March 8, 2016
One particular section of Chapter 3 caught Bloom’s attention. There, the SEC suggested that “an alternative approach be examined” and posited that if well-capitalized specialists and supplementary market makers could have turned to a single “product” for trading baskets of stocks, the market damage—and volatility—may have been significantly smaller. Indeed, such a product might even have prevented the crash by providing a liquidity buffer between the futures market and individual stocks. “I walked into Nate’s office and said, ‘Here’s an opening we could drive a truck through,’ ” Bloom says. ... Of course, today we do have what the report refers to as basket-trading products. We call them exchange-traded funds, or ETFs, and they’re a $3 trillion global industry, with more than 6,780 products on 60 exchanges to choose from. In the U.S. last year, ETFs traded about $20 trillion worth of shares—more than the country’s gross domestic product. ... “We were essentially reverse-engineering what the SEC called for in their report,” Bloom says. “We viewed it as a product proposal being made by the regulators.”
Houston is the fourth-largest city in the country. It’s home to the nation’s largest refining and petrochemical complex, where billions of gallons of oil and dangerous chemicals are stored. And it’s a sitting duck for the next big hurricane. Why isn’t Texas ready? ... Such a storm would devastate the Houston Ship Channel, shuttering one of the world’s busiest shipping lanes. Flanked by 10 major refineries — including the nation’s largest — and dozens of chemical manufacturing plants, the Ship Channel is a crucial transportation route for crude oil and other key products, such as plastics and pesticides. A shutdown could lead to a spike in gasoline prices and many consumer goods — everything from car tires to cell phone parts to prescription pills. ... After decades of inaction, they hoped that a plan to build a storm surge protection system could finally move forward. ... Several proposals have been discussed. One, dubbed the “Ike Dike,” calls for massive floodgates at the entrance to Galveston Bay to block storm surge from entering the region. That has since evolved into a more expansive concept called the “coastal spine.” Another proposal, called the “mid-bay” gate, would place a floodgate closer to Houston’s industrial complex. ... The 10 refineries that line the Ship Channel produce about 27 percent of the nation’s gasoline and about 60 percent of its aviation fuel ... Flooding is the most disruptive type of damage an industrial plant can experience from a hurricane. Salty ocean water swiftly corrodes critical metal and electrical components and contaminates nearby freshwater sources used for operations.
Her speech was punctuated by European brand names, which functioned as a kind of currency. A maid’s monthly wages, she said, were probably the price of a pair of Roger Vivier satin pumps. A night out can cost half a suède Birkin bag. On Weymi’s last birthday, in March, she’d spent more than two Fendi totes—around four thousand dollars—on drinks in less than an hour. ... The Chinese presence in Vancouver is particularly pronounced, thanks to the city’s position on the Pacific Rim, its pleasant climate, and its easy pace of life. China’s newly minted millionaires see the city as a haven in which to place not only their money but, increasingly, their offspring, who come there to get an education, to start businesses, and to socialize. ... The children of wealthy Chinese are known as fuerdai, which means “rich second generation.” ... President Xi Jinping has spoken of the need to “guide the younger generation of private-enterprise owners to think where their money comes from and live a positive life,” and the government recently held an educational retreat for seventy children of billionaires, who were given a crash course in traditional Chinese values and social responsibility. ... Moneyed people leave China for various reasons. Some are worried about pollution. Others want to secure a good education for their children. ... for affluent Chinese, the most basic reason to move abroad is that fortunes in China are precarious. The concerns go deeper than anxiety about the country’s slowing growth and turbulent stock market; it is very difficult to progress above a certain level in business without cultivating, and sometimes buying, the support of government officials, who are often ousted in anti-corruption sweeps instigated by rivals.
His customers include the Defense Department and various spy agencies. He has about 200 people on the payroll, most of whom go to work every day in places where they could very well get shot or blown up--Iraq, Afghanistan, Ghana, Djibouti, Somalia, and Libya, to name a few. They guard buildings, protect VIPs, train foreign soldiers, and do a lot of office work, too: "Our specialty," says Patriot Group COO Rob Whitfield, "is providing sometimes common services in real crappy places." ... As a veteran, Craddock knows about war--what it is to confront bad guys face-to-face, to lose a friend in combat, to endure long separations from family, and then to wonder, once you're out, whether you'll ever again do anything as focused, as intense, as in-your-face important as what you did in uniform. As an entrepreneur, he also knows about business--what it is to risk everything on a proposal that goes nowhere, to be cut off by your banker, to drain your 401(k)--and ultimately what it feels like to succeed in a notoriously corrupt industry that's closely regulated, intensely scrutinized, rife with unsavory characters ("Some of the folks who work for us--I wouldn't want to be on their bad side, consistently"), and beholden like no other to the fickle winds of geopolitics. ... Total Defense Department spending on contractors--including those supplying weapons and R&D as well as services--peaked at $412 billion annually, and is down more than 30 percent since 2009. Among the factors: troop drawdowns, shrinking budgets, and a deteriorating business climate marked by intense congressional scrutiny, stricter oversight in the field, and heightened public distrust. ... Ironically, as spending drops, the relative importance of the private sector grows. Contractors deliver continuing access to talented people the military can't otherwise retain and instant access to short-term skills.
Around Shenzhen, since mid-December a cottage industry of more than 1,000 factories that were churning out the boards has shrunk to a couple hundred. “We maybe lost 50% of our revenues after the Amazon announcement,” says Feng, speaking from his shamrock-green factory floor. ... Unlicensed manufacturers had begun copying Chic’s board immediately after it appeared at the Canton trade show. By the summer of 2015, more than a thousand factories—up to 10,000, by some estimates—were making boards for distributors who sold them abroad online. Factories like Feng’s that had been making LED screens or iPhone cases switched to building hoverboards in a matter of days. And many factories, licensed and otherwise, cut corners on safety standards, often by subbing in cheaper, potentially flammable batteries.