Silicon Valley's perversion of philanthropy

1 big thing: Silicon Valley's perversion of philanthropy

2. Silicon Valley's morals

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The SEC vs. stealth activists

3. The SEC vs. stealth activists

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4. Building of the week: Hallgrímskirkja, Iceland

We're approaching giving season — for some, anyway. Others, often in California, have rather more heterodox ideas of what constitutes philanthropy. 

In this week's newsletter, I unpack a couple of parts of Marc Andreessen's manifesto. I also check in on the SEC's attempt to crack down on total return swaps. The whole thing is 1,358 words, a 5-minute read. 

Thanks to Javier David for editing this week's newsletter, and to Jay Bennett for copy editing it. 

Markets

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The problem with EVs is they're made in China

1 big thing: The problem with EVs

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2. The U.S. opportunity

3. Why you shouldn't give money to charity

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4. How to avoid capital gains taxes

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Elon or SBF? Who won the Great Business Book matchup of 2023

5. Elon sells books

Welcome back to Markets Weekend, where we covet a Jeep Avenger (the 2023 European Car of the Year) but won't ever get one because Stellantis won't sell them on this side of the pond. 

In this week's newsletter, I wonder when and whether cheapish EVs like the Avenger will ever make serious inroads on these shores. 

Also: How to save money on taxes when you give to charity, even if you don't itemize. And the winner of the Isaacson vs. Lewis book war. All in 1,395 words, a 5-minute read.

Thanks to Kate Marino for editing this newsletter and to Jay Bennett for copy editing it. 

The fee hurdle tripping up the retirement and real estate industries

1 big thing: The fee hurdle

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Journalism at hedge funds

2. Journalism at hedge funds

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The restaurant productivity boom

3. What we're reading: The restaurant productivity boom

4. Building of the week: The Basilica of San Vitale, Ravenna

Do you ever dream of a world where overfed middlemen might find themselves going a little hungrier? That world might have gotten just a little closer this week. 

In this week's newsletter, I write about those intermediary fees, as well as hedge-fund journalism, restaurant economics, and immersive art experiences. The whole thing is 1,435 words, a 5.5-minute read. 

Thanks to Javier David for editing this newsletter and to Jay Bennett for copy editing it. 

How Big Oil megamergers show fossil fuels are here to stay

1 big thing: Oil is here to stay

Bonus: The tables turn

Why it’s so hard for the U.S. to derisk its China relations

2. What we're reading: Codependent competition

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Why Microsoft owes the IRS $29 billion in taxes

3. Microsoft's great tax battle

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It's time to abolish dimes

4. The dime has come

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America's oil giants are getting even bigger. 

In this week's newsletter — 1,359 words, a 5-minute read — I try to unpack why. Also: The future of national security; Microsoft's tax bill; and why we should abolish the dime. (Don't @ me.)

Thanks to Kate Marino for editing this newsletter, to Ben Geman for helping out enormously with the oil stuff, and to Jay Bennett for copy editing the whole thing. 

The power of the West’s interdependence with China

1 big thing: The power of Chinese interdependence

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Bonus: Getting friendlier

The short shelf life of immersive attractions

3. The ephemerality of immersive attractions

Americans' phones still aren't their wallets

4. Americans' phones still aren't their wallets

Maybe it's because it's a long weekend, or because I'll be on vacation next week, but I'm feeling upbeat and optimistic about how China is likely to continue operating within the global economy. 

In this week's newsletter, I go into a bit more depth on that, and I also deliver on my promise to write about immersive experiences. The whole thing is 1,071 words, a 4-minute read. 

Thanks to Kate Marino for editing this newsletter, and to Jay Bennett for copy editing it. 

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National

It's Giving Tuesday. For most of us, that means it's the day when an astonishing number of charities send us emails asking for money. But the mission of Giving Tuesday, the organization, is much bigger than that. 

Why it matters: Not all of us have spare cash to give — but all of us can be a bit more generous.

The big picture: Generosity takes many forms. 

Sometimes it's as simple as spending time with a friend or neighbor and listening to what they have to say. 

