Opinion: Leading Democratic Presidential Candidate Wants to Destroy Silicon Valley

The democrats' primaries will take place in a year. Now ahead of Joe Biden, Elizabeth Warren and Bernie Sanders - 76, 70 and 77 years, respectively. However, the example of Trump shows that the years are not always a hindrance. Unfortunately. In the end, the system and the team should work, and the young, intelligent and energetic vice president can compensate for the age disadvantages of the country's leader. But do not put on Elizabeth Warren! She wants to "destroy" Silicon Valley, "break" the leading IT and high-tech companies in America.

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Giant companies in XXI century

The fact is that since February 2016, the top 10 of the most expensive companies in the world are mainly American. Occasionally, the Chinese (and what else?) Competitors burst into this magnificent top ten, which should be borne in mind. And most importantly, now the first five places are occupied by IT and high-tech giants.

This generally means a good state of the economy, a stream of investments, and as for the leaders, the US global leadership. It is favored by the relative dominance of US stocks on the bull market (this is the name of the growth period of stock quotes as opposed to the bear market when stock prices fall), as well as a strong dollar plus, which is significant in this context, high demand for mega shares caps of companies with a capitalization of more than $ 200 billion, which gives the giants certain advantages. They are concentrated in the USA and now investments in them are more profitable than in European or Asian companies.

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But it was not always so. In 2010, 4 of 10 of the most expensive (capitalized) companies in the world were Chinese. Market capitalization is expressed simply by the total value of the company's issued shares listed on exchanges, and reflects both the degree of success and the measure of investor confidence in it and the hopes placed on it. The dynamics of the change of leaders is very revealing, it demonstrates the change of world priorities in the economy, technology and even in the structure of society, therefore, it is necessary to follow it.

Now Microsoft is ahead. She, Intel and IBM were the first among IT and generally among high-tech companies to challenge the industrial and raw material giants that traditionally topped the rankings. In September 1998, Microsoft ousted General Electric from the top of the pedestal and stayed there for two years! In April 2003, it again took the lead, but only for three months. Then oil prices began to rise and in the summer of 2005 Exxon Mobil topped the list, and the beginning of 2007 marked the steep rise of Gazprom - in May it entered the top ten, in June it rose to sixth place, in August to third, and Miller, his boss, promised that the company will be the first to cross the $1 trillion mark. capitalization.

Thank God, it did not come true. But in the summer of 2007, another raw material company, China Mobil, burst into the top ten. Oil prices then passed for a hundred dollars / barrel, and the market was seething like a superheated boiler. By November, the Chinese were in third place, and the fourth was taken by ICBC - Industrial and Commercial Bank of China. These surprises were not exhausted, and PetroChina struck even seasoned brokers. Her take-off was truly jet-driven, and in December she was in the lead in stock races, and with a huge margin, she nearly broke the trillionth line and almost twice ahead of Exxon Mobil! However, 2008 Exxon was quickly blown away and returned to the first place by May, Gazprom was third, and as a result the gas workers and oilmen took the whole pedestal, and there were five of them in the first six.

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But September came 2008, the global financial and economic crisis hit and stock quotes fell down along with oil and gas prices. Microsoft and in those hard times kept steadfastly, periodically going into third place, but the main thing is that in February 2010 appeared in the top 10 Apple and by May rose to the fifth position, and in July - to the third. In October, when Jobs himself, alas, left us, his company came out on top in the world standings! Phenomenal dynamics.

That month, both the IBM veteran shook the old days (4 place), and Gates’s company did not let up - 5 place, so that in the first five there were only two raw materials companies, which foreshadowed a change in favor of new technologies. But in the 2011-th half of the top ten places were oil and gas workers. Fracture did not occur immediately.

Yes, at 2012, Apple quickly broke away from Exxon, the first in history to exceed the milestone of half a trillion capitalization, but Jobs’s death affected success, the following year the recession began, and the company barely kept second place. In June, 2013 happened another significant event, more joyful - Google appeared in the top 10. Fortunately, by the end of the year, Apple’s business had improved, it returned to first place, Microsoft was third, Google was fifth, and only two oil companies remained in the top ten - and not a single Chinese company! The exchange landscape has changed noticeably and began to look familiar to us now.

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In April, Jobs's brainstorming 2015 overcame the $ 700 billion mark, and in May it was twice as expensive as Exxon - in the summer of the previous year, oil prices collapsed, and this company became cheaper. In August, she lost the second place to the Gates company; in September, Google bypassed it - and for the first time IT specialists won all three first places.

February 2016 was marked by the appearance of Facebook and Amazon in the top 10, and the newcomers did not lose heart in the big leagues. In April, Bezos 2017 company rose to the 4-place, and the social network Zuckerberg, which caught more and more people, breathed in the back of the head. In July, 2017 overtook the Warren Buffett holding and new companies won the first five places on the capitalist Olympus!

