U.S. sailors aboard the USS Abraham Lincoln marked ordinances headed for Iran with their names on Tuesday (U.S. Central Command)

The U.S. and Israeli bombing of Iran had a swift effect, if not on regime change, then at least on the global economy. Oil prices have shot up, home mortgage rates climbed back above 6%, and the specter of inflation returned. With President Donald Trump now saying the war could last four or five weeks, or perhaps “far longer than that,” Big Business This Week’s Peter Green sat down with Gregory Daco, chief economist at EY-Parthenon, an arm of the consulting firm formerly known as Ernst & Young, to discuss what happens next.

You outlined two scenarios for the conflict’s economic impact, one where a short war would have a moderate impact on the economy, and one where a prolonged war could have a severe impact.  Where do those take us?

The moderate one would essentially see oil prices rise into the $80 range and gas prices rise around the 50-euro per megawatt hour range. The difference is that this moderate escalation scenario would see some persistence in the shock. We would be talking about prices in that range until the second half of the year and then some resumption to lower oil prices in the second half of 2026.  A more severe scenario would entail further escalation in oil prices, further market volatility, and downward pressure on stocks alongside an appreciation of the U.S. dollar. In that scenario, oil prices would rise to $110 per barrel and last into 2027.

Beyond oil and energy, what other economic factors are likely to be affected?

It’s not just energy. Crude and natural gas are the two prime gauges of the uncertainty and the stress. But it’s also financial assets and financial market indicators. You would likely see a correction in terms of equity prices. You would likely see increased market volatility. You would see different degrees of U.S. dollar appreciation. And you would likely see movements in the 10-year yield. There’s an open question as to whether the dollar would play a safe haven refuge role in a severe scenario. Because so far it has not. Yields have risen when you typically would expect them to fall.

We’ll get back to the dollar, but why might bond yields rise during a global shock when they historically fell?

The economic paradigm today is heavily influenced by supply shocks, which is very different from pre-pandemic, where most of the shocks were essentially demand-driven. The results from supply shocks tend to be stagflationary. You tend to have higher inflation and lower output. Investors are pricing in higher inflation expectations. And in an environment where there are supply shocks, in part driven by the U.S., investors are looking to diversify their holdings. They’re not necessarily seeking refuge in dollar-denominated assets to the same extent that they once were.

Oil markets seemed oversupplied before the crisis. Why are prices suddenly spiking?

You start from a structural position of a surplus state. When you have a highly volatile situation in a region that is highly important in terms of production, refining, and transportation, then there start to be questions not just about stocks but about flows. If you have a stall of navigation in the Straits of Hormuz, that creates questions around flows. Markets and investors are trying to price what is happening in terms of these flows and what the risks are in terms of the provisioning of energy across the world. What you’re seeing is not necessarily the reflection of a sudden change in the stock picture. There are strategic reserves in China and the U.S., and other economies. There is crude currently on ships. It’s just a question of whether that is satisfying demand. As of right now, the answer is no. So, what we’re seeing is essentially a pricing of these flow disruptions.

Could this crisis disrupt global supply chains beyond energy?

It could. The main pressure point right now is transportation, and the potential impacts are disruptions to travel times and the cost of the fuel for the ships and trucks. If you increase distance and fuel costs more, that becomes an additional cost that will eventually be passed on to the consumer. So it’s not just about commodities. It’s a broader set of implications for transportation and for the cost of goods.

What channels transmit this shock into global growth and inflation?

There are three transmission channels:

• The first is the cost of energy and commodities. Economies that are more energy dependent will see a greater hit.

• The second is uncertainty and volatility. Businesses may hold off on investment or hiring decisions.

• The third is the financial transmission channel. What happens to financial conditions? Is there a plunge in stock prices? Movements in the dollar? Dollar appreciation helps ease inflationary pressures in the U.S. but exacerbates inflationary pressures in other parts of the world. Europe would be a prime example.

Those three channels lead to divergent impacts on economic activity around the world.

How long might the economic effects last?

In the moderate scenario it’s a few quarters. You see a shock that lasts around three months and then dissipation over the remaining couple of quarters. The severe escalation is a multiyear process where you see a notable hit to growth and potential recessionary conditions across the world.

Big Businesses mentioned this week:

$WBD ( ▲ 0.18% )  $PSKY ( ▼ 2.57% )  $NFLX ( ▲ 0.52% )  $XYZ ( ▲ 3.28% )  $LYV ( ▲ 0.72% )  $JBS ( ▼ 4.16% )  $TSN ( ▼ 1.37% )  $SFD ( ▼ 2.3% )  $TGT ( ▲ 0.23% )  $LULU ( ▼ 0.02% )  

This week, big business!

• The usual suspects

• The short stack

• Trumplandia

• Want more Cheddar?

The usual suspects

• You can say one thing about Anthropic CEO Dario Amodei (pictured, above): He doesn’t back down. Faced with a threat from Defense Sec. Pete Hegseth, Amodei walked away last Friday from a lucrative government contract, refusing to let Anthropic’s models be used for mass surveillance in the U.S. or for building autonomous killing machines. OpenAI chief Sam Altman quickly jumped into Hegseth’s arms, promising cooperation. “We haven't given dictator-style praise to Trump (while Sam has), we have supported AI regulation which is against their agenda, we’ve told the truth about a number of AI policy issues (like job displacement), and we’ve actually held our red lines with integrity rather than colluding with them to produce ‘safety theater’,” Amodei said in a memo to employees. It doesn’t look like the move has hurt Anthropic, which is still a public benefit corporation. In fact, Anthropic is on track to generate nearly $20 billion in revenue this year, up from a $9 billion run rate at the end of 2025. Most of that’s down to businesses adopting Anthropic and its $211 a month Claude Code coding tool, while OpenAI chases consumers with $25 subscriptions to ChatGPT. Anthropic is valued at $380 billion, while Open AI is valued at $730 billion, and expects to lose $14 billion this year. Anthropic expects to be cash-flow positive next year.

• Is Netflix the real winner in the Warner Bros. sale? The swift reversal on Friday by the board of Warner Bros Discovery $WBD ( ▲ 0.18% ) accepting a sweetened, debt-ridden offer from Larry and David Ellison’s Paramount Skydance $PSKY ( ▼ 2.57% ) looked like a loss for Netflix $NFLX ( ▲ 0.52% ) , whose all-cash offer for part of the company was rejected. But investors, at least, think Netflix did a Roadrunner and dodged an anvil, walking away from an $83 billion cash and debt deal. For one thing, it collected a $2.8 billion breakup fee, but more importantly, Netflix faces a simpler future with less regulatory threat to its 20% share of the U.S. streaming market (roughly equal to Amazon’s $AMZN ( ▲ 0.98% ) Prime Video). That sent Amazon shares up 14% on Friday after the breakup was announced. The deal will cause a lot of hurt in Hollywood, and could end up too much of a stretch for Paramount, whose market cap is just $13.75 billion, and which will be struggling to pay off $58 billion in debt from the WBD deal and a total debt load of $79 billion, with a newly reduced junk-level credit rating, all while hoping for $6 billion in “synergy” savings that has many WBD employees fearing for their careers, and some wishing that Netflix had won. That’s partly because Paramount has a lot more overlap with WBD. Who made out like a bandit? David Zaslav, for one, who put Warner and Discovery together in the first place, saw its share price tank until Netflix and Paramount began their bidding war. He’s cashing out just over 4 million shares for $114 million at $31 a share, according to an SEC filing listing the sale date as March 3, days after Paramount clinched the deal.  “Merging with Paramount Skydance is like a shotgun wedding with your dumb cousin: I fear for the health of the kids,” producer Gregory Orr, a stepgrandson of Warner Bros founder Jack Warner told The Hollywood Reporter. 

  

• Is Jack Dorsey’s (pictured, above) layoff excuse too good to be true? Twitter founder Jack Dorsey said last week that Block $XYZ ( ▲ 3.28% ) , the payments firm he started, will fire 4,000 workers, 40% of its workforce, because AI can do their jobs better. AI-watchers wondered if this was a harbinger of an AI-powered unemployment apocalypse poised to sweep techland. Understandable, as it came just days after “the Citrini memo,” an AI-Doomsday thought experiment that momentarily sparked a mini market rout. But not everyone is buying the story. Instead, analysts say the company had over-hired massively, and its margins were hurting. Block's headcount jumped from about 3,000 in 2018 to nearly 13,000 in 2023. Meanwhile, net margins plummeted from 8% at the end of 2019, to -3% at the end of 2022. Layoffs began soon after, and Block’s profit margin topped 13% in the third quarter of 2025.

• Live target: Sick of high ticket prices for your favorite band or your home team’s games? So is the Justice Dept., and this week prosecutors opened an anti-trust trial against Live Nation $LYV ( ▲ 0.72% ) , which through subsidiaries including Ticketmaster, has, the department says, exercised an extensive and illegal monopoly over live music and sports in the U.S. Live Nation’s size is no joke: Last year, it presented 55,000 events and sold 646 million tickets around the world. It owns or controls 460 venues and manages more than 300 artists. Among the accusations: that Live Nation pressures venues to sign exclusive ticketing deals, and forces artists to use its marketing arm if they want to play in its venues. Kid Rock is expected to be a government witness, but Live Nation is blaming any issues on the feds, who allowed it to merge with Ticketmaster in 2010. Shares in Live Nation are up 77% in 5 years and 16% in the past 12 months.

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The short stack

• Chopped Meat: Ask a cattle rancher why it’s so hard to make money in the business, and he (or she, but most of them are men) will point to the Big Four meatpackers, Brazilian-owned JBS $JBS ( ▼ 4.16% ) , Cargill, Tyson $TSN ( ▼ 1.37% ) , and National Beef. Add Japanese-owned Smithfield $SFD ( ▼ 2.3% ) for pigs, and the big four have about 85% of the U.S. beef market and 65% of pork. That’s bad for ranchers who see cattle prices drop as the cost of feeding livestock rises. The U.S. Dept of Agriculture says reduced competition in meatpacking means lower prices for cattle. “This evidence is reflected in sharply increased spreads between cattle prices and wholesale beef prices,” the USDA wrote in 2024. Now, Sen.Charles Schumer (D-NY) is introducing a bill to slim down the meat-packing oligopoly. 

• I fought the law, and the law won. Or did it? On Monday, the Justice Dept. cried uncle, and said it wouldn’t fight a court ruling that President Trump’s executive order against Big Law firms was unconstitutional for threatening to revoke their security clearances and strip them of government business. Then on Tuesday, the Justice Dept. reversed itself and said it will fight the court ruling. The fate of the government’s appeal is now in the hands of a judge, but legal observers say it's unlikely the President's order will withstand scrutiny even at the Supreme Court. Still, nine Big Law firms bowed to Trump, even as four firms pursued the appeal.

• A Target target? After 13 consecutive quarters of weak or falling sales, Target $TGT ( ▲ 0.23% ) finally has a plan, at least according to new CEO Michael Fiddelke. The plan: Spend $6 billion on stores, workers, and technology, slim the corporate workforce and add store associates, and revamp some of its fading categories, with a renewed emphasis on groceries. Will it work? Shares shot up 6.7% on Tuesday after Fiddelke’s announcement, but sales were down again in the quarter ending Jan 31, this time by 2.5%, and the share price has dropped more than 55% since a 2022 high. 

• When life gives you Lululemon, make Lululemonade. Lululemon $LULU ( ▼ 0.02% ) founder Chip Wilson is at war with the company’s board, which he says lacks the marketing and creative expertise to revive the fading athleisure brand. Wilson is the firm’s largest individual shareholder, with more than 8% of the company. The company says it’s been engaging with Wilson, and has pledged more transparency, but Wilson notes the company hasn’t recovered from a second see-through leggings fiasco earlier this year.

Trumplandia

The Iran War by Numbers (since Feb. 28):

• And…about those tariffs: International tariffs just rose 50% to 15% across the board, front the 10% duty Trump imposed on all imports after the Supreme Court’s February dismissal of his more onerous emergency tariffs. This time, Trump is using a rule that allows him to place duties on imports for 150 days, in order to reduce the balance of payments deficit. On Wednesday a judge ruled that the administration must begin repaying $130 billion in tariff payments from international companies, but the administration is expected to appeal.

Want more Cheddar?

You’re clearly into smart people talking about even smarter things. Lucky for you, that's literally our whole deal at Cheddar. We interview the brightest minds in business, finance, and tech. If you'd like more in-depth analysis from interesting people, lcheck out our where to watch page and turn us on 24/7! Your wallet will thank you and so, more importantly, will your mind. But also your wallet. Remember that. 

Peter S. Green is a veteran reporter and editor who has spent more than two decades covering business and finance from Eastern Europe to New York City, and has worked for Bloomberg News, The New York Post, The New York Times and The Messenger. He lives in New York City and is always looking for the next big story. Email him here.

It was hardly unexpected. The Supreme Court’s ruling last Friday that President Donald Trump had no authority to issue his “Liberation Day” tariffs has thrown the U.S.’s global trade relations into turmoil, with trading partners, importers and U.S. companies unsure which tariffs apply to what, and whether they will get back the $130 billion or more that they paid the U.S. Treasury to comply with the duties imposed under the International Emergency Economic Powers Act (IEEPA).  

“We are exactly where we thought we would be,” said Rebecca Homkes, a consulting economist and lecturer at the London Business School. Without the IEEPA, Trump announced he was imposing blanket tariffs of up to 15% on all goods coming into the country, using a trade tool called Section 122, which may have its own legal issues. It’s designed to combat balance of payments problems, and can only stay in place for 150 days, before Congress has to reauthorize the tariffs, something it’s unlikely to do with mid-term elections coming in the Fall.

Source: YouGov

Companies are either suing the government or working with advisors to figure out how big a refund they are owed. But Homkes says it’s unlikely the consumers will see either rebates or lower prices from the IEEPA rollback. “I would highly doubt they ever will,” she said. “We are still in an environment of pretty heightened volatility.” 

The good news is that after a year of tariffs, economists are discovering that prices don’t necessarily shoot up, though not necessarily for good reasons. “Tariffs can reduce growth, but they tend to not raise prices in the long term in the next year or so because growth slows sufficiently that higher prices are hard to pass through,” Jose Rasco, chief investment officer for HSBC Global Private Banking and Wealth Management, Americas, told BBTW. Still, he says the tariffs are coming at a time when the economy is booming for other reasons, so they can’t slow it down that much. 

“We're going to focus on the fundamentals and the fundamentals, accelerating economic growth, inflation that is not at the Fed's level of growth, but is well contained, and earnings that are accelerating at almost double the rate of the historic average, sign me up for that any day,” said Rasco. “So I think, you know, fixed income looks good. Equities look really good. We're just in the middle of a repricing of AI, which I think will work out by the end of the first quarter.”

Lawyers are urging importers to get their refund claims in now, while the trade court is waiting to give its ruling on refunds. “That is the question on everybody's mind, how to get refunds,” said Lizbeth Levinson, co-chair of the international trade practice group at law firm Fox Rothschild in Washington. “I'm recommending what I call the belt and suspenders approach; they should file a suit even now,” she said, and not wait for a court ruling.

Figuring out what that refund should be is massively complex, said Emil Stefanutti, CEO of Gaia Dynamics, a company that uses AI tools to help importers calculate duties. The U.S. uses 22,000 different product codes for imports, and each component of an imported product may have a different tariff rate. Where it gets really messy is with, say, a car part made with a chip from Taiwan, a lightbulb from Vietnam, and wiring from Thailand, all put together in China and installed into a car in Mexico. 

Source: The Cato Institute

It may take several years to settle the refunds, from the government reviewing claims to expected resistance from President Trump, who said tariffs could replace nearly all the government's revenue from income tax. But the real disruption will come from the ongoing uncertainty, said Stefanutti, who works closely with firms navigating tariff and import duties. 

“Whatever you had planned, whatever you thought you knew is changed,” he said. The Liberation Day tariffs had already upset companies’ expectations. “They plan for the year, they know the pricing, they know what kind of sourcing strategies they're going to use, and now they have to recalculate again. It’s taxing, no pun intended, for companies to keep up with this,” he said. 

“The real question isn't whether tariffs exist or will keep existing, it's whether policy stabilizes enough for companies to plan around it. The volatility that exists is very hard to predict, and I think companies are realizing that the era of frictionless global trade is over,” he said.

Big Businesses mentioned this week:

$NFLX ( ▲ 0.52% )  $WBD ( ▲ 0.18% )  $PSKY ( ▼ 2.57% )  $NVO ( ▲ 1.48% )  $LLYZ ( ▲ 0.28% )  $BBAI ( ▲ 5.48% )  $UBER ( ▼ 1.58% )  $BKNG ( ▲ 8.46% )  $DASH ( ▲ 3.22% )  $AXP ( ▼ 1.29% )  $AAL ( ▼ 5.38% )  $GRAL ( ▼ 4.15% )  $MSFT ( ▲ 1.35% )  $AMLX ( ▼ 6.31% )  $NVDA ( 0.0% )  $MBG ( ▼ 0.29% )  $STLA ( ▼ 2.68% )  $GOOG ( ▼ 0.84% )  $AMD ( ▼ 1.3% )  $META ( ▼ 1.07% )  $CRWV ( ▼ 5.89% )  $SAVEQ ( ▲ 0.43% )  

This week, big business!

• The usual suspects

• Want more Cheddar?

Chips on the shoulder

• Anthropic and Pentagon battle over Kill Switch: What do you do when the Pentagon says “Fire”? That’s the challenge for Anthropic, the self-professed ethical AI company, which said the Pentagon can’t use Anthropic software for autonomous killing machines or mass domestic surveillance. Defense Sec. Pete Hegseth summoned Anthropic CEO Dario Amodei to the Pentagon on Tuesday and issued an apparently contradictory ultimatum: If Anthropic doesn’t bend by Friday, the Defense Dept. will both label the company a supply chain risk, banning it from being used by the military and any military contractor, and at the same time invoke the Defense Production Act, effectively nationalizing the company — or at least its Claude AI software — so the military can use it without the company’s consent. The standoff comes at a pivotal moment for the AI industry. Anthropic is the only AI provider that has so far been approved for use in classified settings, but as AI technology far outpaces government regulation, Anthropic has set its own guardrails. Those rules limit what the Pentagon wants to do, hence the standoff. As Dean Ball, a former Trump AI adviser, warned,  the Pentagon’s stand could hurt both the military and Anthropic, calling Hegseth’s threat “incoherent.” 

Twitter tweet

• DeepSeek or DeepFake? China’s DeepSeek, which claimed to have used an array of lower-grade silicon chips and home-grown ingenuity to match the capabilities of the most advanced U.S. AI models for a fraction of the cost, was actually built and trained with Nvidia’s $NVDA ( ▲ 0.16% ) most sophisticated AI processor, the Blackwell, an unidentified Trump Administration official told Reuters. Nvidia’s stock fell 17% on the day in January 2025, when DeepSeek announced its supposed breakthrough, as investors questioned whether Nvidia’s high-cost, high-margin AI chips would find a market. The U.S. official did not say how China obtained the Blackwells, which are barred from export to China. Both Nvidia and the U.S. Commerce Dept. declined to comment on how the chips might have gotten to China. The official said DeepSeek was probably trained by having OpenAI, Anthropic and other AI models vet its responses.  White House AI chief David Sacks and Nvidia CEO Jensen Huang have argued that the U.S. should allow China access to advanced U.S. AI tech to keep it from developing its own chips. 

• The circularity continues: Desperate to catch up with booming rival Nvidia $NVDA ( ▲ 0.16% ) , chipmaker AMD $AMD ( ▼ 1.3% ) has been selling off parts of itself to potential customers. After selling a stake to OpenAI in exchange for chips, Meta $META ( ▼ 1.07% ) will now buy chips from AMD and get a stake in the company of up to 10%. It’s the reverse of what cash-rich rival Nvidia is doing. Nvidia has been buying stakes in its clients, OpenAI, xAI and data center developer CoreWeave $CRWV ( ▼ 5.89% ) , who use the cash to buy Nvidia chips. AMD’s stock rose 6% on news of the deal. 

• What if… Oooops! A thought experiment by a 30-year old stock analyst sent real-life tech stocks tumbling briefly on Monday, after it described a potential future where AI had sent unemployment soaring, gutted software companies, and sent shockwaves through financial markets, as an Occupy Silicon Valley movement protested outside the office of OpenAI and Anthropic. “What if our AI bullishness continues to be right...and what if that’s actually bearish,” Citrini Research published in a Substack post that went viral. The note said that it’s describing “a scenario, not a prediction. This isn’t bear porn or AI doomer fan-fiction.” Even so, some Wall Streeteers said the note was a necessary warning. “I don’t think it’s necessarily going to play out as they see it, but it’s a bit of a wake-up call that the economy already no longer resembles the one just a few years ago,” Neil Wilson, an analyst at Saxo Capital Markets, told the Guardian.

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The usual suspects

• Weakened Spirit: That tiny yellow dot on the horizon? That’s all that’s left of Spirit Airlines $SAVEQ ( ▲ 0.43% ) , after the failing budget carrier said it’s near agreement with its creditors. Nearly all flights will touch one of four hubs: New York, Detroit, Fort Lauderdale, or Orlando. Fewer U.S.-based passengers are risking flights to see family in Latin America, putting a big dent in the airline’s Central and South American flight plans. And expect fewer flights on low-demand Tuesdays and Wednesdays. With fewer flights and fewer planes (and fewer crew members), Spirit will cut its debt load to $2.1 billion from $7.4 billion. And if the company can emerge from bankruptcy, a merger could be in the cards, its attorney told CNBC.

• Cheaper Glutamides! NovoNordisk $NVO ( ▲ 1.48% ) says it's slashing prices for weight-loss drugs Ozempic and Wegovy as it ramps up a price war with rival Eli Lilly’s $LLY ( ▼ 2.02% ) Zepbound for a global market that could reach $139 billion by 2030. Both Ozempic and Wegovy will list for $675 a month, from next January - that’s a 50% cut for Wegovy and a 34% cut for Ozempic, which is focused on diabetes. Zepbound retails online for about $299 a month. The price cuts are aimed at the increasing number of people who need the weight loss drugs but who lack insurance that covers the cost. 

• Boeing’s Boost: Recovering U.S. planemaker Boeing $BA ( ▼ 2.31% ) has secured $30B worth of orders from three different Vietnamese airlines for nearly 100 jets. The Boeing buy is part of a proposed trade deal that would lower tariffs on Vietnamese imports to the U.S., which are stuck now at 20%. In 1997, Boeing bought McDonnell-Douglas, the plane maker that manufactured the A4E Skyhawk, the plane the late Sen. John McCain was flying when he was shot down by North Vietnamese forces during the Vietnam War. 

Do you have a reservation?

