Writing in the London Review of Books, Rebecca Solnit expresses her discontent at the unstable housing market in San Francisco, driven by new money from the tech boom (Google, Facebook, etc.):
At the actual open houses, dozens of people who looked like students would show up with chequebooks and sheaves of resumés and other documents and pack the house, literally: it was like a cross between being at a rock concert without a band and the Hotel Rwanda. There were rumours that these young people were starting bidding wars, offering a year’s rent in advance, offering far more than was being asked. These rumours were confirmed. Evictions went back up the way they did during the dot-com bubble. Most renters have considerable protection from both rent hikes and evictions in San Francisco, but there are ways around the latter, ways that often lead to pitched legal battles, and sometimes illegal ones. Owners have the right to evict a tenant to occupy the apartment itself (a right often abused; an evicted friend of mine found a new home next door to his former landlord and is watching with an eagle eye to see if the guy really dwells there for the requisite three years). Statewide, the Ellis Act allows landlords to evict all tenants and remove the property from the rental market, a manoeuvre often deployed to convert a property to flats for sale. As for rent control, it makes many landlords restless with stable tenants, since you can charge anything you like on a vacant apartment – and they do.
A Latino who has been an important cultural figure for forty years is being evicted while his wife undergoes chemotherapy. One of San Francisco’s most distinguished poets, a recent candidate for the city’s poet laureate, is being evicted after 35 years in his apartment and his whole adult life here: whether he will claw his way onto a much humbler perch or be exiled to another town remains to be seen, as does the fate of a city that poets can’t afford. His building, full of renters for most or all of the past century, including a notable documentary filmmaker, will be turned into flats for sale. A few miles away, friends of friends were evicted after twenty years in their home by two Google attorneys, a gay couple who moved into two separate units in order to maximise their owner-move-in rights. Rental prices rose between 10 and 135 per cent over the past year in San Francisco’s various neighbourhoods, though thanks to rent control a lot of San Franciscans were paying far below market rates even before the boom – which makes adjusting to the new market rate even harder. Two much-loved used bookstores are also being evicted by landlords looking for more money; 16 restaurants opened last year in their vicinity. On the waterfront, Larry Ellison, the owner of Oracle and the world’s sixth richest man, has been allowed to take control of three city piers for 75 years in return for fixing them up in time for the 2013 America’s Cup; he will evict dozens of small waterfront businesses as part of the deal.
Evictions, foreclosures, and legal loopholes. This doesn’t sound like a city I’d want to inhabit. A must-read for perspective.
Following the dismal 4th quarter earnings announcements by Amazon, detailed below, Amazon’s share price shot up by more than 10%.
- Q4 revenue of $21.27 billion missed expectations of $22.23 billion
- Q1 EPS of $0.21 missed expectations of $0.27;
- The firm guided top-line lower, seeing Q1 sales of $15-$16 billion, below the estimate of $16.5 billion
- The firm guided operating income much lower, seeing Q1 op income of ($285)-$65 Million on expectations of $261.4 MM
- The firm said the its physical books sales had the lowest growth in 17 years
- Total employees grew by 7,000 in the quarter and 32,200 Y/Y to a record 88,400
- Worldwide net sales Y/Y growth was the slowest in years at 23%, down from 30% in Q3 and 34% a year ago
- And, last and certainly least, LTM Net Income is now officially negative, or ($49) meaning as of this moment the firm with the idiotically high PE has an even more idiotic N/M PE.
The question is why? Matthew Yglesias has a great thought: Amazon is a charitable organization. To wit:
The company’s shares are down a bit today, but the company’s stock is taking a much less catastrophic plunge in already-meager profits than Apple, whose stock plunged simply because its Q4 profits increased at an unexpectedly slow rate. That’s because Amazon, as best I can tell, is a charitable organization being run by elements of the investment community for the benefit of consumers. The shareholders put up the equity, and instead of owning a claim on a steady stream of fat profits, they get a claim on a mighty engine of consumer surplus. Amazon sells things to people at prices that seem impossible because it actually is impossible to make money that way. And the competitive pressure of needing to square off against Amazon cuts profit margins at other companies, thus benefiting people who don’t even buy anything from Amazon.
It’s a truly remarkable American success story. But if you own a competing firm, you should be terrified. Competition is always scary, but competition against a juggernaut that seems to have permission from its shareholders to not turn any profits is really frightening.
Sometimes (often) the markets are a fool’s game.
The Wall Street Journal has a bizarre story of four grown men who’ve been playing a game of tag for 23 years:
It started in high school when they spent their morning break darting around the campus of Gonzaga Preparatory School in Spokane, Wash. Then they moved on—to college, careers, families and new cities. But because of a reunion, a contract and someone’s unusual idea to stay in touch, tag keeps pulling them closer. Much closer.
