Financial Relativity → Stock Dicking → Cryptonapping

Hey Neighbor. A new Yale study of post-college job applications suggests that having study abroad experiences on a resume, while seemingly obnoxious, boosts a candidate’s chances of an interview while having a minor (even if it’s in economics) does not. 

Companies value social skills over minor academic achievements. Fair enough.

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→ Trump’s continued war on DEI and any form of race-based hiring or admission policy has prompted some to wonder what a class-based admissions policy would look like. Researchers in Australia have actually worked it out, but there’s a major catch: Any such policy would require applicants to honestly disclose personal information [1]. Good luck with that. (READ MORE)

→ So-called “Hybrid Hierarchies” are catching on. In essence, these company return-to-work policies require middle managers to commute while allowing outstanding individual contributors to do pretty whatever they want. The trend creates a new incentive structure for would-be corporate climbers. (READ MORE)

Upper Middle Research identifies readers with professional expertise and matches them with surveys and focus groups that pay up to $300 an hour (probably during lunch) and keep them abreast of what’s going on in their field.

On the joy of losing less money than the other guy.

It’s a safe bet that the coders at ServiceNow in Santa Clara enjoyed watching Nvidia’s shed $600B in value yesterday as Silicon Valley went full “Distracted Boyfriend” over a new, cheap Chinese AI. 

Over the last five years, ServiceNow, an IT services platform (with an AI twist!), has seen its stock 5x while Nvidia, a couple hundred yards down the San Tomas Express Way, has seen its stock has 28x, minting roughly 2,300 millionaires. Everyone is getting wealthy, sure, but ServiceNow employees are, relative speaking, falling behind. As such, it’s only logical they would celebrate Nvidia’s minor fall even if it didn’t give their (probably indexed) portfolios a major lift.

Losing money is always worth it if the rich guy next door loses more.

In the 1960s, Walter Garrison Runciman, 3rd Viscount Runciman of Doxford (known to the chaps as “Garry”) attempted to popularize the concept of “relative deprivation,” the idea that particularly strong negative emotions are experienced by those deprived of access to desirable goods and experiences enjoyed by their friends, family, neighbors, or former selves. A neo-Darwinian, Runciman hypothesized that wellbeing is determined by relative rather than absolute position – at least in the suburbs where everyone is eating well.

It was the kind of unrelatable theory that only a Viscount (and heir to a shipping empire) could have conjured and, ironically, Runciman may have become invested in it precisely because it didn’t catch on with the hoi polloi. His academic career faltered – not in absolute terms, but compared to his Cambridge contemporaries – and he spent the nineties stuck in the great circle jerk that is the House of Lords. But in the 2010s, his idea suddenly gained traction thanks in part to the economist Paolo Verme, who tied relative deprivation to the Freudian concept of the ego and made this attractive little diagram:

The diagram – and the concept of relative deprivation – applies most powerfully to the white-collar Upper Middle. Its basic math: In 2022, the difference between the personal wealth of an American in the 50th percentile and an American in the 51st percentile was $9,130 (4% of total holdings). The difference between the personal wealth of an American in the 90th percentile and an American in the 91st percentile was $225,150 (10% of total holdings). Though deltas get more extreme closer to the tippy top, they also become less observable. The only difference between a guy with a billion dollars and a guy with two billion dollars is the size of the yacht. [2]

If this all sounds like poor little rich kid stuff, that’s because it is. But that doesn’t mean it can be dismissed. There are very real negative consequences to being a poor little rich kid. 

In a study out this month, Harvard Researcher Emily Dore finds that childhood exposure to income inequality has a more profound negative effect on the long-term health of children from more privileged backgrounds than it does on children from less privileged backgrounds. Her data suggests that well-off children in high-income states have worse expected health outcomes than kids from solidly middle class towns. Dore suggests this is due to the “social status threat” – anxiety driven by relative deprivation – that has come to define Upper Middle culture in Massachusetts, New Jersey, Washington, Connecticut, and California.[3]

Which brings us back to Santa Clara, where ServiceNow coders can look out their glazed windows at Nvidia’s extravagant new HQ. Relative to most Americans, these nerds are rich, but relative to their neighbors… not so much. And, as it turns out, that matters more. It matters enough that losing money will feel good as long as those neighbors lose more.

That’s normal. Take it from a Viscount.

→ Starbucks is rebranding (kinda) as The Starbucks Coffee Company and bringing back the writing customers’ names on cups thing. Once again, anyone with a vaguely ethnic name and a caffeine habit will have to come up with a “Starbucks Name” and everyone named Michael will give up and say “Mike.” (READ MORE)

→ Severance S2 has been smothered with critical love – and for good reason. Everyone wants to know what’s up at the mysterious biotech firm Lumon. Theories abound. A recommendation for those that can’t get enough: Watch S4 of Brockmire, which began as a show about a baseball broadcaster and became a bizarre, but timely meditation on oligarchy and dehumanization featuring a mysterious AI known as Limon. (WATCH ON ROKU)

→ MSNBC host Chris Hayes has been spotted wearing a gold chain.

→ Hotel room TVs are now playing “sleep support content.” (READ MORE)

→ Institutional investors are buying more single-family homes, prompting states like New York to contemplate restrictions. As it stands, institutional investors own a bit more than 2% of housing stock and trending up. There’s plenty of debate over how this could negatively (inflates prices) or positively (introduces liquidity) affect the market, but no coverage of the fact that this will doubtlessly make suburbs even more bland looking. Private equity execs are going to go all in on eggshell. 

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→ New outlets are using unprecedented numbers of pixels covering perceived economic threats both real and imagined. Yesterday, stories about a “stock market rout” were given the bold headline treatment. It was a roughly -1% day. There are, historically, about 31 of those a year. As Callie Cox shows, returns have been heavily correlated to negative story counts in the past. In other words, speculative coverage of the economy poses a risk to the economy. (READ MORE)

→ Online cheerleading for has put crypto investors at risk. The crypto attack tracker on the open-source code repository Github (of course) shows an increase in publicized attacks on HODLers. There have been two kidnappings in the last week. Why rob crypto wallets? Because that’s where the money is. [4] (CHECK OUT THE LIST)

→ Caitlin Zaloom has published a strong argument that economists have been given too much power in American politics in The New York Review of Books, where Senior Editor salaries start at $69K. Glass houses. (READ IT)

[2] It’s important to note that rich people care enormously about the relative size of their yachts and that the yacht industry has been absolutely booming over the last several years. (The only thing that outranks yacht is spaceship.)

[3] Relative deprivation also goes a long way to explaining political dynamics. Dore’s results indicate that members of that coastal elite experience more negative consequences when they fail to keep up than members of middle-America’s middle class do when they fall further and further behind. It’s less mentally taxing to hate some distant Ivory Tower toffs than it is to resent one’s neighbor.

[4] In case you’re unfamiliar with the quote I’m alluding to here, it’s a classic from the famous bank robber Willie Sutton. Asked why he robbed banks, Sutton famously responded thusly: “Because that’s where the money is.” Some really great cold-blooded shit.