more if they didn’t try for a slice of that TAM-pie.

Despite all that, Microsoft seems to have turned it around. Their perception is pretty good now, and they’re out of that share-price plateau of the 2000’s. And, again, what did they do? They made good products, they built a good business, they changed almost everything.

Luck is handy too

You can throw more negative and positive examples on the pile: Yahoo!, how SUSE blossomed after it go out from Novell’s thumb, how AOL lost its way (though, maybe that’s getting better?), SAP & Oracle (deciding which and how each is good or bad is left as an exercise to the reader), etc.

In each case, companies just have to do the simple thing of trying to build a good business, make good products and services, and, well, catch a substantial stream of lucky breaks.

Since I don’t know burgers, payments, and hotels, I can only assume that in Josh’s list of new gods, McDonald’s, Visa, and Marriott are following a similar, annoyingly common sense approach.

Gods become “old god” because they suck versus the new gods

To hop on the American Gods metaphor train, sure, some of the old gods fell into disfavor out of whim (Johnny Appleseed don’t seem half-bad, and Easter seems pretty nice!), but most of them were dumped because they were shitty: blood sacrifice, mind-control, and otherwise treating humans like shit sure seem like a raw deal compared to TV, free-market-money, Jesus, and Paul Bunyan. The old gods stopped trying to innovate, as it were, and got all stuck on hammering in people’s heads, child sacrifice, and hanging humans.

That shit don’t sell now-a-days. So, you know, like the doctor says: don’t do that.

Meanwhile, back to the point

So, still, why’s the money-hole going so well?

You’re wondering how it could be possible that the S&P 500, the Nasdaq 100 and the Dow Jones Industrial Average could be climbing to record highs day after day, given, well, everything.
How is it that stocks can break through to new heights while the country at large seemingly sinks to new depths?

Who really knows why “the market” is “up” when it should be “troubled,”. In general, the way companies are valued and the way businesses run doesn’t seem effected much by cultural strife, change, and, chaos (in the short to medium term, at least). So, if the ruling hill-billy class wants to make a big to-do out of bathrooms, what does “god money” care? If anything, money likes contained chaos, constant change that makes cash turn over and change hands.

Also, of course, Republicans are in power, which makes money-focused people hopeful for tax reductions, repatriation, regulation reduction, and things that are otherwise the opposite of “Democrats wanting to use money to help poor people.” Most investor class people seem to stop reading that sentence after the word “money.”

Finally, you can’t exactly trust anything that Trump and friends say – sure, that 35% border tax would tank huge sectors of the economy, but come on, he’s caved on so many other things…well, actual important, money-related things (though, hey, how am I going to do my pivot tables if I can’t use my laptop on the way back from Zurich?)

There’s an argument to be made that if people can’t maintain steadily, growing salaries, there won’t be enough consumer money sloshing around to spend on things …but if ‘400 wealthiest Americans had “more wealth than half of all Americans combined,”‘ what do they need that other half for but to packaged up their prepared meals and old-man groaning mattresses to be drone delivered?

More, how much influence does the social chaos of state and local government really effect “the market,” and Congress doesn’t seem to actually do anything (nor want to), and we’ve got a little under two years until the next gut-wrenching election night – what if we elect more crazies, but this time they can actually get shit done?!

Don’t worry, though! There’s plenty of time to order five gallon tubs of guacamole and wrastle with (and for) carnies into the office!

Which is to say: in politics, so far, there hasn’t been much more than talk about money. It’s all been able people and culture. Investors don’t invest in people and culture (maybe they use their own cash to buy expensive art, sure), so why should the market be down?

Sprinkling Internet on NGO’s don’t work

At first, you’re like, “oh, another piece where someone makes fun of us nerds and misunderstands our damagingly sarcastic way of saying everything that belies the privilege we all live under.” Then you’re like, “oh, this is actually a good piece.” E.g.:

Human rights work attempts to prevent the abusive deployment of power against those who have little of it. While technology might disrupt some power structures, it might also reinforce them, and it is rarely designed to empower the most vulnerable populations. Human rights defenders are innovative, and they have used software to do work it wasn’t designed to do, such as live-streaming police violence against civilian populations to press for government accountability. But perpetrators of mass violence are innovative too. Software alone is unlikely to provide clear human rights victories.

And, especially:

Assuming that adopting the tool is feasible, do the benefits this tool provides outweigh the cost of disrupting your existing workflow?

People rarely consider that, in all walks of life.

Source: Tech folk: ‘Move fast and break things’ doesn’t work when lives are at stake

Highlights from that Thiel/Trump piece

One could have predicted Mr. Thiel’s affinity for Mr. Trump by reading his 2014 book, “Zero to One,” in which he offers three prongs of his philosophy: 1) It is better to risk boldness than triviality. 2) A bad plan is better than no plan. 3) Sales matter just as much as product.

Some Rumsfeldian level poetry…except the Rumsfeld one was easier to decide:

When I ask about the incestuous amplification of the Facebook news feed, he muses: “There’s nobody you know who knows anybody. There’s nobody you know who knows anybody who knows anybody, ad infinitum.”

