Numbers are compelling. They are easy to see and remember. They serve as proof. No wonder your resume bullets should have them. The Economist uses numbers to great effect. In fact, they love fractions. Copy/pasted quotes from last two issues of the Economist. All quotes, click on the titles for links.
Family offices become financial titans
- Largely unnoticed, family offices have become a force in investing, with up to $4trn of assets—more than hedge funds and equivalent to 6% of the value of the world’s stockmarkets.
- The average one [family office] oversees $500m-1bn. The biggest, mostly sfo, administer far more. George Soros’s manages $25bn.
- Since 1980 the share of the world’s wealth owned by the top 0.01% has risen from 3% to 8%.
- They [family offices] have debt equivalent to 17% of their assets, making them among the least leveraged participants in global markets.
- The average family office returned 16% in 2017 and 7% in 2016.
- Investments in hedge funds, by contrast, have been falling, and now account for only 6% of portfolios.
Congress discovers a bill with bipartisan support that the president will sign
- Though welcome, this would only nibble at the prison population. Roughly 2.2m people are imprisoned in America. Less than 10% of them are in federal prisons, and federal prisoners are the only ones affected by the First Step Act’s reforms (see chart).
Michael Cohen was sentenced to prison for things he did for his boss
- Mr Cohen, then [2007] a lowly lawyer at the Trump Organisation on a salary of $75,000 a year, was made an offer he could not refuse. Would he like to become an executive vice-president and special counsel to Donald Trump, with a salary of $500,000 a year?
Canada is woefully unprepared for a shift away from fossil fuels
- Alberta produces 81% of Canada’s oil and gas.
- Canada’s declared goal is to reduce emissions to 30% below 2005 levels by 2030. That means curbing Alberta’s oil-and-gas production.
- Alberta’s sovereign-wealth fund, created in 1976, has been raided so frequently that it contains a paltry C$17.5bn (US$13bn). Norway’s fund, set up 14 years later, has about $1trn, partly because its oil wells are more lucrative but also because its leaders have been much thriftier.
- Alberta is forecasting a deficit of C$8bn this year and does not expect to balance the budget until 2023. The office-vacancy rate in Calgary is more than 27%, up from 4% in 2012. Unemployment is 6.3%, above the national average of 5.6%.
The West once flooded China with opium. China is returning the favour
- The country is the world’s biggest exporter of pharmaceutical ingredients and accounts for one-third of global sales of chemicals.
- Fentanyl’s unusual potency—30 times greater than heroin—makes it easy to smuggle powerful amounts in small, hard-to-detect quantities.
- In 2017 America’s Department of Justice guessed that fentanyl purchased in China for $3,000-5,000 could be worth around $1.5m on American streets.
- About 29,000 people in America died from overdosing on opioids such as fentanyl in 2017, up from about 5,000 in 2014.
To curb pollution, China has appointed over 1m “river chiefs”
- Earlier this year a government report said that surface water in nearly a third of “river sections” surveyed was too risky to touch, let alone drink. Water in nearly 15% of them was rated too dirty even for industrial use. Lakes are worse.
When Marlboro Man met Mary Jane
- Just 14% of American adults smoked cigarettes in 2017, compared with around 42% in 1965.
- It announced that it was spending $1.8bn to buy a 45% share in Cronos Group, a Canadian cannabis firm, with an option to purchase a further 10% in the future. The news boosted Cronos’ share price by 29%; Altria’s crept up by 2%.
- At present recreational cannabis is legal in just ten states. Some reckon the total market could be worth between $40bn-70bn, equivalent to America’s spending on wine or spirits. Altria’s revenues in 2017 were a little over $25bn.
- The predicted shift to vaping explains reports that Altria also plans to acquire JUUL, a vaping firm that has captured around 75% of America’s growing e-cigarette market.
The biggest brand in digital media [Vice] has lost much of its lustre
- The duopoly [Google and Facebook] commands the majority of the $100bn internet advertising market in America; Vice, BuzzFeed and Vox combined get less than 1% of that market.
- In November Disney disclosed it had written down its $400m investment by $157m. That puts the value of Vice Media at around $2.5bn to $2.7bn, a steep drop.
- On December 11th Verizon, a wireless giant, wrote down the value of its digital-media properties—a combination of Yahoo and AOL—by $4.6bn, as they had simply failed to build a robust ad business. (Verizon acquired Yahoo’s core business for $4.5bn only 18 months ago.)
- And it is not clear how long HBO will keep the nightly show, for which it pays at least $60m a year (the network may discontinue a separate hour-long weekly news magazine show, which would mean a loss for Vice of tens of millions of dollars in revenue).
PayPal is thriving by defying conventional wisdom
- Today PayPal has a market capitalisation of $101bn and is one of Silicon Valley’s most valuable technology firms, larger than either Goldman Sachs or Morgan Stanley by value.
- This year it is expected to facilitate digital payments worth around $582bn, roughly four times more than in 2012.
- In 2018 the firm is expected to bring in $3.4bn in operating income.
