1 big thing: A quieter bull run
Unless it's improbably interrupted, the bull run on Wall Street will become the longest on record this week, and — if most analysts are right — the party will continue for some time yet.
- But if there is something to worry about it's that the run is not self-propelled. Instead, it relies largely on the rocket fuel of unusually low interest rates and, most recently, the corporate tax bonanza.
- Crucially, it seems to have done little to salve the profound popular mistrust in institutions and the leadership class, who put in motion the series of calamities that continue to hound the U.S. and the world — the Iraq war, the financial crash, and the everyone-for-themselves economy.
The background: The run began March 9, 2009, amid the edgy fright and gloom of a financial crash that had beaten the confidence out of nearly everyone. On Wednesday, it will be 9 years, 5 months and 13 days old, passing the iconic tech-and-dotcom boom of the 1990s.
As the boom has gone on and on, animal spirits — business, market and consumer confidence — have helped keep it aloft. One marker: Earlier this month, investors drove Apple to a record market cap of $1 trillion.
- But the spirits are more subdued than the feverish 1990s. This bull run had returned about 320% by the close of trading Friday; but that compared with 417% for the dotcom boom — making it almost 25% smaller at the same point in its life, according to LPL Financial.
- And this boom isn't exceptionally long if you consider history and the chasm left behind by the financial crash. About eight years of the run probably went into just digging out of that hole, says Kenneth Rogoff, a Harvard professor and co-author of This Time is Different, a history of market manias.
Rogoff is among those who point out the role of low interest rates in fanning stock prices — highlighting that the Fed is now slowly raising rates. "The extremely low level of global real interest rates, which are near historical lows, has to be considered a major factor underlying ALL asset prices, from equities to housing to art," Rogoff tells Axios in an email exchange.
Why it matters: Just as the booms of recent decades leaned on bubbles in real estate, Silicon Valley startups, and exotic Wall Street financial instruments, this time it's historically low interest rates.
- "We don't know how to grow the economy and create fresh incomes apart from leveraged asset price appreciation, it seems," Jonathan Levy, an economist at the University of Chicago, tells Axios.
2. "Blood cobalt" and lithium-ion
The U.S. government is funding a push to reinvent lithium-ion batteries so they contain little or no cobalt, an increasingly expensive metal found largely in the Democratic Republic of the Congo.
The big picture: Cobalt — contained in virtually every commercial lithium-ion battery on the planet — has unusual energy density and the ability to stabilize volatile electrochemistry. But its price has swung wildly given booming demand for electric cars in China, from Tesla, and elsewhere — in addition to electronic devices like smartphones. Activists say workers in the DRC often toil in inhumane conditions.
- By seeking to eliminate or seriously reduce the metal's use in batteries, the Department of Energy, along with several startups, may complicate what has been one of the primary quests of the last decade: to create a safer, cheaper battery that lasts much longer than current technology.
- In a June speech in Washington, DC, Peter Faguy, a senior manager in the battery research effort at DOE, used the term "blood cobalt" to describe the metal, suggesting that removing it from lithium-ion batteries is a moral issue.
What's going on: The DOE is funding three-year research efforts at Argonne and Lawrence Berkeley national labs.
- Jason Croy, who is leading the Argonne effort, said that a leading solution is to swap in nickel. That does well in achieving high energy, but so far hasn't proven stable enough for use in commercial batteries.
- At Berkeley, Gerbrand Ceder, the project leader, said he is working on an entirely different material — a battery made with disordered rock salt, which he said does not require cobalt for stability.
3. Teddy Roosevelt and social stability
In 1905, Theodore Roosevelt said that the industrial age was bringing Americans untold new conveniences — but also roiling society. With that, he began a wave of antitrust actions, climaxing in a suit against kingpin Standard Oil and its breakup six years later.
In a new paper, Tom Wheeler, a fellow at Harvard's Shorenstein Center and former chairman of the Federal Communications Commission, suggests that Big Tech could face a similar reckoning unless it acts to protect society.
