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Bloomberg Businessweek January 14, 2019

Each issue of Businessweek features in-depth perspectives on the financial markets, industries, trends, technology and people guiding the economy. Get the digital magazine subscription today and draw upon Businessweek's timely incisive analysis to help you make better decisions about your career, your business, and your personal investments.

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Bloomberg Finance LP
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50 Issues


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in brief

On Jan. 8, SoftBank announced it had decided to make a $2b investment in WeWorkrather than taking a widely expected $16 billion controlling stake. Later that day, the shared-office pioneer announced it was renaming itself the We Co. In Gabon, the smallest oil producer in OPEC, authorities said they’ve put down an attempted coup. A group of soldiers had seized control of the national broadcaster while Ali Bongo, who’s led the country since he virtually inherited the presidency from his father in 2009, was recovering abroad from a stroke. Justice Ruth Bader Ginsburg has missed three days of oral arguments at the U.S. Supreme Court. The absences are her first since she joined the country’s highest court in 1993. She’s recovering from cancer surgery. New York’s iconic Chrysler Building is being put up for…

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▶ We’re in the Money U.S. bank earnings take center stage with Bank of America, Citigroup, Goldman Sachs Group, JPMorgan Chase, and Morgan Stanley all reporting. Analysts are looking for signs of a rebound amid improved cost controls. ▶ The U.K. Parliament votes on Prime Minister Theresa May’s Brexit plan on Jan. 15. A loss—which is likely—means the legislature takes over the divorce timetable. ▶ Brits battered by Brexit will reveal their spending habits on Jan. 18, when the U.K. releases December retail sales, covering the crucial Christmas period. ▶ The Central Bank of Turkey announces its one-week repo rate on Jan. 16, as the country struggles to fight inflation. ▶ On Jan. 16 the U.S. Federal Reserve publishes its latest Beige Book, an economic report based on anecdotal information from the…

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the president is losing the fight over his wall

Donald Trump’s Jan. 8 presidential address and the response from the Democratic Party’s leaders in Congress offered little prospect that the standoff over the president’s wall will be quickly resolved. As yet, neither side looks ready to back down or seek compromise. For this to change, public opinion may need to shift. Encouragingly, the exchange suggests it soon might—against Trump. As the shutdown drags on, its damaging effects on the economy and on vital government functions (including border security, by the way) will become more apparent. And as the costs rise, attention will shift to who’s to blame. On this the president has more to worry about than his opponents. It was telling that Trump’s address made no real effort to justify the shutdown as a legitimate or effective tactic. The president refused…

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is the boom doomed?

Ben Bernanke got a big laugh from economists in Atlanta on Jan. 4. A few minutes after Janet Yellen said, “I don’t think expansions just die of old age,” he replied, “I like to say they get murdered.” All right, not that funny. But the nerdy repartee between the past two Federal Reserve chairs at the annual meeting of the American Economic Association reveals how central bankers think about recessions—and says something about how likely it is that the U.S. will tip into one over the next year. The open secret of the economics profession is that its practitioners don’t have a theory for why expansions die. Or rather they have several theories, each of which contradicts the others and none of which is fully supported by the data. Because economists don’t…

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big pharma’s blockbuster curse

The biggest pharmaceutical companies count on multibillion-dollar drugs to fund their expensive research units and justify high share prices. But now investors want more, demanding that companies queue up the next crop of top products before the current generation even hits peak profitability. This conundrum is at the heart of the industry’s biggest merger deal. Bristol-Myers Squibb Co. on Jan. 3 agreed to pay $74 billion in cash and stock for Celgene Corp., a New Jersey biotech that gets almost two-thirds of its revenue from a single medicine: the blood cancer pill Revlimid, the third-biggest-selling drug in the world, with almost $11 billion in revenue expected this year, according to analyst estimates compiled by Bloomberg. Seen one way, Bristol-Myers got a bargain. Investors had already punished Celgene for the lack of a…

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the ice cream wars heat up

Since October, a new lineup of ice cream with postmodern flavors such as Turmeric Chai & Cinnamon, Cold Brew & Chocolate Chip, and Matcha & Fudge has been popping up in U.S. freezers. The brand—the deliberately misspelled Culture Republick—promises not only gustatory delight but also better digestive health with billions of live probiotic bacteria in every tub. The logo, in bright yellows, greens, and reds, shows a big “C” poised like Pac-Man to munch into the little “r.” And the makers pledge to donate 10 percent of profits to local arts groups. In short, everything about the brand screams anti-establishment, the kind of thing you’d more likely find at a food co-op than at Walmart, Safeway, or Piggly Wiggly. It’s made by Unilever. Culture Republick is an effort by the world’s…