An unforgivable act of cultural vandalism

It’s pretty much impossible to overstate how much of an icon the Seagram Building is. Suffice to say that the Times’s then architecture critic, Herbert Muschamp, deemed it in 1999 to be “the millennium’s most important building”. Designed by two giants of 20th Century architecture, Mies van der Rohe and Philip Johnson, its elegance borders on perfection; it is undoubtedly a masterpiece, inside and out.

Ever since the building opened, its grand piano nobile has been home to the Four Seasons restaurant, as much an gem of mid-century Modernism as the building itself. It’s hard to imagine one without the other — except, now, that’s exactly what’s going to happen. The Four Seasons’s owners, Julian Niccolini and Alex von Bidder, are reportedly “scouting out a new location downtown”, while a new restaurant, with a new name, will open up in the Seagram Building, to be run by an organization named Major Food Group. …


Can companies be paid to borrow money? It’s theoretically possible — but it hasn’t happened yet. And the example of Apple in Switzerland suggests that it’s not likely to happen any time soon.

A couple of weeks ago, I got into a couple of Twitter fights about a meme which was gaining momentum in the econoblogosphere: that Nestlé was “getting paid to borrow money”, in the words of a Washington Post headline.

The source of the meme was the fact that one of Nestlé’s bonds, denominated in euros and maturing in 2016, had briefly traded at a negative yield. Does this mean that Nestlé was being paid to borrow money? No. A company has to pay to borrow money if it ends up paying back more money than it borrowed. …


Davos is the spiritual home of homo economicus, where human behavior can generally be explained in terms of the perpetual war between greed and fear. That’s one reason why the World Economic Forum is such a hot ticket. If you’re a student of the men (and they’re overwhelmingly men) who control the world’s money and power, being in Davos can help you gauge just how nervous or covetous they seem.

This year, my highly-unscientific first impression is that fear is very much on the ascendant. A lot of people seem to feel the need to explain to me, on an entirely unsolicited basis, just how powerful and important they are — much more so than in previous years. What that says to me is that they’re not on the lookout for new opportunities, in the way that they have been in previous years, so much as they’re trying to consolidate whatever gains they have made since the end of the financial crisis. …


Can she turn YouTube into an ad platform as indispensable as Facebook?

Jonathan Mahler has a big profile of YouTube’s Susan Wojcicki, wherein he makes one particular point with great vehemence. Just count the occurrences!

1. “Above all, the quality of most YouTube programming is too unpolished to draw big investments from many blue-chip advertisers.”

2. “Companies expect their ads to be placed strategically against high-quality and appropriate content.”

3. “For all of the countless hours of programming created for the site, YouTube has yet to produce a truly premium show. …


Here’s one way that capitalism works: you find a special idea, something truly innovative. Impressed by its genius, you invest, and magic is made. By which I mean, you make lots of money.

That description applies to all manner of stock picking, including venture capital. But it also applies, if you take a recent James Stewart column at face value, to the art world.

The headline on the column talks about “Investing in Genius,” much as you might invest in, say, a Steve Jobs startup. And it takes him no time at all to start citing dubious statistics about the “average compound return” on contemporary art. He’s not talking about art like it’s an asset class: he goes further than that. …


An IM conversation with Stratechery’s Ben Thompson

I got a fair amount of pushback from small publishers after I declared that “if you’re not getting 20–30 million unique visitors every month, and don’t aspire to such heights, then you’re basically an economic irrelevance”. Rafat Ali and Ben Thompson led the charge. (That’s Thompson’s image, above, from his post “Publishers and the Smiling Curve”.) Here’s the IM conversation I had with Thompson after my article appeared.

Ben Thompson: My basic thesis is that the Internet generally works in favor of the very large and the very small.

Felix Salmon: I agree with you on the very-large end of the spectrum.
But my feeling is that the shift from desktop to mobile is bad for both the medium-sized and the small.
Because the value of the inbound link is going to steadily deteriorate, in a world where people spend much less time following links and much more time just staying within apps. …


The value of Uber lies increasingly in the global ubiquity of its service

It’s crazy-prices season in the markets right now! Apple is worth more than $700 billion, Vice is worth $2.5 billion, and Uber, we’re told, is worth somewhere in $40 billion range. Which is double what it was worth six months ago. Meanwhile, the price of oil continues to plunge, along with the yields on European bonds: Spanish government bond yields are at a record low of 1.885%, France is below 1%, and Germany’s at a downright Japanese 0.697%.

What all of these things have in common is that they’re deeply, importantly, about international, cross-border concerns. Once upon a time, investors like Warren Buffett could happily live in an America-sized opportunity space and make their fortunes. And to this day, Americans have an understandable tendency to judge American companies on how well they’re doing in America. …


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Barry Ritholtz has a blockbuster of a story today, with detailed 2013 pay figures for senior Pimco employees. The top of the food chain, that year, looked something like this*:

Bill Gross: $290 million
Mohamed El-Erian: $230 million
Daniel Ivascyn: $70 million
Wendy Cupps: $50 million
Douglas Hodge: $45 million
Jay Jacobs: $22 million

All of these sums, according to Ritholtz, came out of a $1.5 billion bonus pool which was split between 60 managing directors.

Obviously, the numbers here are mind-bogglingly enormous. …


(Hint: It’s not only shareholders.)

Andrew Ross Sorkin recently discovered the secret to how companies like IBM keep their per-share earnings rising steadily upwards: share buybacks. IBM’s revenues have gone basically nowhere over the past six years or so, he explains, but its earnings (or at least its earnings per share, which is all that shareholders really care about) have been doing great — because the number of shares outstanding has been shrinking.

The cost of IBM’s buyback program has been truly enormous: $108 billion, since 2000. And the effect of the buyback program has been pretty impressive. Here’s a chart:

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What you see here is the total number of IBM shares outstanding, on a fully diluted basis, falling from 1.8 billion at the end of 1999 to just 1 billion at the end of the second quarter this year. To be precise, the share count has fallen by 797,604,000 shares. That’s a lot of shares to repurchase! …

About

felix salmon

Felix Salmon was a senior editor at Fusion

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