A kind word to a colleague, thanking them for everything they do, can work wonders. 

If you know new parents, offer to look after their children for the evening. 

Cooking for people is nearly always greatly appreciated. And elderly neighbors often love help with yardwork and other chores.

Your local small businesses greatly value your business— but they also love it if you spread the word about them or leave a glowing review online. 

Between the lines: The nonprofit sector always has less cash than it needs, and has found Giving Tuesday to be a powerful and effective fundraising tool. 

Not all financial generosity needs to go via a charity, however. The needy are all around us — and they appreciate a gift of cash all the more if it comes from an individual who's giving with thoughtfulness and respect. 

Charities also have many volunteering opportunities. That's a great way of getting hands-on experience with an organization and can be very rewarding.

Once Americans start volunteering for an organization, they become much more likely to give money to it — which is often what the charity really wants.

The bottom line: Charities understandably want to be efficient and effective — and cash is generally the best way to help them achieve those goals. 

Giving Tuesday is a good day for that kind of giving. (There's no bad day for it.) At the same time, it's also a good day for inefficient acts of generosity. Not everything needs to be optimized.

This article appeared in Axios Finish Line, our nightly newsletter on life, leadership and wellness. Sign up here.

Axios Finish Line: A day for generosity

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Charities

Economy

Thanks to the soaring stock market, a lot of Americans are sitting on substantial capital gains in their (taxable) brokerage accounts. Those Americans should, as a rule, be donating shares to charity this Giving Tuesday instead of giving cash.

Why it matters: It's well known that donations to charity are tax-deductible — which is good news for the 12% of households who itemize their tax returns. What's less well known is that it's possible to save a substantial amount of tax via charitable donations even if you don't itemize your taxes.

The big picture: Normally, it's illegal to sell a stock and then buy it back immediately just for tax purposes — that's considered a "wash sale." But there's no wash-sale rule when securities are donated to charity. 

That allows individuals to replace stock they bought cheaply with stock purchased at the current market price, eradicating their capital gains tax liability.

Alternatively, a charitable donation can be used to eradicate the tax hit that would normally accompany a regular portfolio rebalancing. 

How it works: Let's say that a married couple with two kids normally gives $1,000 per year to charity. They also received $3,400 in the first round of stimulus checks in March 2020, and decided to invest it 50-50 in Vanguard's long-term Treasury bond ETF, and its broad stock-market ETF. 

Today, the stock-market ETF would be worth $2,930, for a gain of $1,230, while the bond ETF would be worth $955, for a loss of $745. 

In order to rebalance that portfolio back to 50-50, the family would have to sell $988 of the stock ETF and use the money to buy the bond ETF. But that sale would trigger a taxable capital gain of $415.

Alternatively, the family could donate $988 of the stock ETF. Then, instead of giving $988 in cash to charity, they could use it to buy more of the bond ETF. 

The final outcome would look the same — $988 given to charity and a balanced securities portfolio worth $3,885 — but there would be no capital gains tax payable, and the total capital gain in the portfolio would be slashed from $1,230 to $242.

Between the lines: Almost everybody with investments in a taxable brokerage account has some investments that have risen a lot in value. Broadly speaking, whether you itemize your taxes or not, it is always a good idea to donate those investments to a donor-advised fund (DAF) rather than giving cash directly to either the DAF or charity.

Once the stock arrives at the DAF, it is immediately liquidated and the cash can be divvied up between any number of charities.

If you simply buy back the stock you donate at the current market price, you eliminate the capital gains liability without changing your portfolio construction at all. 

Naturally, a donor who does itemize her taxes receives a full tax deduction for the current value of the stock on top of losing her capital gains liability. A back-of-the envelope tax-savings calculator can be found here.  

The catch: Not all brokerage accounts make it easy to select the tax lots with the lowest cost basis to donate. And the ability able to donate specific shares bought at a low price, while a nice one to have, is not realistically a reason to move your stocks over to a whole new brokerage.