• Reservation Wars: Book a table or order in - Now you can do it all on Uber Eats $UBER ( ▼ 1.58% ) , as the restaurant reservation wars heat up. Last year, Uber Eats partnered with Booking Holdings’ $BKNG ( ▲ 8.46% ) Open Table (60,000 restaurants) and DoorDash $DASH ( ▲ 3.22% ) paid $1.2 billion to buy booking platform SevenRooms. In 2024, American Express $AXP ( ▼ 1.29% ) , which already owned Resy (20,000 restaurants), bought upscale-focused reservations app Tock (5,000 restaurants) for $400 million. Industry watchers expect the three firms to start an all-out war this year with price incentives and loyalty perks as each attempts to corner the market. “It’s three very large, very ambitious, very well-resourced companies all vying for the same exact piece of real estate, which is high-demand restaurants,” Resy and Eater founder Ben Leventhal told CNBC. DoorDash is expected to lead the shakeup. It’s got about 63% of the delivery market, to Uber Eats’ 25%, and Grubhub’s 6%. SevenRooms claims more than 15,000 restaurants worldwide use its service. Last year, Uber sued DoorDash saying it was strong-arming restaurants into dropping Uber Eats. DoorDash called the suit “a cynical and calculated scare tactic from a frustrated competitor.”

• Never-ending story: Is Netflix $NFLX ( ▲ 0.52% ) about to lose its bid for Warner Bros. Discovery $WBD ( ▲ 0.18% ) ? It looks like the ball is back in play after Paramount Skydance $PSKY ( ▼ 2.57% ) upped its offer for WBD by $1 a share, and promised to pay off Netflix if the streaming giant gets jilted by WBD shareholders. Those shareholders vote on March 20 on whether to accept the Netflix deal, which applies only to the studio and streaming assets, leaving CNN and other linear channels ready for a spinoff. Netflix is offering to buy the studios and HBO Max for $27.75 a share, or $72 billion. The prior bid from Paramount was $30 a share, or $77.9 billion, for the entire company, including its cable networks CNN and TNT. The deal is no financial stretch for Netflix, with its market cap of $350 billion. Paramount’s market cap, at $11.2 billion, means it will load the company with a mountain of debt to complete the deal, and David’s Dad, Oracle founder Larry Ellison, has promised to backstop the bid. Talks with both sides will continue, but Paramount’s board said there’s no guarantee it will find the Ellisons' bid “superior,” and “continues to recommend” the Netflix offer. President Donald Trump himself jumped into the fray this week, telling Netflix to dump board member Susan Rice, a former Obama national security adviser. That’s because Rice told podcaster and former U.S. Attorney Preet Bharara that when Democrats regain power, they shouldn’t “forgive or forget” corporations that “bent the knee” to Trump. “Netflix should fire racist, Trump Deranged Susan Rice, IMMEDIATELY, or pay the consequences,” Trump wrote on Truth Social, atop a repost of a post by Trumpfluencer Laura Loomer.

Marilyn Monroe: Liked diamonds. Investors? Not so much…

• Diamonds are definitely not an investor’s best friend. Don't listen to Marilyn. Global mining giant AngloAmerican $AAL ( ▼ 5.38% ) wrote down the value of its De Beers diamond business by half to $2.3 billion, the third cut in three years, as the Chinese market cools and lovers across the globe opt for increasingly realistic—and cheap—synthetic diamonds. The company is now worth about a quarter of what it was three years ago. Last year, the De Beers unit booked a loss of nearly $500 million. De Beers is looking to spin off the diamond business this year. Diamond prices have fallen from a high of over $8,000 a carat in 2012 to just over $4,000 today. 

• The Unholy Grail fail: It was supposed to be the answer to many of the world’s medical problems: A simple blood test, developed by a medtech startup Grail $GRAL ( ▼ 4.15% ) , would detect cancer long before other tests, extending lives and slashing care costs by allowing patients to be treated long before they had visible symptoms. But a three-year study of 142,000 British adults showed no significant reduction in early cancer detection. Some 185,000 of the tests were sold in the U.S. last year, bringing in revenue of $136.8 million, but Grail lost $408 million. When word of the test results came out, the stock lost 58% of its value. Still, it’s more than tripled in value since September, and it recovered slightly this week. Despite the failure of the UK test, analysts say a few more years of data could show some efficacy, letting the test win FDA approval, which could make it eligible for Medicare reimbursement.

• Seahawks for Sale? Fresh off their crushing defeat of the New England Patriots in Super Bowl LX, the Seattle Seahawks are up for sale. That’s not an unexpected move: The team was owned by Microsoft $MSFT ( ▲ 1.35% ) co-founder Paul Allen from 1997 until his death in 2018. Since then, it’s been owned by Allen’s estate, which his sister Jody Allen has been slowly winding down as she donates the proceeds to charity. Before their Super Bowl win, the Seahawks were valued at about $7 billion according to a CNBC ranking, ranking them 19th in the NFL by value, with 2024 revenue of $638 million. The question is, of course, what they’re worth now?

Aston Martin: Was this photo taken approximately the last time the company made a profit?

• You only live, er…thrice? Aston Martin $AMGDF ( ▼ 4.6% ) , makers of the famous James Bond car with the ejector seat, laid off 20% of its workforce, saying U.S. tariffs were killing its business. Aston Martin sold just 5,448 cars in 2025, down 10% from 2024. It lost 363.9 million pounds last year, down from a 289.1 million pound loss in 2024. The U.S. is Aston Martin's largest single market, but only 25,000 UK-made cars are allowed into the U.S. every quarter, on a first-come first-serve basis. Shares are down 50% in the past year.

• Wayve g’bye, Tesla $TSLA ( ▼ 0.1% ) : Wayve, a UK-based maker of self-driving software, says it’s raised $1.2 billion from investors including Softbank $SFTBY ( ▼ 4.02% ) , Microsoft $MSFT ( ▲ 1.35% ) , Nvidia $NVDA ( ▲ 0.16% ) , Uber $UBER ( ▼ 1.58% ) , and automakers Mercedes $MBGAF ( ▼ 2.58% ) Nissan $NSANY ( ▼ 4.5% ) , and Stellantis $STLA ( ▼ 2.68% ) . The raise values Wayve at $8.6 billion. Wayve isn't building its own cars like Tesla, or deploying fleets of self-driving taxis like Alphabet's $GOOGL ( ▼ 0.74% ) Waymo. Instead, carmakers incorporate Wayve’s software into their vehicles.

Want more Cheddar?

You’re clearly into smart people talking about even smarter things. Lucky for you, that's literally our whole deal at Cheddar. We interview the brightest minds in business, finance, and tech. If you'd like more in-depth analysis from interesting people, lcheck out our where to watch page and turn us on 24/7! Your wallet will thank you and so, more importantly, will your mind. But also your wallet. Remember that. 

Peter S. Green is a veteran reporter and editor who has spent more than two decades covering business and finance from Eastern Europe to New York City, and has worked for Bloomberg News, The New York Post, The New York Times and The Messenger. He lives in New York City and is always looking for the next big story. Email him here.

Is a “prediction market” a gambling platform or an investment vehicle? That’s the question dividing state regulators from the Trump Administration, which is lining up its forces behind the prediction markets, arguing that they serve a useful function, allowing Americans to “hedge commercial risk” and serve as “an important check on our news media.”

More than $1 billion was wagered on the Super Bowl on a single prediction market site, Kalshi $KALSHI ( 0.0% ) , with $100 million riding on which songs Bad Bunny would sing at the halftime show. But that transaction volume is coming at a high cost, taking profits away from legalized gambling, taxes away from government, control away from state governments, and is accelerating a gambling crisis among young men. 

Growth in Gambling Crisis Indicators (2017-2025)

The stakes got higher this week, when the Trump Administration’s Commodity Futures Trading Commission, which regulates derivatives and other financial instruments, announced it was filing a friend-of-the-court brief to defend its “exclusive jurisdiction” over prediction markets.

 “The CFTC will no longer sit idly by while overzealous state governments undermine the agency’s exclusive jurisdiction over these markets by seeking to establish statewide prohibitions on these exciting products,” CFTC chair Mike Selig wrote in the Wall Street Journal this week. 

Backers of the markets, including key players like Kalshi and Polymarket $POLYMARKET ( 0.0% ) , say they are providing financial instruments much like stock options and derivatives, which are essentially bets, not weighted down by ownership of equity (shares) or debt (bonds), on which way stocks, bonds, and markets will move. But state governments are getting ticked off, and they say the prediction markets are nothing more than gussied-up sports books. Their ire has several sources: For one thing, the platforms’ profits from derivatives are taxed at much lower rates than gambling books, generally 15-20% for derivatives and as much as 50% for gambling profits. That’s a lot of money that used to flow into state coffers from places like Caesar’s Palace. For another, by one estimate, prediction markets siphoned off $8 billion from regulated, tax-paying sports books last year. 

Kalshi and Polymarket, for instance, allow “bets” or “contracts” or “predictions”, however you choose to describe them, on just about anything, from which songs Bad Bunny will sing at the Super Bowl halftime show, to whether White house Spokesperson Karoline Leavitt would speak for more than 65 minutes at a recent press conference. Ms. Leavitt cut herself off just seconds before that, igniting the suspicions of Kalshi-watchers that she might have known about the bet.

Age matters, too. Most states limit sports gambling to adults over 21. CFTC-regulated markets are open in most cases to 18-year-olds. “We’re seeing patients who’ve never stepped foot in a casino, who lost everything on their phones. The average age is dropping. The speed at which people get into serious trouble is accelerating,” said Rick Benson, a gambling counselor. “In 30 years of treating gambling addiction, I’ve never seen anything like this.”

Where prediction markets differ from casinos or sports books is that users bet against each other, rather than the house, and the house takes a percentage of each transaction on its platform. The explosion of sports betting began after the Supreme Court legalized sports betting in 2018, and now 39 states have legalized it. 

“If you’re a sportsbook operator in Nevada, for example, there’s a lot you have to do to comply with regulations here and minimum internal control standards,” Gregory Gemignani, a gaming law lawyer and professor at the University of Nevada, Las Vegas, told The Guardian. “The prediction markets have none of that.”

Massachusetts and Nevada are already working to limit prediction markets in their states, and finding some help from the courts. But the federal government is backing the CFTC, with a twist: What’s good for Kalshi and Polymarket is also good for the President’s family. Donald Trump, Jr., has invested in Polymarket through his VC firm and is also a strategic advisor to Kalshi. 

Utah Gov. Spencer Cox says he’s going to fight the CFTC and its chair, Mike Seliig, who claims the prediction markets are not gambling and help Americans hedge risk. CFTC approval has allowed prediction markets to operate in all 50 states, even those, like Utah, that do not allow gambling. “I don’t remember the CFTC having authority over the 'derivative market' of LeBron James rebounds,” Cox posted on X this week. “These prediction markets you are breathlessly defending are gambling—pure and simple. They are destroying the lives of families and countless Americans, especially young men. They have no place in Utah.”

Maybe not in Utah, but with the might of the federal government behind them, the showdown over prediction markets may find its way to the Supreme Court.

Big Businesses mentioned this week:

$KALSHI ( 0.0% )  $POLYMARKET ( 0.0% )  $PSKY ( ▼ 2.57% )  $WBD ( ▲ 0.18% )  $NFLX ( ▲ 0.52% )  $AAPL ( ▼ 0.85% )  $BAC ( ▼ 0.97% )  $NYT ( ▲ 1.02% )  $AMZN ( ▲ 0.98% )  $UNH ( ▼ 1.09% )  $BAYRY ( ▼ 0.91% )  $GOOG ( ▼ 0.84% )  

This week, big business!

• The usual suspects

• The short stack

• Trumplandia

• Elon’s world

• Want more Cheddar?

The usual suspects

Sorry, Bugs: We’re gonna have to wait a little longer until this movie ends.

• That’s NOT all, Folks…  Larry and David Ellison’s Paramount Skydance $PSKY ( ▼ 2.57% ) is back in talks with studio and streaming giant Warner Bros. Discovery $WBD ( ▲ 0.18% ) , promising to sweeten its offer, after rival suitor Netflix $NFLX ( ▲ 0.52% ) agreed to a seven-day waiver on its pending offer for WBD. The waiver is part of Netflix’s merger agreement with WBD, and gives Paramount one last chance to improve its offer. Netflix then has the right to match or better the Paramount offer. Provisions like this are often made a part of big merger deals so that the Board of a target company can prove it honestly pursued the best deal for shareholders. Paramount told WBD it would pay $31 a share, and might improve its offer. But Paramount is a tiny company, by comparison to Netflix, that may be biting off more than it can chew. Paramount’s market cap is just $11.2 billion, compared with Netflix’s market cap of $329 billion. In a letter to Paramount, WBD chair Samuel Di Piazza and CEO David Zaslav said the WBD board still believes Netflix’s offer is better, and noted that Paramount’s “significant debt financing” creates “material closing uncertainty” given Netflix's investment-grade credit rating and positive free cash flow. Paramount wants to buy all of WBD, for about $77.9 billion, but WBD’s board has already pledged to split off the linear networks, including CNN, from its streaming and studios business, which Netflix aims to buy for $72 billion. Netflix chief Ted Sarandos said Paramount is “flooding the zone with confusion,” and notes his deal is all cash. Shares of WBD rose 3% Tuesday, when the waiver was announced, while Paramount shares rose 5%, and Netflix shares rose less than 1 %. The competing offers raised the prospect that shareholders may see the two suitors fight to offer a higher price. “It’s about time the actual headline price bidding heated up in what has to be one of the most inactive corporate bidding wars in history,” Eric Talley, a business professor at Columbia Law School, told the New York Times.

• Buffett’s rotten Apple. In his last quarter as CEO of Berkshire Hathaway $BRK.A ( ▲ 2.74% ) , Oracle of Omaha Warren Buffett sold 10.3 million shares in Apple $AAPL ( ▼ 0.85% ) and 50.8 million shares of Bank of America $BAC ( ▼ 0.97% ) and, perhaps not so surprisingly, bought 5.1 million shares of thriving legacy media company The New York Times $NYT ( ▲ 1.02% ) . The moves were disclosed in a regulatory filing this week. Buffett was once a big believer in newspapers and owned the Buffalo News, the Tulsa World in Oklahoma, and the Richmond Times-Dispatch in Virginia until 2020. Berkshire also sold 7.7 million shares in Amazon $AMZN ( ▲ 0.98% ) , slashing its stake by 77%.

• UnitedHealth’s CEO side bets. Stephen Hemsley, the CEO and chair of UnitedHealth $UNH ( ▼ 1.09% ) has been investing millions of his own dollars in privately held healthcare-related startups that often do business with UnitedHealth, which never told its own shareholders about the potential conflict, the Wall Street Journal reports. UnitedHealth says the investments comply with the company’s conflict of interest policies. The story also didn’t quote anybody who said the side-bets are fishy. It simply reported on them for the first time.

• Bayer Roundup payout: It probably would have been a good idea to mention on the label that weedkiller Roundup could cause cancer. Instead, German pharma and chemical giant Bayer $BAYRY ( ▼ 0.91% ) has been locked for nearly a decade in more than 40,000 lawsuits in the U.S. over claims the weedkiller, used by farmers around the world, causes non-Hodgkin's Lymphoma. Now, Bayer says it’s agreed to pay plaintiffs $7.25 billion to settle the suits. The deal still needs court approval, which is not a sure thing, and a pending Supreme Court decision could determine whether federal law would shield Bayer from claims in state courts. Bayer got into this hole when it acquired Roundup manufacturer Monsanto in 2016. Shares in Bayer rose 7% on the announcement of a proposed deal. Bayer is up 142% in the past year but down 18% over the last five.

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The short stack

Commercial property delinquency rates are on the rise. Source: Trepp.

• Another real estate crash? Office landlords are falling behind on their mortgage payments at a record rate, with 12.34% of office loans wrapped into those famously toxic commercial mortgage-backed securities technically “delinquent,” according to real estate data firm Trepp, and lenders are getting nervous. What’s causing the delinquencies and setting nerves on edge? Two things that have been pretty obvious to ordinary consumers, and should have been clear to commercial investors: As loans to office buildings come up for refinancing (commercial mortgage typically refinance every seven years), it’s clear that mortgage rates aren’t going down anytime soon, and even more obviously, hybrid work means there’s just no longer a need for so much office space, especially the fancy expensive stuff in city centers. Lenders are back adopting the strategy that caused the 2008 commercial real estate crash, when they just kept hoping the market would improve, a tactic called “extend and pretend.” About $25 billion of CMBS loans are now past maturity without being paid off, liquidated, or formally extended. Across all markets, Trepp reported, some $76.6B in CMBS are set to mature in 2026, and 36% of them are at 8% interest or below, meaning many of the properties will start hemorrhaging money, and lenders may have to take them back. 

• Some call it “Activist investing”. Whatever your preferred word, it’s back in the news. Paul Singer’s Elliott Management is back in the ship business, this time, planning to shake up Norwegian Cruise Lines $NCLH ( ▼ 0.9% ) by taking a 10% stake in the travel company. Elliott has been nudging the foundering cruise line for months, and last week, Norwegian tossed CEO Harry Sommer overboard, replacing him with the former CEO of Subway. The Wall Street Journal says Elliott is working with the former COO of rival Royal Caribbean, and says changes in management, cost control, and improved customer experience could push the stock up to $56 a share from $24. In 2012, so-called vulture funds linked to Elliott seized the Argentine navy’s training ship, a three-masted square-rigged sailing ship called the Libertad, in a dispute over sovereign debt repayments. 

• Anthropic’s Problem: Anthropic’s Claude is the only LLM that can be used in classified settings, but Pete Hegseth’s Defense Department doesn’t want to work with Anthropic, and a Trump brothers-adjacent hedge fund, 1789 Capital, recently declined to follow through on a planned nine-figure investment in Anthropic, the Wall Street Journal reported. Why? Because Anthropic’s leaders have criticized Trump, the Journal reported, and because it’s been lobbying for AI regulation and refusing to let the Pentagon use its AI for domestic surveillance or autonomous weapons. OpenAI, Google $GOOG ( ▼ 0.84% ) , and xAI all say they’re cool with having their AI used in any “lawful use” cases. Anthropic is already on edge over the Pentagon’s claim that Claude was used in the capture of Venezuelan President Nicolas Maduro in January. Now the journal says the Pentagon views Anthropic as a “supply chain risk.” 

Trumplandia

Baseball caps signed by Donald Trump at the White House last October. Source: The White House

• Japan’s Big Investment…um, wait for it. Japanese firms are planning to invest as much as $36 billion in U.S. ventures, the U.S. Commerce Dept. said this week. Softbank $SFTBY ( ▼ 4.02% ) is promising $33 billion for a gas-fired power station in Ohio, and an as-yet unidentified investor will commit $2 billion to a new oil terminal in Texas. That's a far cry from the $550 billion Trump trumpeted last year, when he walked back tariffs on Japanese goods. It’s not yet clear who will be making the investments, nor whether the investments will be cash for ownership stakes or simply the sale of equipment made by Japanese companies. So far, there’s been no comment from the Japanese government or companies, but the move comes ahead of Prime Minister Sanae Takaichi’s visit to Washington next month. The New York Times reports that Japanese companies have little enthusiasm for investing in the U.S., describing the projects as “strategic but less than bankable.”

Elon’s world

• Business intelligence? Just days before Elon Musk announced his plans to merge xAI and SpaceX into what he says will be a trillion-dollar-plus company, Musk sold an unidentified stake in xAI to Saudi Arabia’s AI company, Humain, created last year by Crown Prince Mohammed bin Salman. Humain became “a significant minority shareholder in xAI, with its holdings subsequently converted into shares in SpaceX,” the company said in a statement. The deal gives the Islamic regime a stake in a key U.S. government contractor, tying the fate of the U.S. closer to that of the Saudi royal dynasty. It comes after a visit to Washington in December by the prince, after which the White House agreed that Saudis could buy special U.S. computer chips that defense analysts feared could end up in the hands of China. 

• Ukraine got a rare piece of good news this week, when Starlink shut down unauthorized users in Russia and Ukraine. All of Russia and its military are banned by U.S. sanctions from using Starlink, and the shutdown halted a vast number of Russian drones and missiles using the Starlink guidance to target Ukraine. Media reports credit the shutdown of Russian Starlink devices for Ukraine’s capture earlier this month of 201 square kilometers of territory from Russian forces near the Zaporizhzhia nuclear power plant. Musk’s move follows a series of independent media reports of smuggled Starlinks. Meanwhile, the billionaire battle over whose starship is bigger entered a new phase, as Amazon’s $AMZN ( ▲ 0.98% ) Low-Earth Orbit satellite network, now called LEO, but previously known as Kuiper, for a 20th-Century Dutch astronomer, may be catching up to Starlink: Last week it won FCC approval to deploy 4,500 more internet satellites, bringing its planned total to 7,700. Musk’s starlink has more than 9,000 satellites and 9 million customers. Amazon is promising to start offering internet service later this year. Amazon is under pressure from the FCC to deploy 1,600 satellites by July. It asked the regulators to give it another year, saying there aren't enough FAA-approved rockets available to hoist its satellites into space. Europe’s Arianespace will put 32 LEO satellites in orbit this week. Meanwhile, even Elon has real estate fever. Starbase, the newly incorporated South Texas town that’s home to the SpaceX launch pad, wants to add about 11 square miles, about 7 times larger than the city’s current size, including some wildlands owned by Texas and the federal government. 

• Grok gets all ethical on Elon: So while Elon Musk has been urging X users to upload their medical files to Grok, his AI chatbot, to get a second opinion, Grok has been taking its cues from Hippocrates with a sprinkle of peak AI passive-aggressivity:

Want more Cheddar?

You’re clearly into smart people talking about even smarter things. Lucky for you, that's literally our whole deal at Cheddar. We interview the brightest minds in business, finance, and tech. If you'd like more in-depth analysis from interesting people, lcheck out our where to watch page and turn us on 24/7! Your wallet will thank you and so, more importantly, will your mind. But also your wallet. Remember that. 

Peter S. Green is a veteran reporter and editor who has spent more than two decades covering business and finance from Eastern Europe to New York City, and has worked for Bloomberg News, The New York Post, The New York Times and The Messenger. He lives in New York City and is always looking for the next big story. Email him here.

—By Peter S. Green

While the ups of the stock market and the downs of cryptocurrency have been capturing the attention of investors and market watchers, a quieter downturn has been underway since the beginning of the Trump Administration, as the U.S. dollar weakens. Generally, a weak dollar should be good for the economy, lowering the cost of U.S. goods on the world market, and boosting jobs and manufacturing at home. After all, by keeping the yuan artificially low, China built itself into the world’s fastest-growing economy.

The U.S Dollar Index over the last year. Source; Trading Economics.

The dollar is down nearly 14% against the euro since Donald Trump was inaugurated, and the U.S. Dollar index $DXY ( 0.0% ) , a broader measure of the dollar’s strength, is down 11.5%. Overall exports are up 5%, but a lot of that is due to exports of civilian aircraft (one company, Boeing $BA ( ▼ 2.31% ) , got safety clearance to resumemaking 737 jets) and gold, whose price is up 70% in the last 12 months. 

