The News: A User's Manual

Investor News

Procter & Gamble Co. (PG), the world’s largest consumer-products company, is closing hair-care research centers in the U.K. and Japan. The operations in Kobe, Japan, will move to Singapore, and work from the facility in Egham, England, will be moved to the U.S. The U.K. facility works on styling products, and the Japan site focuses on conditioners. P&G also operates a shampoo research center in Cincinnati and a coloring facility in Germany. P&G rose 0.7 percent to $69.82 at the close in New York.

Bloomberg

1.

MANY OF THE wealthiest news organizations around the world spend the majority of their time turning out stories about what is happening inside individual companies. They cover developments within the automotive, aviation, energy, health, consumer, media and tech sectors, their focus powerfully directed by the demands of one kind of audience in particular: investors who need immediate and accurate data about the commercial fortunes of businesses to help them to determine where and how they should park their assets to grow their wealth.

Historically, the evolution of the modern news media has been closely linked to the need for market information on the part of capitalism’s banks, brokerages and trading houses. The transoceanic cables laid between the United Kingdom and the United States in the mid-nineteenth century were jointly funded by financiers and news companies (Reuters, for one). Back then, in the depths of the glacial Atlantic waters, the news stories that ran down the cables would bear answers to such questions as: ‘Is the demand for guano rising or falling?’ ‘What impact will a strike of silk weavers in Lyons have on the market for cotton?’ ‘How much revenue might be raised through a tax on malt?’ And ‘What might happen to corn prices if import restrictions were to be lifted?’

The emphasis on ‘investor news’ persists today. Even mainstream news organizations will give over prominent space to the latest numbers from the main stock markets around the world, along with real-time updates on the rising or falling fortunes of hundreds of thousands of little-known but evidently vast and important corporations which invisibly shore up our lives, from Molycorp Inc. (rare metals) to Sphere Drake Holdings Ltd (commercial property insurance).

Stocks & Indexes

What happened today, according to Bloomberg.

2.

INVESTORS COME TO these news items with concentrated intent: when they consider a company, they want to see the figures for its five-year dividend growth, its latest earnings announcement, its price-to-book ratio for the most recent quarter (MRQ), market cap and current price-to-earnings (P/E) ratio (for the ‘trailing twelve months’, or TTM). At a pinch, they may also check its thirty-day average volume and relative P/E versus SPX.

But it is definitely outside of their remit to wonder what it might be like to be a sales representative or a factory supervisor at the company; to think about the tenor of the management, to imagine the cafeteria, to picture the manufacturing facilities in Shijiazhuang, to wonder about the origins of the raw materials or to ask what the point of a business might be in the wider human scheme.

Investors are like pilots flying high over a landscape at night. For navigation, they rely on only a few beacon signals and visual cues: the nuclear power station on the peninsula, the main north – south motorway and the medieval city, glowing like an encrusted diamond ring at the foot of the mountains. But there is no need to worry about the discussions in the apartment block near the piazza; the dilemmas of the lorry driver at the service station or the dreams of the technician in the turbine hall. In the cockpit, the only sounds are those of the twin Pratt & Whitney engines, thrumming at 25,000 rpms.

The financial news organizations have journalists embedded in some of the world’s most remote economic outposts. There are correspondents monitoring the wheat harvest in Saskatchewan, Canada, the progress of oil exploration off the coast of Brazil, the extraction of niobium and zirconolite tantalum in Malawi, the development of the next generation of commuter trains in the Ruhr Valley, Germany, the weaving of carbon-fibre aerospace panels in Chubu, central Japan – and yet in spite of their extraordinary and privileged vantage points, these journalists are required to maintain a pinpoint focus on only such information as will help investors to answer one lone question: ‘To which companies should we commit our money?’

3.

YET TO WRITE up the goings-on in businesses only in economic terms, to sum up an entire company as being +1.20 or to compress the experiences of 8,000 people into a turnover of 375.776 seems as limited as reducing a novel of the complexity of Pride and Prejudice to a ledger of the characters’ bank accounts. Businesses should be honoured as among the most humanly important organizations on the planet which deserve to have their adventures, prevarications, deceits, passions and sufferings carefully described and powerfully evoked with all the intensity and aesthetic skill that might accompany the narration of a love affair. It is only an accident of culture that still leads us to expect that ‘human interest’ is something best found in someone’s private life rather than at the factory line, the supply chain or the office cubicle. Because of its strict remit, investor news daily ignores phenomena that are no less involving, shocking, attractive and dramatic than what the show-business pages or a novel could offer us.

The journalists who work in the sector should demand that they be allowed to land the plane and add life to their numbers.

SHARP CORP.

TOKYO STOCK EXCHANGE

PRICE CHANGE: ¥ -18

OPEN: ¥288 CLOSE: ¥ 270

They should, for example, be allowed to tell us more about fear. The layman meets the corporate world through fingerprint-free products that omit any mention of the circumstances behind their manufacture. Sharp’s Aquos LE836 television or its R98STM-AA 900-watt microwave is deeply reserved about its origins in a factory on the southern outskirts of the town of Taki in Japan’s Mie Prefecture. These supremely rational, well-engineered machines don’t want to talk about the dynamics that brought them into being: the feelings of pride, jealousy, desire, cruelty and revenge that drove their creators on. Most of all, they don’t want to speak of the anxiety that pervades capitalism in general and the 46,000 employees of Sharp in particular. ‘Creative destruction’ is a useful abstract phrase that financiers and economists will employ to describe the annihilation of weaker firms in a competitive marketplace, but what this means in reality, on the ground in Mie Prefecture, is the brutal end to decades of careful labour, effort, planning, energy and hope. We should dare to hear more about the constricted heart vessels and nighttime agonies of Mikio Katayama, the chairman of Sharp Corp., an honourable and intelligent man who nevertheless made a few very bad bets – an investment in the wrong kind of flat-panel technology, a gamble on a second-rate smartphone screen, an overcommitment to microwaves just as the market turned – and who will now almost certainly be wiped out by the assaults of rival manufacturers, along with many of his co-workers and the value of his share price.