The game they play is fundamentally the same as the schoolyard version: One player is “It” until he tags someone else. But men in their 40s can’t easily chase each other around the playground, at least not without making people nervous, so this tag has a twist. There are no geographic restrictions and the game is live for the entire month of February. The last guy tagged stays “It” for the year.
I guess this game beats Facebook pokes, but:
The participants say tag has helped preserve friendships that otherwise may have fizzled. Usually, though, the prospect of 11 months of ridicule overrides brotherhood.
The Atlanta-Business Chronicle reports that chicken wing prices are the highest ever ahead of Super Bowl XLVII:
Chicken wing prices typically increase around the Super Bowl, but this year the ballgame favorite has reached a record high.
Wholesale wings are currently at about $2.11 a pound (Northeast), the highest on record at the U.S. Department of Agriculture, up 26 cents or 14 percent from a year earlier, according to The National Chicken Council.
The council says Americans will eat 1.23 billion chicken wings on Super Bowl Sunday. That’s down one percent from 2011 due to a shortage in the number of chicken wings produced.
There’s also this:
Meanwhile, here in metro Atlanta, two men were arrested for stealing $65,000 in frozen chicken from Nordic Cold Storage in the 4300 block of Pleasantdale Road in Doraville where they were employed, reports Fox 5 Atlanta.
Get your chicken while it’s hot, folks.
In a strong op-ed piece in The New York Times, James Diamond (author of Guns, Germs, and Steel) argues that we overestimate certain risks while understating the risks we come across daily (such as taking a shower):
Studies have compared Americans’ perceived ranking of dangers with the rankings of real dangers, measured either by actual accident figures or by estimated numbers of averted accidents. It turns out that we exaggerate the risks of events that are beyond our control, that cause many deaths at once or that kill in spectacular ways — crazy gunmen, terrorists, plane crashes, nuclear radiation, genetically modified crops. At the same time, we underestimate the risks of events that we can control (“That would never happen to me — I’m careful”) and of events that kill just one person in a mundane way.
The op-ed focuses on Diamond’s fascination with the natives of New Guinea. Diamond’s biggest lesson is realizing the importance of being attentive to hazards that carry a low risk each time but are encountered frequently.
Daniel Pink, writing in The Washington Post, explains how ambiverts are at an advantage over introverts and extroverts in leadership/sales roles:
Ambiverts, a term coined by social scientists in the 1920s, are people who are neither extremely introverted nor extremely extroverted. Think back to that 1-to-7 scale that Grant used. Ambiverts aren’t 1s or 2s, but they’re not 6s or 7s either. They’re 3s, 4s and 5s. They’re not quiet, but they’re not loud. They know how to assert themselves, but they’re not pushy.
In Grant’s study, ambiverts earned average hourly revenues of $155, beating extroverts by a healthy 24 percent. In fact, the salespeople who did the best of all, earning an average of $208 per hour, had scores of 4.0, smack in the middle of the introversion-extroversion scale.
What holds for actual salespeople holds equally for the quasi-salespeople known as leaders. Extroverts can talk too much and listen too little. They can overwhelm others with the force of their personalities. Sometimes they care too deeply about being liked and not enough about getting tough things done.
But the answer — whether you’re pushing Nissans on a car lot or leading a major nonprofit or corporation — isn’t to lurch to the opposite end of the spectrum. Introverts have their own challenges. They can be too shy to initiate, too skittish to deliver unpleasant news and too timid to close the deal. Ambiverts, though, strike the right balance. They know when to speak up and when to shut up, when to inspect and when to respond, when to push and when to hold back.
Still curious? Daniel Pink is the author of To Sell is Human: The Surprising Truth about Moving Others, which I am currently reading. The basic gist: we are all salesmen, day in and day out, whether we realize it or not.
Olivia Laing contemplates the meaning of loneliness in a piece for Aeon Magazine:
Something funny happens to people who are lonely. The lonelier they get, the less adept they become at navigating social currents. Loneliness grows around them, like mould or fur, a prophylactic that inhibits contact, no matter how badly contact is desired. Loneliness is accretive, extending and perpetuating itself. Once it becomes impacted, it isn’t easy to dislodge. When I think of its advance, an anchoress’s cell comes to mind, as does the exoskeleton of a gastropod.
I think Olivia is correct in hypothesizing that loneliness comes and goes in vicious cycles (it’s hard to break free when you’re in a slump).
It seems that this is what loneliness is designed to do: to provoke the restoration of social bonds. Like pain itself, it exists to alert the organism to a state of untenability, to prompt a change in circumstance. We are social animals, the theory goes, and so isolation is — or was, at some unspecified point in our evolutionary journey — unsafe for us. This theory neatly explains the physical consequences of loneliness, which ally to a heightened sense of threat, but I can’t help feeling it doesn’t capture the entirety of loneliness as a state.
A wonderful essay.