Carol Roth, You Will Own Nothing

At Amazon, Carol Roth, You Will Own Nothing: Your War with a New Financial World Order and How to Fight Back.

'Shark Tank's' Kevin O'Leary, 'I have 54 companies in every state and nearly every sector, and we now know what the percentage is, it's just under 40 percent --- 40 percent are never coming back!' (VIDEO)

Office workers. Are the coming back in the new economy? 

Elon Musk say employees working from home are like Marie Antoinette: Let them eat cake! (Like the folks who have to deliver your groceries every day and can't "work from home.")

Kevin O'Leary is great.

WATCH:

Target Earnings Squeezed as Shoppers Stick to Basics

Target's getting hammered. Their grocery business takes just 3 percent of the share of total grocery sales in the U.S. And folks aren't shopping for the quasi-fashionable Target brand --- Tar-Jay. 

Maybe Target's the next Bed Bath & Beyond?

At WSJ, "Consumers cut back on nonessential items as sales come in flat; rise in theft cuts into profit."

Bed Bath & Beyond Files for Bankruptcy

My wife briefly worked there. Briefly. It wasn't her most memorable or rewarding job. 

The company made a bad bet on its own-store brand lines, alienating longtime customers who shopped there for deals on major brand names. 

At the Wall Street Journal, "Bed Bath & Beyond Files for Bankruptcy":

Bed Bath & Beyond Inc. BBBY -2.17%decrease; red down pointing triangle filed for bankruptcy protection to wind down its business after years of losses and failed turnaround plans left the once-powerful retailer short of cash.

The company had warned of a potential bankruptcy for months. It needed a $375 million loan to get through the holidays. It struck an unusual $1 billion financing deal with a hedge fund in February to put off a bankruptcy filing, then scrapped the deal and tried this month to raise $300 million from other investors.

None of the moves were enough. Nor were efforts to stem losses by closing hundreds of stores. Sales evaporated and its stock price tumbled well below $1 in recent weeks, as the rescue efforts dimmed.

The retailer filed for chapter 11 bankruptcy Sunday in the U.S. Bankruptcy Court in Newark, N.J., and said it expects to close all of its 360 Bed Bath & Beyond and 120 Buybuy Baby retail locations eventually. Top lender Sixth Street Partners has put up $240 million in financing to keep Bed Bath & Beyond operating through the liquidation process, the company said.

Bankruptcy gives Bed Bath & Beyond the breathing room to conduct going-out-of-business sales at its physical stores and solicit interest from potential buyers for its remaining assets, such as its branding. Individual investors who continued to back Bed Bath & Beyond during its final months, when it was flooding the market with shares, will likely be wiped out in chapter 11, which prioritizes the repayment of debt over shareholder recoveries.

As Bed Bath & Beyond’s situation worsened, suppliers stopped shipping goods to the retailer. Photo: Johnny Milano/Bloomberg News If a bidder emerges for the business in bankruptcy, Bed Bath & Beyond said it would pivot away from its liquidation plans to pursue a sale.

Once a pop-cultural phenomenon, Bed Bath & Beyond has long been losing shoppers to rivals and struggling to stock its stores. Replacing KitchenAid mixers and other name brands with private label goods further alienated vendors and customers.

Bed Bath & Beyond joins a growing list of once-ubiquitous retail chains seeking court protection. Some like J.C. Penney Co. continue to operate hundreds of stores; others like Sears and Toys ‘R’ Us closed most of their locations; while Circuit City and Linens ‘n Things disappeared altogether.

The country’s largest wedding dress retailer, David’s Bridal LLC, recently filed for bankruptcy and said it would shut all of its stores if it doesn’t quickly find a buyer. It was the chain’s second bankruptcy filing in less than five years....

Bed Bath & Beyond didn’t have an unprofitable year as a public company until 2019—when it reported its first annual sales decline. By then, the rise of Amazon.com Inc. and other online retailers had started to eat into the business. “We missed the boat on the internet,” Mr. Eisenberg said.

A group of activist investors forced the co-founders, who had relinquished their executive duties in 2003 but remained co-chairmen, off the board in 2019. The reconstituted board hired former Target Corp. executive Mark Tritton as chief executive.

Mr. Tritton moved quickly to put his stamp on the company. He sold many of the company’s noncore businesses, including Christmas Tree Shops. Then, in January 2020, he signed a deal to sell roughly half the company’s real estate to a private-equity firm and lease back the space.

With the world in lockdown due to the Covid-19 pandemic, Mr. Tritton pushed through what the company called the biggest change to its assortment in a generation. It replaced name brands such as KitchenAid mixers, All-Clad cookware and OXO spatulas with private-label goods manufactured just for Bed Bath & Beyond.

The rationale was sound: Private-label merchandise carries higher margins and helps retailers differentiate their offerings from competitors. The playbook has worked for countless chains from Target to Macy’s Inc. But it failed at Bed Bath & Beyond for several reasons, according to former employees and analysts.

Mr. Tritton made the switch at a time when supply chains had been upended by the pandemic. Factories had temporarily closed and shipping delays were proliferating, along with rising costs, making it difficult for retailers to keep goods flowing to their stores in a timely manner.

The company also rolled out too many private brands too quickly, before it had the infrastructure to support them, the former employees said. It planned to launch eight new brands in 2021 alone. At first, the results of Mr. Tritton’s strategy looked promising. Bed Bath & Beyond’s sales rose 49% in the spring quarter of 2021, compared with a year earlier when stores were closed for Covid lockdowns. Mr. Tritton presented results to the board showing that some of the early private-label launches—such as the Simply Essential line of bed, bath, kitchen, dining and storage items—were well-received by shoppers, according to people with knowledge of the company.

Some of that buying was due to consumers stocking up while sheltering from the pandemic. As that demand ebbed, the gains quickly evaporated. By August 2021, sales were falling, and they continued to drop, as losses piled up.

“You know if you buy Cuisinart what you are getting,” said Sheryl Bilus, a 68-year-old retired bank manager who lives in Canton, Ga. “But with their own brands, you don’t know what the quality is like.”

Mr. Tritton had planned a similar overhaul of the Buybuy Baby chain by replacing Gerber and other children’s brands with private-label goods. But he was pushed out in June 2022, before he could make many of those changes. Sue Gove, a veteran retailing executive and Bed Bath & Beyond director, was named interim CEO.

