There's quite a lot of Axios brevity in this week's Edge: No item is longer than 330 words. Total word count comes to 2,070, which is less than 8 minutes of reading time.
Illustration: Aïda Amer/Axios
It's easier to turn power into money than it is to turn money into power. That said, if you want power, and even if you want money, it helps a lot if people think you're a billionaire.
Driving the news: Jeffrey Epstein, whose pedophilia is now back in the public eye, was almost invariably described as a billionaire even when there was no evidence that he was worth anywhere near that much money.
Epstein is far from being the first fake billionaire. Malaysian fraudster Jho Low similarly attempted to buy himself impunity, with some success: He remains at large.
The bottom line: Some people want to be wealthy; criminals, by contrast, often find it more useful to be perceived to be wealthy. The genuinely rich tend to care about preserving and growing their wealth. Really big spenders are disproportionately likely to be frauds.
Illustration: Aïda Amer/Axios
In the attention economy, power (which can then be turned into money) is measured in large part by the ability to attract and generate mindshare.
Consumer brands have historically bought screen time by spending billions of dollars on TV advertising. But that tactic doesn't work if your key consumers don't watch broadcast TV.
Go deeper: Iconic brands lose their luster
You wouldn't make a 5x leveraged bet on the S&P 500 — not unless you were an extremely sophisticated financial arbitrageur, or a reckless gambler. Even then you wouldn't put substantially all of your net worth into such a bet. Stocks are just too volatile. But millions of Americans make 5x leveraged bets on their homes — that's what it means to borrow 80% of the value of the house and put just 20% down.
By the numbers: Unison, a housing-finance startup, has crunched U.S. house-price data in a paper to be released tomorrow. Over the long run, any given home is likely to experience price volatility of about 15% per year; during the height of the crisis, that number spiked to more than 35%. That's broadly in line with the kind of volatility you see in the stock market.
Be smart: Annualized house price volatility is much greater than the amount you can expect a home to rise in value over the long term. That number is closer to about 4%. While homes are much less volatile than individual stocks, they're just as volatile as the kind of diversified stock indices most people invest in.
The bottom line: Any given home has roughly a 30% chance of ending up being worth less in five years' time than it is today. If you can't afford that to happen, you probably shouldn't buy.
Illustration: Sarah Grillo/Axios
Summer breaks are bad — for kids, for parents, and for entire nations.
"Teachers spend approximately four weeks reteaching lessons at the beginning of each school year because over the summer students forget what they had learned the previous year. Research indicates that the problem of summer learning loss is most acute for low-income students."— Ruy Teixeira, All-Day, All-Year Schools
What we don’t know: On July 24, parliament enters recess and can no longer oust the prime minister in a vote of no confidence. By the time it returns, there might not be enough time to elect a new government before Britain crashes out of the EU on October 31.
The bottom line: If Britain crashes out of the EU on October 31 because MPs were on their summer holidays and therefore couldn't prevent it, the banter heuristic — "that the funniest outcome in British politics is the most likely" — would go down in history as encompassing an extremely dark sense of humor.
Deutsche Bank and Citigroup have a lot in common. The two enormous lenders have taken advantage of their international reach and their massive balance sheets to be a central part of the foreign exchange market; they also have a reputation for banking unsavory characters like Jeffrey Epstein and Raul Salinas. Of late, however, their fortunes have significantly diverged.
Losers: Some 18,000 workers in Deutsche's investment bank lost their jobs this week, with pretty much the entire equities sales and trading team being vaporized.
Flashback: In 1998, Deutsche Bank bought Bankers Trust for $10 billion, becoming the world's largest bank (by assets) in the process; as part of the deal, it also inherited a longstanding relationship with Donald J. Trump. "In 2015, Deutsche Bank wrote its BT assets down to zero as part of a $6.6 billion balance-sheet purge," wrote Crain's Aaron Elstein last year. "But the stink of this long-ago merger still lingers."
The bottom line: Citi is no one's favorite bank. But thanks to the 2009 bank bailout, it has managed to survive in today's world of low leverage and low margins. Deutsche, which received no bailout, can similarly no longer rely on leverage to provide profits. The problem is that without that leverage, it can't seem to find a route to sustainability.
Illustration: Sarah Grillo/Axios
20 years after American Express released the titanium Centurion Card, almost everybody is getting in on the metal game.
The bottom line: There is no functional reason why a card should be metal. But consumers like the clunk (there are league tables of which cards are clunkiest), and the more issuers that get in on the game, the more pressure there is for all their competitors to follow suit. You'll end up paying for it somehow, you'll just never know how.
The 2009 wine, at $4,500 a bottle, was a lot cheaper than the 2015 will be.
Loïc Pasquet is probably the most controversial winemaker in the world. He specializes in making wine the way it was made before the phylloxera epidemic wiped out most of France's grapes in the 19th century. His ungrafted vines bear rare varietals like castets, mancin and pardotte, and he ages his wines in amphorae rather than oak barrels.
Driving the news: Pasquet has announced that his 2015 vintage — just 550 bottles in total — will sell for €30,000 (about $34,000) per bottle. He claims that the difference between his wine and his neighbors' is "the same difference as between a 2CV Citroën and a Ferrari."
Why it matters: Pasquet has been extremely successful at selling his wine in Russia and China. There's no other wine quite like it in the world, and it's made in such low quantities that he can effectively name his price. The kind of people he's selling to will see no measurable impact on their net worth after dropping $270,000 on a six-pack of Liber Pater. Instead, they will simply convert money into happiness. It's a well-known phenomenon: The more you spend on a wine, the more you enjoy it.
Illustration: Rebecca Zisser/Axios
Facebook's executives could be forgiven for thinking that this week was bad enough, what with Donald Trump attacking them on Twitter and Jay Powell pouring cold water on their cryptocurrency ambitions. But the Silicon Valley panopticon will get even more attention from Washington this week, writes Courtenay.
Earnings season starts tomorrow with the big banks. Netflix releases quarterly results on Wednesday, with UnitedHealth and Chewy following on Thursday.
China's second-quarter GDP report is also out tomorrow. Economists expect growth to come in at 6.2% — a slowdown from Q1’s 6.4%.
Photo: Christoph Soeder/picture alliance via Getty Images
A major new gallery, designed by David Chipperfield, opened on Berlin's Museum Island this week, prominently bearing the name of James Simon. It's the culmination of 20 years of planning and 10 years of construction.