Public opinion is swinging against tech monopolies (September 26)

The battle between technology monopolies and governments has only just begun. This is not designed to stifle innovation, but to make sure that the interests of citizens and the profit motive of these companies are aligned.

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Rupert Mitchell
Rupert Mitchell

Editor

a thoughtful piece from today's financial times

Rupert Mitchell
Rupert Mitchell

Editor

Political ads on Facebook recall memories of the banking crisis

Cindy Ponder-Budd
Cindy Ponder-Budd

Editor

Prosecuting big US technology companies is not without precedent. Microsoft waged a court battle against the US government for 21 years. The initial case was against Microsoft's bundling of its Internet Explorer browser software with its Microsoft Windows operating system. Below is an interesting summary of the company's saga. http://www.seattletimes.com/business/microsoft/long-antitrust-saga-ends-for-microsoft/

Ken_Dyks
Ken_Dyks

Editor

Quebec is leveling the playing field for Uber.

" Québec’s local government announced some new policies for Uber and its drivers, such as requiring Uber drivers to go through a 35-hour training session, which is something local taxi drivers must complete. The government also wanted Uber drivers to undergo mandatory car inspections every year, as well as background checks conducted by law enforcement officials. "

And Uber says, meh, we don't like an even battle...

Paul Krake
Paul Krake

Editor

the Walmart tax statistic is amazing

Ken_Dyks
Ken_Dyks

Editor

This is all in the natural evolution of businesses. First come ambition and innovation, and with it the push into grey areas of regulation and ethical behavior (and sometimes even plain black, with allowing foreign entities to advertise for political causes (deplorably denied!)). It's the entrepreneurial spirit. Then these businesses overplay their hand, the bucket spills over with frustration from numerous sources, and the regulators step in.

Now is the time for these companies to start giving back, really give back. I read an argument that AMZN should consider Detroit for their second HQ, to revive that city, and several more examples can be thought of (be proactive in paying some tax, maybe?. Since 2008 Walmart paid 64x more taxes than Amazon).

I think these guys are really more scared of the EU. If the EU really steps up their regulation, and at the same time the FANGs start giving back in the US, it will be interesting to see if this leads to friction between the EU and US, defending their new national champions. Trump on the barricades with Zuck, that will be the day!

Paul Krake
Paul Krake

Editor

I think it will likely be an organic decline rather than an initial market shock. The first phase of the move is that the stock stop re-rating which has been a major catalyst for global equity strength. While the regulatory will continue to deteriorate, it's all about earnings until we start see real legislative action.

Paul Krake
Paul Krake

Editor

Yes because these assets compete with longer duration assets. We have seen examples of this via Australian banks where investor use them as an alternative to fixed income. Bond proxies only work if back end rates remained anchored due to stable inflation expectations. for the thesis to hold, I have to be right about the long-term inflation outlook being stable.

Hugh_Jenkins
Hugh_Jenkins

Paul - You allude to an eventual rotation back into the likes of consumer staples stocks - dependable (low growing) dividend payers. I guess a return to the bond proxy equity love of a couple of years ago. Can this really happen with the backdrop of the current (short term granted) rates environment?

Rupert Mitchell
Rupert Mitchell

Editor

@VFTP we have debated this a fair bit. These stocks are sitting in so many portfolios of people we speak to. No reason to be short but what should people be looking for as catalysts to take down exposure? A Zuckerberg appearance on the Hill? Something hostile out of the EU? What does the dip that turns into a crack look like?



Paul Krake
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Ken_Dyks
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