“When you get a weaker dollar, it does tend to boost manufacturing and exports, and help certain service sectors that can export their services globally, such as tech,” notes Joe Brusuelas, chief U.S. economist for RSM, a global network of consulting and accounting firms focused on middle-market companies. But he adds, “the other part of this is that when the dollar depreciates, you’re creating conditions for greater inflation, and everybody’s purchasing power declines, including those manufacturing firms and tech firms that are exporting their software.”

But this time, that logic isn't holding up, said Brusuelas. Despite relatively contained inflation, at about 2.7%, he said investors have shifted their focus on risk away from inflation and a stronger economy to what he called “the sustainability of the U.S. fiscal path,” and the “unpredictability” coming out ofWashington which has undermined global investors’ faith in the dollar as the ultimate safe haven.

“If you cut taxes and you increase tariffs, the value of the dollar should go up,” said Brusuelas. “The problem is those policies were put in place alongside other policies that caused global investors to respond adversely by focusing on the unfunded tax cuts and the unwise and erratic implementation of trade policy.” 

Take soybeans, for instance. In 2024, the US accounted for about 21% of China’s soybean imports by value, while Argentina had about 3.9%. In 2025, the U.S. share was just 15%, while Argentina’s share nearly doubled to 7%. Most of that decline was because of tariffs placed on China in the first half of last year, as the Trump administration sought, without much success, to cut the U.S. trade deficit. “Turn over the apple cart, and you’re going to spill some fruit,” said Brusuelas. 

Last week, a group of farmers and former agriculture officials warned in a letter to Congress that the Trump Administration's trade policies risked “a widespread collapse of American agriculture.” 

Javier Palomarez, CEO of the United States Hispanic Business Council, says a lot of his members are hurting from the weaker dollar, as everything from imported construction material to parts for bicycles and technology gets more expensive. It also drives up interest rates, as the U.S. Treasury has to offer higher dollar-denominated returns to attract investors. “Our number one challenge has always been access to capital and credit, and a weaker dollar makes it even harder to secure a loan," Palomarez said. “A weaker dollar means less purchasing power on Main Street, higher inflation, higher operating costs.”

Some of the stresses on U.S. business are transitional, said Steve Wyett, chief investment officer at BOK Financial, part of the Bank of Oklahoma. As the U.S. tries to reduce its dependence on imports (through tariffs) and export more (through tax breaks), there’s what he calls a “timing differential.” “That’s where the dollar can play its part as a relief valve,” said Wyett. “It makes our exports to Europe more affordable to Europe.”

But it’s not clear that the declining dollar is going to bring more investment to the U.S., or even bolster the economy, notes Dominic Pappalardo, chief multi-asset strategist for Morningstar Wealth $MORN ( ▲ 1.6% ) . The growing U.S. debt, at over $38 trillion, is “problematic and unsustainable for the long term,” he said, and combined with rising interest rates in other countries, particularly Japan, investors are moving money out of the U.S. that also puts downward pressure on the dollar, which Pappalardo says is still too expensive. About a year ago, he notes, the dollar was the third most-expensive currency among 34 covered by Morningstar. Now it’s about the 10th priciest and it still has room to fall, probably in the single digits, he said.

Big Businesses mentioned this week:

$DXY ( ▼ 2.25% )  $BA ( ▼ 2.31% )  $MORN ( ▲ 1.6% )  $AAL ( ▼ 5.38% )  $DAL ( ▼ 3.95% )  $UAL ( ▼ 5.03% )  $SBUX ( ▲ 1.59% )  $KHC ( ▲ 0.79% )  $PSKY ( ▼ 2.57% )  $WBD ( ▲ 0.18% )  $NFLX ( ▲ 0.52% )  $LHX ( ▼ 2.35% )  

This week, big business!

• The usual suspects

• The short stack

• Trumplandia

• Want more Cheddar?

The usual suspects

That’s one way to fly…

• Coffee, tea, or profit-sharing? Pilots and flight crews at American Airlines $AAL ( ▼ 5.38% ) say the company’s CEO should go, after they found their end-of-year profit share was worth about $150 per employee. At 0.3%, that contrasts with Delta’s $DAL ( ▼ 3.95% ) profit share of 8.9% of profits or nearly four weeks' average pay per employee, and United’s $UAL ( ▼ 5.03% ) profit share of about two weeks’ pay. And it’s not just the profit-sharing. American’s flight cancellation rate is the highest of all major U.S. airlines, and despite having more flights and more domestic passengers than its major rivals, American reported a record $54.6 billion in revenue for 2025. With net profits of $111 million. The unions say it’s time for CEO Robert Isom to cash in his miles and fly home. “We require leaders who are willing, equipped, and empowered to get the house in order,” the Allied Pilots Association union said in a letter to the airline’s board. Investors echo the discontent: American shares are down 12.5% in the past year, while shares in Delta and United are both up about 10.3%.  

• It ain’t just lemon pound cake anymore: As Starbucks $SBUX ( ▲ 1.59% ) $100-million CEO Brian Niccol continues his revamp of the venerable coffee chain, Starbucks is rolling back its menu slimdown, adding more food options (well, snacks, really) and drinks in a major update. Now on the menu: Yuzu-filled croissants and a strawberry matcha loaf, along with a new basic dark brew called 1971 (the year the first Starbucks opened in Seattle). Starbucks' share price has been on a bit of a rollercoaster since Niccol took over in September 2024, up just 4.9% since then. While the stock has seen overall growth under his leadership, it has experienced significant volatility, reaching a 52-week high of $117.46 in March 2025 before paring gains as investors weighed the long-term execution of his "Back to Starbucks" turnaround plan. It’s down 17% since then. Compare that to the S&P 500, which is compared to the S&P 500, which is up 16.8% over the same period, and you’ve got a 33% difference.

• Lobster trapped: It takes a lot of work to survive when you’re an endangered species. That’s what Red Lobster CEO Damola Adamolekun is finding out, two years into his effort to turn around the troubled casual dining seafood chain. After closing 130 restaurants during its 2024 bankruptcy, Adamolekun told the Wall Street Journal that he’s looking at closing more of the less profitable locations. A big part of the problem? Not those all-you-can-eat shrimp deals, but a 2014 move by a previous owner, PE firm Golden Gate Capital, to cash out by selling the chain’s real estate and tying it down in long-term leases. Well, that and the rising prices, dimming consumer confidence, and a pandemic-induced decline in eating out. New offerings, like the $28 boil bag, boosted foot traffic 18% last summer. But the biggest challenge to profitability is the leases on the 550 remaining restaurants that often tie poorly performing restaurants to more profitable ones with the same landlord.

• On second thought, I WILL have ketchup with my mac ‘n’ cheese. New CEO Steve Cahillane says he’s icing plans to split food giant Kraft Heinz $KHC ( ▲ 0.79% ) , and instead will end what he called a decade of underinvesting in promoting its brands. He says the company will spend $600 million on sales, marketing, and R&D. Kraft and Heinz merged in 2015, with the backing of Warren Buffett’s Berkshire Hathaway $BRK.A ( ▲ 2.74% ) , but even Berkshire’s new CEO, Greg Abel, still the food giant’s biggest shareholder, said the rethink was a good idea. And Kraft Heinz sure needs some new ideas. Its share price is down 15.5% in the past year, and 45% since the merger, and it’s had nine straight quarters of declining sales. “It certainly didn’t turn out to be a brilliant idea to put them together,” Buffett told CNBC in October, lamenting the fact that Berkshire had no say in the decision to split, despite holding about 27.5% of the company’s stock. “But I don’t think breaking them apart will fix it,” he added.

• Paramount pulls out the stops: Larry and David Ellison’s Paramount Skydance $PSKY ( ▼ 2.57% ) says it’s added some bells and whistles to its $30-a-share offer for Warner Bros. Discovery $WBD ( ▲ 0.18% ) , promising to pay 25 cents a share every three months, if its bid doesn’t close by the end of 2026. It also offered to pay the $2.8 billion breakup fee that WBD would owe rival Netflix $NFLX ( ▲ 0.52% ) if it rejects the Netflix bid of about $27.50 a share. WBD’s board says it worries that Paramount won't be able to close the deal, saying it’s too dependent on debt and financing by foreign investors, including a Middle Eastern investment fund, which could lead regulators to block a deal. But Paramount may have the regulatory approval angle covered: Larry Ellison is a close friend of President Donald Trump, and son David Ellison, the Paramount CEO, met twice with Trump at the White House last week, CNN reports. A few days later, Trump told NBC he wasn’t involved in the talks. Two days after that, news broke that the Dept. of Justice was investigating whether the deal would give Netflix potential monopoly power in the streaming industry. Meanwhile, Ancora, an activist investor group, says it’s amassed a $200 million stake in WBD and favors the Paramount deal. “Paramount Skydance rather materially just addressed most of the Warner Bros Discovery Board’s concerns,” Seaport Research analyst David Joyce wrote in a note this week. 

• EV havoc: Ford $F ( ▼ 3.67% ) said it’s taking a $900 million charge in the fourth quarter from the tariffs, after the White House cut a tariff credit plan by more than half. Together with a previously announced charge of $19.5 billion to roll back its EV plans, Ford announced an $11.1 billion loss for the fourth quarter, its largest ever, after a profit of $1.8 billion a year earlier. Revenue of $45.9 billion was down 5% from a year earlier. Ford says EV losses will continue for three years. Altogether, Ford, GM, and Chrysler owner Stellantis have announced more than $50 billion in charges for cutting back on EVs, largely due to rollbacks in government tax credits and emission rules, and in government-sponsored expansion of charging stations. 

• I spy with my little car: After transit authorities in Norway and Denmark found that Chinese bus maker Yutong could remotely shut down their buses, U.S. regulators are now banning cars made or sold in the U.S. from using any software that connects to the cloud. The fear: Chinese state-linked actors could use a car's sensors to track Americans or interfere with their driving. Automakers have until March 17 to certify that their cars and parts don't use Chinese-written code. Chinese-made high-tech cars will have to be disconnected from the cloud. The rule has prompted a flurry of M&A deals as Chinese firms try to sell control of their companies to non-Chinese owners by the deadline.

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The short stack

Kalshi: It’s go time in the prediction markets.

• You bet I will! These are boom times for prediction markets. Kalshi $KALSHI ( 0.0% ) CEO Tarek Mansour said Super Bowl Sunday trading volume blew past $1 billion, up 28-fold from last year, with more than $100 million bet on what Bad Bunny’s first song would be. Meanwhile, the casino industry says Kalshi and its rival Polymarket $POLYMARKET ( 0.0% ) are in fact online gambling platforms, and should pay gambling taxes and be regulated just like casinos and online sports books, like DraftKings $DKNG ( ▲ 0.12% ) and FanDuel. States including Massachusetts and Nevada are trying to ban prediction markets from sports bets, a move that could cripple the industry. About three-fourths of Kalshi’s trading volume (and its commissions) comes from sports. Meanwhile, a study by the National Bureau of Economic Research has found that Kalshi bettors predict economic news and data just about as well as a room full of economists with Ivy League PhDs. Kalshi markets, the paper said, “yield well-calibrated, rapidly updating density forecasts on important economic variables.” In other words, they get it right. 

• Heavyweight battle: Danish Wegovy-maker NovoNordisk $NVO ( ▲ 1.48% ) wants a U.S. court to block telehealth portal Hims & Hers $HIMS ( ▼ 3.47% ) to stop selling compounded versions of Novo’s patented semaglutide weight-loss pill. Hims was authorized to compound the drug because of a supply shortage in the U.S. But Novo says it's ramped up U.S. production, and that shortage is over. The FDA is with Novo on this one, but the fight may drag on.

• Bit of a blunder: A clerical error at South Korean crypto exchange Bithumb led to what could have been the second-worst crypto crisis in blockchain history. Instead of handing out rewards worth a total of 620,000 Korean won, worth about $430, the exchange handed out prizes totaling 620,000 Bitcoins, worth about $42 billion. The exchange was able to halt all the transactions within about 30 minutes, but still, recipients cashed out about 100 bitcoins, at the time worth about $9 million, and their sell-off may have helped propel a wider Bitcoin decline. More worrying: How Bithumb was able to hand out 620,000 Bitcoins, when it only held a reserve of 50,000 coins.

Trumplandia

• It looks good on paper: The Trump Administration’s growing pile of stakes in major U.S. corporations may look good on the books, but it doesn’t appear to be doing much good for the U.S. economy. Rare earths miner MP Materials' $MP ( ▼ 5.08% ) stock has doubled since the Pentagon announced it would take a stake of up to 15% in the company, to secure a source of the raw materials needed for military equipment. Intel’s $INTC ( ▲ 0.81% ) share price has more than doubled since the Commerce Department took a 10% stake in August 2025. Defense contractor L3Harris Technologies $LHX ( ▼ 2.35% ) is flat since a January announcement that the Pentagon was investing $1 billion in the production of rocket fuel, and could turn that into shares in an IPO of the rocket fuel division later this year. Governments have never been good at picking the winners in business, and may even be stifling nascent competition. “It is an invisible barrier to startups and new market entrants,” Scott Lincicome, of the Cato Institute, told CNBC. “Why would you ever want to enter a market that you know your chief competitor is backed by the U.S. government?”

• Everybody wants a job, but how many are there to go around? A long-awaited employment report released Wednesday suggests more people had been hired in January than had been expected, lowering the unemployment rate to 4.3% from 4.4%, and appearing to give the Fed an excuse — if it wants one — to lower interest rates without boosting unemployment. But the numbers at this point are best guesses based on limited information — mainly data from payroll processing firms and state unemployment offices. That point was hammered home with accompanying revisions to last year’s numbers, delayed by the government shutdown last year that check the early numbers against unemployment insurance tax records. The revisions showed an astounding 898,000 fewer people were employed in March 2025 than previously thought. That means the U.S. added only 181,000 jobs in 2025, 70% fewer jobs than the 584,000 new jobs initially reported. Worse yet, the Job Openings and Labor Turnover Survey released last week showed a massive drop in December in the number of unfilled jobs, suggesting that despite the January uptick, future job growth ill be weak. Even as the economy continues to grow, companies are cutting back on pay increases and hiring, instead prioritizing productivity, technology adoption, and cost discipline. Economists are calling it a “jobless expansion.”

Want more Cheddar?

You’re clearly into smart people talking about even smarter things. Lucky for you, that's literally our whole deal at Cheddar. We interview the brightest minds in business, finance, and tech. If you'd like more in-depth analysis from interesting people, lcheck out our where to watch page and turn us on 24/7! Your wallet will thank you and so, more importantly, will your mind. But also your wallet. Remember that. 

Peter S. Green is a veteran reporter and editor who has spent more than two decades covering business and finance from Eastern Europe to New York City, and has worked for Bloomberg News, The New York Post, The New York Times and The Messenger. He lives in New York City and is always looking for the next big story. Email him here.

—By Peter S. Green

All it took was a gentle nudge for tech markets to fall significantly. When Anthropic introduced some new plug-ins last week for its AI code-writing bot Claude Cowork, it didn't seem like a big deal. Well, that was until users tried it. In a few hours, Claude was able to write better code to replace much of the work done by existing software used for legal, sales, marketing, and data analysis. By Tuesday, markets were in the throes of a full-scale SaaS-pocalypse, as software service providers and traders saw that AI might just replace a lot of Saas products.

The NASDAQ index, which is heavy on tech stocks, is down almost 5% over the last five days. image credit: Google.

On Tuesday, London Stock Exchange Group $LNSTY ( ▲ 0.3% ) which has a large data analytics business, fell 13%, Thomson Reuters $TRI ( ▲ 4.41% ) , which owns Westlaw, dropped 16%, and LegalZoom $LZ ( ▲ 2.11% ) plummeted 20%. The shock is lingering. The S&P Software index is down 10% in the last five days and has yet to recover. 

The AI fallout hasn’t been limited to software stocks. Nvidia’s $NVDA ( ▲ 0.16% ) loose announcement that it probably, maybe, wasn’t gonna blow an entire $100 billion for a stake in OpenAI after all raises some questions for Oracle $ORCL ( ▲ 1.59% ) , which last year announced a multi-year $300 billion contract to lease data centers to…OpenAI. Oracle borrowed a lot of money to start building out the data centers, but OpenAI says it's about four years away from becoming cash-flow positive, and without the Nvidia investment to prime the AI pump, the whole circle of financing could spin to a stop. Oracle is already down 57% since its September high, which could mess up plans for a $20 billion stock issue this year. 

Commentators have hardly been sanguine about the flow of market news.

Alternative stores of value also took a hit. Silver plummeted from a Jan. 29 high of $121 to a Wednesday low just above $75. Bitcoin $BTC ( ▼ 2.04% )  is dropping faster than a mobster’s victim wearing concrete boots. It plunged from an October high of $126,000 to about $65,000 as of Thursday. That’s a disaster when it costs about $87,000 to mine a single bitcoin, today. One big concern is the large stake of Bitcoin amassed by billionaire Michael Saylor in Strategy (originally MicroStrategy) $MSTR ( ▼ 4.53% ), a business intelligence software company. Strategy holds 713,502 bitcoin it bought for a total of $54.3 billion, at an average price of around $76,000. That’s an unrealized loss of over $7 billion at today’s price, and if Saylor dumps the coin to cut his losses, it could rock the crypto market. Saylor had just one word for the market on Thursday:

Twitter tweet

“HODL” is a crypto term that's come to mean “Hold on for Dear Life.” Strategy is down 70% in the last 6 months and fell 15% on Thursday.

How low could Bitcoin go? Famed short trader Michael Burry says that since crypto hasn’t become a means of exchange for anyone or anything, it could go to zero. “There is no organic use case reason for Bitcoin to slow or stop its descent,” he said in a Substack post reported by Bloomberg on Monday.

Big Businesses mentioned this week:

$LNSTY ( ▲ 0.3% )  $TRI ( ▲ 4.41% )  $LZ ( ▲ 2.11% )  $NVDA ( ▲ 0.16% )  $ORCL ( ▲ 1.59% ) , $BTC ( ▼ 2.04% ), $MSTR ( ▼ 4.53% ), $DIS ( ▼ 0.61% ) , $GOOGL ( ▼ 0.74% ) , $AMZN ( ▲ 0.98% ) , $WLFI ( ▼ 2.2% ) , $AAPL ( ▼ 0.85% ) , $PEP ( ▼ 1.96% ) , $RDFN ( ▼ 0.36% ) , $PYPL ( ▲ 1.9% ) , $HPE ( ▼ 0.37% )  

This week, big business!

• The usual suspects

• The short stack

• Trumplandia

• Want more Cheddar?

The usual suspects

Incoming Disney CEO Josh D’Amaro — Image Credit: Disney

• There’s a new mouse running the house: For the second time in six years, Disney $DIS ( ▼ 0.61% ) CEO Bob Iger has handed over the keys to the Magic Kingdom to a successor. The company’s board and shareholders are hoping that this time it sticks. Disney theme parks boss Josh D’Amaro will be the new CEO, taking over on March 18. Disney’s board has been interviewing successors to Iger since 2024, focused mainly on the four horsemen running Disney’s operating divisions. D’Amaro beat out ESPN Chairman Jimmy Pitaro, and Entertainment co-chairs Dana Walden and Alan Bergman. Disney is facing a clouded future. Despite beating Wall Street expectations on quarterly earnings on Monday, shares in the world’s largest entertainment conglomerate fell 7%. Even theme park growth in the Middle East can’t offset the chill investors feel as traditional linear TV watching declines, making Disney work harder and spend more to reach its audiences. Iger passed the magic wand to Bob Chapek in 2020, but in less than two years, the board called Iger back, troubled by Disney’s share price and massive revenue fall when parks, movie theaters, and cruises all shut during the Covid pandemic. Iger’s not going far. He’ll stay on the board until the end of the year. The inevitable message to D’Amaro? Don’t get too comfortable.

• Pepsi’s Challenge: Cheaper Cheetos? PepsiCo $PEP ( ▼ 1.96% ) is hoping to get some of the mojo back in its snack division by cutting prices as much as 15% on potato chips and other snack foods. That’s after the company said it received a flood of emails and phone calls from consumers complaining about the rising price of its food. Pepsi and other firms saw the pandemic as an excuse to raise prices and boost profits, and the cost of salty snacks shot up 38% between 2020 and 2024, a survey showed. It’s not clear if Pepsi will cut wholesale prices or just tell retailers to ask for less, but the move comes after activist investor Elliott Investment Management in December forced Pepsi to cut costs. The firm has lost value this year while rival Coca-Cola $KO ( ▼ 1.37% ) is up 10%.

• 1+1+1 = ? Call it the Triple-X play: Elon Musk said this week he's merging SpaceX with xAi and X, the social media site formerly known as Twitter. How does it all come together? The move could value the combined company at $1.25 trillion, and comes ahead of an expected IPO in June that reports say would raise $50 billion, mostly to build 1 million orbiting AI data centers that would use solar power to beam their work back to earth. It would also let SpaceX develop moon-launched rockets to other planets. Musk wrote in an FCC filing that the satellite network would be the first step to a “Kardashev-II level civilization” that harnesses the sun's energy. For those of us in the back, that’s a hypothetical stage of technological advancement in which a civilization can directly consume the entire energy output of its host star. The merger would also let SpaceX, which has shown positive cash flow, funnel some money into xAI, which is struggling to catch up with rivals Anthropic and OpenAI. And if Musk runs the orbiting data centers and the AI that powers them, he could set up an Apple-like $AAPL ( ▼ 0.85% ) moat, owning the hardware and the operating system. While it looks like the planned IPO is wildly overvalued, and investors who buy in may just lose their shirts, one person has done well with all of the financial engineering: Elon Musk. His net worth jumped $84 billion to $852 billion after he merged his two companies. 

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The short stack

• House Party: Maybe it’s finally a good time to buy a house? Home buyers are gaining leverage and bringing down prices, according to new data from brokerage and data provider Redfin $RDFN ( ▼ 0.36% ) . Last year, 62% of buyers purchased a home below the asking price, the highest rate since 2019,and at an average discount of 8%. Redfin estimates there are 41.7% more sellers than buyers - in other words, nearly twice as many people want to sell their homes as there are potential buyers. That lets buyers turn the screws on sellers to lower the price of a home. But with mortgage rates still above 6% (6.19% last week, says Bankrate), of course, it’s only a buyer’s market for those who can afford to buy. 

• Epsteined: Brad Karp, chairman of the largest U.S. law firm, Paul Weiss, was ousted Wednesday over his ties to sex-offender Jeffrey Epstein, by a group of senior partners who call themselves the “Deciding Group,” the Wall Street Journal reports. There’s no evidence Karp was involved in any of Epstein’s illegal activities, but he kept in touch long after Epstein’s sex crime conviction, and reviewed a plea-bargain deal for Epstein. The firm’s number two, Scott Barshay, broke the news to Karp. If all this sounds a bit like a putsch, it probably was. Karp led the firm to bow to Donald Trump’s 2025 demand that law firms help him on a pro bono basis, or be blocked from doing business with the government. Paul Weiss’ agreement paved the way for several other large law firms to abandon anti-Trump clients and promise hundreds of millions of dollars in work for clients selected by Trump. Dozens of top litigators left the firm after Karp’s accord. 