Meanwhile, Bed Bath & Beyond’s stock went on a wild ride after Ryan Cohen, the billionaire founder of pet retailer Chewy Inc., took a big stake in the company and agitated for changes, including the sale of Buybuy Baby. The board considered strategic alternatives for the baby chain, but decided against selling because separating it would have been time-consuming and costly, and they needed to nail down a new strategy before marketing it to potential bidders, people familiar with the situation said...

Decoding the Bud Light Disaster

At Instapundit, "THOMAS LIFSON: Decoding the Bud Light disaster as marketing VP Alissa Heinerscheid ‘takes leave of absence’.

U.S. Added 517,000 Jobs as Hiring Accelerated in January

Well, that recession everyone's been predicting hasn't materialized. This economy is sizzling, *despite* the loathed Biden administration's efforts to throttle it.

At the Wall Street Journal, "U.S. added 517,000 jobs in January, snapping five-month string of slowing employment growth":

The U.S. labor market accelerated at the start of the year as broad-based hiring added a robust 517,000 jobs and pushed the unemployment rate to a 53-year low.

January’s payroll gains were the largest since July 2022 and snapped a string of five straight months of slowing employment growth, the Labor Department said Friday. The unemployment rate was 3.4% last month, its lowest level since May 1969.

Wage growth continued to soften last month, despite the strong job gains. Average hourly earnings grew 4.4% in January from a year earlier, down from a revised 4.8% in December. Annual revisions to employment and pay data suggest that wage growth has been cooling—but at a slower pace than previously thought.

The average workweek rose to 34.7 hours, the highest since March 2022.

“This is just incredibly, surprisingly strong,” said Kathy Bostjancic, chief economist at Nationwide. “Not only are you hiring more workers but the workers you have overall are working more hours. It doesn’t really get stronger than that.”

The hiring gain was well above economists’ expectations. Economists surveyed by The Wall Street Journal had expected 187,000 new jobs last month.

The report likely keeps the Federal Reserve on track to raise interest rates by another quarter-percentage point at its meeting next month and to signal another increase is likely after that. The central bank raised its benchmark rate by a quarter point this week to a range between 4.5% and 4.75%.

The Fed is trying to keep the economy growing at a slower-than-average pace to weaken demand and cool inflation. But the report Friday suggested the labor market had been even more resilient in recent months than recently reported, with the growth in average hour earnings and payrolls revised higher at the end of last year.

Stocks fell and bond yields climbed following the jobs report.

Payrolls grew in a range of sectors, including leisure and hospitality, professional and business services and healthcare. The hiring surge contrasted against high-profile corporate layoff announcements, particularly by tech companies that have cut back amid economic uncertainty...

 

Big Banks Predict Recession, Fed Pivot in 2023

Hmm.

Let's see if these predictions hit gold.

At the Wall Street Journal, "More than two-thirds of economists at 23 major financial institutions expect the U.S. to have a downturn this year."

How Caroline Ellison Found Herself at the Center of the FTX Crypto Collapse

A strange woman. Very strange.

At WSJ, "As CEO of Alameda Research, Ms. Ellison took a leading role in helping Sam Bankman-Fried build the FTX empire."

Alameda was at the center of Sam Bankman-Fried’s collapsing FTX empire. Caroline Ellison was at the center of Alameda. https://t.co/sRk7CWWjm4

— The Wall Street Journal (@WSJ) November 20, 2022

Policies Pushing Electric Vehicles Show Why Few People Want One

From Bjorn Lomborg, at the Wall Street Journal, "They wouldn’t need huge subsidies to sell if they really were a good choice, and consumers know that":

We constantly hear that electric cars are the future—cleaner, cheaper and better. But if they’re so good, why does California need to ban gasoline-powered cars? Why does the world spend $30 billion a year subsidizing electric ones?

In reality, electric cars are only sometimes and somewhat better than the alternatives, they’re often much costlier, and they aren’t necessarily all that much cleaner. Over its lifetime, an electric car does emit less CO2 than a gasoline car, but the difference can range considerably depending on how the electricity is generated. Making batteries for electric cars also requires a massive amount of energy, mostly from burning coal in China. Add it all up and the International Energy Agency estimates that an electric car emits a little less than half as much CO2 as a gasoline-powered one.

The climate effect of our electric-car efforts in the 2020s will be trivial. If every country achieved its stated ambitious electric-vehicle targets by 2030, the world would save 231 million tons of CO2 emissions. Plugging these savings into the standard United Nations Climate Panel model, that comes to a reduction of 0.0002 degree Fahrenheit by the end of the century.

Electric cars’ impact on air pollution isn’t as straightforward as you might think. The vehicles themselves pollute only slightly less than a gasoline car because their massive batteries and consequent weight leads to more particulate pollution from greater wear on brakes, tires and roads. On top of that, the additional electricity they require can throw up large amounts of air pollution depending on how it’s generated. One recent study found that electric cars put out more of the most dangerous particulate air pollution than gasoline-powered cars in 70% of U.S. states. An American Economic Association study found that rather than lowering air pollution, on average each additional electric car in the U.S. causes additional air-pollution damage worth $1,100 over its lifetime.

The minerals required for those batteries also present an ethical problem, as many are mined in areas with dismal human-rights records. Most cobalt, for instance, is dug out in Congo, where child labor is not uncommon, specifically in mining. There are security risks too, given that mineral processing is concentrated in China.

Increased demand for already-prized minerals is likely to drive up the price of electric cars significantly. The International Energy Agency projects that if electric cars became as prevalent as they would have to be for the world to reach net zero by 2050, the annual total demand for lithium for automobile batteries alone that year would be almost 28 times as much as current annual global lithium production. The material prices for batteries this year are more than three times what they were in 2021, and electricity isn’t getting cheaper either.

Even if rising costs weren’t an issue, electric cars wouldn’t be much of a bargain. Proponents argue that though they’re more expensive to purchase, electric cars are cheaper to drive. But a new report from a U.S. Energy Department laboratory found that even in 2025 the agency’s default electric car’s total lifetime cost will be 9% higher than a gasoline car’s, and the study relied on the very generous assumption that electric cars are driven as much as regular ones. In reality, electric cars are driven less than half as much, which means they’re much costlier per mile....