This position (Apple, Amazon, Google, Microsoft and Facebook) was preserved in July 2018, when the leader passed $ 900 billion, while Exxon dropped to 10, the sic transit gloria mundi. So the worldly glory passes and the color of time changes. Finally, a trillion was taken in September! Yes, Apple could not resist at this height, and Google, Amazon and Microsoft used the braking leader. They started vigorously, changing places, and if Bezos did not manage to get Apple, then in January of this year, the Gates company repeated its success twenty years ago.

Top 10 at the beginning of July

What is the current state of affairs? On July 5, again exceeding a trillion Microsoft was in the lead - $ 1050,3 billion, followed by Amazon - $ 956,6 billion and Apple - $ 939,7 billion. Then Alphabet (this is the old GOOGL & GOOG) - $ 786 billion, Facebook - $ 560 billion, Berkshire Hathaway - $ 528,2 billion, Alibaba $ 451,2 billion, Visa $ 386,1 billion, Johnson & Johnson $ 373,2 billion and JPMorgan Chase $ 368,1 billion.

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In the top ten, as you can see, there are no commodity companies (Exxon Mobil at 11-th place), but there was a Chinese Alibaba, working in online commerce. This is alarming. Especially in light of the emerging persecution of domestic giants.

By the way, we did not speak in vain about capitalization, as a measure of trust of the company's investors. Facebook, for example, does not justify it, as well as user confidence, Mark Zuckerberg’s company is constantly shaken by scandals related to access to personal customer data using the Russian trolls' social network to interfere in American and European affairs, with favoritism and manipulation. As a result, after last year’s collapse, its capitalization has fallen again since the beginning of May, it stabilized only in early June, and since then the Mark Zuckerberg company has been gradually improving its affairs.

They do not trust the leaders in the upper echelons of power, in connection with which there is not a rhetorical question at all.

Will the giants survive?

It would seem that America should be proud of its leadership in such an advanced business and its companies, the largest brands in the world, that provide this leadership. The capitalization of any of the top four exceeds the capitalization of the Top 100 Russian companies ($592B as of December 31, 2018), and any pair of the top three exceeds Russia’s GDP. However, on June 3 it became known that the US government intends to conduct an antitrust investigation against Amazon, Apple, Facebook and Google. The Federal Trade Commission will look at Amazon and Facebook, and the Department of Justice will check Apple and Google. That day, Facebook shares fell 7,5%, Alphabet (Google) fell 6%, Amazon fell 4,6%, and Apple fell 1%. Not sure if this is good...

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Claims against the giants of Silicon Valley are made by both Republicans and Democrats. Trump is unhappy: Google, Facebook and Twitter are censoring the message of conservatives that is “wrong”, “unfair”, and perhaps “illegal.” Democratic senator Elizabeth Warren, who is running for president, echoes him. She included "the destruction of Silicon Valley" in the list of campaign promises and threatens to "break" Facebook, Google and Amazon after the victory. “Twenty-five years ago, Facebook, Google and Amazon did not exist. Now they are on the list of the richest and most recognizable companies in the world. This is a good story, which also serves as a reminder of why the government should break monopolies and promote free competition. ”

Um, free competition is fine, but, first, these companies are not monopolies. For example, not all Americans can afford the Apple “Macintosh” or iPhone, the majority costs Chinese laptops and Samsung smartphones. And as for the most capacious market of the world, the Chinese, the share of Yabloko is only a few percent. Secondly, since the time of the Sherman Act and Standard Oil, against which it was directed, a lot of water has flowed under the bridge and the situation has changed dramatically. The world is now fairly globalized, unlike the nineteenth century, and these companies, including Amazon (its activities are not limited only to e-commerce), are transnational in the full sense of the word. This means, by the way, that they are competing with the same giants, including the Chinese ones - see above the example of Alibaba, so you need to think about who will benefit from splitting American companies? Whose mill pours water on Elizabeth Warren, who has many influential supporters in Congress?

Take at least Tencent, a Chinese investment company that has already been in the Top 10, is the largest investment and one of the largest venture capital firms in the world. Now it is investing in shares of the American giants, but it is worth going on about the disaggregation, as already our investments will flow into China. Unlike the giant banks, which really should be disaggregated, IT and high-tech giants are integral, complex phenomena, they are most effective and competitive in the form of giants. Approximately two-thirds of the users of the world prefer Google, having every reason to do this, and that now, to please a poorly versed 70-year-old aggressive lady, break an excellent search engine?

Or take Facebook - that’s why it’s valued, because it’s a global social network! Back in the porridge of small or novice networks, the road is no longer there, which was shown by the failure of the very same Google to compete with Facebook. And by the way, how does Warren technically imagine such a scrapping? Obviously, she absolutely does not understand such things, so God forbid, to see her in the presidential chair!

But if the administration still manages to “break” the pride and hope of America, then foreign rivals will immediately take advantage of this and capture the market, which is unlikely to benefit the American economy and the country's authority. I hope this attempt will not succeed - a similar investigation has already been conducted against Google, it has dragged on for two years and ended with zilch. But the very fact of such inclinations is very alarming and suggests that presidential candidates should also be assessed by their degree of understanding of the role of modern technology in the modern world. So that they do not try, for example, to revive coal energy.

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