January 16, 2023

Today's Topics

Hello! 94 years on from his birth, we're sending good wishes to all of our readers on this Martin Luther King Jr. Day. Today we're exploring:

  • The JPMorgan Machine: America's largest bank handles whatever is thrown at it.
  • Peak Podcast: Have we hit peak podcast, or is the industry just on pause?
  • Dollar Dominance: USD has given up some of its recent gains.
Not yet a subscriber? Sign up free below.

Bank robbery

JPMorganChase’s 2021 acquisition of Frank, a student finance planning platform, seemed like a great deal at the time, until it recently found out that nearly 4 million of the site’s 5 million-strong userbase didn’t exist.

The bank discovered that its hot, student-helping startup, which came with a $175m price-tag, had vastly overinflated its scale after they sent marketing emails to customers and ~70% bounced back. Jamie Dimon, the JPMorgan CEO who’s in Switzerland for Davos '23, said the acquisition was a “huge mistake”.

The JPMorgan machine rolls on

However, while the "Frank fraud" has dominated headline mentions for the nation's largest lender, JPM’s earnings report from Friday suggests that, whilst a lawsuit is underway, the bank won’t be losing too much sleep over the botched deal.

JPM reported a whopping $37.7bn net income figure for 2022, taking the company's total profits over the last 15 years — a cycle that's seen global financial meltdowns, recessions and a pandemic — to more than $370bn.

The secret sauce is that JPM doesn't rely too heavily on any one business. When it's boom time, the investment banking division thrives. When times are leaner, the bank’s proficiency in the boring-but-robust aspects of the job — providing bank accounts and credit cards, for instance — picks up the slack. Right now for example, JPM is a beneficiary of the rising interest rates that we’ve heard (and written) so much about, even as dealmaking and corporate activity slow.

Peak podcast...

We might be able to add podcasts to the list of trends that boomed in 2020 and are now coming back down to Earth. After soundtracking many lockdown-induced walks, major media empires were built around podcasts. There were multi-million-dollar deals for hosts such as Joe Rogan, Alex Cooper and many others as audio giants like Spotify poured money into the format.

But the exuberant boom may be over. Data from Edison Research shows that listener numbers actually fell last year after years of growth. Just 38% of adults surveyed said they had listened to a podcast in the last month, down from 41% in 2021.

...or just a podcast pause?

That cooling off, coupled with a slower ad market more generally, is leaving podcast producers struggling to fill ad space, with anecdotes from industry insiders suggesting that shows that used to claim 80% of advertising sales are now often forced to settle for 50%.

Clearly the "cons" column of your "should I start a podcast?" list is getting longer, and data from Listen Notes — a podcast database — confirms that launching a podcast has lost some of its pull. Its data shows that over 1 million new podcasts were started in 2020. Last year, the same database tracked only ~217,000 new shows, an ~80% drop.

Not yet a subscriber? Sign up free below.

Dollar dominance fades

In the last two years, the US Dollar has been the hottest thing on the currency markets.

Pegging values to the start of 2021, at its peak the US Dollar had made gains of 27%, 28% and 46% against the major currency pairs of the Euro, British Pound and Japanese Yen, respectively. But in the last 4 months, the greenback has started to slide, giving back roughly half of its gains made against each currency, as investors anticipated that US inflation had likely peaked.

In some ways, you can argue that this news is almost of less consequence for Americans than it is for everyone else. Many of the world's global commodities such as food and fuel are often denominated in USD, as is much of the international debt market. Hence, when USD gets stronger, the relative prices of those goods, or interest payments, goes up too. A slight weakening of the dollar has likely been welcomed by many in recent months.

More Data

• A US Navy veteran and Walmart cashier can finally retire after TikTokers raised $100kfor the 82-year-old.

Kodak is upping film prices around the world by as much as 40% in a blow for photography hobbyists who like to do things the analog way.

• Whenever the World Economic Forum is in town the number of private jet arrivals soars in Davos, per new research from Greenpeace.

• The richest 1% accumulated two-thirds of the $42 trillion of new wealth created since 2020, according to an Oxfam report.

Hi-Viz

• Drone photos capture the beauty of US skyscrapers from on-high.

• Drinking’s up: dry January participation is down for 2023.

Off the charts: Apple chief Tim Cook hit the headlines for taking a huge 40% pay cut, but just how wide is the gap between worker salary and CEO realized compensation? Answer below.

(A) ~35x difference.

(B) ~175x difference.

(C) ~350x difference.

Click on your guess to see the answer.

We're a fully bootstrapped, independent media company. If you enjoyed this data-driven newsletter, sharing it with your friends helps us out a lot.
Not yet a subscriber? Sign up free below.

Recent newsletters

Whistling: Crime doesn't pay... but whistleblowing seems to
Burgernomics: The Economist's Big Mac Index is back
V8 dreams: Ferrari's brand is unmatched, but will it thrive in the age of electric?