Electric vehicles will take over the market only if innovation makes them actually better and cheaper than gasoline-powered cars. Politicians are spending hundreds of billions of dollars and keeping consumers from the cars they want for virtually no climate benefit.

How Many Books Actually Sell?

 See Lincoln Michael, "No, Most Books Don't Sell Only a Dozen Copies: A little post on why publishing statistics are so confusing":

OMG In the Penguin Random House/S&S antitrust trial it was revealed that out of 58,000 trade titles published per year, half of those titles sell fewer than one dozen books. LESS THAN ONE DOZEN.

— April Henry (@aprilhenrybooks) September 4, 2022

One thing the PRH/SS merger trial revealed is that publishing has a lot of problems. This is very true! At the same time, many of the problems seem to have mutated into unbelievable chimeras as they made their way around the discourse. Today, for example, much of the literary internet was debating a claim that 50% of books published sell fewer than 12 books.

This claim took off with the usual suspects—conservative pundits claiming publishing is too “woke” and self-publishing evangelicals saying every author would make a fortune if they ditched traditional publishing—but the publishing professionals I know said this claim is very fishy. (I’m pretty sure publishers would go out of business if 50% of their books sold less than 12 copies!) So this statistic isn’t true. Or at least it isn’t true in the way you might think.

But publishing statistics are often not what you think. This extreme 12 copies claim joins a couple others that have gone around the internet recently: “98 percent of books sell fewer than 5,000 copies.” “90 percent sell fewer than 2,000 copies” “Most books sell fewer than 99 copies.” Etc.

Are all of these true? None of them? Part of the problem with evaluating claims of “most published books sell [X] copies” is that it—[apologies for the Derrida voice]—it all depends on what you mean by “book,” “published,” and “sell.” No, I’m not playing postmodern games here. It really is confusing.

What’s “a book”?

The Platonic ideal of a book might be a collection of text printed on a few hundred paper pages. But the term encompasses much more than that, including books that have almost no text at all (for example the “adult coloring book” craze of the 2010s). Publishers publish novels and memoirs as well as cookbooks, puzzle books, Mad Libs, etc. But it’s even more confusing than this when it comes to those statistics.

Last year, Orbit published my debut novel The Body Scout. I wrote one novel, so published one book. Right? Not exactly. From a sales tracking perspective, books are published in multiple formats, each with different ISBNs. I wrote one novel, but from a title count POV I actually published 4 books: hardcover, paperback, ebook, and audiobook. Other books have even more formats (mass market version, movie tie-in editions, etc.) and because they all have different ISBNs, they all have different sales figures. When it comes to classics that are in the public domain, like Pride and Prejudice or Shakespeare, there can be literally hundreds of editions in existence (put out by various publishers) each of which could be counted separately.

What’s “published”?

A published book can refer to a newly written and released book—aka frontlist, or a novel published for the first time in 2022—or it can refer to anything a publisher puts out in a given year, including a reissue of an existing book. But sometimes “published” means any book that exists in any format available for purchase. A hundred-year-old novel that no longer can be found bookstore shelves yet sits in cardboard box in the back of a warehouse somewhere is “a published book.” Some books are never published in print at all and exist only as ebooks and/or audiobooks. And many books exist in “print on demand” form in which a physical copy doesn’t exist until someone purchases it. In the old days, books would go out of print when people stopped buying them. But in the modern digital age books can exist “in print” for forever.

It’s also worth pointing out here that publishers range from tiny micropresses run as a hobby in someone’s garage to multi-billion dollar companies. If you’re counting books by ISBNs, this would also include many self-published books.

What’s “a sale”?

When people reference book sales, they’re typically talking using Nielsen’s BookScan numbers. Think of BookScan as the book industry version of Nielsen TV ratings. Briefly, BookScan is a “point of sale” tracking system that counts the number of print copies sold at participating retail locations. BookScan allegedly tracks about 75% of retail sales including lots of indie bookstores as well as Barnes & Noble, Amazon, and Walmart.

It’s a fine tool for what it is, but from a data perspective it’s only partial. I already mentioned the issue with multiple formats above. BookScan also only tracks print so doesn’t include audiobooks or ebooks. (There is a Nielsen ebook estimator, but it’s rarely included in these statistics. And ebook sales are tricky since prices fluctuate wildly.) Even restricting ourselves to print books, BookScan misses plenty. Sales to libraries, for example, can be a significant portion of a book’s sales. Many small press and self-published authors might sell directly via an author’s website or in-person events. And so on.

Additionally, there are dramatic differences between 1) lifetime sales, 2) sales in the first 12 months after publication, and 3) sales in any random calendar year. Most books sell most of their copies in the first year or two after publication. Some books are perennial sellers and others might break out later—e.g., when there is a TV or film adaptation—but most sell the bulk of their copies early. Any statistic based on 3) is going to give you a completely inaccurate impression of what a book has sold. Imagine a 1998 novel that sold 6,000 its first year and 10,000 copies to date. It might sell only 12 copies in 2022, decades later, but that hardly means it was a failure.

Okay, so what does all the above mean? Mostly it means these statistics are completely meaningless unless we know what’s being included. Are you counting lifetime sales or one year’s sales? One year’s sales for frontlist titles or backlist titles? Only Big 5 books or anything with an ISBN?

Take the statistic that most published books only sell 99 copies. This seems shocking on its face. But if you dig into it, you’ll notice it was counting one year’s sales of all books that were in BookScan’s system. That’s quite different statistic than saying most books don’t sell 100 copies in total! A book could easily be a bestseller in, say, 1960 and sell only a trickle of copies today. In the same way, most old movies and albums aren’t frequently watched/listened to in 2022. It’s only a small percentage of past works that remain popular. Most backlist books selling fewer than 99 copies doesn’t tell you anything about how much newly released books sell.

(If you’re wondering—as people did on Twitter—why publishers keep books in print that don’t sell, remember that a book being in print doesn’t mean a publisher is actively spending lots of money on the title. It doesn’t break the bank to keep one box in the corner of a warehouse. And as I noted above a book can be “in print” these days and exist only in a digital form or awaiting “print on demand.”)