The bottom line: DAFs — tax-advantaged giving vehicles — have generally been pitched at individuals with hundreds of thousands if not millions of dollars they want to give to charity. Now that startups like Daffy are making DAFs available much more broadly, the tax benefits of charitable contributions are available to a much bigger swathe of the population. 

Editor's note: This story has been corrected to state that the family would have to sell $988 of the stock ETF, rather than $240, to rebalance the portfolio to 50-50.

Why you shouldn't give money to charity

Nonprofit

Thanks to the soaring stock market, a lot of Americans are sitting on substantial capital gains in their (taxable) brokerage accounts. Those Americans should, as a rule, be donating shares to charity this <a class="gtmContentClick" data-vars-link-text="Giving Tuesday" data-vars-click-url="https://www.axios.com/2023/11/28/a-day-for-generosity" data-vars-content-id="33c6a1e2-eff3-4cb3-8733-e081d9ba92b7" data-vars-headline="Why you shouldn&#x27;t give money to charity" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.axios.com/2023/11/28/a-day-for-generosity" target="_self">Giving Tuesday</a> instead of giving cash.Why it matters: It&#x27;s well known that donations to charity are tax-deductible — which is good news for the 12% of households who itemize their tax returns. What&#x27;s less well known is that it&#x27;s possible to save a substantial amount of tax via charitable donations even if you don&#x27;t itemize your taxes.

Latest news on Wall Street, Corporate America and financial regulation.

Business

Two-thirds of the world's EVs are made in China. 

Why it matters: As the world meets in Dubai to try to get a grip on carbon emissions, the most obvious way of accelerating the shift from gas-powered to electric vehicles has run straight into a geopolitical brick wall. 

Be smart: The best way to get more people to buy EVs is to make them affordable to many more people, thereby boosting demand.

Cheaper EVs are relatively easy to find elsewhere in the world, but those EVs are Chinese, and the U.S. is determined to block imports of Chinese EVs. 

Note: ICE vehicles have internal combustion engines; BEV vehicles are battery-powered EVs. Data:S&P Mobility; Chart: Tory Lysik/Axios Visuals

By the numbers: Chinese consumers had their choice of 235 different EVs in the first half of this year, per JATO, and paid on average $35,000 for a battery-powered vehicle. 

Americans, by contrast, had only 51 EVs to choose from and ended up paying an average price of more than $70,000 — in a country where median after-tax annual household income is just $64,240.

EVs will account for only 9% of auto sales this year in the U.S., compared with 18% in Ireland, 37% in Sweden, and 82% in Norway. 

Consumers at the top end of the market are very well-served right now. But the broad mass of Americans looking for affordable vehicles has very little to choose from.

Between the lines: Some Chinese EVs are too small or flimsy for the U.S. market — but many aren't. The four-door MG4, for instance, a sporty hatchback with up to 320 miles of range, sells on average for $38,000 in Europe. 

The $35,000 Volvo EX30, made in Zhangjiakou, is receiving rave reviews and will actually be available in the U.S. next year; its manufacturer, Geely, is willing to pay a 27.5% tariff in order to try to break into the American market.

Chinese manufacturers have "radically improved their vehicle designs and their execution," notes Joe Langley of S&P Global Mobility.

Where it stands: The U.S. has two competing policy objectives. From a climate perspective, it should love the fact that China is capable of producing some 36 million EVs per year — a number that dwarfs North American production of just 1.2 million EVs per year. 

From a strategic perspective, however, the U.S. hates the idea that Chinese imports might undercut domestic manufacturers and further damage a nascent sector that's already struggling with unsold inventory. 

What we're reading: The WSJ's Yuka Hayashi had a fascinating article that you might have missed over the Thanksgiving break. 

"Washington has effectively built a fortress to keep out Chinese EVs," she writes — but nevertheless goes on to paint a picture of the Chinese industry as "a modern day Godzilla with the power to trample on and destroy anything that gets on his path" that's planning to use "unfairly low prices" to launch "a big assault."

The words "flood," "flooding," and "swamp" are all used to characterize what China might do to the U.S. market — and what policymakers on both sides of the aisle are determined to avoid.

