Weekend Papers Summary
* NY TIMES (Saturday): The U.S. government shut down on Saturday for the third time in two years of unified Republican rule in Washington, and it will stop work at nine federal departments and several agencies, affecting hundreds of thousands of employees; With the departure of Defense secretary James Mattis, Donald Trump will likely assemble a team of advisors who will not tell him what he cannot do, and will embrace his “America first” doctrine; related story says Trump’s disregard for friendly nations in Europe and Asia could fundamentally diminish America’s global clout; The Supreme Court refused to allow the Trump administration to immediately enforce a new policy of denying asylum to immigrants who illegally cross the Mexican border; “Technology companies are dragging stocks into an ominous territory that the market hasn’t seen in nearly a decade: a severe decline known as a bear market”; + AMZN: Story says the company’s dominance in e-commerce is never more pronounced than in the weeks before Christmas, where its obsession with getting goods to customers on time sets it apart from rivals; (Sunday): The government shutdown is set to continue for days, with the Senate adjourning until next Thursday and Democrats saying they won’t accede to Donald Trump’s demand for $5B for a border wall; related story says that “At the midpoint of his term, the president has grown more sure of his own judgment and more isolated from anyone else’s than at any point since he took office”; Sunday Business: Lead story reports on Epic Systems, a healthcare services provider with $2.7B in annual revenue, “one of the nation’s biggest tech companies, and almost certainly the quirkiest.”
* WSJ (Weekend): “Technology and other fast-growing companies tumbled, extending a painful stock-market rout that shaved about 400 points off the Dow industrials Friday and pulled the Nasdaq Composite into bear-market territory”; Climate change is changing the fishing industry as warmer water temperatures drive the catch northward, forcing crews to retool boats and rework their businesses; This U.S. economy had a mixed year: consumer confidence was high and households spent robustly, but manufacturers pulled back amid shifts in the global economy; A Russian operation that allegedly sought to influence Americans through social media also sought to persuade business owners to buy into a marketing campaign and turn over private information; The presidential primary field could be the largest in more than 40 years as several Democrats, some more known than others, consider potential bids for the White House; Aid organizations are warning that Trump’s decision to withdraw troops from Syria could put humanitarian relief for about 1.6 million people at risk; Flights resumed at Gatwick airport on Friday after a shutdown because of drone sightings, which caused a full-day closure of the crucial air hub on Thursday; “China will boost efforts to arrest an economic downturn while easing off its push to restrain debt, in a shift that could help Beijing withstand short-term shocks from the trade conflict with Washington, but add to longer-term risks”; + GS: Chief David Solomon issued a strong defense of the firm, which is facing strong criticism for its role in the Malaysian 1MDB scandal, and said its culture of compliance remains strong; Intelligent Investor column profiles Paul Samuelson, the “godfather of the index fund,” who believed that beating the market is hard, but not impossible; + DAL, UAL, AAL: Among airlines changing their boarding processes as demand for overhead baggage space increases, offering early boarding for high-paying fares and frequent fliers, or charging regular fliers extra for it; + PSA, CUBE, LSI, EXR: Shares of the four largest self-storage owners have quadrupled or better since bottoming out in 2009, but investors worry the industry has attracted so much investment that space may be outpacing consumer demand; H.O.T.S.: ULTA’s superior business model and celebrity cosmetics line should help it thrive amid changing consumer tastes; Saudi Arabia is adding to output cuts announced at the recent OPEC meeting with the publication of a specific oil quota; CPB should have delayed hiring former Pinnacle Foods chief Mark Clouse after criticism from CAG, which acquired the brand earlier this year.
* FT (Weekend): The Malaysian government said GS should pay $7.5B in reparations related to its business with the scandal-plagued 1MDB sovereign investment fund, a sum that goes far beyond bond fees and insurance volumes; China denied U.S. and British allegations that it has been involved in the theft of western commercial secrets through a state-run cybercrime enterprise, and demanded a stop to such “slander”; Belgium faces months of minority government after the country’s king accepted the resignation of prime minister Charles Michel, who will remain in “caretaker” capacity; Investors have been piling into computer-driven hedge funds in recent years, seeking to leverage big data and artificial intelligence, but events in 2018 have tested their resolve; Lex Column: The shutdown of London’s Gatwick airport by drones highlights a moral flaw intrinsic to the devices: their pilots can endanger lives without risking their own; Regardless of what GS ends up paying in the 1MDB scandal, the final costs will be heavy; Network advantage is the key ingredient in the tie-up between Takeaway.com and Delivery Hero, which are combining German operations; Comment: Chinese president Xi Jinping has created a cult-like atmosphere around himself, undermining the reforms made by his predecessor Deng Xiaoping, who laid the groundwork for modern China, says Gideon Rachman, p. 9.
* NY POST (Saturday): Supreme Court justice Ruth Bader Ginsberg had surgery Friday to remove two malignant growths from a lung, her third bout with cancer since 1993; +/- GS: In a private memo to staff, chief David Solomon told employees not to believe everything they read about the 1MDB affair, and defended the bank’s policies; + MDP: Publishing giant finalized the $150M sale of Fortune magazine, which it owned following its acquisition of Time Inc., to Thai business tycoon Chatchaval Jiaravanon; (Sunday): New York state has some of the highest cellphone taxes in the nation, with a typical household with four phones paying $100 per month for taxable wireless services.