• PayPal Plummets: PayPal $PYPL ( ▲ 1.9% ) , the original online payment company, just can’t stop the markdowns. News that the board had replaced the firm’s CEO and expected to make less money this year sent shares plummeting 20% on Wednesday, pushing them down 50% for the year and 84% in the last five years. That's quite a comedown for the company that literally invented online payments as part of eBay back in the early decades of this century. Former HP $HPE ( ▼ 0.37% ) CEO Enrique Lores will replace Alex Chriss as CEO, effective March 1. What happened? Apple $AAPL ( ▼ 0.85% ) and GooglePay $GOOGL ( ▼ 0.74% ) on the consumer side, and payment platforms including Square and Plaid on the business side, ate PayPal’s market. Former PayPal CEO David Marcus shared his thoughts in a l-o-o-o-ng X post, saying the company made “a fundamental miscalculation” by ignoring what made it unique. “It is optimized for payment volume instead of margin and differentiation. It leaned into unbranded checkout, where PayPal had the least leverage, instead of branded checkout, where the margin, data, and customer relationship actually lived,” he wrote.

Twitter tweet

• Farm Around and Find Out: President Trump’s policies are threatening the “widespread collapse” of U.S. agriculture, a bipartisan group of farmers and former agriculture officials wrote to Congress this week. The farmers said Brazil is gobbling up export markets for soybeans, chicken, wheat, and beef, while U.S. farmers face new trade obstacles and higher costs. “Barely half of all farms will be profitable this year,” the letter said, as the U.S. runs a historic agriculture trade deficit, reversing record farm export surpluses and farm incomes during the Biden Administration. Who’s to blame? “The current Administration's actions, along with Congressional inaction, have increased costs for farm inputs, disrupted overseas and domestic markets, denied agriculture its reliable labor pool, and defunded critical ag research and staffing,” the letter said. They want funding cuts restored, new trade deals approved by Congress, and HB-2 visas for farmworkers.

• Google it: A googol, the word that inspired the name of the tech company we all know as Google $GOOG ( ▼ 0.84% ) , is the number 10, followed by 100 zeroes. And that’s almost how much money Google made last year (give or take a few zeroes), as AI supercharged its ad and cloud computing businesses. Google parent Alphabet reported an 18% jump in Q4 revenue and said it will double spending on AI this year. That led to a record $403 billion in sales in 2025, and a profit of $132 billion. Alphabet’s shares rose 65% last year. But Google’s success in monetizing its AI investments means it likely has a lot of room to grow further, analysts say.

• AI Ad wars take over the Super Bowl: AI snark will hit a whole new level at the Super Bowl, where Anthropic plans to air an ad skewering rival OpenAI’s ChatGPT for planning to place (wait for it) advertisements in its chats. Anthropic said Clauide won't become an ad vehicle, the way most search engines have. "Claude is a place to think,” Anthropic wrote in a blog post. “Our users won’t see 'sponsored' links adjacent to their conversations with Claude; nor will Claude’s responses be influenced by advertisers,” it added. OpenAI is planning its own Super Bowl ad, and in the meantime, OpenAI chief Sam Altman smacked back at Anthropic. “I guess it’s on brand for Anthropic doublespeak to use a deceptive ad to critique theoretical deceptive ads that aren’t real,” Altman wrote, sounding like he might have been protesting too much. Ad spending by AI companies is huge. AI firms collectively spent $333.6 million on linear TV ads promoting their chatbots last year, up 43% from 2025, and $426 million on digital ads in 2025. Both firms need to find a way to make money. Anthropic, backed by Alphabet $GOOG ( ▼ 0.84% ) and Amazon $AMZN ( ▲ 0.98% ) , says it will be cash-flow positive by 2028. OpenAI is setting 2030 as its turnaround date.

Trumplandia

• The Spy Sheikh: It sure helps to have friends in high-net-worth places. Just days before his 2025 inauguration, Donald Trump’s family crypto business got a $500 million investment from Abu Dhabi’s national security adviser, and $187 million of the cash went to Trump family entities, the Wall Street Journal reports. A few months later, Abu Dhabi gained access to highly sensitive AI computer chips, a deal opposed by U.S. national security specialists who feared China could obtain the chips through a joint venture between Huawei and the UAE. Sheikh Tahnoon bin Zayed Al Nahyan’s 49% stake in World Liberty Financial $WLFI ( ▼ 2.2% ) also sent $31 million to Trump’s Middle East envoy Steve Witkoff and his family, according to the Journal. The news follows a New York Times investigation showing President Trump has made an additional $1.4 billion while in office. Trump’s biggest fan, Sen. Elizabeth Warren (D-MA), wasn’t thrilled about the story, Tweeting that it represents “corruption, plain and simple.”

Twitter tweet

• Apprentice Fed Chair Edition, The Final Episode: Who the heck is Kevin Warsh, the guy who beat out three people, including the Other Kevin, for the dubious privilege of becoming the next Fed chair? Well, for one thing, he’s the son-in-law of Trump ally and billionaire Ronald Lauder, 81, who reportedly originally urged Trump to buy Greenland for its mineral wealth, and reportedly is already doing business there. But what will Warsh do? A college friend told the New York Times that Warsh can “get a job done.” Trump said the 55-year-old attorney is “straight out of central casting.” But really, it all comes down to one thing: Can he preserve the Fed’s independence and maintain investors' faith in the U.S. economy? That’s not a sure thing, when Trump has threatened to remove current Fed chair Jerome Powell for not cutting interest rates fast enough. Warsh served as a Fed governor from 2006 to 2011 and helped broker the sale of failed investment bank Bear Stearns to JPMorgan Chase $JPM ( ▼ 1.95% ) when the subprime mortgage market collapsed in 2008, a key to preventing economic collapse. But is he going to lower interest rates? Warsh has been a hawk, arguing for higher rates to keep inflation in check. Trump said after nominating Warsh that he had not gotten a commitment to cut rates, but said, “He certainly wants to cut rates. I’ve been watching him for a long time.” Ethan Harris, a former economist at the New York Fed, said Warsh won’t have much immediate influence over rate decisions. “He comes to the FOMC with a huge credibility problem and will have to earn their trust. Hence, Fed policy will continue to be driven by the economic views of the majority of the Committee, regardless of where Warsh lands,” Harris wrote in a blog post.

Want more Cheddar?

You’re clearly into smart people talking about even smarter things. Lucky for you, that's literally our whole deal at Cheddar. We interview the brightest minds in business, finance, and tech. If you'd like more in-depth analysis from interesting people, lcheck out our where to watch page and turn us on 24/7! Your wallet will thank you and so, more importantly, will your mind. But also your wallet. Remember that. 

Peter S. Green is a veteran reporter and editor who has spent more than two decades covering business and finance from Eastern Europe to New York City, and has worked for Bloomberg News, The New York Post, The New York Times and The Messenger. He lives in New York City and is always looking for the next big story. Email him here.

—By Peter S. Green

A member of the public tells it like a Brookings Institution economist…

Have we seen the end of 80 years of increasing global prosperity and relative peace? The global institutions that kept the world functioning since the end of World War Two have proved spectacularly unable to keep the world moving in a positive direction in the past couple of years. Economist Eswar Prasad, a senior fellow at the Brookings Institution and a professor at Cornell University, says in a new book of the same name, that we’ve entered the “Doom Loop” and we’ll have to reinvent the world to survive it. We asked him if the glass might be half full, after all.

BBTW Editor Peter S. Green: So what is the Doom Loop?

Eswar Prasad: Economics, domestic politics, and geopolitics are stuck in a negative feedback loop and bringing out the worst in each other. We’re at a point right now where these three have become very closely intertwined in a way that you cannot pull them apart, so each ends up reinforcing the other in a negative way. Globalization was seen as a positive-sum game where everybody could benefit from freer trade. It would be a balancing force that offset the zero-sum game of geopolitics. It did improve GDP across the world, especially in emerging markets and developing countries. The problem is that the benefits were not evenly shared, either within countries or among countries. What was supposed to be a force for good has ended up infecting domestic politics, and it's also ended up infecting geopolitics. And of course, the effects on domestic politics have had a further negative effect on geopolitics. So it all turns into a sort of vicious spiral, where we are fast-moving toward a world where instability becomes the norm.

So globalization is to blame for the current world disorder?

In many democratic countries, the benefits of globalization were not evenly shared, and there wasn't a good social safety net in place to help those left out. They feel left out not just because they lost their jobs in the process of transition, but they feel that opportunities to climb back up the economic ladder are gone. And second is the feeling that the whole democratic process has been captured by the economic and political elites, so the elites get the benefits of globalization. That has certainly opened very fertile ground for false populists, who claim to have the interests of the common man at heart, to play to the politics of resentment, blaming China or foreign companies or immigrants as the source of a country's economic woes, rather than accounting for factors like technology, which are affecting everybody. And second, government policies are not serving those at the lower end of the economic ladder well. 

So the old rules are dead. What now?

One potential force of stability amid all this chaos could be if everybody agrees upon a common set of rules of the game, and this is particularly true in the international sphere. Now, the United Nations, the World Trade Organization, the IMF, this entire group of organizations is losing legitimacy from both sides. Advanced countries like the United States feel that these organizations have been co-opted by the smaller emerging market countries and that some of them, especially China, are getting a free pass. The emerging market economies, especially China, but others as well, feel that these organizations have been captured by the advanced economies, especially when you think about places like the IMF and the World Bank, where voting rights are distributed according to old economic power rather than new economic power. This has cost these institutions their legitimacy and their credibility. At the same time, emerging market countries led by China are setting up their own institutions, like the Asian Infrastructure Investment Bank. So rather than having cohesion through a common set of rules, we're getting fragmentation of the rules of the game. 

So where does this go? What's the next phase for all of this?

The dynamics of the doom loop are such that rather than moving towards a world of stability, we are stuck with instability being the norm for some time, with these two superpowers, neither of whom is seen as reliable or trustworthy, and we have the other middle power sort of bouncing back and forth. So it's going to be a very unstable world. 

That’s pretty gloomy. Is there any hope? 

It will take a lot of work. And it will not be happening anytime soon. It will take citizens getting much more engaged, not just as citizens of our countries looking at our short-term interests, but as citizens of our communities and of the world, recognizing that really shared prosperity is the only way all of us can do better. Second, it will take leaders: Community, business, national leaders who can help us see beyond our short-term interests and prejudices. And third, it will take better institutions, good democratic institutions, including the rule of law, an independent central bank, and a system of checks and balances at the domestic level.

(This interview has been condensed and edited for clarity)

Big Businesses mentioned this week:

$SBUX ( ▲ 1.59% )  $AMZN ( ▲ 0.98% )  $UPS ( ▼ 5.82% )  $WBD ( ▲ 0.18% )  $NFLX ( ▲ 0.52% )  $PSKY ( ▼ 2.57% )  $UNH ( ▼ 1.09% )  $CVS ( ▼ 2.33% )  $HUM ( ▼ 1.29% )  $SMG ( ▼ 4.02% )  $VREOF ( ▼ 6.82% )  $NVDA ( ▲ 0.16% )  $GM ( ▼ 3.05% )  $TSLA ( ▼ 0.1% )  

This week, big business!

• The usual suspects

• The short stack

• Elon’s World

• Want more Cheddar?

The usual suspects

Hit me baby, one more time…

• Starbucks makes more bucks, but its shares still lose bucks: Forget the Venti Iced Caramel Macchiato with almond milk and an extra shot of espresso: Starbucks $SBUX ( ▲ 1.59% ) CEO Brian Niccol says the coffee company’s new healthy options, like the Caramel Protein Latte, are the future. Maybe he’s onto something? A year-long revamp to make the company’s coffee shops more appealing (while shutting 600 underperforming stores, opening 128 new ones, and firing 2,000 corporate employees) pushed revenue up 6% in the fiscal first quarter, even as the makeovers, along with rising coffee prices, tariffs, and higher wages for baristas, pushed profits down 63% from a year earlier. Then again, shares fell 6.7% on Wednesday after the earnings announcement. 🤷

• Freddy Kruger meets Amazon and UPS: It’s slasher time at two of America’s largest employers, and one reason is that the two shipping giants are arch rivals. You forgot Amazon $AMZN ( ▲ 0.98% ) was in the shipping business? UPS $UPS ( ▼ 5.82% ) sure hasn’t. A year ago, UPS said it would cut the volume of Amazon packages it handles by half over 18 months, because the delivery deal was hurting its margins. Amazon packages accounted for about 25% of UPS’ deliveries but just 11% of its profits. A year on, the Amazon-slim seems to be paying off. Boosting its margins seems to have helped UPS’ stock, at least. UPS on Tuesday projected 2026 revenue of $89.7 billion, above analyst forecasts of $88 billion, sending shares up 5%. But the next day, the share price plummeted, ending Wednesday down 2.6% from its Tuesday open. Last year, Amazon Logistics shipped 6.3 billion parcels to UPS’ 4.7 billion. It's on track to overtake the U.S. Postal Service, the industry leader, with 6.9 billion packages shipped in 2025.  No wonder UPS said it’s laying off  30,000 workers this year. Last year, UPS pink-slipped 14,000 managers and 34,000 operations workers.  Meanwhile, Amazon said it’s making its own job cuts: It’ll fire 16,000 more corporate employees, following the mass firing of 14,000 white-collar workers in October, largely due to the boom in AI capabilities. That 30,000 is close to 10% of Amazon’s workforce.

• Add one more suitor for Warner Brother Discovery $WBD ( ▲ 0.18% ) : While Netflix $NFLX ( ▲ 0.52% ) seems to have the upper hand over poorer rival Paramount Skydance $PSKY ( ▼ 2.57% ) , big-time media entrepreneur and Democratic Party donor Barry Diller wants to buy CNN, once WBD has sold its film studio, entertainment assets, and catalogue to Netflix. The Wall Street Journal reports that Diller told $WBD ( ▲ 0.18% ) of his interest last spring, but WBD said this week that CNN is not for sale. It’s not clear how Diller would finance the purchase. In related news, the GOP chair of the Senate‘s anti-trust committee sent a letter to WBD and Netflix bosses saying the planned sale raised “serious antitrust issues.” Paramount owners Larry and David Ellison are close allies of President Trump.

• Health insurers take a dive. It kinda sucks to be in a business that depends on the government for a big chunk of its income. That’s a lesson shareholders in UnitedHealth Group $UNH ( ▼ 1.09% ) and several other major insurers learned this week, when the government’s Center for Medicare and Medicaid Services decided to raise reimbursement rates for 2027 by an average of just 0.09%. Last year’s raise was 5%. It surprised the insurers and their investors. Shares in UnitedHealth dropped 19% on Wednesday, and Centene $CNC ( ▼ 3.82% ) was down 11%. CVS $CVS ( ▼ 2.33% ) fell 15%, but was down just 11% by midday Thursday. Humana $HUM ( ▼ 1.29% ) , with 17% of the Medicare Advantage market, fell 26% through Thursday morning. UnitedHealth has 30% of the Advantage market. It reported 2025 earnings this week, down 41% from 2024 to $19 billion, and said revenue will fall 2% this year, its first drop since 1989. 

• Finding Value: Gold prices have shot up to over $5,100 an ounce, doubling in the past year, with investors looking for a safe haven as the long-term health of the U.S. economy gets worrisome. Meanwhile, the U.S. dollar is looking a little glum. It hit a four-year low against the euro on Wednesday, at $1.19. Investors saw more growth in Germany and less risk of a budget cliff in France. But the big driver? U.S. policy. America’s unpredictable recent moves on Greenland have reignited the “Sell America” trade, even after President Trump reassured the audience at Davos that he wouldn’t “use force” to take over the country. That should have sent metal prices falling, Chris Weston, head of research at Pepperstone, told Reuters. Instead, he noted, “Gold increasingly looks like a hedge against Trump as the U.S. president and the absolute unpredictability that comes with it.” There’s silver, too, and it’s having an odd knock-on effect. A 500% hike in the price of silver over the last year has hit manufacturers that use the metal in everything from electronics to solar panels. Now they’re all looking to cut back, as silver now accounts for about 26% of the cost of a solar panel, compared to just 3% three years ago. 

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The short stack

Scotts Miracle-Gro is selling its cannabis-supply business

• Cutting Grass: Lawn care company Scotts Miracle-Gro $SMG ( ▼ 4.02% ) has agreed to dump its cannabis-supply business, innocently labeledHawthorne Gardening, to Canadian cannabis firm Vireo Growth $VREOF ( ▼ 6.82% ) . Scotts said the reefer business had been a drag on its growth in recent years and wants to go back to its non-hemp gardening business. Interest in Scotts’ cannabis cultivation materials and equipment was high during the pandemic. Scotts will get a 13% stake in Vireo, whose shares are down 88% since their 2019 debut. But it’s not curtains yet for the cannabis market. Sales of beverages containing hemp-derived THC are rising as consumers practicing Dry January look for “the buzz without the booze,” the New York Times reports. Last year THC beverage sales were $850 million in the U.S., and should hit $4 billion by 2028, according to Future Markets Insight. One big new consumer of THC drinks? Soccer moms, says the Times.

• Aircraft engines: You never really think about the engines when you’re up in the air, but supply chain squeezes and demand for quieter, fuel-efficient engines has sent the price of a turbofan shooting up. A pair of new engines used for parts can now account for as much as 80% of the cost of a new aircraft, up from 20%-30% a decade ago, according to a report by aviation consultants Avolon. The result: shares in jet engine maker Rolls-Royce $RLLCF ( ▲ 20.83% ) have grown in value almost as fast as Nvidia $NVDA ( ▲ 0.16% ) , at 1209% in five years versus 1,366% for the chipmaker. 

• Generally Motivated: General Motors $GM ( ▼ 3.05% ) CEO Mary Barra promised great returns for investors in 2026, and the market responded instantly, with shares up more than 8% on Tuesday. Promising profits between $13 and $15 billion, despite a $3.3 billion loss last quarter after it rolled back EV production, reacting to tariffs and the end of federal EV subsidies for car buyers. GM said it would raise its dividend by 6% and buy back $6 billion in shares. It’s bought back $23 billion since late 2023. Barra also tore into Canada's plan to roll back tariffs on the first 49,000 Chinese EVs sold there this year. “I can’t explain why the decision was made in Canada,” Barra told GM employees on Tuesday. But most other people could tell her: The deal is a result of Canada's anger over Trump’s tariffs and the resulting shutdown by U.S. carmakers of some Canadian car plants. 

Elon’s World

One of Elon Musk’s companies’ stock is going down. The other is about to list on the markets…

• Tesla $TSLA ( ▼ 0.1% ) continues to break investors’ hearts: Annual revenue dropped 3% last year, and profits in the fourth quarter dropped 61% while operating expenses rose 39%. More importantly, people just aren't buying Teslas: Sales plunged 16% in the first quarter and 8.6% for the whole year. Responding to the lack of new designs, Musk said he’d stop production of the 2012 Model S and 2015 Model X cars, and spend $20 billion to convert the car factories into production lines for humanoid robots. Meanwhile, after getting Tesla's stock to pop 4% last week with the news that Tesla had started Robotxi rides in Austin with no human safety monitor, it appears that no one has actually gotten in an unmonitored Tesla taxi, according to tech site Electrek. Shares in Tesla are down more than 8.5% in the past month. 

• A date is set for the IPO of SpaceX: June 28th. It’s not only Elon Musk’s 55th birthday, it’s when Jupiter and Venus apparently align, according to multiple press reports. While no details have been confirmed, Musk is reportedly seeking $50 billion from investors, valuing the company at $1.5 trillion. It was valued at $400 billion after its last share sale. Musk said last year that the company was expected to generate $15.5 billion in revenue in 2025, 80% of that from Starlink, which it owns. Musk owns about 42% of SpaceX. That price tag — 100X revenue is a “monster premium,” Neil Wilson, an analyst at Saxo Capital Markets, told The Guardian. “A valuation that big reflects not just a tech and AI premium, but Elon Musk’s stardust and a frothy market, plus a heck of a lot of media narrative,” he said.

Want more Cheddar?

You’re clearly into smart people talking about even smarter things. Lucky for you, that's literally our whole deal at Cheddar. We interview the brightest minds in business, finance, and tech. If you'd like more in-depth analysis from interesting people, lcheck out our where to watch page and turn us on 24/7! Your wallet will thank you and so, more importantly, will your mind. But also your wallet. Remember that. 

Peter S. Green is a veteran reporter and editor who has spent more than two decades covering business and finance from Eastern Europe to New York City, and has worked for Bloomberg News, The New York Post, The New York Times and The Messenger. He lives in New York City and is always looking for the next big story. Email him here.

As President Donald Trump ratcheted up his rhetoric on Greenland, suggesting he might invade the Danish island and slap 25% tariffs on eight EU states, U.S. stock indices fell 2% in what looked like it could become a rout. Then on Wednesday, in the wee hours New York time, Trump gave a speech at Davos, where he said he wasn’t going to invade Greenland after all or impose tariffs. Markets zoomed back, and by midday Thursday, the Dow was up 500 points from its drop. The same thing happened multiple times during Trump’s first term (China tariffs, North Korean showdown, Government shutdown, the threat to leave NATO), and gained the name the “Trump Fade.” Now it’s called TACO, for “Trump Always Chickens Out.” The day the president announced his massive new tariff plans last April, the S&P dropped more than 3% and the Dow fell nearly 4%. By June, when many of the tariffs were rolled back, the markets had recovered, and investors were back in. 

The S&P 500 over the last five days, with the sharp drop on Jan 20 aligning with the president’s threats to take over Greenland and impose tariffs on eight NATO allies.

But how resilient are the U.S. markets? Each time, they go to the edge and then snap back, but will the bungee cord break at some point? “Consumer spending has so far outweighed the cocktail of Trump chaos,” Tim Mahedy, chief economist at advisory firm Access/Macro, told BBTW. But, he warned, the threats and even the modified actions Trump eventually takes are driving down investor confidence in the U.S. “It’s really just a question of when, not if, this drives us over the cliff.” For now, Mahedy said in an interview with BBTW, consumer spending is keeping the U.S. economy afloat, and investors keep buying at ever-higher valuations, desperate to continue the biggest bull market in U.S. history, with the S&P 500 returning over 235% in the past decade. Eventually, though, something may give, and Mahedy says to expect investors demand higher yields on U.S. treasuries.