- Big Tech threatens privacy and the market, Wheeler writes, and should work with government to formulate laws on digital businesses.
- According to Wheeler, the companies should parrot Roosevelt, whose actions ushered in "the economic and social stability that underpinned the growth and prosperity of the 20th century — stability for both companies and consumers."
- If they do not do so, they will expose themselves "to the political reality that if they are not 'at the table' working collaboratively to make policy, they will be 'on the table' as their business practices are dissected by others."
- Read David McCabe's post on Wheeler's paper.
- Via NYT: The activists who took on Silicon Valley — and won.
4. Parkland, swag and QR
In China, QR codes are everywhere, used to pay for seemingly every single thing all day long, adding up to an estimated $1.65 trillion in transactions in 2016 alone.
- Not so much in the U.S., where, apart from some experimental use by Snap and Facebook, people barely notice the QR codes around them — except, now, in youth voter registration.
What's going on: In their most recent popularization in the U.S., QRs are front and center in the anti-gun violence movement from March for Our Lives, launched by students at Marjory Stoneman Douglas High in Parkland, Fla.
After the February massacre at the school, in which a gunman killed 17 students and teachers, Jammal Lemy, 20, a local t-shirt designer and former Stoneman student, was asked by movement leaders to design merchandise to help fund their national tour.
- The students decided to model their merchandise after that sold by the National Rifle Association, which rallies its supporters using patriotism. "We said, 'We are patriotic too' — that Americans have the right to dwell in public spaces peacefully and safely," Lemy tells Axios.
- The students' main objective is registering youth voters for the November midterms.
- These two factors came together late one night, when, after numerous rejections of his design ideas, Lemy envisioned an American flag in which a QR code took the place of the stars.
The idea was that 38 states allow online registration, so if you scan the t-shirt's QR — which Lemy thought would be an irresistible impulse — you would be taken instantly to a voter registration page.
- The impact: The Parkland students say some 10,000 people have registered using the t-shirts. "It's being politically active with swag," Lemy said.
5. Worthy of your time
- Against identity politics (Francis Fukuyama - Foreign Affairs)
- The future of wheat (Eileen Drage O'Reilly - Axios)
- From Tahrir to Trump on social media (Zeynep Tufekci - Tech Review)
- Why did China not dominate the 20th century? (Bradford DeLong)
- Progress amid the blockchain hype (Avi Salzman - Barron's)
- The secret promises to grab Amazon's HQ2 (Julie Creswell - NYT)
6. 1 spreading thing: Condiment crisis
"Hold the mayo!" a new generation of Americans is collectively shouting, thereby threatening the nation's long-time favorite salad and sandwich smathering.
Erica Pandey writes: Snicker if you like but people like Sandy Hingston, a boomer from Philly, are in a condiment crisis over the obsolescence of her potato salad and deviled eggs in favor of foods containing mustard, ketchup, salsa, kimchi, wasabi — anything but mayo. Hingston, in short, lives in fear that mayo is going the way of now-passé Jell-O.
What's happening: Ketchup and mustard have been staples of the all-American diet for over a century, but mayonnaise has been the most popular by far.
- Now Hingston, a writer at Philadelphia Magazine, has uncovered a hidden dark side to the subject of sandwich spreads — her younger relatives are eschewing family tradition in favor of what they regard as hipper condiments, she recently wrote.
- Little did she expect the raw nerve she would expose: hate mail poured in (though one defender also sent two quarts of Duke's Mayo). "It turns out people really, really identify with their condiments," Hingston tells Axios.
Hingston's essay also caught the attention of Zoe Leavitt of CB Insights, the market research firm. Leavitt found that the data backs up Hingston's suspicions:
- Mayonnaise sales have dropped — by 6.7% over just the last five years.
- That's bad news for big-time brands like Heinz and Kraft that sell tons of mayo, Leavitt says.