In terms of the dozen copies statistic, I can’t evaluate it because it is unclear what it’s referring to. Fifty-eight thousand books is more books than PRH publishes in a given year, but far less than their entire backlist. Is 58k all new books published with an ISBN, including self-published books? Is it something else? I really don’t know and none of the publishing professionals I follow seem to know either. (Editing to add: Jane Friedman, who posted this number originally on Instagram, noted there was no source given in testimony. Friedman gives her own guess in the comments.)

In my experience, and with the data I’ve seen, most traditionally published novels that you see on bookstore shelves or reviewed in newspapers sell several hundred to a few thousand copies across formats. Many sell much more of course. I’ve seen some flops that sold only a couple hundred. And of course not all traditionally published novels appear in bookstores or reviewed in newspapers. Is it possible someone has published a Big 5 novel that sold only 12 copies over its lifetime? I suppose. But I don’t think it’s 5% much less 50%! ...

Still more. 

Bed Bath & Beyond to Close 150 Stores, Cut Staff, Sell Shares to Raise Cash

Probably, the most poorly managed major corporation in the country right now. They're close to going out of business.

My wife worked there briefly, years ago, but quit just a few weeks into the job. My wife's got 30 years of retail sales and management experience, so if she quit that job so fast, something was totally fucked up. 

At WSJ, "Home-goods seller to lay off 20% of corporate, supply-chain workers":

Bed Bath & Beyond Inc. BBBY -21.30%▼ said it would close roughly 20% of its namesake stores, cut its workforce and bring in fresh cash to stabilize the business through the holiday season as the retailer confronts plunging sales.

The home-goods seller is attempting to trim costs and raise money as it tries to correct recent operating missteps and navigate a challenging economic environment. It has been burning through its cash reserves for several quarters, and a shopper exodus has shaken investor and vendor confidence.

On Wednesday, executives and directors attempted to assuage its uneasy partners. In a business update, they said the company secured commitments for more than $500 million in financing and could potentially sell as many as 12 million shares of common stock to raise money. They also pledged to overhaul the assortment of goods in the company’s stores, focusing more on national brands after spending millions to develop private-label goods.

“While there is much work ahead, our road map is clear and we’re confident that the significant changes we’ve announced today will have a positive impact on our performance,” said Sue Gove, a board member who is serving as interim chief executive.

Bed Bath & Beyond’s stock fell 21% in Wednesday trading, as the plan to sell shares could dilute the holdings of existing shareholders. The stock, a favorite among meme investors, has lost more than half its value over the past two weeks.

As of Wednesday, the company’s market value was roughly $750 million. At its peak in June 2012, the company had a valuation of more than $17.3 billion, according to FactSet data.

Founded more than 50 years ago, the Union, N.J., company had several decades of rapid growth as it became known for its big-box stores stockpiled with merchandise and 20%-off coupons. In recent years, it has wrestled with falling sales and shifting strategies.

In 2019 activist investors ousted the chain’s founders and revamped the board, saying its leaders had failed to modernize the stores and capitalize on the rise of e-commerce. Mark Tritton, a former Target Corp. executive, joined the company in 2019 and sought to turn around the retailer by pushing deeper into private-label brands, among other initiatives. Those brands, however, weren’t well-received by shoppers and were hindered by pandemic-related supply-chain constraints.

Bed Bath & Beyond’s board ousted Mr. Tritton in June and installed Ms. Gove, a retail-restructuring consultant, as interim CEO. The company is working with search firm Russell Reynolds Associates to find a permanent CEO, and said Wednesday that the search process is continuing.

The retailer received another blow in August when billionaire activist Ryan Cohen sold his 10% stake in the company, about six months after acquiring his shares. The company’s stock, which had been rallying in previous weeks, slid after individuals followed Mr. Cohen’s selloff.

The business update came just days after the end of the company’s latest quarter, which showed the issues facing the retail chain. Comparable sales—reflecting sales at stores open at least a year—fell 26% in the quarter ended Aug. 27. The company’s operations also burned through about $325 million of its cash reserves during the period.

While the company plans to release its full second-quarter financial report on Sept. 29, preliminary results show that the money it is bringing in the door is leaving quickly. And the new financing only provides a short runway for the turnaround effort, analysts say.

The more than $500 million infusion, led by JPMorgan Chase & Co. and asset manager Sixth Street Partners, includes $375 million from a new loan and the expansion of a credit line. The Wall Street Journal had previously reported the company was near a new loan deal.

The new arrangement will reduce the debt exposure of the JPMorgan credit line by more than half while Bed Bath & Beyond retains access to about $800 million in borrowing capacity. The company said it ended the latest quarter with about $200 million in cash and investments...

 

TikTok Influencers Push to Unionize Amazon

These people are kids with millions of followers on social media.  And they're demanding Amazon pay its workers $30.00 an hour. Right. Fucking brats. 

At WaPo, "Gen Z TikTok creators are turning against Amazon":

A coalition of top TikTok stars is pledging to cease all work with Amazon — including shutting down storefronts and halting new partnerships with the e-commerce platform — until the company meets the demands of the Amazon Labor Union.

Boasting a combined following of over 51 million, the group of 70 TikTok creators says that the campaign, called the “People Over Prime Pledge,” is designed to pressure Amazon to meet the requests of its workers, which include a $30 minimum wage, increased paid time off and halting activities the group considers “union busting.”

“Amazon’s widespread mistreatment of their workers and blatant use of union busting tactics will no longer be tolerated by the TikTok Community,” reads a statement from Gen Z For Change, an advocacy group that coordinated the pledge and works frequently with creators.

Amazon Labor Union, which did not help organize the People Over Prime Pledge, didn’t immediately respond to a request for comment.

The campaign is a public setback for Amazon, which has sought to develop tighter relationships with young influencers in recent years. In 2017, the company launched the Amazon Influencer Program, allowing creators to earn revenue by recommending products in personalized Amazon storefronts. Earlier this year, Amazon flew more than a dozen Instagram, YouTube, and TikTok stars to a luxurious retreat in Mexico to encourage influencers to grow their presence on the platform. In June, Amazon built a massive VIP lounge at VidCon, an annual conference for online video stars, where influencers could learn about ways to work more closely with the company.

