| Good morning. France's centrist and left-wing parties are racing to stop the momentum of the country's far right following the first round in a legislative election. Boeing is ending decades of separation as it moves to buy Spirit Aero, while BlackRock is expanding its private asset capabilities. And a boom in 24-hour stock trading is rattling Wall Street. Here's what traders are talking about — Morwenna Coniam Want to receive this newsletter in Spanish? Sign up to get the Five Things: Spanish Edition newsletter. As speculation swirls over candidacy for the US Presidential vote later this year, it's France's election which is dominating international headlines today after the far-right National Rally led by Marine LePen scored an emphatic victory in the first round of the country's legislative ballot. Still, polls suggest an absolute majority is not the most likely outcome after next week's second round of voting. That's lent relief to European markets, with French stocks rebounding and the euro climbing to its highest since mid-June. Early gains in US equity futures fizzled ahead of construction spending and manufacturing due later. Among notable movers, Spirit AeroSystems advanced in pre-market trading after Boeing agreed to buy it back for $37.25 a share in an all-stock deal that values the supplier at $4.7 billion. The deal, with a total transaction value of about $8.3 billion, unwinds a two-decade separation and comes as Boeing tries to fix its manufacturing defects. In other deals news, BlackRock will acquire private capital database provider Preqin $3.2 billion in cash, as the world's largest money manager accelerates its push to become a major player in alternative assets. The acquisition deepens BlackRock's ability to oversee risks and analyze data across fast-growing markets for private assets, and also expands its Aladdin technology systems. The amateur-investing revolution that has swept US markets since the pandemic is helping fuel a boom in overnight stock trading, with the likes of Robinhood Markets and Interactive Brokers having adopted ways to offer the buying and selling of American shares 24 hours a day, five days a week. That has effectively eliminated the traditional eight-hour overnight break, and the move has proved so popular that others are taking note. You can read more about the trend — and associated concerns — in today's Big Take. Turning to the US election, President Joe Biden's campaign is going on the attack against donors, consultants, officials and media voices who are calling on him to drop out of the 2024 race after his devastating debate performance. Aides spent the weekend publicly dismissing suggestions that Biden reconsider his candidacy or take dramatic steps to overhaul his operation. They also angrily denounced the suggestion Biden and his family might entertain a discussion of leaving the race as they traveled to Camp David for a private getaway. This is what's caught our eye over the past 24 hours. Does it feel to you like the world's gone crazy?
If so, then you should check out the new episode of the Odd Lots podcasts that Tracy Alloway and I did with Dan Davies. Dan is probably one of the most interesting people I've had the pleasure of talking to over the years. He's an analyst, banking expert, author, and just all-around expert on things. His most recent book is the The Unaccountability Machine: Why Big Systems Make Terrible Decisions - and How The World Lost its Mind. Using a lens from the field of cybernetics, his basic argument is that as the world has gotten more and more complex -- too difficult for any human or groups of humans to understand -- we've created numerous Accountability Sinks which are designed to allow large organizations or governments to pass the buck for when something goes wrong.
So for example, if your flight is delayed for hours, and you can't get an answer on whether the flight is going to be canceled or not, or even what the underlying issue is, it's because actually nobody knows. No individual can give you an answer. Instead there's some faceless, nameless system, or set of rules driving the situation that gets the blame. If you think about finance, there are numerous accountability sinks. Ratings agencies. Investment committees. Indexes. Index designers. Proxy advisors. Consultants of all types. The list could go on. In a sense, all of these things exist so that accountability for some decision or some outcome could flow through to someone else. Sometimes these things end up in disaster, and (almost) everyone can wash their hands of blame or responsibility. And again, the argument is that this the inevitable result of complexity beyond the realm of human comprehension. When things go bad, there's nobody who can say "I screwed up" in part because nobody did screw up. And people go crazy, because nobody knows with whom they're supposed to be frustrated. One of the other really interesting ideas from our conversation with Dan is that the hollowing out of so-called "middle management" has contributed to these problems. Everyone likes to imagine that organizations are filled with wasteful "email jobs" (David Graeber had a more colorful term). But, per Dan, these jobs play a role in maintaining the knowledge of the organization that otherwise is so hard to comprehend.
And so one theory is that when you look at the troubles at a company like Boeing, a lot of it might have to do with drives for efficiency -- thinning out management ranks -- that caused the organization to lose internal knowledge and accountability. Anyway. It was a blast talking to Dan. Check out the episode on Apple, Spotify, or elsewhere. Follow Bloomberg's Joe Weisenthal on X @TheStalwart | 
No comments:
Post a Comment