What they're saying: "Global markets are now flooded with cheaper Chinese electric cars," complained European Commission president Ursula von der Leyen in a speech in September. 

The bottom line: The U.S. seems determined to remain the exception to that rule, even if that means remaining near the back of the pack in terms of EV adoption. 

Washington is determined to keep the most affordable EVs out of the US

Electric vehicles

Two-thirds of the world&#x27;s <a class="gtmContentClick" data-vars-link-text="EVs" data-vars-click-url="https://www.axios.com/energy-environment/electric-vehicles" data-vars-content-id="90600ef1-c004-480c-a149-a25d26207eae" data-vars-headline="The problem with EVs is they&#x27;re made in China" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.axios.com/energy-environment/electric-vehicles" target="_self">EVs</a> are made in China. Why it matters: As the world <a class="gtmContentClick" data-vars-link-text="meets" data-vars-click-url="https://www.axios.com/2023/11/29/cop28-what-to-watch-for-dubai" data-vars-content-id="90600ef1-c004-480c-a149-a25d26207eae" data-vars-headline="The problem with EVs is they&#x27;re made in China" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.axios.com/2023/11/29/cop28-what-to-watch-for-dubai" target="_self">meets</a> in Dubai to try to get a grip on carbon emissions, the most obvious way of accelerating the shift from gas-powered to electric vehicles has run straight into a geopolitical brick wall.

Ominous forecasts about the impact of climate change serve as the backdrop for the world — led by U.S. lawmakers and companies — to debate big action on the problem, which could upend energy systems and our way of life.

Energy & Environment

Larry Summers, a controversial former Treasury secretary and the president emeritus of Harvard University, is one of three men comprising the interim board of OpenAI. 

Why it matters: Summers now holds enormous sway over the future of the organization that, more than any other, has driven the commercialization and widespread adoption of AI. 

The big picture: Summers is an academic turned policymaker who subsequently embarked upon a highly lucrative part-time career as a board member and advisor to companies on Wall Street and in Silicon Valley.

He is is highly sought-after for his reputation as a brilliant economist and creative thinker and his network of contacts in the worlds of politics and finance.

Between the lines: Summers has found himself at the center of countless controversies, from the memo he wrote at the World Bank saying that "the economic logic behind dumping a load of toxic waste in the lowest-wage country is impeccable" to the interest-rate bets he made that ended up costing Harvard $1 billion.

At Treasury in the 1990s, Summers led the charge to deregulate the derivatives market, fighting hard against colleagues like Brooksley Born and Paul Volcker. Those deregulated derivatives would later play a central role in the 2008 financial crisis. Summers also opposed the U.S. signing on to aggressive goals on carbon emissions. 

Later, at Harvard, Summers gave a speech suggesting that when when it comes to  the individuals with the greatest aptitude in science, men could vastly outnumber women. 

Summers was reportedly friendly with sex offender Jeffrey Epstein, appearing on the flight logs of Epstein's private jet. 

What they're saying: "There is no greater indication that OpenAI is unserious about the interests of humanity than their elevation of Larry Summers to its Board of Directors," says the Revolving Door Project's Jeff Hauser in a press release. 

Journalists, wrote The New Yorker's John Cassidy upon Summers' 2010 departure from the White House, "aren't the only folks Larry considers intellectually beneath him. Such a category would include most members of President Obama's cabinet and their top policy advisers; many of his colleagues in the White House; virtually all foreign officials; ninety per cent of the Harvard faculty; and a similar proportion, or possibly higher, of his fellow academic economists."

The other side: Summers also has plenty of admirers. Former President Obama appointed him director of the National Economic Council and considered naming him chair of the Federal Reserve. President Biden has also sought out his advice.

Companies such as Citigroup and Nasdaq OMX Group have brought Summers on as a paid consultant. He earned $5.2 million just in 2008 from working one day a week at hedge fund DE Shaw, on top of $2.8 million from speaking engagements.

More recently he became very popular in Silicon Valley, sitting on the boards of Block and Lending Club and serving as an advisor to Jiko, PillPack, Andreessen Horowitz, Barry Silbert's Digital Currency Group (DCG), and others.

