Bloomberg Businessweek-Europe Edition 4/16/2018

Americas ● During his congressional testimony, Facebook founder Mark Zuckerberg saw his fortune grow by $2.4 billion as his comments on the recent data breach buoyed the company’s shares. ▷ 50 ● Bank of America said it will stop lending to gunmakers that produce assault-style weapons for nonmilitary markets. It becomes the second major bank to rethink its relationship with gun manufacturers after the Parkland, Fla., massacre; in March, Citigroup said it would ban its retail customers from selling bump stocks. ● Nike bought Invertex, an Israeli software startup, for an undisclosed sum. Invertex is best known for developing body-scanning technology. ● Mexico’s inflation rate slowed in March to 5 percent, the lowest level in a year. In February the country’s central bank raised interest rates a quarter of a percentage point, to 7.5 percent,…

By threatening a tariff war with China, Donald Trump has essentially thrown a deck of cards into the air. We don’t know yet where each will land. While it appears that both the U.S. and China would suffer in a trade war, “the pattern of loss is going to be very difficult to predict,” says Jamie Murray, Bloomberg Economics’ chief European economist. One of the most powerful laws in economics is the law of unintended consequences. As formulated by the American sociologist Robert Merton in a 1936 paper called “The Unanticipated Consequences of Purposive Social Action,” it says that consequences “are occasioned by the interplay of forces and circumstances which are so complex and numerous that prediction of them is quite beyond our reach.” The law of unintended consequences strengthens the case…

French President Emmanuel Macron’s fight with public-sector rail workers will show how serious he is about economic reform. Unions are promising two days of disruption each week for the next three months unless he abandons his plan to expose the network to a whiff of economic reality. Macron should stand his ground. A government-commissioned report published in February showed just how badly France’s rail networks are failing. They receive €14 billion ($17.3 billion) in state subsidies each year but still run an annual deficit of €3 billion. Their debt is €45 billion and rising. Despite these outlays, service quality—already worse than in Germany and other European countries—is deteriorating. Meanwhile, railway workers enjoy lifetime employment, automatic pay increases, free tickets for their families, and retirement at the age of 52. Macron wants to…

The mood at the annual generic drug industry confab in Orlando in February was especially somber. The discussion during one panel was all about plunging drug prices, consolidation among drug-buying groups, and the increasingly cutthroat nature of the business. A top executive at Israel-based Teva Pharmaceutical Industries Ltd., the No. 1 supplier of generics in the U.S., which is laying off 14,000 employees and shuttering about half its 80 manufacturing plants, tried to lighten the mood with gallows humor: “Teva certainly has no challenges,” said Brendan O’Grady, the executive vice president who heads its North American commercial business. The joke hit the mark. The generic drug industry, which supplies almost 9 of 10 drugs prescribed in the U.S., is in crisis. These companies aren’t the superstars making cutting-edge cancer and hepatitis…

As a pilot in the Royal Norwegian Air Force at the height of the Cold War, Bjørn Kjos spent his days chasing Russians out of NATO airspace, a game of cat and mouse that was risky, terrifying—and utterly exhilarating. “It was the best life you can live,” Kjos says, running his fingers over one of two model fighter jets he keeps in his office. These days, the 71-year-old chief executive officer of Norwegian Air Shuttle ASA is again flying perilous skies—though the risk comes from bankers, not the cockpit of a MiG. Norwegian, which has expanded from a low-cost regional carrier into a globe-spanning colossus shaking rivals with trans-Atlantic fares as low as $99, lost almost $250 million in the fourth quarter of 2017—at a time many airlines are seeing near-record…

Each time a head of cattle is sold in the U.S., part of the proceeds goes to the beef checkoff fund. Average auction cost of a 1,200-pound steer is about $1.4k from which $1 goes to the fund Ranchers-Cattlemen Action Legal Fund United Stockgrowers of America, a group representing independent ranchers, is suing the U.S. Department of Agriculture in federal court, arguing that the fees violate the First Amendment by forcing its members to subsidize speech with which they don’t agree. Another complaint: The ads also benefit foreign meat sold in the U.S. U.S. beef market (projected 2018) A Texas A&M University study found that, on average, each dollar spent by ag promotion boards yields $9 in additional sales. “The programs are highly effective,” says Gary Williams, professor of agricultural economics. Boards Mine…