The growing attacks by the Trump Administration on global trade are part of a longer-term trend, said Dan Boston, head of the global small company team at Polar Capital, which manages about $38 billion. “U.S. policy transmission has been more chaotic, increasing the perceived risk in the market,” Boston told BBTW. That’s already apparent in the dollar’s 12% slide against the euro since Trump returned to office. And investors are increasingly aware that other markets can have an appeal: “The U.S. is a dynamic market—it's just not the only great market,  nor does it hold a monopoly on the world's best ideas,” said Boston, who runs a fund that invests mainly in European listed companies. 

Mike Reynolds, vice-president for investment strategy at Glenmede, a U.S.-based investment advisor managing about $50 billion, says it's hard for investors to handicap political risk. “There’s 100-plus years of history where markets have largely looked through geopolitical issues,” he said. But he warned that tariffs are a game-changer. Following through on threatened 25% tariffs on Europe would have cut 20 basis points off U.S. GDP. “It’s an escalation for sure, but it's not on the scale that would put the U.S. economic expansion at risk,” said Reynolds. In fact, he says, markets have begun to bet on the TACO trade, that the Trump Administration won't follow through on its threats. 

“Over the last year, markets have been conditioned not to take the Administration literally, when it comes out with these new proposals,” said Reynolds. But, he warns that’s still a risky spot to be in, “It’s a dangerous thought process,” he said. “Because you could end up having the Administration follow through.” One case in point: Denmark threatened to dump its U.S. treasury holdings. Denmark alone isn’t a major holder of U.S. debt, but that could have provoked a cascade of European investors pulling out of the U.S. bond market, raising interest rates, and straining the government’s ability to pay its debts or even social security. “It hinted at a DEFCON 5 scenario,” he said.

But it’s the earnings of U.S. companies that are keeping things from going south, at least for now, argues Bill Mann, chief investment strategist at Motley Fool Asset Management. Eventually, Mann said in an interview, the “chaos reign” of the Trump Administration will lower the “overall trust in American markets.” That matters, said Mann, because the U.S. dollar is still the world’s reserve currency and the U.S. is still the world’s largest and most dynamic economy. But Mann says that we’ve entered a 10-year cycle where we won’t see the same growth we had for the past decade, or the high valuations of U.S. stocks (around 40x forward earnings), largely dependent on the Maginficent Seven tech stocks (Alphabet $GOOG ( ▼ 0.84% ) , Amazon $AMZN ( ▲ 0.98% ) , Apple $AAPL ( ▼ 0.85% ) , Meta $META ( ▼ 1.07% ) , Microsoft $MSFT ( ▲ 1.35% ) , Nvidia $NVDA ( ▲ 0.16% ) , and Tesla $TSLA ( ▼ 0.1% ) ), Already, Mann says his Motley Fool Global Opportunities Fund is shifting to more foreign stocks than its benchmarks.  “You see a lot of jawboning, but [nerovusness] hasn’t shown up in the US market,” Mann said. “Yet.” 

All that global turmoil has been good for gold at least. Gold futures are up 74% in the past twelve months, with the metal now trading at $4,800 an ounce, and analysts say it could break $7,000 next year, as investors seek to put some of their riches into a safe haven.

“There’s no question that damage has been done to the economy,” said Mahedy. “The economy did quite well under Trump, but that  means it would have done even better had these crazy policies not taken hold.”

—Peter S. Green

Big Businesses mentioned this week:

$AAPL ( ▼ 0.85% )  $AMZN ( ▲ 0.98% )  $AVO ( ▼ 3.43% )  $BAC ( ▼ 0.97% )  $BRK.B ( ▲ 2.65% )  $COST ( ▼ 2.4% )  $COP ( ▲ 1.01% )  $CVGW ( ▼ 2.82% )  $CVX ( ▲ 2.08% )  $GOOG ( ▼ 0.84% )  $GS ( ▼ 3.67% )  $HAL ( ▼ 0.78% )  $JPM ( ▼ 1.95% )  $KHC ( ▲ 0.79% )  $META ( ▲ 3.26% )  $MS ( ▼ 3.0% )  $MSFT ( ▲ 1.35% )  $NATH ( ▼ 0.15% )  $NFLX ( ▲ 0.52% )  $NSC ( ▼ 2.17% )  $NVDA ( ▲ 0.16% )  $PSKY ( ▼ 2.57% )  $RYAAY ( ▼ 5.02% )  $SFD ( ▼ 2.3% )  $TSLA ( ▼ 0.1% )  $TGT ( ▲ 0.23% )  $UNP ( ▼ 2.44% )  $WBD ( ▲ 0.18% )  $WMT ( ▼ 3.52% )  

This week, big business!

• The usual suspects

• The short stack

• Trumplandia

• Elon’s World

• Want more Cheddar?

The usual suspects

• Netflix goes all cash:  If you’ve got it, flaunt it. That seems to be Netflix $NFLX ( ▲ 0.52% ) CEO Ted Sarandos’ plan to best Larry and David Ellison’s Paramount $PSKY ( ▼ 2.57% ) in the battle for control of Hollywood studio Warner Bros. Discovery $WBD ( ▲ 0.18% ) . With its share price down 30% in the past three years, Netflix says it’s putting up all cash in its $83 billion offer for most of WBD’s assets (the cable networks, broadcast channels, and CNN will be spun off first). Paramount wants to buy the TV and cable pieces, too, but its $100-billion plus offer is backed with a pile of debt and financing from Middle Eastern investment funds that could have trouble passing muster with U.S. regulators. Netflix’s results, in this week, show why the streaming giant needs WBD: Revenue growth, at 16% last year, is expected to reach only 13% in 2026, and its 325 million subscribers are thirsty for new content, hence the desire for the studio and WBD’s vast library, which include the DC superheroes franchise and HBO.

• Playing with the Big (Box) Boys: Amazon $AMZN ( ▲ 0.98% ) has spent nearly two decades trying to build a brick-and-mortar presence to match its online shopping supremacy. Whole Foods, which it bought in 2017, has been the sole success story. Those Amazon Go convenience stores are down to just 16 outlets in four states, half their 2023 peak, but now Jeff Bezos’ juggernaut is aiming for the world of big box stores, with plans for a 230,000-square-foot retail outlet in Orland Park, Illinois, outside Chicago. Half the space would house an Amazon-branded supermarket, including things you don't find at Whole Foods, like diapers. The rest would be another fulfillment warehouse. What’s propelling the move: Despite Amazon’s ubiquity, in-store purchases still make up 80% of what U.S. consumers buy, and Amazon wants a piece of what Costco $COST ( ▼ 2.4% ) , Walmart $WMT ( ▼ 3.52% ) , and Target $TGT ( ▲ 0.23% ) are getting. 

• Your mother was right. Ketchup doesn't go on Mac ‘n’ Cheese. And Greg Abel, Warren Buffett’s successor at Berkshire Hathaway $BRK.B ( ▲ 2.65% ) , may just be channeling her, filing paperwork to potentially dump his 27.5% stake in food giant Kraft Heinz $KHC ( ▲ 0.79% ) , which Buffett helped create by urging the two food giants to merge in 2015. The combined entity’s shares are down 70% since then. And last year, Berkshire took a $3.8 billion write-down on the stake. Kraft Heinz is now planning a split. As Buffett said last year, “It certainly didn’t turn out to be a brilliant idea to put them together.”

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The short stack

Nathan’s Hot Dog Eating Contest champ Joey Chestnut

• Hot Diggity Dog! Smithfield Foods, $SFD ( ▼ 2.3% ) , the North Carolina-based ham maker, may have bitten off a lot more than Joey Chestnut can chew. Smithfield has agreed to buy the famed Coney Island hot dog brand, Nathan's Famous $NATH ( ▼ 0.15% ) , for $102 a share, or about $450 million. Shares were up over 8% on the news. Smithfield's has been making and marketing Nathan’s hot dogs for years, and the deal would consolidate its control over the company. 

• Slippery rock: So how’s that Venezuela oil thing going? Halliburton $HAL ( ▼ 0.78% ) , the oil field services firm once led by the late Vice President Dick Cheney, is one of the few U.S. companies enthusiastic about getting back into Venezuela’s oil business. That’s probably because estimates of reviving the country’s moribund oil industry rank as high as $183 billion. It may also be because Halliburton had a disappointing fourth quarter, with lower profits and flat revenue from a year earlier. Halliburton left Venezuela in 2019 to comply with Trump’s first sanctions. But the clients who’d pay Halliburton to fix Venezuela’s infrastructure are less enthusiastic. Chevron, $CVX ( ▲ 2.08% ) , the only U.S.oil major operating in Venezuela, says it wants to see some political and economic stability before it gets anywhere near Trump’s call for U.S. oil firms to invest $100 million there. Conoco $COP ( ▲ 1.01% ) is in no hurry either. Its Venezuela chief was kidnapped there in 2002, and it pulled out of the country in 2007 after refusing to let then-president Hugo Chavez nationalize its business. Still, the U.S. intervention has emboldened some oil traders, the Wall Street Journal reports, including Vitol and Trafigura, which won licenses from the Trump administration, and raised prospects that some Greek oil tanker owners might profit from the end of the shadow fleet that was taking most of Venezuela’s oil to market. Meanwhile, the Trump Administration said it’s taken the proceeds from oil it seized from Venezuela and deposited it in offshore accounts. That includes one in Qatar, where it’s apparently being held to pay both Venezuela and some of its creditors. That’s raised concern in Congress that the money is being hidden from congressional oversight.

• That’s a lotta guac. Who knew avocado growers were a hot commodity? Mission Produce, whose ticker symbol is $AVO ( ▼ 3.43% ) , agreed to buy rival Calavo Growers $CVGW ( ▼ 2.82% ) for a 20% premium to its closing price Tuesday as Mission, one of the largest publicly traded avocado producers in the U.S., beefs up its market share. Mission gets more farmland, two Mexican packing houses, and to offset seasonal dips in avocado supply, it’s getting Calavo’s tomato and papaya lines, along with, of course, a guac factory. It’s all just in time for the Super Bowl, when America goes peak guac, salsa, and wings!

• Wrong Track: The largest U.S. railroad merger to date has been temporarily derailed by the Surface Transportation Board, which told the Union Pacific $UNP ( ▼ 2.44% ) and Norfolk Southern $NSC ( ▼ 2.17% ) railroads to redo their homework and submit more details about their likely joint market share if the two lines complete a planned $71.5 billion merger. The merged rail systems would create the first company controlling coast-to-coast rail shipments. Unions and rival rail systems have complained that the merged line would have too much market power, eroding competition and lowering wages.

Trumplandia

• See you in court: President Trump has sued JPMorgan Chase $JPM ( ▼ 1.95% ) and its CEO Jamie Dimon for allegedly dropping him and several of his resorts as clients for “political reasons,” after the Jan. 6, 2021 insurrection in Washington. The suit, filed in a Florida court, seeks $5 billion in damages. The suit says Dimon agreed to place the Trump businesses on a “blacklist,” and comes a day after Dimon, speaking in Davos, said Trump’s plan to cap credit card interest rates at 10% would be “an economic disaster” cutting many Americans off from credit. Dimon also slammed Trump’s immigration crackdowns. A JPM spokesperson said the suit has “no merit.” But, she added, “We do close accounts because they create legal or regulatory risk for the company.”

• Cooked: President Trump’s effort to impose his will on the Fed appears to have hit another roadblock: the Supreme Court. The Justices appeared skeptical of the Administration's claims during oral arguments this week that it could fire Fed governor Lisa Cook over unproven allegations that she’d falsely claimed two houses as primary residences to get favorable mortgage rates. Fed Chair Jerome Powell sat through the hearings, where Justice Brett Kavanaugh warned that letting Trump sack Cook would “weaken, if not shatter,” the Fed’s independence. “Once these tools are unleashed, they are used by both sides,” he warned. 

• Who’s paying for the tariffs? According to a study by Germany’s Kiel Institute for the World Economy, 96% of the tariff burden is being paid by U.S. consumers, not by foreign producers. Fewer goods are being imported, which reduces competition and raises prices. "The tariffs are an own goal," says Julian Hinz, Research Director at the Kiel Institute and an author of the study. "The claim that foreign countries pay these tariffs is a myth. The data show the opposite: Americans are footing the bill." 

• Family Affair: Wondering just how much the Trump family has made since Mr. Trump took over the presidency? The New York Times has a fascinating infographic. They peg the total at $1.4 billion and growing.

Elon’s World

Space X to IPO?

• Rockets go up (And IPOs, too). Elon Musk has reportedly lined up four banks to underwrite an IPO of SpaceX, according to multiple press reports. Musk once said he wouldn’t take the rocket firm public until he’d landed a spaceship on Mars. What’s changed? AI.SpaceX is racing to be the first into space with satellites that run on unfiltered solar power and can host AI data centers. But that takes billions of dollars in debt that Musk doesn’t have in cash. The money would also help Musk’s beleaguered xAI raise cash to compete with rival firms OpenAI and Anthropic. Last month, Bloomberg reported a SpaceX IPO could raise $30 billion and value the company at as much as $1.5 trillion. Insiders name the banks involved as Bank of America $BAC ( ▼ 0.97% ) , Goldman Sachs $GS ( ▼ 3.67% ) , JPMorgan Chase $JPM ( ▼ 1.95% ) , and Morgan Stanley $MS ( ▼ 3.0% ) . Will investors buy in? SpaceX may have to reduce the number of its rockets that blow up. 

• Ryanair and “The Big Idiot.”  When Ryanair $RYAAY ( ▼ 5.02% ) , Europe’s discount airline, opted not to install Starlink satellites in its planes, saying they’d never be a moneymaker for the no-frills carrier, Musk said Ryanair CEO Michael O’Leary was misinformed about the cost. “I frankly wouldn’t pay any attention to anything that Elon Musk puts on that cesspit of his called X,” O’Leary said on an Irish radio show. “He’s an idiot. Very wealthy, but he’s still an idiot.” Musk retorted (on X), “Ryanair CEO is an utter idiot. Fire him,” and then said he might buy the airline and replace O’Leary with someone named Ryan. He also called O’Leary an “insufferable, special needs chimp.” O’Leary says Musk is welcome to become a shareholder (EU law bars him from owning more than 49% of a European airline). Ryanair’s $37 billion market cap pales next to Musk’s $677 billion net worth, but Ryanair’s been making book on the feud, launching a “Big Idiot” sale, only available for Elon Musk and other ‘idiots’ on X,” with 100,000 tickets available for 16.99 euros ($19.91).  But perhaps the market tells the tale: Ryanair is up about 60% in the past 12 months. Tesla $TSLA ( ▼ 0.1% ) is up 1.4% over the same period.

  

  Ryanair’s response on Instagram

• Feud styles of the rich and AI: Elon Musk and Sam Altman are at it again. This time, the X owner and the OpenAI founder are arguing over whose AI has killed more people. On Tuesday, Musk boosted a post saying OpenAI’s ChatGPT has been linked to nine deaths. “Don’t let your loved ones use ChatGPT,” Musk wrote. Altman countered with a jab at Tesla’s $TSLA ( ▼ 0.1% ) A not-quite-self-driving feature: “Apparently more than 50 people have died from crashes related to Autopilot,” he replied on X.

Want more Cheddar?

You’re clearly into smart people talking about even smarter things. Lucky for you, that's literally our whole deal at Cheddar. We interview the brightest minds in business, finance, and tech. If you'd like more in-depth analysis from interesting people, lcheck out our where to watch page and turn us on 24/7! Your wallet will thank you and so, more importantly, will your mind. But also your wallet. Remember that. 

Peter S. Green is a veteran reporter and editor who has spent more than two decades covering business and finance from Eastern Europe to New York City, and has worked for Bloomberg News, The New York Post, The New York Times and The Messenger. He lives in New York City and is always looking for the next big story. Email him here.

Fed Chair Jay Powell in his video address to the nation on January 11

The image was stark. Fed chair Jerome Powell stood in front of the American flag staring straight at the camera. Just two days earlier, President Trump’s Justice Department threatened criminal charges against  Powell over a $3 billion renovation of two century-old Fed buildings in Washington. The move came after months of pressure on Powell from Trump, who says Powell is moving far too slowly to lower rates, and has publicly threatened to remove Powell, belittled him, and called him “too-Late” Powell. 

“This is about whether the Fed will be able to continue to set interest rates based on evidence and economic conditions — or whether instead monetary policy will be directed by political pressure or intimidation,” Powell said. 

The last 12 months have seen an extraordinary change in the way the U.S. economy works. From pressuring the Fed to lower rates to telling investment firms they can’t buy single-family homes, imposing and lifting sector-specific tariffs, or deciding who can sell chips to China, the Trump Administration has taken a heavy hand in the economy.

By some measures, analysts say, that hasn’t been working out very well.

“When a government intervenes in the economy to try to set the ‘appropriate’ price for something, you end up with shortages, which only drives up prices,” said Chris Hodge, chief economist at Natixis Corporate & Investment Banking, and a former Fed and Treasury official. “You remove the economic incentive for private sector actors to set whatever the appropriate prices are.”

Often, in fact, the effect tends to be the opposite of what was intended. “The pressure being applied to the [Fed] and to Powell specifically, is going to be counterproductive,” said Hodge. “Bond yields and mortgage rates are a function of inflation expectations, and growth staying steady, but growth is not going to stay steady if the government continuously puts its thumb on the scale in the private sector economy, and inflation expectations are not going to be well anchored around 2%, the Fed’s target number.”

Luigi Zingales, a professor of finance at the University of Chicago's Booth School of Business, doesn't mince words. 

“This is a power grab move to scare everybody,” Zingales said of Trump’s investigation of Powell on his podcast Capitalisn’t. “He's doing that to prove that he has absolute power. You can be attacked, criminally attacked, criminally indicted for resisting Trump.” 

The problem, noted Zingali, is that attacking Powell ultimately makes it harder for the Fed to lower interest rates. “By using the sledgehammer, [Trump] all but ensures that the next Federal Reserve meeting will not cut interest rates.”

And why hasn’t the market reacted violently to the assault on the Fed? That may be, said Zinglaes, because the U.S. dollar has a virtual monopoly when it comes to being a monetary safe haven. “You have no alternative,” said Zingales. “The U.S. dollar is the international medium of exchange and it is very difficult for anybody to go anywhere else. And at the end of the day, if you want to save assets, you're going to invest in U.S. Treasuries. What is the alternative?”

That doesn’t mean the White House should stay out of the economy altogether, says Michael Ashley Schulman, chief investment officer for Running Point Capital Advisors, a multifamily office. 

“The real question is whether it’s helping the game stay fair,” Schulman says. “Investors can live with rules, taxes, and even occasional clumsy refereeing, but struggle to price a world where property rights feel negotiable, contracts feel political, and capitalism starts to look like a subscription service that can be cancelled when it becomes inconvenient. When the White House leans on the Fed, markets charge an uncertainty premium through higher long-term Treasury rates, shakier expectations, and more apprehensive risk appetite.”

—Peter S. Green

Big Businesses mentioned this week:

$PSKY ( ▼ 2.57% )  $WBD ( ▲ 0.18% )  $JPM ( ▼ 1.95% )  $AAPL ( ▼ 0.85% )  $GS ( ▼ 3.67% )  $MPC ( ▼ 1.55% )  $VLO ( ▲ 1.08% )  $PBF ( ▲ 1.92% )  $GOOG ( ▼ 0.84% )  $NVDA ( ▲ 0.16% )  $MSFT ( ▲ 1.35% )  $BP ( ▲ 1.18% )  $WMT ( ▼ 3.52% )  

This week, big business!

• The usual suspects

• The short stack

• Trumplandia

• Elon’s World

• Want more Cheddar?

The usual suspects

• Loony Tunes: David Ellison and dad Larry, the Oracle $ORCL ( ▲ 1.59% ) founder and gazillionaire, just won't give up in their pursuit of Hollywood studio and media giant Warner Bros. Discovery $WBD ( ▲ 0.18% ) . After the Ellsion’s Paramount Skydance $PSKY ( ▼ 2.57% ) sued the Warner Bros. board this week to get more information about why WBD chief David Zaslav and his board have rejected their offer for the studio and all its assets, rival bidder Netflix $NFLX ( ▲ 0.52% ) appears ready to up its offer to an all-cash deal. Netflix’s current cash and stock deal is valued at about $27.75 per WBD share, but that’s after WBD completes a planned spinoff of its cable and broadcast properties. Paramount is offering $30 a share for everything, but that’s at the core of the problem because Paramount, with a $13 billion market cap, is a far weaker financial prospect than Netflix, with a market cap of about $405 billion. The Ellisons are counting on a pile of debt, as well as cash from Middle Eastern investment groups, to close the deal. WBD’s board has said the risk of that deal falling through is high. An all-cash offer from Netflix could also shorten the timeline, with a shareholder vote on the sale coming as soon as next month. 

• Saks declares bankrupcy: America’s department stores have long been an endangered species, but it’s taken a while for the pre-eminent U.S. luxury retailer to catch on. This week, Saks Global, the parent company of the iconic Saks Fifth Avenue and ultra-luxe retailers Neiman Marcus and Bergdorf Goodman, filed for bankruptcy protection. The proximate cause was a stack of debt from the 2024 $2.7 billion acquisition of Neiman Marcus and Bergdorf (financed with  $2 billion in debt) and the ire of creditors after Saks missed a $100 million payment in December. The real reason is arguably the inability of large retailers to adapt to changing trends. More Americans buy clothes online, and mega-luxe brands from Louis Vuitton to Fendi have their own retail outlets now. The bankruptcy plan is meant to keep the business running, and Saks says it will close some of its 33 Saks stores, 36 Neiman Marcus stores, and 70 Saks Off Fifth discount outlets. But there’s been some further talk in New York about the valuable Fifth Avenue flagship across from Rockefeller Center: creating a slimmed-down department store on the lowest floors, and converting the rest to a luxury hotel. 

JPMorgan Chase CEO Jamie Dimon

• Dimon in the rough: Fresh off his reported $770 million in compensation last year, JPMorgan Chase $JPM ( ▼ 1.95% ) CEO Jamie Dimon said the largest U.S.bank saw profit fall 7% in the fourth quarter, as investment banking fees dropped on a slowdown in IPOs, and the company took a $2.2 billion charge for potential loan losses on the Apple $AAPL ( ▼ 0.85% ) credit card business it will take over from Goldman Sachs $GS ( ▼ 3.67% ) . Speaking of which, JPM’s 2025 profits hit $57 billion, not quite 2024’s $58.5 billion, the largest profit ever recorded by a U.S. bank.

• Drill, baby, drill: That’s BP’s $BP ( ▲ 1.18% ) new motto, after the UK-based energy giant said it’s taking a charge of up to $5 billion as it walks away from renewables and low-carbon energy like natural gas to go back to drilling for oil. BP’s shares are still down about 12$ from a  2023 peak, but up 6.5% in the past week. 

