Apple Is Worth As Much As 32 Eurozone Banks Combined

This certainly adds an interesting data point to the debate about intangible versus tangible value. But let's not get too philosophical. The basic issue is about money.

Apple is making a lot of it. In Europe, and China, and the US, and wherever. The European banks had a cozy arrangement with their continental confreres and used to rake it in. But as in so many cautionary tales by noble Europeans like the Brothers Grimm, Kenneth Grahame, Euripedes and Cato - they got greedy. And they are now locked into a web of irredeemable investments of their own devising.

So the banks, with their allegedly tangible investments, financial acumen and domination of global commerce face uncertainty while Apple, with its focus on such imponderables as design and functionality marches from triumph to triumph. It is a commentary on the role of well-thought out technology in our lives, but also of the impact poorly conceived policies that favored easy rentier financial returns over longer term and less certain investment in the future.

However, nothing is forever. Apple may well be overvalued and like Microsoft or Google or other, similarly unassailable franchises, may eventually stumble. And the banks? Well, they will take some hits and certain executives will be forced into an early, if cushy, retirement as sacrificial offerings to the human tendency to make too much of a good thing. But the banks will come back - most of them. JL

Reuters via Talking Points Memo:

Technology company Apple is now worth as much as the 32 biggest euro zone banks.

That's the stark result from a steep fall in the share price of banks including Spain's Santander, France's BNP Paribas, Germany's Deutsche Bank and Italy's Unicredit, compared to a steady rise in Apple's valuation, according to Thomson Reuters data.
Earlier on Friday the DJ STOXX euro zone banks index fell 4 percent, valuing its 32 members at $340 billion. That's based on the market capitalization of their free-float shares, which for some French banks in particular is less than 100 percent.

The index has crashed by a third since the start of July, hammered by fears banks will lose billions from their holdings of euro zone government bonds and a failure of policymakers to stop a euro zone debt crisis from spreading.

The euro zone banks have lost three-quarters of their value since peaking in May 2007.

In contrast, Apple's market capitalization has soared to $340 billion on the back of the success of innovative technology products like iPods, iPhones and iPads.