Avoiding being all rainbows:

“If you’re too optimistic, it sounds like you’re out of touch,” he says. “The Republicans needed a far more pessimistic candidate. Somehow, what was unusual about Trump is, he was very pessimistic but it still had an energizing aspect to it.”

What exactly do they do?

“One of the things that’s striking about talking to people who are politically working in D.C. is, it’s so hard to tell what any of them actually do,” he says. “It’s a sort of place where people measure input, not output. You have a 15-minute monologue describing a 15-page résumé, starting in seventh grade.”

Source: Peter Thiel, Trump’s Tech Pal, Explains Himself

Keeping money at the top

Given that the wealthiest 10% of Americans own 81% of all stocks and mutual funds, these uses of corporate cash are a direct transfer of corporate profits away from creating jobs and capital investment, increasing income inequality. And the repurchase trend has accelerated radically. Stock buybacks as a percent of capital spending have risen to an all-time high of 113% in the last five years, compared to 60% in 2000 and 38% in 1990.

The $520 billion that companies spent on 2015 stock repurchases alone is enough to pay the average U.S. wage to 11 million workers — considerably more than our 7.8 million citizens who are currently unemployed. To put this in a different perspective, the amount corporations spent on stock repurchases in 2015 that went to the wealthiest 10% of the population was $60 billion more than the total federal government spending on all safety net programs combined.

From How Big Business Created the Politics of Anger, March 2016.

It’s Not the Economy, Stupid

Rational anaysis is hard to find in real life:

But in Elkhart, people have jobs they didn’t have six years ago, and they’re working more hours. Their homes are worth more than they were before Obama took office, on average, and their paychecks are fatter than they used to be. Yet Obama is, and will likely remain, the president who didn’t do anything right.

Link

“synecdoche”

There should be a word for “when you use a fancy word, thus establishing your erudition, and your subject, not being so erudite, takes it as an insult.”

Meanwhile:

Sweden, where one lives if one wants to avoid coal rolling.

I can’t vouch for the “vast right wing media conspiracy angle,” but:

The core of the ethnonationalist perspective is that a country’s constituent groups and demographics are locked in a zero-sum struggle for resources. Any government intervention that favors one group disfavors the others. Government and other institutions are either with you or against you.

What FOX and talk radio have been teaching the right for decades is that native-born, working- and middle-class whites are locked in a zero-sum struggle with rising Others — minorities, immigrants, gays, coastal elitists, hippie environmentalists, etc. — and that the major institutions of the country have been coopted and are working on behalf of the Others.

And back to the “synecdoche” in question:

I will continue to roll coal anytime I feel like and fog your stupid eco-cars.

Was it not Franklin – or maybe Jefferson? – who said “the best way to express your freedom is to shit all over it.”

See also “asshole vs. jerk” and the tactics of my tribe when it comes to being an asshole to make a point.

Source: This one quote shows what angry white guys mean when they talk about government overreach

Fear of change vs. change is progress

Ezra Klein frames up the election well here:

This is the argument coursing through this election. Democrats believe America’s rising diversity, its increased emphasis on inclusion, is making it greater. Republicans have nominated a candidate who represents and channels the fears of that diversity, the sense of displacement — both real and imagined — that accompanies that inclusion.

Check out a different view from Peter Beinart:

But when Elizabeth Warren and Bernie Sanders took the stage later in the evening, the convention began to sound much more like the campaign Gore actually ran: the dark and angry, “people versus the powerful.” Warren said: “I’m worried that opportunity is slipping away for people who work hard and play by the rules.” Sanders talked about “the 40-year decline of our middle class” (40 years that include the presidencies of Bill Clinton and Barack Obama), called American inequality “grotesque,” and said America was moving “toward oligarchy.”

Source: “The Democrats’ message: America is already great. Don’t let Trump screw it up.”

The real reason women are leaving Wall Street

Chock full of meaty stuff, I don’t really think it’s limited to Wall Street:

When Keller wasn’t working sources worldwide, she was digging into vehicle costs by model, labor negotiations, management changes, market share, environmental regulations, currency fluctuations, consumer spending, car preferences, balance sheets, industry gossip and really anything else that could potentially affect profits and stock prices of auto manufacturers and suppliers. She would then type, rapid-fire, clearly and concisely, with accompanying tables and charts, her findings and conclusions. Those were published in a constant stream of output worthy of a large team of analysts. She tightly controlled her business.

“When times are good, intellectual capital is valued on Wall Street,” says long time Wall Street executive Jack Rivkin, “It is more of a meritocracy. In a downturn, political savvy and connections become predominant.”

One day in 2010, Palmieri had an epiphany. “I was at the management table with the CEO,” she says, “I sat there and realized, ‘I’m at the table. I’ve made it. I’ve networked, I’ve clawed, I’ve said ‘yes,’ I’ve said ‘no,’ I’ve put in all this time and effort and I was underwhelmed. What I was getting back was not acceptable to me.”

The real reason women are leaving Wall Street