• Droning on: Look, up in the sky; It’s a bird, it’s a drone, it’s a Walmart $WMT ( ▼ 3.52% ) delivery! Walmart and Alphabet’s Wing drone company say they’re expanding service to 270 Walmarts by the end of next year. Walmart's Wing service now just serves the Dallas area. Fueling the expansion has been a successful push by drone lobbyists to allow commercial drones to fly out of sight of their operators. That’s a help for drones that monitor powerlines in the wilderness and offshore drilling platforms, but municipal authorities are concerned about packages dropping out of the sky and drones smacking into trees or each other or civilians. We’ll let you know if and when that happens.

• The alphabet now knows its 1,2,3’s—and 4’s. The Google $GOOG ( ▼ 0.84% ) parent became the fourth company in history to hit a $4 trillion market cap, sitting right below Nvidia $NVDA ( ▲ 0.16% ) ’s $4.56 trillion. Both Apple $AAPL ( ▼ 0.85% ) and Microsoft $MSFT ( ▲ 1.35% ) crossed the $4 trillion threshold last year, but have since slipped. Alphabet got a bump this week when Apple announced it was dumping its own AI effort and would be loading Alphabet's Gemini in its products.

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The short stack

Nike’s first pickleball sponsoree: Anna Leigh Waters

• Pickleball: Who said pickleball is just an irritating pastime for aging millennials? Not Nike $NKE ( ▼ 1.06% ) . The iconic sneaker brand has just signed its first pickleball sponsorship deal with 18-year old U.S. pickleball pro (yes, there is such a thing) Anna Leigh Waters, who will become the brand’s first global pickleball ambassador. Pickleball has become big business: the United Pickleball Association is offering $31 million in tournament prize money for pickleball pros this year. No word on how big Waters' contract is, but it's probably not quite up there with Michael Jordan’s, or the $1 billion-plus that LeBron James has secured. 

• Financial Follies: About that credit card crackdown. Jumping on the affordability bandwagon, President Trump said he wants credit card issuers to cap interest rates at 10 percent. Trump offered no clues about how he’d enforce the idea, a promise he campaigned on in 2024, but he’s already killed a Biden-era rule that capped credit card late fees at $8. Banks say that the ability to charge life-crushing interest rates (as high as 36% for some people with poor credit scores, and averaging about 19-24%) lets people with lower incomes get credit cards. “If you bring the caps down, you're going to get restricted credit, meaning fewer people will get credit cards, and the balance available to them on those credit cards will also be restricted,” said Bank of America $BAC ( ▼ 0.97% ) CEO Brian Moynihan, who earned $35 million in 2024. Then again, at 36% interest, maybe life without a credit card is better.

• Oil Outlook: A handful of Gulf Coast refineries outfitted more than two decades ago to handle the heavy, sulfurous muck that’s pumped out of Venezuela could be back in the black. Back in 2018, the U.S. imported 500,000 barrels of Venezuelan crude a day, but late last year that number had dropped to about 125,000. If Venezuelan oil gets to the U.S., and there’s been no confirmation of any agreement, that would be a big boost for refinery owners, whose shares have jumped since Jan. 3, when U.S. commandos captured President Nicolas Maduro. They include Marathon Petroleum $MPC ( ▼ 1.55% ) (up 10%), Valero Energy $VLO ( ▲ 1.08% ) (up13%), and PBF $PBF ( ▲ 1.92% ) (up 15%).

Trumplandia

• Inflation: What goes up just won't come down. This week’s inflation figures from the decimated Bureau of Labor Statistics showed there’s been little progress in trimming inflation, with core CPI stuck at 2.6%, about where it started the year. The problem is that hourly wages just aren't keeping pace, rising only around 1%. And that’s where the real affordability issue lies, says Douglas Holtz-Eakin, former director of the Congressional Budget Office. The solution, he says: “The administration should focus on getting the labor market back to life. Of course, the decline started with the announcement of the tariffs in April. The obvious solution is a U-turn on tariffs, which is not going to happen. But the administration needs to develop an alternative, and quickly.”

• China Trade surplus: So how did those tariffs work out for China? Very well, thank you. Despite a 20% drop in the value of exports to the U.S., China reported a global trade surplus of $1.19 trillion last year, up 20% from 2024. That was buoyed by export growth to Southeast Asia (up 13.4%, the EU (+8.4%) and Africa (+25.8%). Semiconductors (+26.8%), ships (+26.7%), and autos (+21.4%), were the top growth categories, the kind of products the U.S. used to export. Next week, China is expected to announce GDP growth of 5% for 2025, analysts from ING Bank wrote this week. The key question is how long China can keep up that growth. It’s facing trouble on two fronts: Rising protectionism abroad — Mexico has already ramped up tariffs and the EU is threatening to do the same, and while a weak currency keeps Chinese goods cheap abroad, it's raising costs for consumers at home, stalling domestic demand..

• Let’s make a deal! Chicago-based biopharma giant AbbVie, the company formerly known as Abbott, says it’s cut a deal with the Trump Administration to avoid tariffs on imported drugs in exchange for promising to invest $100 billion in the U.S. over the next 10 years, and selling some of its meds direct to patients through the government’s new pharma portal, called TrumpRx. Last April, AbbeVie pledged to invest $10 billion by 2035. It’s not clear if that investment is rolled into the new pledge. AbbeVie has about 6,000 employees across 11 plants in the U.S.

Elon’s World

• Grok’s XXX Trouble: Grok’s got an image problem: Its xAI-powered image-generating features have been enabling users to create millions of explicit, deep-fake nude photos of ordinary people, mainly women and children,  performing sex acts without their consent. California’s Attorney General Rob Bonta said the images are being used to harass women and children across the web. In a statement on Wednesday, Bonta said he’s launched a criminal investigation. “xAI developed Grok’s image generation models to include what the company calls a ‘spicy mode,’ which generates explicit content,” Bonta said. “The company has used this mode as a marketing point.” Bonta’s probe comes days after India, Malaysia, Indonesia, Ireland, the U.K., France, and Australia, as well as the European Commission, launched their own investigations. Malaysia and Indonesia have already moved to suspend Grok. “It’s disgusting,” U.K. Prime Minister Keir Starmer said. Musk said Wednesday he was “not aware of any naked underage images generated by Grok,” and blamed “user requests.” U.K. media later reported that X has agreed to eventually block users from creating deep fake nudes and bathing suit pics, if Parliament passes a law banning the posts.

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You’re clearly into smart people talking about even smarter things. Lucky for you, that's literally our whole deal at Cheddar. We interview the brightest minds in business, finance, and tech. If you'd like more in-depth analysis from interesting people, lcheck out our where to watch page and turn us on 24/7! Your wallet will thank you and so, more importantly, will your mind. But also your wallet. Remember that. 

Peter S. Green is a veteran reporter and editor who has spent more than two decades covering business and finance from Eastern Europe to New York City, and has worked for Bloomberg News, The New York Post, The New York Times and The Messenger. He lives in New York City and is always looking for the next big story. Email him here.

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Early last Saturday morning, U.S. commandos abducted Venezuela’s sitting president, Nicolás Maduro, and his wife, Cilia Garcia, to stand trial in New York on drug-running charges. Then President Donald Trump announced the U.S. will be “running” Venezuela, and control the country’s oil exports, its main source of revenue. Trump said he’d make sure buyers pay market rate for the oil and that the proceeds go to help the Venezuelan people, one in four of whom are starving after a quarter-century of corrupt government. Trump and Secretary of State Marco Rubio say they’re counting on the country’s interim leader, former Vice-President and Maduro ally Delcy Rodriguez, to play ball with their plans. It’s not clear to what extent she and the rest of the country’s heavily militarized, authoritarian government will go along, but Rodriguez is a savvy political player: As foreign minister, she ensured Venezuela donated $500,000 to President Trump’s 2017 inauguration committee.

In outline, the Trump plan is this: As Venezuela sits on possibly the largest proven oil reserves in the world, the U.S. will spend either taxpayer dollars or encourage U.S. companies to spend their own money — a plan U.S. oil companies have rejected without taxpayer guarantees — to rebuild Venezuela’s collapsed oil infrastructure. With its naval blockade of Venezuela, the U.S. will determine which ships can leave the country carrying oil abroad, and will process the oil sales through offshore accounts and strangely, not via the U.S. Treasury. The money will buy U.S. food and supplies to feed Venezuela and restart its economy.

But here’s the challenge: First off, oil isn't the weapon it once was. The U.S. is a net exporter of oil and refined petroleum products, and with oil prices already below $60 a barrel, it doesn’t take much to bump it below $50, at which point it becomes unprofitable for oil companies to pump much of the oil in America’s reserves. Second, Venezuela’s oil is low-quality thick crude, laden with sulfur. Extracting the good stuff from the goop is expensive: It needs a steam pipe pumping superheated water and chemicals into the ground to melt the oil enough for it to flow into the standard extraction pipe of a well. Then it needs costly processing that requires more special chemicals in special refineries before it can be shipped abroad for final refining into gasoline, diesel, and other petroleum products. That’s why Venezuelan oil already trades at a discount of $13 to $25 a barrel compared to West Texas Intermediate or Brent crude. Canada’s own heavy tar sands oil trades at a $13-$15 a barrel discount, suggesting a future price band for Venezuelan oil.

Added to those challenges is the enormous investment needed to increase production — oil analyst firm Rystad estimates it will take $180 billion and at least a decade to restore Venezuela’s production to its peak of 3 million barrels a day, last seen in the early 2000s. Output is now estimated at about 820,000 barrels a day, or less than 1% of the less than 100 million barrels a day pumped around the world last year. So even at full capacity, Venezuela’s oil production won’t affect global production or supply. The markets reinforced that, with oil futures virtually unchanged this week. Sure, some observers have noted that U.S. refiners spent close to $100 billion in recent decades to accept heavy oil, the kind that comes from Venezuela, but that’s also coming in by pipeline from the tar sands of Canada. Moral arguments on the pro and con side for regime change in Venezuela aside, experts are finding it hard to see how the plan to exploit Venezuela’s oil makes business sense.

—Peter S. Green

Big Businesses mentioned this week:

$ORCL ( ▲ 1.59% )  $WBD ( ▲ 0.18% )  $NFLX ( ▲ 0.52% )  $PSKY ( ▼ 2.57% )  $BUD ( ▼ 2.49% )  $JPM ( ▼ 1.95% )  $GS ( ▼ 3.67% )  $AAPL ( ▼ 0.85% )  $TSLA ( ▼ 0.1% )  $BYDDY ( ▼ 3.82% )  $F ( ▼ 3.67% )  $NVDA ( ▲ 0.16% )  $SIEGY ( ▼ 2.87% )  $LMT ( ▼ 1.43% )  $GD ( ▼ 1.48% )  $HEI ( ▼ 3.97% )  $LHX ( ▼ 2.35% )  $RTX ( ▼ 2.38% )  $KTOS ( ▼ 4.03% )  $AVAV ( ▼ 2.61% )  $NOC ( ▼ 1.84% )  $PLTR ( ▼ 0.34% )  

This week, big business!

• The usual suspects

• Car talk

• Trumplandia

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The usual suspects

The Warner Bros. logo sure has changed a bunch over the years…

• WBD’s “just say no” moment: David Ellison and his dad Larry, the founder and CEO of Oracle $ORCL ( ▲ 1.59% ) , are not having much luck with their efforts to convince the board of Warner Bros. Discovery $WBD ( ▲ 0.18% ) to dump Netflix’s $NFLX ( ▲ 0.52% ) $83 billion bid for the Ellison-controlled Paramount Skydance’s $PSKY ( ▼ 2.57% ) more speculative but nominally bigger bid of about $108.4 billion. Even after Larry promised to backstop $40 billion of the huge debt pile Paramount would take on to buy Warner, the WBD board said on Wednesday that the offer is too risky. Among their objections: Paramount wants to halt WBD’s spin-off sale of its cable assets, and hasn’t agreed to pay WBD the $2.8 billion it would owe Netflix for breaking off the engagement and returning the ring. Paramount's latest bid offers “insufficient value,” including “an extraordinary amount of debt financing” that creates a risk the deal may not close, Samuel Di Piazza, the WBD board chair, said in a letter to shareholders. Then there’s the elephant in the room: politics. Donald Trump’s FCC boss, Brendan Carr, who told Congress his regulatory agency is not independent of the president, has indicated he’d try to block the Netflix bid, claiming it would give the streamer too much market power. One reason for the price gap: Netflix would come in after WBD spins off its cable and linear properties, including CNN, which Trump said needs a new owner. The Ellisons have already begun remaking Paramount's CBS News unit as a pro-Trump voice, most famously by appointing right-wing media disruptor Bari Weiss as editor in chief, and cancelling a 60 Minutes dive into conditions for deportees from the U.S. at a prison in El Salvador. Shares in $WBD ( ▲ 0.18% ) are up 172% in the past year, since it became clear that CEO David Zaslav would sell the company. Shares rose 0.3% on Wednesday. Oracle is up 19% in the past year, after a 37% plunge from a September high.

• Can it: Budweiser’s Belgian parent Anheuser-Busch InBev $BUD ( ▼ 2.49% ) said it will spend $3 billion to buy back a 49.9% stake in its U.S. plants that make the cans that hold the King of Beers. The seven plants in six U.S. states were sold to Apollo Global Management in 2020, for about the same price, as part of a plan to pay down debt it racked up buying SABMiller. Now, cash flow is stronger, and AB InBev wants to be sure someone can hold its beer.

• Advisedly not: JPMorgan Chase $JPM ( ▼ 1.95% ) says it’s planning to drop the use of all proxy advisory firms, and replace them with its own AI service to determine how to vote shares in more than 3,000 public companies. The firms, including ISS and Glass Lewis, analyze a company’s activities and recommend how shareholders should vote on board members and other actions that come up at annual meetings and special shareholder meetings or votes. The firms often look critically at incumbent boards and have often irked CEOs and boards who dislike the scrutiny. Last month,  President Trump called on the SEC to investigate proxy advisers. JPM chief Jamie Dimon has been a  vocal critic of theirs, too, saying earlier this year they “should be gone and dead.” Definitely on the agenda at JPM’s next annual meeting: Dimon’s pay package. The chief took home about $770 million last year, as the bank’s share price rose 34%, putting the 69-year-old exec’s net worth at $2.4 billion, according to Forbes. 

• Bad Apple? Goldman Sachs $GS ( ▼ 3.67% ) says it finally found someone to take Apple’s $AAPL ( ▼ 0.85% ) disappointing credit card business off its hands: JPMorgan Chase $JPM ( ▼ 1.95% ) , which has its own vast credit card issuing business. Goldman has been desperate to exit the card business, after failing with its online consumer banking businesses. The firm shop lost $3 billion from 2020 to 2023 on the Apple Card and its online bank, Marcus. After announcing plans to kill Marcus and sell the card, Goldmann's stock shot up 34% in a year. The JPM deal will take about two years to fully close, and includes $20 billion in consumer debt.

• Boeing’s Baaaaack, Baby! Alaska Airlines $ALK ( ▼ 9.41% ) , whose 737 popped a door in 2024, sending Boeing’s stock crashing, and ending the career of former CEO David Calhoun, has given the U.S. planemaker a massive boost, ordering 110 new passenger jets, including 105 737’s, this time in the forthcoming Max10 configuration. The other five planes are long-haul 787-10 Dreamliners, which will likely be used on new routes to South Korea and Italy. Alaska has 413 planes in its fleet. Boeing has more than 6,000 aircraft on backorder, so the company is looking healthy again to investors. Boeing shares are down only about 8% since the blowout, but up 67% from an April low.

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Car talk

Don’t say “number 2.”

• Tesla is number two in the EV market, now. The EV maker’s sales fell 16% in the third quarter, and 9% for the full year, falling to 1.64 million cars worldwide from 1.8 million in 2024, largely because the federal government ended its $7,500-a-car EV subsidy. Meanwhile China’s BYD $BYDDY ( ▼ 3.82% ) (the name stands for Build Your Dream) said it sold 2.26 million electric cars in 2025, up 28% from 2024, under founder and CEO Wang Chuanfu. Still, if Tesla can hold on, the U.S.market will grow. Analysts Cox Automotive expect EVs to make up 8.5% of the U.S.new car market this year, doubling by 2030.

• There’s a (smaller) Ford $F ( ▼ 3.67% )  in your future: Cutting back on EV production didn't hurt Ford’s bottom line. Surging sales of lower-priced trucks, including the Maverick and Ranger, saw the total number of vehicles Ford sold in the fourth quarter jump 2.7% to 545,216. A 5.4% rise in truck sales made up for a 2.5% drop in SUV sales. Maverick sales climbed 54%, while Ranger sales jumped 46%. Ford’s share price is up 41% in the past year. Curiously, despite inflation, tariffs, and job losses, new car sales in the U.S. are up slightly in 2025. Why? Because the rich are spending big. Cox analysts say Families earning $150,000 a year or more now buy 43 % of new cars, up from one-third in 2019. Households earning less than $75,000 are buying about 25% of vehicles sold, down from more than a third in 2019.

The tech stack

Not pictured: Nvidia CEO Jensen Huang with his board of directors.

• It’s Jensen Huang’s world, and we’re just living in it. The Nvidia $NVDA ( ▲ 0.16% ) CEO is headlining the vast Consumer Electronics Show in Las Vegas this week. At one event, Huang said he’s churning out advanced H200 AI chips for Chinese customers as Nvidia tweaks “the last details” of an export agreement with the Trump Administration. Despite concerns that the chips could give China an edge in AI development, Trump agreed Nvidia could export the chips as long as he gave the government 25% of the profits from China sales. The Chinese market may be short-lived for Nvidia, as the country's domestic chipmaking surges. A report by consulting firm Frost & Sullivan says Chinese chips would go from being backups to “core pillars” of China’s AI industry by 2030. On Monday Huang said Nvidia has developed a family of open AI models called Alpamayo, that mirror the human-like thinking needed for self-driving cars. Will it catch up with Tesla $TSLA ( ▼ 0.1% ) , or even beat Waymo? Nvidia is linking up with Mercedes $MBGAF ( ▼ 2.58% ) at first, but leaving carmakers to develop the hardware.  Musk said this week that he’s “not losing any sleep” over Nvidia’s newly-unveiled autonomous car tech:

Twitter tweet

• Powering hungry: Huang also unveiled a new and faster AI server system. It’s called the Vera Rubin (named for a pioneering female astronomer). All its new chips will need a lot of electricity, and Nvidia, along with German engineering giant Siemens $SIEGY ( ▼ 2.87% ) are investing in a BIll Gates-backed nuclear fusion startup called Commonwealth Fusion Systems. CFS also signed a deal to sell Google $GOOGL ( ▼ 0.74% ) power from the first commercially viable fusion plant, which it says it wants to bring online some time in the 2030s.

• Power struggles: Big tech and the American consumer are locked in a power struggle over… (you guessed it) power. As electricity rates rise across the country, most notably in the Mid-Atlantic -Midwest region whose energy flows are governed by the 13-state PJM interconnection, local governments are demanding that new data centers be prepared to switch to backup power or power down to avoid power cuts or blackouts. But the data centers say they can’t, or won’t, unplug. “It’s a high-stakes fight, because hundreds of billions of dollars or trillions of dollars of capital are on the line,” Michael Webber, an engineering professor at the University of Texas at Austin and former chief technology officer at investment firm Energy Impact Partners told the Wall Street Journal. “Power is the critical bottleneck.”

Trumplandia

• What’s the fun of being president if you can’t move the stock market? On Wednesday Donlad Trump rattled the stock market by declaring that he’d ban institutional investors from buying more single-family homes, and told defense contractors to cut their CEO salaries to $5 million because they’re charging too much and taking too long to build or repair weapons for the U.S.military. Contractor Raytheon $RTX ( ▼ 2.38% ) was singled out: “Either Raytheon steps up, and starts investing in more upfront Investment like plants and equipment, or they will no longer be doing business with the Department of War,” Trump wrote on his social media platform Truth Social. He told the contractors that they need to build more plants in the U.S.,and he’d bar them from stock buybacks, even though such threats may technically be beyond his authority.

• Trump also claimed he’s planning to boost defense spending by 50% next year, to $1.5 trillion from the currently budgeted (but not yet spent) FY 2026 budget of $1.1 trillion. He also aims to pay down the national debt and pay a dividend to “moderate income Patriots,” arguing that tariffs will cover the costs. The math may not pan out, though, because tariffs brought in about $124.5 billion in revenue between January 2025 and September 2025 before accounting for income and payroll tax offsets, while total federal revenue for the 2025 fiscal year (ending on Sept. 30) was $5.23 trillion, and total spending was $7.01 trillion, leaving a deficit of $1.78 trillion. With the national debt at over $38 trillion, interest payments alone are over $1 trillion a year. Still, the mere whiff of more defense spending boosted a raft of defense stocks in early trading Thursday. Lockheed Martin $LMT ( ▼ 1.43% ) and General Dynamics $GD ( ▼ 1.48% ) swept past price targets while other defence stocks rose, including Heico $HEI ( ▼ 3.97% ) , L3Harris $LHX ( ▼ 2.35% ) and even Raytheon $RTX ( ▼ 2.38% ) . Movers included Kratos Defense $KTOS ( ▼ 4.03% ) , AeroVironment $AVAV ( ▼ 2.61% ) , Northrop Grumman $NOC ( ▼ 1.84% ) , and Palantir $PLTR ( ▼ 0.34% ) .

• Housing issues. Back on the home front, Trump seems to be reacting to voter anger in some red states over the rising price of housing. The Government Accountability Office found in 2024 that large institutions owned 25% of rental homes in Atlanta and 18% in Charlotte. Home prices are up more than 50% across the nation since 2019, and the National Association of Realtors says the median existing-home price in November rose to $409,200, up 1.2% in a year. “People live in homes, not corporations,” Trump posted on his social media accounts. But some housing experts are calling out Trump’s post as disingenuous. Under Trump, the federal Dept. of Housing and Urban Development has rolled back many protections for individual homebuyers, including “First Look” requirements that gave owner-occupants, public entities, and nonprofits a chance to buy distressed properties and mortgages before they're available for investor purchase. "An administration that wants to prioritize owner-occupants could restore those protections," one former HUD official told USA TODAY’s Andrea Riquier.

Want more Cheddar?

You’re clearly into smart people talking about even smarter things. Lucky for you, that's literally our whole deal at Cheddar. We interview the brightest minds in business, finance, and tech. If you'd like more in-depth analysis from interesting people, lcheck out our where to watch page and turn us on 24/7! Your wallet will thank you and so, more importantly, will your mind. But also your wallet. Remember that. 

Peter S. Green is a veteran reporter and editor who has spent more than two decades covering business and finance from Eastern Europe to New York City, and has worked for Bloomberg News, The New York Post, The New York Times and The Messenger. He lives in New York City and is always looking for the next big story. Email him here.

Editor Peter Green spoke with experts about the trends that will shape big business and the economy in 2026.

Energy

We spoke with Carolyn Kissane, a professor at New York University’s Center for Global Affairs, where she teaches and researches on the geopolitics of energy.

BBTW: What happened to the ‘great energy transition’ that was supposed to leave oil, gas and coal on the dustheap of history?

