What we’re reading (10/13)
“The Market Has Been Fabulous, Maybe Excessively So” (New York Times). “Consider how powerful the U.S. stock market rally has been. The S&P 500, the most widely followed U.S. stock market benchmark, rose 5.9 percent for the quarter and 22 percent since the start of the year through September, including dividends. In the 12 months through September, it returned a sizzling 34.2 percent. That’s more than triple the average annualized return of 10.5 percent since 1926.”
“Fate Of Lina Khan’s Bid To Reshape Antitrust Comes Down To Election” (Wall Street Journal). “Whether Khan sticks around is more of an open question. Khan would be open to remaining atop the FTC if Harris wins, according to a person familiar with her thinking. Harris has ties to the country’s biggest corporate law firms, whose merger departments feed on the flow of deals brokered by investment banks. Some investors, such as Reid Hoffman, have also said Khan’s antimerger bent hurts innovation. Hoffman, the founder of LinkedIn and a major Democratic donor, said this summer that Khan should be replaced if Harris wins the White House.”
“OpenAI Must Scale A Massive Money Mountain” (Spyglass). “OpenAI is clearly very good at fundraising. Understatement of the century, thus far? But a lot can happen between now and 2028. An in AI, where the days feel more like months, even more is unknown. That's a massive risk, to put it lightly. Of course, they'll have levers they can pull to dial down burn, in particular with compute. But there's also a chance they'd have to dial it up as well. It's just a complete unknown at this point. It does feels like it will be hard for any other startup to compete with such cash needs – Anthropic, answer your phone, Amazon is calling – but OpenAI will be competing with Google, Meta, and all the rest of Big Tech. Maybe not Apple. But probably them too, eventually.”
“Just How Doomed Is Home Insurance?” (Vox). “Home insurance premiums are rising across the country. Florida homeowners already pay the highest rates, on average about $3,600 per year, according to the Florida Office of Insurance Regulation, well above the national average of around $2,400 per year. Across Florida’s 10 largest cities, rates are more than $10,000 per year, according to a report from Insurify. Last year, US home insurance rates jumped 11.3 percent on average, which has led some to drop their coverage altogether. Some Floridians have seen rate hikes as high as 400 percent over the past five years. That’s if they can find insurance at all. Hundreds of thousands of Americans have come home to a breakup letter from their private insurers, canceling their coverage.”
“America’s New Millionaire Class: Plumbers And HVAC Entrepreneurs” (Wall Street Journal). “Aaron Rice has two logos tattooed on his left leg: one from the plumbing business he co-founded more than a decade ago, and another from the private-equity-backed company that recently bought it. Few businesses are as vital to their customers as local plumbing, heating or air-conditioning companies—especially in places like Tucson, Ariz., where Rice works and residents sweltered in 100-degree heat most days this summer. For years, Rice, 43 years old, was skeptical when out-of-state investors offered to buy his company. He assumed most of them knew little about skilled-trade work or his customers. They were just looking to make a buck. But in 2022, when approached by a local HVAC company backed by private equity, he changed his mind, figuring that they knew the business.”