Instagram knows you don't like its changes. It doesn't care.

“I think their method of offering influencers life-changing payouts to make them feel as if they need to work with them while also refusing to pay their workers behind the scenes is extremely wrong,” said Emily Rayna Shaw, 24, a TikTok creator with 5.4 million followers who has partnered with Amazon in the past. “I want to feel comfortable recommending Amazon products to my community because it is so reliable, but I can’t do so until I know that they are treating their workers fairly.”

Many of the creators behind the People over Prime Pledge have done promotional deals with the company but plan to shut down their storefronts and decline future partnerships because of concerns over worker treatment. Creators who have worked with Amazon say that the company requires them to sign nondisparagement agreements, so that they can’t speak negatively about the platform even when the deals are over.

Amazon — which is the second-largest private employer in the U.S., where it has a higher rate of worker injuries than its competitors — has increasingly become a target for organized labor. In April, the independent Amazon Labor Union won an election at a large fulfillment center in Staten Island, marking a major union victory. Amazon workers are also organizing facilities in Bessemer, Ala.; Garner, N.C.; Albany, N.Y.; Campbellsville, Ky., and San Bernardino, Calif.

But the company has cracked down on these efforts, disciplining, firing, and even calling the police on some workers who show support for unions. The National Labor Relations Board has said some of the company’s conduct violates labor law, but the agency has limited resources to police a company of Amazon’s size. Even at the warehouse where Amazon Labor Union won the election, the company has successfully delayed the start of the contract-bargaining process, which itself could take months or years to complete.

[Amazon could stymie unions for years by going to the courts.]

Jackie James, 19, a TikTok creator with 3.4 million followers said that she will not be doing deals with Amazon until they change their ways. “As an influencer, it’s important to choose the right companies to work with,” she said. “I don’t think that workers should be treated the way they are under Amazon.”

Yet as labor organizing efforts within Amazon have hit speed bumps — Amazon Labor Union lost a second election in Staten Island in May — the movement has remained high profile, attracting support from Sen. Bernie Sanders and President Biden. Amazon Labor Union president Chris Smalls appeared on a prominent Twitch stream last week, and the hashtag #hotlaborsummer has popped up on Twitter.

Amazon has previously denied discontent among its workers, arguing turnover is a function of the company’s flexibility. “A large percentage of people we hire are re-hires, showing that they will choose to work for us when they want to,” Kelly Nantel, an Amazon spokeswoman, told The Post in June. Amazon founder Jeff Bezos owns The Washington Post.

“We’re demanding that Amazon listen to their workers and make changes to provide a healthy workplace environment,” said Aidan Kohn-Murphy, founder of Gen Z For Change, who also posts on TikTok. “Until Amazon institutes these changes, we as creators will block Amazon from monetizing one of the largest social media platforms in the world.” ...

Penguin Random House and Simon & Schuster Antitrust Case Goes to Court

Opening arguments were held yesterday. 

The attorney for Penguin Random House, Daniel Petrocelli, is a freakin' firecracker.

At the New York Times, "The trial to decide whether the publishing giant may buy Simon & Schuster is a test of the Biden administration’s push to expand antitrust enforcement."

And at Vanity Fair, "The Antitrust Showdown to Determine Simon & Schuster's Fate Is About to Begin":

Jonathan Karp is rallying the troops at S&S as its suitor, Penguin Random House, heads to trial Monday against Biden’s Justice Department. The witness list is a who’s who of publishing bosses, power agents, and authors—including Stephen King—with a $2 billion deal on the line.

On Monday, as lawyers for Penguin Random House and the Department of Justice were sharpening their sabres ahead of the antitrust duel of the summer, CEO Jonathan Karp fired off an email to his approximately 1,500 employees at Simon & Schuster, the nearly century-old publishing house that Karp has lorded over for the past two years. The fate of Simon & Schuster—whose catalog stretches from the classics of Fitzgerald and Hemingway, to the mass-market gold mines of Stephen King and Mary Higgins Clark, to the recent political blockbusters of Bob Woodward and Mary Trump—has hung in the balance since the publisher was put on the block in March 2020 by its parent company, now called Paramount Global, which arose from the tortured recombination of Viacom and CBS, whose focus on mounting an offensive in the streaming wars leaves little room to manage a comparatively antiquated book-publishing business.

Almost nine months after the sale was announced, Bertelsmann’s PRH bested Rupert Murdoch’s HarperCollins with a $2.18 billion bid for S&S, a proposed mash-up that would turn the Big Five publishers into the Big Four. However, the Champagne toasts turned out to be premature: Last November, Joe Biden’s merger-averse DOJ sued to block the deal, citing concerns that it would give the world’s largest book publisher “unprecedented control” over the industry, resulting in “lower advances for authors and ultimately fewer books and less variety for consumers,” a string of claims that PRH characterizes as ludicrous. S&S has been in limbo ever since—a discontinued operation as far as Paramount Global’s earnings releases are concerned, and yet still bereft of its suitor’s embrace.

Which brings us back to Karp’s memo, a sort of pep talk to counteract the lingering uncertainty. “As I’ve told you before, I am hopeful that Simon & Schuster will become part of Penguin Random House,” wrote Karp, a 58-year-old former reporter and theater buff who rose up to become one of the most powerful and highly regarded figures in the publishing industry. “I spent 16 years at Random House, and I know their culture is a lot like ours—wholeheartedly devoted to books and deeply committed to its employees and authors. Penguin Random House’s parent company, Bertelsmann, has been in the book business since 1835 and shares Penguin Random House’s profound commitment to improve public readership. I strongly believe that Penguin Random House will be an excellent steward of Simon & Schuster’s legacy, and that we, and our authors, will benefit greatly from becoming a part of this superb publishing company.”