He has hailed digital currencies as being "new platforms for financial inclusion," adding that "Barry and his team at DCG are building an important platform with great potential to help these technologies reach mass adoption." That was before Silbert and DCG were charged with defrauding more than 230,000 investors of more than $1 billion.

The bottom line: Summers, winner of the prestigious John Bates Clark medal in economics and nephew of two economics Nobel laureates, is very smart, often wrong, and never in doubt. 

He declined to tell Axios why he joined the board of OpenAI, how long he intends to stay on it, or what he hopes to achieve there.

Who is Larry Summers, the controversial pick to join OpenAI's board

Summers is very smart, often wrong and never in doubt.

Larry Summers in 2018. Photo: Mark Kauzlarich/Bloomberg via Getty Images

OpenAI

Artificial Intelligence

Larry Summers, a controversial former Treasury secretary and the president emeritus of Harvard University, is one of three men comprising the interim <a class="gtmContentClick" data-vars-link-text="board of OpenAI" data-vars-click-url="https://www.axios.com/2023/11/22/sam-altman-return-open-ai" data-vars-content-id="983cb828-6658-45b7-828d-cf0310e54309" data-vars-headline="Who is Larry Summers, the controversial pick to join OpenAI&#x27;s board" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.axios.com/2023/11/22/sam-altman-return-open-ai" target="_self">board of OpenAI</a>. Why it matters: Summers now holds enormous sway over the future of the organization that, more than any other, has driven the commercialization and widespread adoption of <a class="gtmContentClick" data-vars-link-text="AI" data-vars-click-url="https://www.axios.com/technology/automation-and-ai" data-vars-content-id="983cb828-6658-45b7-828d-cf0310e54309" data-vars-headline="Who is Larry Summers, the controversial pick to join OpenAI&#x27;s board" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.axios.com/technology/automation-and-ai" target="_self">AI</a>.

From the Valley to D.C., Big Tech players like Facebook, Google and Amazon are under more scrutiny than ever as new technology develops and privacy and antitrust concerns grow in lockstep with companies’ ambitions.

Technology

Data: Circana; Chart: Deena Zaidi/Axios Visuals

This time last year, we wondered who would win "the great business book matchup" of 2023. 

The verdict is now in: Walter Isaacson, by a mile. His Elon Musk biography sold 228,521 copies in its first eight weeks in bookstores. 

That's more than three times the 72,860 books that Michael Lewis' "Going Infinite," about Sam Bankman-Fried, moved in the same timeframe.

Who won the Great Business Book matchup of 2023

Elon Musk

This time last year, we <a class="gtmContentClick" data-vars-link-text="wondered" data-vars-click-url="https://www.axios.com/newsletters/axios-markets-4ed3b242-2014-4f3b-addb-4a33fcc560ef.html?chunk=3&amp;utm_term=emshare#story3" data-vars-content-id="c16f44ac-8260-4fe7-b9fe-eb0296aeace9" data-vars-headline="Elon or SBF? Who won the Great Business Book matchup of 2023" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.axios.com/newsletters/axios-markets-4ed3b242-2014-4f3b-addb-4a33fcc560ef.html?chunk=3&amp;utm_term=emshare#story3" target="_self">wondered</a> who would win &quot;the great business book matchup&quot; of 2023. The verdict is now in: Walter Isaacson, by a mile. His Elon Musk biography sold 228,521 copies in its first eight weeks in bookstores.

Felix Salmon

Stories

The problem with EVs is they're made in China

Elon or SBF? Who won the Great Business Book matchup of 2023

Why you shouldn't give money to charity

Axios Finish Line: A day for generosity

Who is Larry Summers, the controversial pick to join OpenAI's board

Newsletter editions

⚡️ Markets Weekend: Electric shock

🤝 Markets Weekend: Embracing China

⚔️ Markets Weekend: Fee wars

🛢 Markets Weekend: Sticky oil

🙃 Markets Weekend: Bizarro philanthropy