The Week in Business: Government Workers Need a Paycheck, and Brexit Needs a Miracle
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I’ve been thinking a lot about that famous egg — you know, the one that just broke the world record for the most-liked Instagram post ever. It’s a normal egg, brown, with freckles, nothing special. It could’ve been the egg you’ll eat for breakfast this morning. Instead, it hatched an internet phenomenon, for reasons no one can explain.
Say what you will about that egg and those who cared about it. But in a week when much of the world seemed so mired in acrimony, it was a small (very small) symbol of what collective effort can do. Speaking of accomplishments, prepare for the week ahead with the top stories in business and tech, below. Then go enjoy an omelet.
Jan. 13-19
What’s Up?
Entering Crisis Mode
President Trump’s government shutdown continues, and the household budgets of federal employees are hurting. Some 800,000 haven’t been paid in weeks, and a typical furloughed worker is now about $5,000 behind in salary. Thousands have filed for unemployment. They’ve cut back on spending and investing, which is taking a serious bite out of the country’s economic growth. On a warmer note, some thoughtful souls have been offering free pizza, wine, financial services and even homemade casseroles to unpaid workers across the country. Still, none of these gestures can substitute for a paycheck.
Mixed Results for the Big Banks
Remember the ex-partner at Goldman Sachs who helped steal $2.7 billion from a Malaysian sovereign wealth fund, spending his share on designer bags and diamond necklaces? Though Goldman tried to distance itself from the scandal, it recently earmarked $516 million to cover potential penalties. Nevertheless, the bank beat analysts’ expectations with a sunny earnings report on Wednesday. The fourth-quarter numbers of other big banks were mixed, breaking a yearlong streak of the industry’s record profits. But in light of the market’s plummet in December, they are still doing better than some analysts predicted.
Won’t You Stay My Neighbor?
Skyrocketing living costs have made many tech-centric cities, particularly on the West Coast, inaccessible to teachers, firefighters and pretty much anyone else who isn’t making a fat salary. In Seattle, Microsoft is trying to stem that exodus by putting up $500 million to finance affordable homes. While some say the pledge is too little, too late, it’s still the most ambitious step that any tech company has taken to solve the housing crisis of its own making.
Jan. 20-26
What’s Next?
Emergency Brexit
It’s Groundhog Day across the pond. By Monday, Prime Minister Theresa May must cobble together a new plan for Britain’s departure from the European Union. As predicted, Parliament resoundingly struck down her proposal last week — but, hey, she kept her job despite a no-confidence vote the next day. A no-deal Brexit, which could wreak havoc on the British economy and its trading partners, looks more and more likely. Some companies are starting to brace themselves; the deadline is less than 10 weeks away.
Pill Pushers
Who started the opioid epidemic? A Massachusetts court will hold a status hearing this week in a case that contends the Sackler family, owner of the company that makes OxyContin, should be held partly accountable. The business, Purdue Pharma, has already paid hundreds of millions of dollars in fines for misrepresenting the dangers of the painkiller, which was once marketed as having an addiction risk of “less than 1 percent” (nope). Sackler family members have claimed to be unaware of such practices, but evidence in a court filing by the Massachusetts attorney general suggests that they were more involved than they let on. Purdue Pharma said in a statement that the filing was “littered with biases and inaccurate characterizations.”
Davos, Declined
There will be some notable absences at the annual World Economic Forum in Davos, Switzerland, this week. Mr. Trump canceled the United States delegation, citing a need to keep his administrators in Washington during the government shutdown. Mrs. May has also bowed out (see above). This year’s forum was supposed to focus on rising tensions between world powers and the possibility of a full-blown global trade war. But with major players missing in action, how far will they get?
What Else?
Crooks: They love the internet. Facebook uncovered two more Russian-backed misinformation campaigns and deleted more than 500 pages and accounts as a result. Meanwhile, two men were charged with hacking into the Securities and Exchange Commission’s database to steal secrets that fetched about $4.1 million in illegal profits. In other news, the pop star Rihanna is teaming up with the luxury conglomerate LVMH Moët Hennessy Louis Vuitton to start a fashion brand. She’d be its first female designer of color.
What Counts
$13: The new cost of Netflix’s most popular streaming plan. The monthly fee was increased by $2 last Tuesday for new subscribers, while existing users won’t see the upcharge for a few months. The company attributed its higher rates to one simple reason: It takes a lot of money to create quality content.
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