The fate of S&S will soon be decided one way or another, with PRH and the DOJ gearing up to face off in court. The bench trial is set to begin Monday, adjudicated by Judge Florence Pan at the U.S. District Court in Washington, D.C. Three weeks have been allocated for the trial, which is slated to run from August 1 to August 19. The attorneys will then have until September 7 to submit any additional briefings to the court, and Pan is expected to rule sometime in November. The witness list is stacked with A-listers from the publishing world, including executives from S&S and PRH, as well as top literary agents and authors. Karp and Penguin Random House CEO Markus Dohle are both due to be called, as are King (for the government), Hachette Book Group CEO Michael Pietsch (ditto), and power agents Andrew Wylie (whose client roster includes Vanity Fair), Gail Ross, Joy Harris, and Elyse Cheney. (Those agents and a few others are notably being called by the defense.) The array of potential witnesses includes PRH honcho Andy Ward and the Pulitzer Prize–winning journalist and best-selling author Charles Duhigg. “During the trial, our ability to comment on the testimony and proceedings will be limited,” Karp told his staff. “We will keep you informed of further developments when we have news that we can share.”

PRH buying S&S is a small deal in the grand scheme of things, but the merger is being closely watched insofar as it reflects the Biden administration’s push to stem corporate consolidation. It also has obvious implications for the already much-consolidated publishing space, where there’s skepticism about creating another behemoth in an industry that has been upended by Amazon. As one big shot editor told me when the lawsuit was first announced, “I don’t know anyone who would think this is a great thing to happen.” Both sides filed their pretrial briefs last Friday...

Keep reading.

 

Twitter Says It's Going to Sue Elon Musk for Trying to Back Out of Takeover Deal

Folks see Musk as a free-speech savior, so it'd be a bummer if the deal doesn't go through. That said, frankly, Twitter's valuation was below $44 billion when Musk first made the bid. It's dropped precipitously since then, not to mention the market value of Musk's Tesla electric car company, whose stock was being used to leverage the deal. 

We'll see, in any case. It's still awful bad on that hellsite. 

At the Verger, "Twitter says it’s going to sue Elon Musk for trying to back out of the deal."

Markets Suffer Worst First Half of a Year in Decades

At the Wall Street Journal, "Investors gird for more volatility; almost everything—from stocks to bonds and crypto—falls to start 2022":

Global markets closed out their most bruising first half of a year in decades, leaving investors bracing for the prospect of further losses.

Accelerating inflation and rising interest rates fueled a monthslong rout that left few markets unscathed. The S&P 500 fell 21% through Thursday, suffering its worst first half of a year since 1970, according to Dow Jones Market Data. Investment-grade bonds, as measured by the iShares Core U.S. Aggregate Bond exchange-traded fund, lost 11%—posting their worst start to a year in history.

Stocks and bonds in emerging markets tumbled, hurt by slowing growth. And cryptocurrencies came crashing down, saddling individual investors and hedge funds alike with steep losses.

About the only thing that rose in the first half was commodities prices. Oil prices surged above $100 a barrel, and U.S. gas prices hit records after the Russia-Ukraine war upended imports from Russia, the world’s third-largest oil producer.

Now, investors seem to be in agreement about only one thing: More volatility is ahead. That is because central banks from the U.S. to India and New Zealand plan to keep raising interest rates to try to rein in inflation. The moves will likely slow down growth, potentially tipping economies into recession and generating further tumult across markets.

“That’s the biggest risk right now—inflation and the Fed,” said Katie Nixon, chief investment officer for Northern Trust Wealth Management.

Ms. Nixon said she would be keeping a close eye on economic data to gauge how much rising interest rates are weighing on growth over the next few months. Her firm has kept money in U.S. stocks, wagering the economy will slow down but avoid a recession. It has also put money into companies focused on natural resources, a bet that should pay off if inflation persists for longer than it expects.

“You don’t want to be whipsawed by the markets,” she said.

The good news for investors is that markets haven’t always done poorly after suffering big losses in the first half of the year. In fact, history shows they have often done the opposite.

When the S&P 500 has fallen at least 15% the first six months of the year, as it did in 1932, 1939, 1940, 1962 and 1970, it has risen an average of 24% in the second half, according to Dow Jones Market Data.

One reason markets have often snapped back after big pullbacks: Investors have eventually stepped in, wagering prices have fallen too far. Fund managers currently have larger-than-average cash positions, smaller-than-average equities positions and a markedly high degree of pessimism about the economy, Bank of America found in its June survey of investors. Those factors, among others, make markets look “painfully oversold”—and thus potentially ripe for a rally, the bank’s strategists said in a separate report.

But even those finding buying opportunities these days say they are focusing on specific companies, instead of buying broadly. They concede that the current economic environment—in which inflation is high, borrowing costs are rising and growth is expected to slow—makes it difficult to be enthusiastic about many parts of the market.

Economists surveyed by The Wall Street Journal in June said they saw a 44% probability of a recession in the U.S. in the next 12 months, compared with 18% in January.

History also has shown the Fed has seldom been able to pull off a “soft landing,” a scenario in which it slows the economy enough to rein in inflation but avoids tightening monetary policy to the point of causing a recession. The U.S. went into recession four of the last six times the Fed began raising interest rates, according to research from the Federal Reserve Bank of St. Louis that looked at monetary policy tightening cycles since the 1980s.

“The runway for the Fed to manage a soft landing is not only narrow but also winding and bumpy,” said Lauren Goodwin, economist and portfolio strategist at New York Life Investments...

The Bear Market Descends

The fear is palpable.

At the Wall Street Journal, "Dow Drops Over 800 Points; S&P 500 Closes in Bear-Market Territory as Stocks Slide":

Investors raise bets on aggressive Federal Reserve interest-rate increases; cryptocurrencies decline.

The stock-market selloff deepened Monday, with the S&P 500 entering a bear market, as investors took another look at Friday’s red-hot inflation data and liked it even less.

Faced with rising chances of aggressive monetary tightening by the Federal Reserve, investors broadly unloaded risk. The S&P 500 slumped 3.9% as 495 of its 500 components ended the day lower. The declines left the U.S. stock benchmark down more than 20% from its January record, sending it into a bear market for the first time since 2020.

Meanwhile, a rout in cryptocurrencies highlighted investors’ increasing unwillingness to hang on to their most speculative holdings. The price of bitcoin plunged below $23,000 before paring that loss to trade at 5 p.m. ET down 66% from its November high.

The drop in cryptocurrencies accelerated Monday after interest-rate fears sparked a weekend selloff. Bitcoin, the biggest cryptocurrency, traded at 5 p.m. at $23,250.72, a drop of 15% from 24 hours earlier. Ethereum was down 16% from 24 hours earlier to about $1,243. Shares of Coinbase Global fell 11%, while Celsius Network said it was pausing all withdrawals, swaps between cryptocurrencies and transfers between accounts, citing “extreme market conditions.”