Carlyn Kissane: The world is increasingly divided into electro-states and petro-states. The U.S. is becoming a petro-state: We see an increase in the use of oil, natural gas, and even coal. And part of that is just driven by a number of different factors, we have AI, we have electrification, we have the fact that people still have a desire to drive and fly. China is an electro-state. They're really building out electrification. China is the great disruptor to the U.S. energy dominance model. When you look at the future demand outlook for oil and gas, China can get renewables in place faster than oil and, particularly, gas, which needs very expensive infrastructure. Meanwhile, they're locking in consumers for their renewable energy technologies that are going to displace fossil fuels. Still, we are a bit of a hybrid. We produce the most oil, the most natural gas, but we also continue, even in the face of antagonism, to build out renewable energy technologies.

Where are oil and gasoline prices going? Crude is down 20% this year and it’s dipped below $60 a barrel. Do we go into the lower end of the $50 market?

That's possible. And that's where you get into some interesting scenarios, because U.S. producers will not find the low 50s very attractive for continuing production. So there might be some reining in of production, which will then ultimately lead to a tighter market over the medium to long term. Gasoline will stay within the mid $2 a gallon range, which will hurt EV sales. Plus, you have the rollback of fuel efficiency standards and EV incentives. Historically, when prices at the gas pump go down, Americans tend to think, ‘well, it's a good time to buy a bigger car.’

What about Venezuela? There’s talk that one motive behind the U.S. confrontation with the Maduro regime is to get access to Venezuela’s oil reserves.

We're not going to see additional barrels coming out of Venezuela without a lot of investment in infrastructure. Again, there'll be a question as to whether companies are willing to go in, given the cost outlook, the capex that it would require, and whether or not we actually need additional barrels on the market in the medium to long term.

Affordability

BBTW spoke with Mike Konczal, senior director of the Economic Security Project, and a former senior economic adviser to President Joe Biden. Mr. Konczal focuses on affordability, the new watchword in economic policy, and he’s a close watcher of economic data. BBTW asked him what to expect with jobs, interest rates, and the GDP.

What are we likely to see in 2026?

Mike Konczal: The trends that accelerated in 2025 and are likely to continue: It’s going to be a very low-hire economy — unemployment will probably continue to go up, not because people are being laid off, but because businesses aren't hiring. People who are new to the labor market, especially young people, will find it hard to find a job, and that will mechanically increase the unemployment rate. Even if no one loses their job, the fact that people can't find jobs, which really stands out in the data, is quite important. That will create a fair amount of discontent and discomfort with how the economy is doing, regardless of the headline numbers.

What about consumer spending—it’s been surprisingly robust despite tariffs and unemployment, and continuing inflation.

That’s the second trend: there was a slowdown in consumer spending, a slight one. It wasn't huge, but in the first half of 2025 in particular, perhaps because people were most nervous about the tariffs and what exactly that would look like. During the Biden administration, people hated the economy in consumer sentiment surveys, but they kept spending, and that kept the economy going pretty strong in ‘23 and ‘24. Now people hate the economy, and they're not spending as much. The pro case is that the stock market's booming, and that's making people feel very rich and allowing more affluent people to keep the economy going, the so-called “K-shaped economy.” But with healthcare premiums likely to spike, people are going to feel that quite a bit. 

With fewer jobs, inflation stuck just below 3%, and consumers having to spend a lot more on healthcare, what will that do to Gross Domestic Product and interest rates? Will we have a recession?

A slowdown in spending would cause lower growth, and in turn, a Fed that's not super excited to cut rates because inflation is still slightly above target…it will be less like, there's a giant recession, or it's the 1970s again, or unemployment's going to skyrocket, which I don't think is true. But we will be a little bit poorer, and things will work a little bit less, and it'll be a little bit harder than it needs to be. I don't think that's great for the American people.

Management

Since the end of World War Two, the U.S. has been the world’s dominant economic power, but now that’s changing. China and the EU are each on track to overtake the U.S. in economic activity by the middle of this century. Are America’s CEOs ready? BBTW spoke with Hal Gregersen, senior lecturer in leadership and innovation at MIT's Sloan School of Management, a former executive director of the MIT Leadership Center,

BBTW: What does America's corporate management have to do to react to this fast-changing and unpredictable economic and political environment?

Hal Gregersen: Well, do you have a couple of days? The data show that the average CEO is late 50s, early 60s. Their experience base has very little to do with the current environment that they're facing, and relatively few of them have any expertise level in or sense of the technologies that are compounding and combining. And you look below that group of people, and it's people reporting to the CEOs, at most will be there five years on average, so most senior executives, and most CEOs are in their role at most seven-ish years, which means that there's very little incentive or capability for the average senior leadership team to care about the future they're walking into, or be capable of doing something about it. They're already painted into a corner.

How do they get out of that painted corner? 

The first question I ask senior leaders now, board members, CEOs, C-suite teams, is about AI. I ask: “AI is impacting your world but what specific skills and roles and parts of your identity are you going to let go of and new ones take on in the next five to ten years?” Less than 5% of any group I've dealt with in the last 12 months will acknowledge either verbally or with their eyes that they’ve thought about that question before. The degree to which they fail to look at themselves before they start making sweeping changes across an organization is just stunning to me. That's the starting point, being aware that this is how my world is changing because of these technological changes. So that thing sort of stacked up against them.

Many of these leaders came through training programs or got their MBAs long before AI was in widespread use. Do they have the tools to handle this new world?

Relatively few of the senior leaders have a technology background or a science background to understand these compounding and combining technologies, and as a result, what they don't understand, they often delay in terms of making significant choices. And this is not the time to be delaying. It's the time to be looking very far forward. Some companies and leaders do make sure they plan far into the future: BlackRock, it's 30 years; for Jensen Huang at NVIDIA, it's at least 10 to 15 years. Same for Lisa Su at AMD. I often ask the second set of questions after presenting some information about sensors and IoT, semiconductors, AI, the quantum economy, biotechnology, energy technology, space technology, autonomous systems. We'll ask these same senior leaders, number one, which of these technologies or combinations are most deeply impacting your world today? And then we'll ask them, which do you think will be impacting your world tomorrow? They pick maybe one or two. Then you ask them how many of these technologies do you actually track personally and understand what they are and what their implications are for you? I did this with a group of 200 board members and CEOs two weeks ago. I'm not kidding, no more than 10 hands went up in the room. People just fail to grasp that all of these things, either directly or indirectly, are reshaping their world.

How do these executives begin that process of looking at themselves?

We change organizations by changing individuals. The first piece becomes, are these leaders genuinely challenge-driven, and do they have clarity about the challenge, and are they transparent about the challenge? One of the top three needs is creative thinking. The elite set of leaders who are creating the ways that we're living are constantly thinking down the road and acting in the present to get there. Even though that intent in the future is foggy at times, they're doing it by design: Whether it's individually or as an organization, as we enter 2026, we're going to be different in the future. But are we going to be different by design or by default? They need to think about what are the challenges we care about? What are their horizons on those challenges? Are they big enough for where we need to go? What are the skills, roles, and identities required to get there? What are we going to have to let go of in order to take on these new things, to create that kind of new us? And that's the direction the successful folks go.

Can the old dogs learn these new tricks?

There's roughly 10 or 15% sitting in a room hearing the same stuff, for whom it finally clicks, and they decide, ‘I am going to do something about this.’ It's that I've thought carefully about who I am and the organization I'm in, and I've come to conclusions about something that's going to sound weird when I say it, and we're still not maybe 100% set on the language, but it works for the moment. What are, as a leader, my truth-seeking mechanisms in a rapidly changing world?

What’s one tool leaders can use?

It's called the questionverse. If you and I were in a meeting like we are right now and you got a challenge at the beginning of the day, I would say to you, let's do a questionverse, and here's what I mean by that. We're going to set a timer for four minutes. We're going to generate as many questions as we can together in those four minutes. No answers, no explanations. Let's try to get 20 questions in four minutes. And if we suspend our conviction enough to stop and try that simple exercise, 85% of the time, we reframe our challenge, and we get at least one idea to move it forward. 

Want more Cheddar?

You’re clearly into smart people talking about even smarter things. Lucky for you, that's literally our whole deal at Cheddar. We interview the brightest minds in business, finance, and tech. If you'd like more in-depth analysis from interesting people, lcheck out our where to watch page and turn us on 24/7! Your wallet will thank you and so, more importantly, will your mind. But also your wallet. Remember that. 

Peter S. Green is a veteran reporter and editor who has spent more than two decades covering business and finance from Eastern Europe to New York City, and has worked for Bloomberg News, The New York Post, The New York Times and The Messenger. He lives in New York City and is always looking for the next big story. Email him here.

‘Tis the season, and there are just a few more days for retailers to get their hands on the money in America’s wallets. This year, the gap between rich and poor is widening. As much as 50% of all spending comes from the top 20% of families. With inflation still hovering near 3% and unemployment rising, BBTW asked MichaelAaron Flicker, the author of “Hacking the Human Mind: The Behavioral Science Secrets of 21 of the World's Most Successful Brands,” how brands keep consumers spending…

You wrote a book called “Hacking the Human Mind” - how do companies do that when it comes to getting you to empty your wallet at Christmas?

MichaelAaron Flicker: We have a lot of subconscious influences on what drives our purchase decisions. The holidays are like the SuperBowl for all retailers. They want to get you to spend, and they want to get you to spend now. It’s empowering for consumers to understand how they do it, because then they can be aware when they're making more of an emotional decision than they otherwise might have realized. Daniel Kahneman said, ‘Thinking is to humans like swimming is to cats. They can do it, they just prefer not to.’

There’s an inherent conflict when it comes to holiday shopping: Consumers, especially now with rising inflation, unemployment, and an uncertain economic outlook, don't want to spend much. But retailers — and the overall economy— need us to spend more. 

MAF: We want to get people to make responsible choices, but brands must get people to make decisions to buy. So, there's lots of psychological insights that they're using to get that done. The top 20% of consumers are exerting incredible buying power right now. Brands and retailers are focused on them, trying to capture as much of the pie as possible. For consumers to be aware of what's going on, I think it's helpful to understand some of the psychological tactics that brands use. 

The number one thing you see a lot of retailers using right now is scarcity: There's only so much time left in this offer, or there's only so many pieces left. The study that explains the emotional side of this comes from 2010 by Suzanne Shu at UCLA’s Anderson School of Management. Researchers offered participants a gift voucher worth $6 for a free coffee and cake at a local cafe, and randomly gave participants one of two vouchers, one expiring in three weeks and the other expiring in two months. The research showed that when the expiry date was two months away, only 6% of the vouchers were redeemed, but at just three weeks, 33% of the vouchers were redeemed. A lot of these lightning sales on Amazon $AMZN ( ▲ 0.98% ) are playing with, you're so worried that you're going to miss out. That fear of missing out on the deal really drives a lot of consumer behavior. 

What other tactics do they use to get you to spend?

There are two broad ways people get what they want in life, through other people, what we could call social connectedness, or through money. By focusing the buyer on the nostalgia, it boosts the sense of social connectedness, and the importance of money wavers. It explains why Pumpkin Spice Latte is such a moneymaker for Starbucks $SBUX ( ▲ 1.59% ) . It creates this nostalgic moment for them, 21 years and running, where it just prints money for Starbucks. 

What’s changed this year?

Social targeting allows marketers to create the feeling of a “movement” that is happening everywhere, even when it’s not. Through social platforms, brands can target consumers with multiple messages that “everyone’s buying this” with things like influencers, content creators and ads that have lots of likes and comments — even when it’s targeted to a relatively small group of people. Behaviorally, that’s enough. Humans don’t need statistical proof of popularity; we rely on perceived consensus. When a shopper sees repeated signals that “people like me are doing this,” the brain treats it as social proof and it has a very strong effect on a person’s action.

So social proof gets turbocharged by targeting. Showing early signals of participation, excitement, and discovery to the exact consumers most likely to be receptive to that behavior drives results. And marketers hope to compress the adoption curve: so that it feels like something is “taking off” almost instantly.

And then, once social proof is established, all the other holiday biases we discussed become dramatically more powerful through what we call “bias stacking.” Scarcity doesn’t just mean “limited supply” — it becomes “limited supply and everyone’s already grabbing it.” Urgency isn’t just about door-buster, 12 hour left deadlines — it’s about the rush to participate and not be left out. Time pressure, loss aversion, and FOMO stop operating independently and start reinforcing one another.

How do consumers counter this?

If we as consumers realize that being shown emotion in commercials is appealing to our subconscious, our sensibilities of wanting to connect with the story happening in the commercial…brands are doing that to lessen the evaluation of the cost and to increase the social connectedness with the brand.

What about the famous new Year’s resolutions?

There is this idea of fresh start effects. At New Year's, where there's a fresh start to the year, and people reset, it also happens on your birthday. If you move to a new home, the fresh start effect is in place. The ability to reset your habits has a surprising effect on your openness to try new brands or your openness to try new things. In 2018. in the United Kingdom, the West Midlands police wrote to 2,000 repeat offenders that now would be an ideal opportunity to make a fresh start and abandon your life of crime. When the police try the fresh start letter after the birthday of the criminal, the response rate jumps 56% in their willingness to call a hotline, largely because it's their birthday. 

So how do we “hack” back? 

The number one thing we would recommend is taking a beat, taking a breath and say, “what's really driving my urgency in this moment? Is the urgency coming from a deal I'm worried I'll never get again?” Or is my desire that my spouse really wants this, and that I was going to buy it anyway? Pick apart what's being emotionally driven and what's being rationally driven. By just taking a step back, imagine explaining the purchase to your spouse, and right away, you have to be more logical. And if you can't explain it, maybe you ought not do it. 

(This interview was edited for length and clarity) 

—Peter S. Green

Big Businesses mentioned this week:

$WBD ( ▲ 0.18% )  $PSKY ( ▼ 2.57% )  $NFLX ( ▲ 0.52% )  $ORCL ( ▲ 1.59% )  $PEP ( ▼ 1.96% )  $WMT ( ▼ 3.52% )  $DIS ( ▼ 0.61% )  $GOOG ( ▼ 0.84% )  $F ( ▼ 3.67% )

This week, big business!

• You wrote a book called “Hacking the Human Mind” - …

• There’s an inherent conflict when it comes to holi …

• What other tactics do they use to get you to spend …

• What’s changed this year?

• How do consumers counter this?

• What about the famous new Year’s resolutions?

• So how do we “hack” back? 

• The usual suspects

• Car talk

• Want more Cheddar?

The usual suspects

Not pictured: Netflix (left) and Paramount (right)

• No dice: Warner Bros Discovery $WBD ( ▲ 0.18% ) ’s board of directors just put their finger firmly in the shotgun barrel of the Ellison family, Jared Kushner and their Saudi Arabian backers, advising shareholders to turn down the hostile bid from the Ellisons’ Paramount $PSKY ( ▼ 2.57% ) for the storied Warner Brothers Studio, HBO, CNN, and a raft of other media and entertainment properties, and calling the Ellison offer “illusory.” The Board said it unanimously endorsed Netflix’s $NFLX ( ▲ 0.52% ) $72 billion offer over Paramount’s $108 billion bid. Paramount’s offer was to include $40.65 billion in equity, but the Ellisons balked at putting up their share of the cash, said the WBD board. “PSKY has consistently misled WBD shareholders that its proposed transaction has a 'full backstop' from the Ellison family. It does not, and never has,” the Board wrote in a letter to shareholders released on Wednesday. “There is no Ellison family commitment of any kind… they propose that you rely on an unknown and opaque revocable trust.” Netflix’s offer is fully funded, and it’s got a market cap of over $400 billion, compared to paramount’s $15 billion market cap, the Board added. Just hours before WBD rejected the Ellison bid, First Son-in-law Jared Kushner’s Affinity partners dropped out. Affinity was part of the Ellison offer, and its patron, Saudi Arabia’s Public Investment Fund, promised to invest $24 billion in the Ellison bid.(On Monday, Kushner’s firm also pulled out of a planned Trump luxury hotel deal in Belgrade after Serbian prosecutors charged four government officials with corruption linked to the hotel site). A deal with Netflix still needs the Federal government’s approval, and President Trump has said he wants to have a say in who gets WBD and its assets. Ellison's takeover of Paramount has shifted Paramount property CBS News to the right, and influence over WBD’s CNN, a longtime thorn in Trump's side, would be a victory for Trump. But under the Netflix option, WBD would spin off its cable and linear TV offerings (apart from HBO), potentially stymying a bid to control CNN. A final decision by shareholders won’t come for months, and a WBD sale would likely come late next year. Stay tuned for the next exciting episode!

• One big loser in the WBD drama is a company you’ve likely never heard of: Called Hackman Capital Partners, it owns and operates about 60 soundstages from Hollywood to Ireland. Shows like Seinfeld and Gilligan’s Island were shot on hackman’s stages, but the entertainment industry's consolidation means fewer new shows are being shot, and whoever wins the WBD battle will get a vast catalogue of old shows and films, meaning less demand for new productions. Sound stage construction boomed during the streaming boom a decade ago, and the pandemic, with private equity firms including Blackstone and Bain Capital pouring cash into new stages. New shoots of big-budget U.S. film and TV projects dropped 30% from 2022 to 2024, according to data firm ProdProp, and now payments are coming due on all the money that fueled the soundstage expansion, the Wall Street Journal reports. 

• What about Oracle? The Paramount-WBD dispute has been shining some unwanted light on Larry Ellison’s company, Oracle $ORCL ( ▲ 1.59% ) . Investors and analysts are concerned about Oracle’s big push into AI, upgrading its data centers to run AI bots. That’s why Oracle’s stock took off in September when OpenAI committed to buy $300 billion in computing power from Oracle over 5 years. Oracle’s stock shot so high that Ellison’s stake briefly made him richer than Elon Musk. But OpenAI doesn’t have enough cash to meet all its commitments—it’s basing them on imagined future revenue. And when Wall Street figured that one out, Oracle’s stock took a 10% dive. It dove another 5% today on more news of that ilk: That contracts that have yet to be signed and booked as sales might not actually come through. The contracts are called “remaining performance obligations” or RPOs, and for Oracle, RPOs now account for nine times Oracle’s revenue for the past four quarters. That’s helped send the stock down more than 40% from its all time high in September.

• Pepsi’s challenge: It pays for Pepsi’s $PEP ( ▼ 1.96% ) retailers to have friends in high places. Like at Pepsi, for instance. According to a class action suit filed this week, Walmart’s $WMT ( ▼ 3.52% ) friends at Pepsi went out of their way to protect the market share of America’s largest retailer. Pepsi would monitor retail prices charged by Walmart competitors for Pepsi sodas and snacks, and make sure Walmart got a better price. Walmart’s volumes were so great, Pepsi had to stay on the chain’s good side: Pepsi sales through Walmart and its affiliated Sam's Club accounted for 14% of revenue last year. The suit follows a Federal Trade Commission suit filed in the last days of the Biden Administration. Trump appointees withdrew the suit, but now a private suit makes the same claims. It argues that anti-trust law blocks wholesalers from conspiring with merchants and selling the same goods at different prices.

• The envelope, please: And the winner for broadcaster of the 2029 Academy Awards is…..  YouTube? $GOOGL ( ▼ 0.74% ) That’s right. The Hollywood awards show with its famous red carpet and celebrity dustups is changing places, ending what will be a 56-year run on Disney’s $DIS ( ▼ 0.61% ) ABC network. YouTube is the biggest TV network in the U.S. now, with 13% of all TV viewing time. What’s behind the move? Younger viewers now stream most of their programming over the web.

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Car talk

• Tesla’s self-driving troubles: Can Teslas really drive themselves? A California court said “no,” and ordered Tesla $TSLA ( ▼ 0.1% ) to fix its technology or stop advertising its Autopilot and self-driving capabilities which it says make the false claim that a driver can just get in a Tesla and let the car take them away. The court stayed its order to give the company time to make its self-driving tools work, but Tesla has faced a steady stream of lawsuits from drivers and victims of self-driving cars. Tesla still hasn't introduced fully self-driving taxis in Austin, Texas. It promised 500 cabs by the end of the year, now it says it may remove passenger seat monitors in about 60 cabs by the end of the year, but there’s no sign of the 1,000 Tesla robotaxis promised for San Francisco. Tesla’s robotaxis rely solely on cameras and machine-learning technology rather than also using lidar or radar sensors as Google’s Waymo does. 

• Ford’s $19.5 Billion EV hit: The spark is gone from Ford’s $F ( ▼ 3.67% ) EV business. After racking up losses of $13 billion since 2023, Ford said rolling back its investment in rechargeable cars and trucks, and writing down investments of $19.5 billion. The end of federal EV subsidies, and a peak in demand for large EVs, like the F-150 pickup made it clear to Ford leadership that EVs aren't a money-spinner. Still, Ford says it's on track for a $30,000 small EV pickup for sale by 2027while it expands hybrids. Ford shares dropped about 3% on the news, but shares are still up 38% this year. 

Trumplandia

• Inflation gets personal: A new study by the Bank of America Institute says lower-income families are facing inflation that’s higher than that of people in the upper-income brackets. Looking at Fed data in August, the Bank found lower-income households’ annual inflation was 3%, compared with 2.9% for middle and higher-income households, who spend a smaller share of their income on food, energy, and shelter. That’s largely because lower-income households spend more of their money on necessities such as food, rent, and transportation costs, “they are hit more, relative to higher-income groups who spend more on services,” Francesco D’Acunto, a professor of finance at Georgetown McDonough’s Psaros Center for Financial Markets and Policy, told CNBC. “The data is very clear about that.”

• Just how much inflation is there anyway? Bureau of Labor Statistics numbers for inflation, just out, show prices rose 2.7% in the October-November period from a year earlier. That suggests inflation is falling closer to the Fed’s 2-ish% target, and would let the Fed keep cutting interest rates. But some data watchers say the numbers may be rigged, and in fact, inflation is much higher. Meanwhile, the jobs report is also showing bad news, with job growth collapsing and unemployment rising. The economy lost 105,000 jobs in October, before gaining 64,000 in November. That’s a 6-month average of 17,000 new jobs a month, the lowest in 15 years (apart from the Covid period). Meanwhile, unemployment, measured in new benefit claims, is up to 4.6%, the highest since the end of Covid, and average hourly wages are rising by only 3.5%, which, if inflation is really at 3% means real wages are growing at only 0.5%, the lowest since 2023. 

Twitter tweet

• Apprentice Fed Chair Edition: Is it Kevin? Or Kevin? Or Chris? A couple of weeks ago, President Trump said he knew who he was going to pick to succeed Jerome Powell as Fed Chair in May. The front runner: One of the two guys named Kevin, this time Kevin Hassett, director of the National Economic Council. But now it seems Kevin Warsh, a former Fed governor, and Chris Waller, a current Fed governor, are also in the mix. The choice matters because Trump says he wants a Fed chair who will follow his lead and lower interest rates further. But the Fed is divided over whether to lower rates again. “If the next chair comes in with a specific agenda that is not consistent with the economic backdrop, I think that person will lose the room right away,” Tom Porcelli, the chief economist at Wells Fargo, told the New York Times. Whatever cuts the Fed may make next year, it’s not clear they will translate to lower mortgage rates or credit card rates for consumers. Last week’s Fed cut by a quarter-percentage point to 3.5%-3.75% saw mortgage rates climb to 6.38% from 6.33%.