NESTLE SA

SWISS STOCK EXCHANGE

PRICE CHANGE: CHF +0.20

OPEN: CHF 63.55 CLOSE: CHF 63.75

We should at the same time be allowed to see the world behind the numbers, to appreciate capitalism as a visual, sensory phenomenon and to absorb the fearsomely ordered, sterile beauty of its offices and manufacturing centres. We should follow the photographer Jacqueline Hassink into the world’s boardrooms, where decisions affecting the livelihoods of hundreds of thousands are taken amid stark but expensive furnishings by a few diligent courtiers, often engineers by training, masters of political intrigue and vessels for tightly coiled ambition – figures who somehow seem, in Hassink’s images, all the more present and powerful for being absent. In the boardroom at Nestlé, near Geneva, for instance, we might briefly admire the map of our planet that allows the members of senior management, like generals in some previous age when war enjoyed the same prestige now accorded to business, to survey the relentless progress of their campaigns to advance the sales of Honey Nut Cheerios, San Pellegrino and Friskies to humans and cats across five continents.

Jacqueline Hassink, The Meeting Table of the Board of Directors of Nestlé, Vevey, Switzerland, 1994.

(picture credit 10.1)

Edward Burtynsky, Cankun Factory, Xiamen City, 2005.

(picture credit 10.2)

TSANN KUEN ENTERPRISE CO. LTD

TAIWAN STOCK EXCHANGE

PRICE CHANGE: TWD +0.60

OPEN: TWD 58.30 CLOSE: TWD 58.90

We should likewise let the photographer Edward Burtynsky take us to China and show us the sacrifice behind many of the won-drously cheap goods we are delighted to buy: the irons, coffee makers, barbecue grills, citrus juicers, vacuum cleaners and toasters that are turned out in prodigious numbers by Tsann Kuen Enterprise in a hangar-like 23,000-person factory in Xiamen City in south-east China.

We should remember that these items are – of course – very cheap not because Tsann Kuen Enterprise is so wondrous or clever and modern technology so ingenious, but principally because workers around Xiamen City suffer grievously from a condition that economists would politely call ‘a lack of pricing power’ – and we might more frankly identify as desperation.

THALES SA

PARIS STOCK EXCHANGE

PRICE CHANGE: EUR +0.08

OPEN: EUR 27.00 CLOSE: EUR 27.08

Yet this shouldn’t prevent moments when we can also admire the beauty of production, like that found in the Pléiades-HR 1A earth-observation satellite, as it reveals its innards in the assembly halls of the Thales factory in Cannes, France. Our wicked species is rarely more impressive than when it is quietly engaged in a complex, ordered task. Given our capacity for indolence and chaos, it can be moving to contemplate the sheer precision, exactitude and discipline that most work demands. Like watching a person sleep, it is hard not to feel an a priori benevolence towards someone whom one has observed adroitly wiring up a satellite.

Benedict Redgrove, Satellite Manufacture, Cannes, 2010.

(picture credit 10.3)

AMCOR LTD

AUSTRALIAN STOCK EXCHANGE

PRICE CHANGE: $-0.11

OPEN: $8.30 CLOSE: $8.19

We should in addition be prompted to give some thought to the meaning of our frenzied labours. Most of us won’t, of course, ever have heard of Amcor, one of Australia’s most profitable companies and the world’s largest maker of tissue cartons, nappy boxes, toothpaste dispensers, suncream tubes and shampoo bottles, but the great fortunes of our day have rarely been accumulated through the sale of the most meaningful items and services, such as poetry or relationship counselling.

When does a job feel meaningful? When we can, at the end of the day, feel as if our work has in some way, however modestly, helped either to reduce the misery or to increase the contentment of others. We like to serve, and we like even more to experience the impact of our efforts on the lives of our fellow humans. Yet when labour is subdivided into ever smaller parts, when whole careers are devoted to turning out objects which will affect another’s well-being for only a second or not at all, then meaning suffers. Not that the stock markets would care; they would reply that meaning should be something reserved for the weekend.

Stock indices leave one juggling a set of varied feelings: an admiration for the fertility of modern business, a wonder at the extraordinary degree of intelligence and effort demanded to suceed in any industry, and yet a guilty sense of the absurdity and waste of so much of our toil and, in the middle of the night, when the mind tends to avenge itself on the compromises of the day, a pained wonder at what we might be doing with the ever-more precious bit that still remains of our lives.

SAP AG

FRANKFURT STOCK EXCHANGE

PRICE CHANGE: EUR -0.10

OPEN: EUR 59.70 CLOSE: EUR 59.60

We can conclude that the numbers and graphs in financial news are only ever a shorthand for the stories and images that we need in order to understand the world we have built. Business is ultimately too interesting and too significant to be described only for the sake of those who want to invest in it.

A sweeping story that needs a modern Emile Zola to tell it: the software manufacturer SAP’s share price, 2011–13.