Even rare bets that have worked in 2022 stumbled Monday. The energy segment, the only one of the S&P 500’s 11 sectors in positive territory this year, fell 5.1%, a steeper decline than that of the broad index. The utilities group, the second-best performer in 2022, also lagged behind the market with a daily drop of 4.6%.

“We’re definitely seeing a risk-off atmosphere, a flight to quality,” said Charlie Ripley, senior investment strategist at Allianz Investment Management. “In that environment, people need to raise cash.”

The S&P 500 fell 151.23 points, or 3.9%, to 3749.63. The Dow Jones Industrial Average dropped 876.05 points, or 2.8%, to 30516.74. The tech-heavy Nasdaq Composite declined 530.80 points, or 4.7%, to 10809.23, off 33% from its November record.

Markets have swung wildly this year as investors scramble to decipher how rapidly the central bank will raise interest rates in an attempt to tame sky-high inflation. Rock-bottom rates and other stimulative policies helped keep the economy—as well as markets—afloat as the arrival of the Covid-19 pandemic idled businesses and threw people out of work.

Now, the Fed is trying to tame surging prices by unwinding that easy-money policy. The Fed will begin its latest two-day policy meeting Tuesday, and most investors believe that the central bank will announce Wednesday it is raising its benchmark interest rate by half a percentage point...

Still more.

 

'That Doesn't Feel Like $150 Worth of Groceries'

From Samuel Gregg, at Bari Weiss's Substack, "Why inflation is worse than you think."

Do We Need a Capitalist Civil War?

 From Joel Kotkin, at UnHerd, "The working class suffer when elites agree":

We Americans like to think of ourselves as a thoroughly modern people — living proof of what, with enough toil and grit, the rest of the free world can one day hope to be. And yet for all our progressivism and idealism, America’s political culture finds itself unable to escape the past. We may be living in a 21st century democracy, but that “democracy” increasingly resembles something that could have been plucked out of feudal Europe or, perhaps more accurately, feudal Japan.

For much of its history, Japanese politics was characterised by conflicts among its ruling daimyo, and later between the great industrial zaibatsu who replaced them as dominant powers. Similarly, America’s politics is now being shaped by a civil war not between classes, but within the ruling capitalist elite.

As the 2022 congressional elections approach, two sides are polishing their armour and fletching their arrows. In one corner stand the daimyo of the gentry corporate elite, largely drawn from the ranks of tech oligarchs and much of Wall Street. Their focus lies in the creation of a capitalist utopia rooted in paternalistic state control, much along the lines of the corporatist “Great Reset”. In the other corner, meanwhile, stand their opponents to the Right, largely made up of those who own private capital and are therefore anxious not to see their activities curbed.

These divisions reflect profound differences in industry, reminiscent of the 19th-century conflicts between aristocratic merchants and British manufacturers, or the one that broke out between the daimyo who embraced industry and those samurai who stubbornly hewed to traditional ways. Drawing on this, the French economist Thomas Piketty aptly divides our capitalist class into what he calls “the Brahmin Left” and the “merchant Right”. One side, as its caste association assumes, tends to see itself as more spiritually enlightened, as priests of the progressive secular religion. The merchant side, however, is more concerned with market competition (particularly from China), the cost of goods, and the impact of regulatory policies on their core businesses.

Today, the Brahmin Left has its base in large corporations and investors, and has allied itself with the academic and media establishments, financing non-profits and generally supporting increasingly intrusive government. By contrast, the merchant Right draws its natural support from the traditional middle class — skilled workers, high-street businesspeople, and small property owners — who also have become the bulwark of the Trumpian Republican Party...

Still more.

 

Stocks Skidded Friday, Dow Dropping More Than 900 Points in Broad Investor Selloff

Shoot, another week like this one and the Dow will be in correction territory. My funds squeaked out of the first quarter with a mild $500 loss, but if this keeps going, I'll be taken to the cleaners --- and imagine how everybody else feels! 

Oh boy this is going to be a rocky year, just in time for the November midterms!

At CNBC, "Dow plunges more than 900 points for its worst day since 2020, falls for a fourth straight week":

And at the Wall Street Journal, "Tech Rout Drags Nasdaq to Worst Month Since 2008":

Tech-heavy index slid more than 4% Friday, bringing its losses for month to 13%.

An April rout in technology stocks deepened Friday, dragging the Nasdaq Composite to its worst monthly performance in more than a decade, as soaring inflation and rising interest rates fanned worries of a recession.

The broad selloff has erased trillions of dollars in market value from the tech-heavy gauge, with investors souring on shares of everything from software and semiconductor companies to social-media giants.

The Nasdaq dropped 4.2% Friday, bringing its losses for the month to more than 13%, its worst showing since October 2008. The index is down 21% in 2022, its worst start to a year on record.

The broader S&P 500 has fallen for four consecutive weeks, shedding 8.8% in April and bringing its year-to-date losses to 13%. The Dow Jones Industrial Average fell 4.9% this month and is down more than 9% this year. Both indexes logged their worst months since March 2020.

The punishing declines in tech and growth stocks mark a dramatic shift from recent years. Investors have ditched shares of some of the biggest tech companies, which had been stock-market darlings for much of the past decade and propelled the indexes’ gains from the pandemic lows.

Within just a few months, some of the most reliable winners morphed into losers. Netflix dropped 49% in April. Nvidia fell 32%. And PayPal Holdings declined 24%. All three stocks are down more than 35% in 2022.

Worries about the Federal Reserve raising interest rates, soaring inflation and the path of the economy have brought stocks sharply lower from the record levels at which they started the year. Many pandemic-era winners also have come falling back to earth as consumer tastes have evolved since 2020. And recently, earnings season has been dotted with some high-profile disappointments, delivering head-spinning one-day stock moves following the reports.

“We’re going into a higher volatility regime, when fundamentals matter again,” said Aashish Vyas, investment director at Resonanz Capital. “It does seem like we are at a systemic shift.”