- PayPal also has network effects—around 60% of Americans shopping online have used it in the past year, reckons Ms Ellis, and around 80% of the top 500 online retailers offer customers the option of paying with PayPal.
- About 40% of transactions in America are paid for in cash so there is room to grow.
- PayPal has grown through deals; in 2018 it has spent $2.9bn. The largest transaction has been its purchase of iZettle for $2.2bn in May.
- A smaller but still significant acquisition was Braintree, a firm that helps firms accept payment within their mobile apps, for $800m in 2013. With it came Venmo, an app that lets mobile-phone users transfer money to each other.
After an awful year for Argentina, a whiff of optimism is in the air
- The worst drought in 50 years wrecked the corn and soyabean harvests, knocking 2% off GDP. The peso lost half its value against the dollar, pushing inflation to 46%. That tipped the country into its second recession in three years and led to a crisis that forced it to seek one of the largest credit lines in the IMF’s history.
Even by the standards of poor countries, India is alarmingly filthy
- All this combustion makes Delhi’s air the most noxious of any big city. It chokes on roughly twice as much PM2.5, fine dust that penetrates deep into lungs, as Beijing.
- In the World Health Organisation’s rankings of air pollution, Indian cities claim 14 of the top 15 spots. In an index of countries’ environmental health from Yale and Columbia universities, India ranks a dismal 177th out of 180.
- Recent estimates put the annual death toll from breathing PM2.5 alone at 1.2m-2.2m a year. The lifespan of Delhi-dwellers is shortened by more than ten years, says the University of Chicago.
The coming of low-Earth orbit satellites
- Morgan Stanley, a bank, projects that the space industry will grow from $350bn in 2016 to more than $1.1trn by 2040. New internet satellites will account for half this increase.
- Bringing access to the internet to places where it is scarce or non-existent could be a huge business. Around 470m households and 3.5bn people lack such access, reckons Northern Sky Research, a consultancy.
- These companies want to avoid the technical issues of geostationary satellites by putting theirs into a low orbit, where the data will take only a few milliseconds to travel to space and back. And because signals need not be sent so far the satellites can be smaller and cheaper. OneWeb claims they might weigh 150kg and cost a few hundred thousand dollars, compared with a tonne or more, and tens or even hundreds of millions of dollars, for the geostationary sort.
The tight labour market is making unskilled work more predictable
- This kind of just-in-time scheduling is widely disliked by workers. A study published in 2017 found that the average worker is willing to give up 20% of wages to avoid an irregular schedule set by an employer on short notice.
- A recent paper by Mr Kesavan and others found that employee-friendly scheduling—keeping shifts more consistent and allowing workers to swap shifts via a mobile app—boosted sales at a group of Gap stores by an average of 7%.
Many of us will pay money to avoid points of view that differ from our own
- On November 27th President Trump dismissed a 1,650-page National Climate Assessment in which 13 federal agencies gave warning about the costs and dangers of global warming.
- In another study Mr Frimer asked people who had voted in the 2012 presidential election whether they were interested in hearing why voters had backed the other side. Over a third of Obama voters and more than half of Romney voters compared the experience of listening to the other side’s voters to having a tooth pulled.
Michael Dell plots his return to the public market
- The billionaire [Michael Dell] founded Dell in his college dorm room at the University of Texas in 1984 and by the age of 27 he became the youngest-ever boss of a Fortune 500 company (Mark Zuckerberg was nearly 29 when Facebook first made the list, in 2013)
- He took Dell private in 2013 helped by Silver Lake Partners, a Californian private-equity firm, in a deal worth $24.4bn.
- Away from the scrutiny of public markets, Mr Dell invested heavily ($13.6bn in research and development since 2013) to strengthen Dell’s capabilities in cutting-edge software and cloud integration. He pulled off the largest-ever tech acquisition, gobbling up emc, a big American provider of data-storage devices and cloud-computing software, for $67bn in 2016.
- On its current trajectory, Dell looks set to achieve annual revenues this year of just over $90bn, up from roughly $80bn last year.
Price guarantees are common at art auctions
- Last month two-thirds of sales at the “evening” auctions—the highest-profile ones—in New York at Christie’s, Sotheby’s and Phillips, the three biggest auction houses, were guaranteed. The estimated value of those guarantees was at least $537m, more than two-fifths higher than in the same month last year, estimates ArtTactic, an arts consultancy.
Luck and shrewd management made the Premier League a global hit
- Its broadcasting rights are now worth £2.8bn ($3.5bn) a year, making it comfortably the richest football league in the world. The combined revenue of its clubs has increased by over 2,500%.
- For all its razzmatazz, the Premier League still has only one-tenth as many staff as the NBA or NFL, a statistic that reflects the enduring power of the clubs.
- All money from overseas broadcasting (negligible in the early years) was divided equally between teams. That ensured a greater degree of competition than elsewhere, enabling Leicester City to win a fairytale title in 2016. . . The only danger, the authors warn, is that the wealthiest teams are endlessly pushing for even more cash and power; in 2018 they successfully ended equal distribution from overseas rights.