The Question
Who should be the next James Bond?
Talking Points
- Airstrike kills at least 80 in Myanmar
- Never bet against the jaebeol: Jay Y. Lee takes over Samsung
- ISIS claims the Iranian shrine attack which left 15 dead
- Hackers compromise Australia's largest health insurer
- Australia's national football team criticises World Cup host Qatar
- Someone steals a 23-million-year-old whale fossil in New Zealand
- An awkward climate problem arises: soaring Big Oil profits
- Atlético Madrid and Barcelona crash out of the Champions League
- Rishi Sunak dismantles his predecessors policies in a day
- Emperor penguins are endangered due to climate change
Deep Dive
The fundamentals of the world's largest technology companies are on display this week. Not much of it is peachy.
Small Tech
There are several equally worthy ways one could structure a review of the quarterly earnings reported this week (alphabetically, chronologically, in descending order of market cap). Instead, while none of this news is funny funny, we've opted to start with the most amusing.
We all know and love the Facebook story, if not the company itself. A dorm-room project for leering at women that evolves into a social network that connects just shy of two billion humans. That growth was fuelled by Sheryl Sandberg's powerful ad-tech engine which plots your every online move on a preference matrix for advertisers. Somewhere along the line, eggs were broken. (Allegations that Facebook enabled genocide, and other things of that nature). Facebook's godhead Mark Zuckerberg may be an eerie specimen but he's nothing if not ambitious. Last October, Facebook became Meta : the most aggressive bet on the metaverse (definition pending) to date. So, how's it going?
Meta shares plummeted 25% on a squalid earnings report this week (nearly equalling its February disasters). It is now worth less than Home Depot. Despite spending $15bn on the metaverse this year (some quarters believe $100bn to date) all it's got to show is a 3D chatroom with graphics that make Mario Party 2 look like a James Cameron production. If the cultural time band for that reference is too narrow, here's a translation: it don't look good. Reality Labs managed to lose $3.7bn last quarter! But Meta's problems aren't just the fact it is frittering away a fortune on a project that wouldn't look astray on a PlayStation 1 (yes, kids; they went back that far). It's also not making money. As the global economy slows, people buy less stuff, and at the end of the day, Meta is just a company that sells ads.
Another company that sells ads is Alphabet . It lost 7% on the day of its report. By Alphabet, we mean Google, and to a lesser extent YouTube. Despite more or less destroying its core functionality with ads, Google is slowing. YouTube, despite launching its Shorts format to head off TikTok, suffered a shock 2% revenue drop. Sundar Pichai lamented the "tough time in the ad market". What he meant was that it is a tough time everywhere, because the world is sliding into recession. Alphabet also owns a bunch of companies in weird deep tech and immortality, but those companies are better at spending money than making it.
The above examples make clear that there is a plummeting market for advertisers. The next one shows an impending decline on the consumer side. Amazon managed to turn a profit last quarter, but predicts paltry 2% growth in sales through the end of the year. International sales are being stung by a strong US dollar. And the approaching recession at home makes for a sad holiday shopping season. The result? A whopping 20% drop in the company's share price . CEO Andrew Jassy nailed it, "there's obviously a lot happening in the macroeconomic environment".
1990s heart-throb Microsoft also suffered a 7% decline, but it's a boring story, so we'll keep this one short. The Azure cloud computing business missed growth targets and the outlook remains dim. Worse still, the PC business is currently staring at the spinning beachball of death. Worldwide shipments were down 19.5% last quarter! CEO Satya Nadella was clear as mud in his statement, "In a world facing increasing headwinds, digital technology is the ultimate tailwind. In this environment, we're focused on helping our customers do more with less, while investing in secular growth areas and managing our cost structure in a disciplined way." A little prosaic for our tastes.
Amid this meltdown Apple managed to stay relatively cool-headed. Apple sells the thing you are (probably) reading this on. There are lots of people who are (probably) like you. Apple is also trying to muscle in on the ad-sellers listed above with a plan to clip the ticket on any ads that are bought in a social media app. That they are maintaining a holier-than-thou attitude while doing so is, frankly, ludicrous.
Elsewhere, Twitter won't report its earnings for another week but it has just been purchased by Elon Musk. So maybe it won't report earnings at all. The world's richest man wasted no time in cleaning out the executive team : CEO Parag Agarwal and the legal eagle who booted Donald Trump were among the first to walk the plank.
Worldlywise
The poll watchers
Early voting is underway in the US midterm elections. There is action everywhere. The duel between Dr Oz and John Fetterman for a Pennsylvania senate seat sank to a new low during their televised debate. In Georgia, Stacey Abrams is looking to snatch power from Governor Brian Kemp. These are difficult races to call. The actively political (often from the extremes of both parties) will certainly hit the polls, but tens of millions of eligible voters will stay home. Midterms just don't have the juice that a glitzy presidential election does. Democrats are whipping up the In This House We... lawn-sign people on abortion rights. And Republicans are conducting mock-outrage press conferences out the front of gas stations. The pollsters, in their limited wisdom, are leaning towards a narrow Republican win in the House of Reps.
But there are those who are not willing to leave it up to chance. Cleta Mitchell, who was part of the effort to overturn the 2020 presidential election result, has formed the Election Integrity Network . She claims to have trained 20,000 "poll watchers" to observe the count in key states. In Arizona's Maricopa County, officials were aghast when armed poll watchers appeared in the parking lot, in tactical gear. Harassment, interference, and intimidation are now commonplace. In Pennsylvania, 50 of the 67 county election chiefs have quit over a barrage of threats. Tiny electoral offices in rural California are trying to install bulletproof glass. Over 1,000 threats of violence have already been reported to the FBI by poll workers.