The FAANG stocks, consisting of the popular quintet of Facebook parent Meta Platforms, Apple, Amazon.com, Netflix and Google parent Alphabet, have collectively lost more than $1 trillion in market value this month, the most since Facebook started trading in May 2012.

Investors say they will be tracking the next batch of earnings results in coming days for signs of slowing growth from other companies. So far, corporate profits are on track to rise 7% for the quarter, according to FactSet, the lowest year-over-year earnings growth rate since the last quarter of 2020....

The latest gross domestic product data showed that the economy recently contracted for the first time since early in the pandemic. Meanwhile, inflation accelerated in March to its fastest pace since 1982, measured by the Federal Reserve’s preferred gauge.

Despite higher prices, U.S. consumer spending for March increased 1.1% from the prior month, showing that American households are absorbing high inflation. Some investors say shares of some tech companies look attractive after the recent selloff, and that they would consider stepping in to buy shares. The Nasdaq is now down 23% from its high and trading at levels not seen since 2020.

Friday’s losses in the stock market accelerated into the closing bell, which some traders attributed to technical factors such as hedging activity and trading by leveraged exchange-traded products. The Dow sank more than 900 points, or 2.8%, and the S&P declined 3.6%...

 

Elon Musk Buys Twitter (VIDEO)

I'm just tickled by this. The funniest thing is I had no doubts he'd take over the company. Turns out it was just a matter of arranging financing, and for a guy like than, how hard could that be? 

What's even more hilarious, of course, is the left's reaction to the buyout. Twitter itself is in meltdown mode. Folks on the right are gloating, rolling over laughing on the floor. Folks on the left are panicking, literally not sure what they're going to do now that their Twitter power has been zapped by a force more powerful than kryptonite. 

It's glorious. 

I never moved to Trump's Truth Social. I dismissed all the others as wannabee's, Gab, Parler, Gettr, or whatever. I'm sure they can generate some good discussions or whatever, but they can't claim to be the "digital town square," not just at home, but globally. Until someone beats Twitter at that scale, attracting even more users, I don't see a credible substitute. 

It's an amazing thing, truly a phenomenal thing. And frankly, as shocking and stupendous is all of this, not much is likely to change. In terms of censorship (and free speech), frankly at the granular level, Musk's ownership might not make much difference. As Megan McArdle points out, "No matter what new policies Musk sets, there will be gray areas. And it is Twitter's progressive workforce, not Elon Musk, who will be making the calls in those gray areas."

In any case, lots of loz at Twitchy. See, "Brian Stelter’s alarmed by ‘total freedom for everybody’ after Elon Musk buys Twitter," and "Build your own: Sounds like Robert B. Reich wants to leave Twitter and keep his followers, is haunted by old tweets."

Plus, the fear is palpable, "NBC News reporter who covers ‘extremism and lies’ for a living says you’re not going to like where Twitter is headed."

In any case, at A.P., "Elon Musk buys Twitter for $44B and will take it private." 

More, at the video below, Kara Swisher, New York Times tech maven reporter, spurts the truth to make leftists very unhappy. 

And the Los Angeles Times, "Elon Musk reaches $44-billion deal to buy Twitter":

Elon Musk’s bid to buy Twitter and take the company private succeeded on Monday, 11 days after the world’s wealthiest man first announced that he’d like to buy the social media firm.

After days of back and forth, Twitter’s board approved Musk’s approximately $44 billion offer Monday.

“Free speech is the bedrock of a functioning democracy, and Twitter is the digital town square where matters vital to the future of humanity are debated,” Musk said in a statement announcing the deal. “I also want to make Twitter better than ever by enhancing the product with new features, making the algorithms open source to increase trust, defeating the spam bots, and authenticating all humans.”

The company’s leadership initially tried to fend off the bid, adopting a “poison pill” measure that would make a hostile takeover difficult.

But Musk announced that he had $46.5 billion in financing lined up in filings with the Securities and Exchange Commission on Thursday, prompting Twitter’s board to meet on Sunday to discuss the bid. Following that meeting, the board opened negotiations with Musk that stretched late into the night, according to reporting by the New York Times.

The deal values Twitter stock at around $54 per share, above the $39 per share that the stock was trading at before Musk’s interest in the company became clear in early April, when he purchased a 9% stake in the company, but also well below the stock’s 2021 high of $77 per share.

Musk stated that his interest in Twitter is motivated not by the company’s finances but by its role as a public forum and his belief that he could manage the platform better than its current leadership.

“Having a public platform that is maximally trusted and broadly inclusive is extremely important to the future of civilization,” Musk said at a public interview on April 14, a day after he first announced his offer to buy the company. “I don’t care about the economics at all.”

He elaborated on this theme in his SEC filing, writing: “I invested in Twitter as I believe in its potential to be the platform for free speech around the globe, and I believe free speech is a societal imperative for a functioning democracy,” and that he believes “the company will neither thrive nor serve this societal imperative in its current form.”

Since its launch in 2006, Twitter has become one of the core companies of the social media age — but it has had a difficult time becoming a profitable business and has been a site of explosive disagreement over the moderation of online speech.

Founded by Jack Dorsey, Evan Williams, Noah Glass and Biz Stone as a site that allowed users to post 140-character messages using SMS texting, Twitter experienced its first surge of interest after a presentation at the 2007 SXSW festival in Texas.

The next few years brought explosive growth. In 2011, the company announced it had 100 million monthly active users. By the time Twitter went public, in 2013, that number had doubled to more than 200 million people using the platform every month.

But Twitter could not sustain that rate of expansion. While Facebook, Instagram and upstart platform TikTok rocketed past Twitter to more than a billion users in the past decade, Twitter hit a plateau. The company counted 300 million monthly users in 2019 before switching its reported metrics. Now it has 217 million monetizable daily active users, per its latest corporate filings.

Under a series of chief executives, Twitter did figure out how to squeeze more money out of those users. Revenue grew from $1.4 billion in 2014 public to over $5 billion in 2021. But the company only booked a profit in 2018 and 2019, and returned to losing money in the past two years.

Even as its user growth stagnated, however, Twitter became the go-to platform for journalists and politicians, a volatile combination that has turned it into one of the key battlegrounds in the fight over online harassment, the limits of public speech and the power of tech companies.

Nowhere was the battle hotter than in the debate around banning former President Trump from the platform...