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The Bitcoin Bubble: CEO Daily for January 10, 2018

January 10, 2018, 12:12 PM UTC

Good morning.

I have an idea for Eddie Lampert, the hedge fund guy who once wanted to be known as the Next Warren Buffett, but instead will be remembered as the Guy Who Killed Sears. (Grave digging continued yesterday when Lands End CEO Jerome Griffith said the iconic retailer “will go away.”)

My idea: Lampert should do an ICO. Call it SearsCoin.

Sound crazy? Not any crazier than what Kodak, another great brand fallen into oblivion, announced at CES yesterday. The company is forming a joint venture with London-based Wenn Media Group to launch KodakCoin, a blockchain-based initiative to help photographers control their photo rights. It is also launching Kodak KashMiner, to put bitcoin mining machines at its Rochester, NY, headquarters. I’m not joking. “Kodak has always sought to democratize photography and make licensing fair to artists,” said CEO Jeff Clarke. “These technologies give the photography community an innovative and easy way to do just that.”

And here’s the punchline: Kodak’s shares yesterday rose 120%!

Conventional wisdom holds it’s hard to know a bubble until it pops. I disagree. We are in a cryptocurrency bubble. Today’s ICOs are the IPOs of the 1990s.

And while we are drawing parallels, JP Morgan CEO Jamie Dimon has become the Alan Greenspan of this episode. Greenspan famously talked of “irrational exuberance” in 1996—four years before the market peaked. Dimon came to the Fortune Global Forum in 2015 and said a virtual currency “was never going to happen.” Yesterday, on Fox Business, Dimon said he regretted calling cryptocurrency a “fraud”. But it’s clear he hasn’t changed his view. “I just have a different opinion than other people.”

Here’s another one: Chris Larsen is the Michael Saylor of this go-round. Saylor was CEO of MicroStrategy, which did its IPO in 1998 and then saw it soar so high that by early 2000, Saylor had a paper net worth of $7 billion . . . before reports of an SEC investigation burst the bubble. (Saylor is still CEO of a deflated MicroStrategy today.) Larsen is the serious-minded cofounder and executive chairman of Ripple, whose cryptocurrency XRP is trading so high that his paper net worth has reached $60 billion. Not surprisingly, that’s sparking lawsuits from others who want some of the funny money.

Bottom line: We’ve seen this movie before. We know the actors. We know the plot. And we know how it ends . . .

We just don’t know when.

News below.


Alan Murray

Top News

Deloitte survey: CFO optimism on the rise.

Fortune got an advance look at the results of Deloitte's Q4 2017 CFO Signals survey (results of which will be available here after 8 a.m. EST on Wednesday). The survey of chief financial officers at some of North America's biggest companies found that more CFOs were optimistic about the current state of the domestic economy in the final quarter of 2017 than they were during the same period last year (74% said they were happy with current conditions, versus 64% last year). The CFOs also pointed to new technologies shaping their long-term business strategies, namely data analytics and automation. More than half of respondents say they are working on replacing more jobs with an automated workforce.

Toyota, Mazda pick a U.S. plant site.

Toyota Motor and Mazda Motor announced their pick for a U.S. site for a $1.6 billion assembly plant: Huntsville, Alabama. The news, which comes a year after Toyota promised to spend $10 billion in the U.S. over the next five years, is expected to bring 4,000 jobs to Huntsville, where the two Japanese automakers will manufacture up to 300,000 vehicles annually by 2021. The Wall Street Journal

Intel promises security flaw fix, while senators seek probe of CEO share sale.

While Intel CEO Brian Krzanich promised that a fix for the massive chip security flaws affecting his company's microchips (as well as those of several rivals), two U.S. senators made a push to investigate Krzanich's sale of a large chunk of his Intel shares last fall. Sen. Jack Reed of Rhode Island and Sen. John Kennedy of Louisiana, both members of the Senate Banking Committee, sent a letter to the SEC and the Justice Department on Tuesday asking for a probe of the share sale, which came after Intel was made aware of the security flaws, but long before that news went public just this month. Bloomberg

$1 trillion for infrastructure.

U.S. lawmakers are discussing plans to spend $1 trillion to improve the country's infrastructure. A bipartisan group of senators met with Trump administration officials on Tuesday to discuss the proposed legislation, which include spending on improvements to the country's roads, airports, seaports, and railway systems. While their is a bipartisan desire to get an infrastructure bill passed, the immense cost of a such an undertaking could also create political obstacles. Reuters

Around the Water Cooler

Are stocks actually cheap right now?

Are stocks currently undervalued, as some cheerleading investors claim, or have the market's record highs made stocks extremely expensive? Fortune's Shawn Tully dives into the best ways to judge value on Wall Street. "Beware of bulls bearing forward earnings projections," he warns. Fortune

Trump is headed to Davos.

The president plans to mingle with members of the global financial elite in Davos, Switzerland later this month for the annual World Economic Forum meetings. Trump is set to be the first sitting U.S. president to attend the Davos forum since Bill Clinton in 2000. Bloomberg

Apple's Ahrendts had brutally honest interview with CEO Tim Cook.

Angela Ahrendts says she was didn't shy away from the brutal truth when interviewing with Apple CEO Tim Cook a few years ago. Ahrendts, who left her job as CEO of luxury fashion retailer Burberry in 2014 to take over Apple's retail business, said in a new interview that she told Cook at the time "I'm not a techie," but that admission did not get in the way of her taking the job. ABC

2017's weather disasters cost U.S. $300 billion.

The unprecedented glut of hurricanes in 2017, along with massive damage from fires, floods, and other weather-related events, cost the U.S. a record $306.2 billion in 2017. That's the estimate from the National Oceanic and Atmospheric Administration (NOAA), which said three huge hurricanes (Harvey, Irma, and Maria) combined for most of the damage and the resulting costs.  Fortune

This edition of CEO Daily was edited by Tom Huddleston Jr. Find previous editions here, and sign up for other Fortune newsletters here.