At its base democracies rely on trust in a system that comprises your fellow constituents. When that trust goes, the system goes.
Bodies of evidence
A major sports event wrapped up in Amsterdam this week. It was not the Ajax tilt at the Champions League — they got towelled up at Johan Cruyff Arena by Liverpool. No, this was the sixth International Consensus Conference on Concussion in Sport. It drew in participants from across the world and impacts just about everything humans play. The conference reviews studies in the fast-moving field; its findings are destined to become policy in the International Olympic Committee, FIFA, and World Rugby. The last conference papers from 2016 are now well out of date: the body of evidence has grown dramatically. And tragically. Former sportspeople have had their lives ruined by chronic headaches and memory loss.
The neurodegenerative disease Chronic Traumatic Encephalopathy (CTE) is now part of most discussions. It can only be studied post-mortem. There are a growing number of former sportspeople who've donated their bodies to the study of CTE. But curiously, the group organising the Amsterdam conference, the Concussion in Sports Group (CISG), has for years played down the link between concussions and CTE. Its proximity to major sports bodies has raised questions of propriety. The claim that there is no "cause-and-effect" between concussion and CTE is the first line of defence for sports codes worldwide. Like everything the IOC touches, the CISG is an opaque body that we should be deeply sceptical of.
This week, the US National Institutes of Health formally acknowledged the causal link between repeat concussions and CTE. These findings are a repudiation of the CISG, and its powerful backers. The evidence is clear; repeated traumatic head knocks leave sportspeople riddled with CTE. This is true regardless of what the attendees in Amsterdam publish.
The Best Of Times
A bit of a bingle
Whoever is fiddling with the controls of the James Webb Space Telegraph has taken another good snap. This time of a mind-bending galaxy merger some 270 million light years away. Two galaxies smashed into one another with energy, violence, and creative potential that is simply beyond our everyday comprehension. New stars burst from the fecund merger at twenty times the rate they did in our own galaxy (keep in mind there are 100,000,000,000 stars in the Milky Way). We'd say "pics or it didn't happen" but this is still scarcely believable even with the image.
Apollo smiles on you
For real .
The Worst Of Times
Under the gun in Nablus
Nablus has a long history of resistance. It was unbowed in 1948, and remains defiant today, in the face of encroaching illegal settlements on the hills surrounding it. Posters of martyred young men adorn walls in public places. The city of 200,000 has ground to a halt after two weeks of military blockade . The dynamic is established: illegal settlements seize more land and harass locals, Palestinian militants spray bullets at a checkpoint in a drive-by, the army locks down an entire city. What is blithely referred to as 'the status quo' is actually teeming with movement and intention: a necessary function of settlers and the occupation army slowly consuming the West Bank.
The price of speaking
It is true that Pakistan is a democracy. It is equally true that Pakistan's army casts the deciding vote. The media has long learned to treat this arrangement delicately, for fear of an indelicate response. Arshad Sharif was one of the few who used his platform as a television host to hammer the powers-that-be. He backed Imran Khan to the hilt, until the prime minister's luck turned. Sedition charges were levelled against Sharif, and so he slipped out of the anchor's chair and fled to Kenya. He came home on Thursday with a bullet in the back of his head .
The official line is a garbled tale of Sharif, and one other, driving straight through a police barricade outside Nairobi. Unfortunately for Pakistan, there just aren't enough Arshad Sharif's left to chase down his assassins.
Highlights
The Image
Rishi Sunak is now Prime Minister of Britain with a wink and a smile. A first for Hindus, South Asians, and Goldman Sachs; a 30th for Oxford University. Photo supplied by Bloomberg .
The Quote
"Given that we expect a rather hawkish Fed meeting in November, I think it's not likely that we'll get an Uptober. I think a lot of Bitcoin holders will be asking 'Why-tober?'"
– Standard cryptocurrency gibberish from AlphaTrAI's Max Gokhhman . For those with more pressing concerns: in years gone by, October has been a good month, hence, Uptober. All together now... 👏🏽 past 👏🏽 performance 👏🏽 is 👏🏽 not 👏🏽 indicative 👏🏽 of 👏🏽 future 👏🏽 results 👏🏽.
The Number
1.8 petabits per second
- We are running out of simple ways to transmit an ever-increasing amount of information. So scientists are now using light instead of electricity, by splitting data into 233 different parts of the light spectrum. The laser-powered chip in question transmitted 1.8 petabits per second . This is roughly double the world's current internet traffic. You'll never need to buffer your (assuredly legal) copy of The House of Dragons again.
13,560km non-stop flight
- A pair of bar-tailed godwits (who is naming these things?) has broken the world record for the longest non-stop migratory flight. Alaska to Tasmania in 11 days and one hour, without so much as a country bakery or highway McDonald's pit-stop.
The Headlines
"Texas Goes Permitless on Guns, and Police Face an Armed Public" — The New York Times . Let's see how this plays out...
"'World's dirtiest man' dies in Iran at 94, a few months after first wash"
— The Guardian . Maybe society is the real sicko...
The Special Mention
A big shout-out this week to the supporters of lousy sports teams .
The Best Long Reads
- Businessweek waits... and waits, on instant delivery
- Bloomberg Green peels open a can of sardines
- Foreign Affairs wants to send a message to Riyadh
The Answer...
There's only one actor who passes muster: Dwayne 'The Rock' Johnson .
