Many historians say it’s inevitable that great empires fade into the sunset of history.
Declines of great empires are easy to see; for some reason, they are too difficult to stop. It’s obvious that it is a combination of the arrogance of its citizens and the unwillingness of leaders to be honest that will lead to an eventual demise.
So, what are the signs? According to Edward Gibbon’s Decline and Fall of the Roman Empire, there are five common signs to the imminent fall of great dynasties:
- Rapid increase of divorce
- Higher and higher taxes
- The mad craze for pleasure
- The decadence of the people
- The decay of religion
Perhaps a few decades from now, some historian will add the unveiling of the $100 doughnut to the list. Talk about pleasure and decadence. A restaurant in Brooklyn is selling the “Golden Cristal Ube Doughnut,” filled with ube mousse, champagne jelly, icing made with Cristal champagne, and covered with 24k gold.
I am all for people buying stuff they can afford and enjoying the fruits of their labor, but what’s happening is somewhat different.
In a nation where the gulf between the haves and the have-nots continues to grow, all the focus is on bridling the poor with the crumbs of redistribution, it sows the seeds of discontent for all. In the first year of the Great Recession, well-to-do shoppers were afraid to walk down the streets of New York with bags from Bloomingdale’s -they slipped them into plastic bags or stopped shopping all together.
I am only being partly tongue-in-cheek about the $100 doughnut as it is a sign of decadence and it underscores the mad craze for pleasure. I assure you the buyers will overwhelmingly be hipsters without bank accounts, and others who simply want to treat themselves, even if their day-to-day economic prospects are murky at best.
The nation is gripped by a flaccid recovery, producing mostly low-paying part-time jobs. The divorce rate is at an all-time high while the rate of marriages has plunged and low birth rates are a crisis. There are more things to worry about than an ultra-expensive doughnut, but few represent the misguided direction of the country.
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Stockholm syndrome
I saw a great article on Foreign Policy about an insanely huge golden statue of Mao. In the same area where Dictator Mao wiped out 45,000,000 poor villagers through famine, his polices were largely responsible for rich businessmen who had chipped in $500,000 to build this 120-foot high monstrosity.
We know humans do destructive things and we know humans often vote against their own best interest, and it should be a cautionary tale for November. Promises will be made that actually sound attractive by focusing on taking from others rather than unlocking and unleashing the potential of everyone. I can only hope Americans doesn’t take the bait.
Yet I can’t help thinking about the bitterness toward elected officials in this nation; people might be ready to do something desperate:
- Violence
- Confiscation
- Martial Law
A number of outcomes are possible as anger can be assuaged, addressed, or stoked into something more sinister.
To a degree, this has already happened as politics of envy has ruled Washington for the past seven years. A perverse kind of Stockholm syndrome is going on, which means we could actually make things worse.
Apple Update
On Tuesday, the stock of the day was Apple (APPL), which continues to march lower. Persistent reports of inventory building at retailers and supply slowdowns in Asia have pushed the shares into bear market territory. A report in the Nikkei Asian Times points to a request for suppliers to pullback on iPhone 6 production.
Oddly, the Street is not taking the bait of a possible iPhone 7 in the works; instead of going with empirical evidence, this could be that moment when the iPhone reaches its critical mass with a decline in sales. I am not sure if this is the case, but I will say that Tim Cook has done okay with product pipeline, but he hasn’t hit a grand slam. Moreover, this operational genius must learn how to move the share price, too.
Yes, he must be Chief Excitement Officer.
He doesn’t need Steve Job’s charisma or Jack Welch’s charm, but he must learn how to talk the stock up the way Jeff Bezos was able to do for years without posting profits.
In the meantime, the stock is at a double bottom and it must make a stand here. Over the holidays, I saw more red-short-wearing sales people than customers at Apple stores, but as a long-term investment, it’s perfectly positioned to dominate for many years to come. Someone needs to get Cook to say as much.
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