Want more Cheddar?

You’re clearly into smart people talking about even smarter things. Lucky for you, that's literally our whole deal at Cheddar. We interview the brightest minds in business, finance, and tech. If you'd like more in-depth analysis from interesting people, lcheck out our where to watch page and turn us on 24/7! Your wallet will thank you and so, more importantly, will your mind. But also your wallet. Remember that. 

Peter S. Green is a veteran reporter and editor who has spent more than two decades covering business and finance from Eastern Europe to New York City, and has worked for Bloomberg News, The New York Post, The New York Times and The Messenger. He lives in New York City and is always looking for the next big story. Email him here.

It’s the intrigue of the hour in Hollywood, and the implications are real for the U.S. entertainment and news industries: Who will win the bidding war for Warner Bros. Discovery $WBD ( ▲ 0.18% ) , which includes HBO and CNN: Larry and David Ellison’s Trump-aligned Paramount Skydance $PSKY ( ▼ 2.57% ) with its Saudi-backed and Jared-Kushner-managed bid, or Netflix $NFLX ( ▲ 0.52% ) , the streaming giant that’s got a production deal with Barack and Michelle Obama?

Last week’s $72 billion Netflix megabid for the stumbling WBD media empire was not the end of the matter (as BBTW and Porky Pig suggested last week). Now mogul David Ellison (son of Oracle’s $ORCL ( ▲ 1.59% ) Larry Ellison) is leading with a $108 billion hostile bid for the whole WBD package, including the broadcast unit and CNN, which WBD’s board earlier said was going to be spun off into a separate company. 

Hollywood is rooting for Netflix, both for money and politics. “I’m ecstatic about anything that keeps WB out of the clutches of the MAGAsphere, which is where Paramount resides,” one prominent Hollywood agent told BBTW without wishing to be named. “At least Netflix is run by sane people. I doubt they’re going to dismantle Warner Bros films, WBTV, or any of WB's other excellent and time-honored divisions.”

As the agent who didn’t want to ruin his lunch hour, noted, a Paramount-WB studio merger would stifle competition — and paychecks — for talent, but Netflix acquiring Warner Bros. will just speed up Hollywood’s inevitable move away from in-theater movie releases. “The worst that happens is shorter feature release windows in theaters, and that’s the way the film industry is going in any event.”

The last two big studio mergers didn't turn out well for Hollywood: Disney’s $DIS ( ▼ 0.61% ) purchase of 20th Century Fox from the Murdochs saw it effectively stop making films, and Amazon’s $AMZN ( ▲ 0.98% ) 2022 purchase of Metro-Goldwyn-Mayer stifled the lion’s roar, effectively turning MGM into a film library. 

Beyond Hollywood, there’s deep concern about the outsize role of three Gulf Arab state investment funds, including Saudi Arabia’s Public Investment Fund, in the Paramount bid. They have committed $24 billion to Paramount’s bid (Paramount’s market cap is just $15.4 billion). Saudi’s PIF also funds Jared Kushner’s Affinity Partners. Paramount has told the SEC that the Gulf funds would give up any voting rights, but as the largest equity investors, they’d still carry weight.

A major concern is the effect combining CBS and CNN would have on the independence of the U.S. media, where politically active right-leaning media companies like Rupert and Lachlan Murdoch’s Fox $NWSA ( ▲ 1.04% ) have outsized influence. Trump said on Sunday that he would “be involved” in the sale decision. 

“What I think [Ellison] has in mind is to effectively challenge the Murdoch operation so there would be two giant [media] corporations in competition with each other,” Marvin Kalb, the founding director of the Shorenstein Center on Media, Politics and Public Policy at Harvard, told BBTW. “Politically, that presents a huge problem for [the U.S.], because Trump already has the support of the Fox operation, and if he also then has CBS and CNN, he would be in the position of a dictator having effective control over media from top to bottom.”

In a normal merger of this size and with its outsized influence on American society, regulators would scrutinize the proposals and might even scupper both deals in favor of WBD’s split into two public companies. But under a Trump administration, regulators are bending to the Administration’s will, said Reuben Miller, the chief regulatory analyst at Dealreporter. Even a national security review by the Committee on Foreign Investment in the U.S. will likely be a breeze, said Miller. “With Kushner's Affinity Partners' involvement, it's basically a get-out-of-jail-free card for the CFIUS process,” Miller said. “There's been a number of mergers in the last year where the chief of the antitrust division, Abigail Slater, has been overruled by senior officials at the Department of Justice and White House officials.”

More likely, he said, Netflix may be investigated for having too big a slice of the streaming market when it acquires Warner Bros’ catalogue and HBO.

—Peter S. Green

Big Businesses mentioned this week:

$WBD ( ▲ 0.18% )  $PSKY ( ▼ 2.57% )  $NFLX ( ▲ 0.52% )  $DIS ( ▼ 0.61% )  $AMZN ( ▲ 0.98% )  $ORCL ( ▲ 1.59% )  $MICC ( ▼ 1.74% )  $UL ( ▼ 2.43% )$CPB ( ▼ 0.12% )  $CBRL ( ▲ 1.47% )  $STLA ( ▼ 2.68% )  $GM ( ▼ 3.05% )  $CART ( ▲ 0.49% )  $XOM ( ▲ 0.63% )  $CVX ( ▲ 2.08% )  

This week, big business!

• Chips, ahoy!

• The usual suspects

• Elon’s World

• About those rates

• Want more Cheddar?

Chips, ahoy!

• What’s a chip worth? That’s one of the biggest questions and major concerns fueling worries about an AI bubble. Or more precisely, just how long will an AI chip last before the next generation chip puts it on the shelf? Moore’s law still seems to rule, and that has investors worried. If Nvidia $NVDA ( ▲ 0.16% ) chips become obsolete in less than three years, as many suspect they will, that could crash the value of AI farms, where investors are betting their expensive chips will last as long as six years. But if they don’t, and new billions are needed for buying the latest chip, the current financing model could collapse, along with the profits of AI firms, which will have to double the cash they spend on new equipment. 

• Shoulda seen it coming: Shares in Larry Ellison’s Oracle $ORCL ( ▲ 1.59% ) plummeted 14% by midday Thursday as its plans for vast AI spending came in way above Wall Street’s estimates and its revenue came in well below. Even as profits grew with per-share earnings of $2.26 blasting past Wall Street’s $1.64 estimate, the problem is the high spending (planned AI outlays on its new data centers jumped from $35 billion for 2026 to $50 billion) and the fact that most of its revenue comes from contracts for services that will take years to be delivered and paid for. Shares are down about 40% from their September peak, just after announcing a vast deal with OpenAI, even as the Magnificent Seven tech stocks have climbed 10%. Ellison owns about 41% of Oracle, and his own net worth has been on a rollercoaster ride alongside the stock, jumping from around $150 billion in early 2025, to $238 billion on Thursday, but briefly cracking $400 billion and besting Elon Musk as the world’s richest man for a day, the Bloomberg Billionaires Index shows. Meanwhile, the stock market continues to rise, as the Fed rate cut and the AI boom boost spending.

• Palantir sub contracting: The U.S. The Navy is handing over the management of its submarine repair and building pipeline to Peter Thiel’s Palantir, and its CEO, Alex Karp. The $440 million contract would save about 20,000 man hours a year, the company said (that’s about 10 full-time employees worth). More importantly it aims to prevent bottlenecks that delay sub repairs by years. 

• Soft dreams are made of these: Masayoshi Son, the Japanese investor who runs the quixotic Softbank $SFTBY ( ▼ 4.02% ) investment fund (it made billions on China’s Alibaba, and lost billions on WeWork and the tech stock plunge of 2022-23) says he’s planning to take hundreds of billions of dollars that Japan has kinda-sorta pledged to invest in the U.S., and build a group of Trump-branded industrial parks on Federal land to manufacture AI infrastructure parts. Son says he’ll start building next year, but under the tariff-cutting U.S.-Japan trade deal the money’s a part of, cash won’t start flowing until 2029. Siphoning that cash out of Japan could destabilize the Japanese economy, and would effectively be a low-cost but risky loan to the U.S. In a fascinating analysis, the St. Louis Fed says Japan might be better off tearing up the trade agreement and accepting higher tariffs. 

• The Nvidia nversion: After lobbying by Nvidia CEO Jensen Huang, President Trump agreed the U.S. based chipmaker could export its H200 chips to China, if it paid a 25% surcharge to the U.S. government, part of Trump’s vision of a booming role for government in the economy. National security hawks (and Chinese tech firms) said the chips could give China a step up in the race for AI supremacy, while Hunag argued the market would be huge. But Beijing has other ideas. It is reportedly planning strict limits on the H200 in a bid to stimulate demand for its own advanced AI-capable chips. Meanwhile, the U.S. Attorney in Houston said this week that the feds had busted a chip-smuggling ring that had sent or tried to send more than $160 million of export-restricted computer chips to China. The chips in question? Nvidia’s H100 and H200 GPUs.

• Details are emerging of another chip transfer: Nexperia, the Dutch company that makes chips for car parts, began working to move research and technology to China when it was bought by Chinese government-backed Wingtech in 2019, the firm’s Dutch former CEO told the New York Times. The Dutch government seized Nexperia in September amid concerns China would cut off the chip supply to European carmakers. 

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The usual suspects

• Ben & Jerry’s great stock market adventure: Magnum Ice Cream $MAG ( ▼ 1.08% ) , the Unilever $UL ( ▼ 2.43% ) spinoff that holds ice cream makers Ben & Jerry’s, Breyers, and Cornetto (and of course the chocolate-dipped Magnum bar) opened on Amsterdam’s Euronext exchange with a market cap of $9 billion. The company sees its biggest growth in the U.S. where Americans eat about 4 gallons of ice cream a year each, and the market is expected to grow from $79 billion in 2024 to $132 billion by 2032, especially because consumers will be able to offset the effects of eating so many magnums with GLP-1 weight loss drugs by then. Magnum holds about a 20% market share of the ice cream market in the U.S.

• Campbell’s is in the soup: It wasn’t enough for a top Campbell's Soup $CPB ( ▼ 0.12% ) exec to be ousted last month after he allegedly called the company’s famous canned soups “highly processed food” for “poor people,” that included “bioengineered meat.” (Campbell's said their meat is not 3-D printed). but tariffs on steel and aluminum used in cans, and on imports from Europe including Rao’s spaghetti sauce had cooled profits, so it’s hiking prices in prime soup season. The company said sales were down 2% from a year earlier in the last quarter, but its share price is down 35% this year.

• Cracker Barrel’s kitchen ills: It’s not just the rebranding controversy that’s killing Cracker Barrel $CBRL ( ▲ 1.47% ) : Food sales at the southern charm roadside rest stops are down 4.7% (retail sales are worse, down 8.5%), and foot traffic at its 660 locations dropped 9% in early November from a year earlier. Customers tell the Wall Street Journal it's about more than the logo. Cost-cutting programs sapped food quality, they say. “Ingredients and recipes changed,” one customer told the news org. “Same names but different experience.”

• Stellantis’ move-out fee: Carmaker Stellantis $STLA ( ▼ 2.68% ) is on the hook for about $157 million, after moving its Brompton, Ontario plant to the U.S. in response to Trump’s 25% tariff on auto and auto part imports. That’s how much the Ontario government had given Stellantis in aid to retool the factory to make gas-and electric-versions of the Jeep Compass SUV. A Stellantis spokeswoman said the shuttered plant wasn’t shuttered, just undergoing “an operational pause,” and that its 3,000 furloughed employees were still employed by Stellantis. Shares in the carmaker are down about 14% this year, but up nearly 40% from an early-April low. GM $GM ( ▼ 3.05% ) has also halted some production in Canada because of the Trump tariffs and reciprocal Canadian tariffs.

The short stack

• Two shoppers walk into an Instacart: It sounds like the setup for a dad joke, but it’s just the latest expose of surveillance pricing, a tech-powered technique that adjusts prices for an item based on an individual consumer’s profile. When Consumer Reports and two other groups did a series of tests, sending shoppers to Instacart $CART ( ▲ 0.49% ) to buy the same item in the same store at the same time, (they were linked in a Zoom call), they found some shoppers were charged as much as 23% more than others, with an average difference of 13%. In one instance, a dozen eggs sold for $3.99, $4.28, $4.59, $4.69, and $4.79 on Instacart at a Safeway store in Washington, D.C. Over a year, that could cost the average family $1,200. That’s thrown some shade on surveillance pricing. Instacart’s share price dropped more than 8% following the report’s release, though it’s since recovered a bit.

• Team USA’s own goal? The deal that host cities signed with soccer’s governing body FIFA to hold this year’s world cup at 26 sites in North America World Cup is gearing up to be a financial fiasco. Facing a collective funding shortfall of about $250 million, their contracts with FIFA bar them from doing what most host cities do - turn to local merchants for sponsorship. The merchants get to promote their brands and the cities get cash to cover the cost of putting on the tournament. But according to U.K. newspaper The Independent, cities can’t sign sponsorship deals with local business that might be in the same line of business as the Cup’s main sponsors, who include McDonald’s (Philly’s bid for a WaWa sponsorship was nixed), Bank of America (no local banks), Anheuser-Busch (no local breweries) and Coke (no other soft drinks). And that’s not all. Egypt and Iran, two Middle East nations that target gays and lesbians, have also complained to FIFA over a World Cup soccer match in Seattle that is planned to celebrate LGBTQ+ Pride. As the Associated Press reports, FIFA risks being accused of a double standard if it sides with World Cup teams’ federations over the city of Seattle. In 2022, at the World Cup in Qatar, FIFA fiercely defended the right of the host nation’s cultural norms to be respected in full by visiting teams, (a.k.a no Pride flags) although notably, Qatar’s scoring the World Cup was dogged by allegations of bribery. Neither Egypt or Iran have vied to host the tournament themselves, or bought the American President an airplane recently. So they might have to suck it up.

Elon’s World

• About that Space Race. First, it was comms satellites (Starlink versus Project Kuiper a.k.a. Leo), then moon shots (SpaceX v. Blue Moon), and now Musk and Amazon $AMZN ( ▲ 0.98% ) boss Jeff Bezos are dueling over orbital AI data centers. The advantage of putting AI centers in space? There’s no issue cooling off the GPUs, and free solar energy removes one barrier to Earthly expansion. But the disadvantages? Pretty much everything, from hosting the payloads into orbit or making repairs to getting the data up to the heavens and back without any lag time. Google $GOOGL ( ▼ 0.74% ) is planning its own orbital AI data center test in 2027. 

• Whether or not it puts AI data centers  into orbit, SpaceX still thinks it’s got a bright future. It’s considering an IPO next year after a capital raise that could value the rocket shop at $800 billion, making it the most valuable private company in the U.S. In July, a secondary share sale valued SpaceX at $400 billion. That’s even as the company has suffered a series of launch pad and midair explosions, prompting NASA to award some moon landing contracts to rival Blue Origin. Musk has a 40% stake in SpaceX, but the new raise could cut that percentage.

About those rates

Now that the Fed has come through with another quarter-percentage rate cut, the big question is: What happens next? Will mortgage rates fall? Will inflation stay tamed? Will hiring pick up? BBTW asked EY-Parthenon Chief Economist Gregory Daco for his take on how the Fed rate cuts will affect consumers:

BBTW: What’s the key takeaway for our readers from this week’s rate cut?

Daco: The main message is that a single rate cut helps, but it works slowly and its effect is limited. Mortgage rates may edge lower, but only gradually, because they depend more on longer-term market yields than on the Fed’s policy rate. At present the yield curve is steepening because of higher inflation, a concerning debt trajectory, optimism around AI driven growth and concerns about political influence on the Fed. 

Will lower rates make firms more likely to hire? 

Cheaper credit gives firms a bit more breathing room, especially on refinancing, but it is unlikely to trigger a hiring surge. With demand cooling and uncertainty still elevated, most companies will remain cautious.

Will lower rates help firms absorb some of the cost of tariffs and bring down prices for consumers?

Lower interest costs provide only a small offset. Tariff-related price pressures come from supply constraints, so monetary policy cannot undo them. That is why our core inflation view remains close to 3% through H1 2026.

Want more Cheddar?

You’re clearly into smart people talking about even smarter things. Lucky for you, that's literally our whole deal at Cheddar. We interview the brightest minds in business, finance, and tech. If you'd like more in-depth analysis from interesting people, lcheck out our where to watch page and turn us on 24/7! Your wallet will thank you and so, more importantly, will your mind. But also your wallet. Remember that. 

Peter S. Green is a veteran reporter and editor who has spent more than two decades covering business and finance from Eastern Europe to New York City, and has worked for Bloomberg News, The New York Post, The New York Times and The Messenger. He lives in New York City and is always looking for the next big story. Email him here.

TODAY’S NEWSLETTER IS BROUGHT TO YOU BY:

Fresh off of Black Friday and Cyber Monday, the start to the holiday season, BBTW editor Peter Green sat down with Ali Furman, U.S. Consumer Markets Industry Leader at consulting firm PwC to ask what trends she garnered from the initial data this year. It’s all about Gen Z, AI, and the new (low) appetite economy.

Peter Green: What’s your takeaway about the future of the retail economy from the start to this year’s shopping season? 

Ali Furman: The top three trends that I believe are going to have an impact on the economy from a consumerism standpoint, generational shifts, AI/agentic commerce, and weight loss drugs.

What’s the most interesting generational shift?

Gen Z is planning to spend 23% less [this shopping season] compared to last year. They're aged 13 to 29, there's two things going on: They have a lot more cost-of-living expenses, and a lot more of them have mortgages and children this year than last year. Prices of things like utilities and food have gone up, reducing the share of their wallet that goes toward expensive, more significant discretionary purchases. It’s also a sign that retailers are not yet meeting Gen Z's needs, because this is a generation that's digitally native, but they love to shop in stores. Their foot traffic is actually rising in brick-and-mortar retail stores, but sales are not corresponding with that increase in foot traffic. It's an opportunity for retailers to do better and capture their wallets in-store. They're also looking for very fast social-to-shelf velocity. So, that's another opportunity for retailers just to do a lot of social listening and not just plug into what the Gen Z-ers are currently interested in, but try to get ahead of them. 

So Gen Z is leading the way on this AI shift? 

Yes. Gen Z is the most cost-conscious generation we've ever seen. They care more about cost transparency, and they're more well educated on cost because of how much time they spend online and how savvy they are with being able to compare, and they all use AI now to help them.

And what about the Ozempic economy? That’s a new one to me, and I think, many of our readers: 

One of the trends that is heavily impacting the consumer right now is wellness, longevity optimization, and weight loss drugs. We call it a physiological disruption that impacts nearly every aspect of a consumer's body and brain. Just in the last six months, U.S. household penetration of users of those drugs, it's grown from 9% of American households have at least one GLP user to 14%. And that's before the cost has come down and before we've moved into other formats like oral pills. There are projections that say in the next 10 years, 75% of the U.S. adult population may be on this drug. 70% of people are considered overweight in the U.S. 40% of people are considered obese. And the oral pill form [is coming], and there's potential for a once-a-year injection. We think about this scenario, you're at your annual physical, and your doctor offers you an annual shot for weight management. So all of these things considered, we could see a very significant portion of the population on this drug. It's a physiological disruption akin to some of the greatest technological disruptions of our time, like the iPhone. When the iPhone first came out, no one could have predicted Uber, Netflix, streaming, TikTok. This is not dissimilar. What this drug does to people's psychology, they report feeling more self-confident and happier. 

What can you say about the economic effects?

We call it the appetite economy. There's a beauty aspect to this, major aesthetic changes that you want to work on, hair loss-related things, skin care-related things. There are travel and wellness-related implications. People stop taking food and wine-indulgent vacations, they move towards active, wellness-based vacations. People who consider themselves overweight, who used to buy a lot of accessories instead of clothing, shift away from accessories, and now they buy form-fitting clothing. They move away from quick-service restaurants toward casual dining for the experience, the quality of the food.

(The interview has been edited for length and clarity)

—Peter S. Green

Big Businesses mentioned this week:

$WBD ( ▲ 0.18% )  $NFLX ( ▲ 0.52% )  $CMCSA ( ▼ 1.53% )  $PSKY ( ▼ 2.57% )  $SBUX ( ▲ 1.59% )  $ABTC ( ▲ 1.74% )  $DIS ( ▼ 0.61% )  $GOOG ( ▼ 0.84% )  $AMZN ( ▲ 0.98% )  $AMD ( ▼ 1.3% )  $NVDA ( ▲ 0.16% )  $AAPL ( ▼ 0.85% )  $SSNLF ( ▲ 55.02% )  $LUKOY ( ▼ 42.0% )  $XOM ( ▲ 0.63% )  $CVX ( ▲ 2.08% )  $F ( ▼ 3.67% )  

This week, big business!

• The usual suspects

• The tech stack

• Car talk

• Want more Cheddar?

The usual suspects

• That’s all, folks! The bids are climbing for Warner Brothers Discovery $WBD ( ▲ 0.18% ) , and at press time, Netflix $NFLX ( ▲ 0.52% ) was leading the pack with a mostly-cash bid for WBD’s entertainment and streaming assets, including the Warner Bros. studio and HBO Max. NBCUniversal parent Comcast $CMCSA ( ▼ 1.53% ) also raised its bid for the studios and streaming, both according to news reports that don’t give a hard figure. But the Larry and David Ellison-controlled Paramount $PSKY ( ▼ 2.57% ) , which also owns CBS, has made a $25 a share all-cash bid (total: $60 billion) for the whole company, backed by an unidentified Middle East sovereign wealth fund. WBD says it wants to wrap up a sale by Christmas, and already planned to split the studios and streaming from its linear TV business, which also owns CNN. Any deal needs FCC and Justice Dept. approval, and President Donald Trump says he favors the Paramount bid, because he likes how the Ellisons are shifting Paramount’s CBS News to the right. Trump has also blasted Comcast CEO Brian Roberts for alleged anti-Trump programming. The Ellisons may sweeten their bid, the New York Post claims. But the markets will likely have the greatest sway over WBD’s board of directors, and Netflix CEO Ted Sarandos’ bid has left Netflix shares down 10% since reports of the bid surfaced, including a 5% drop on Tuesday when the new bid was announced. 

• Costco sues Trump; $COST ( ▼ 2.4% ) , the warehouse retailer that sells all that stuff you never knew you needed, in quantities you'll perhaps never use, at prices you can't resist, is taking on the Tariffs. In a Black Friday lawsuit against the Trump Administration, Costco asked the U.S. Court of International Trade to rule that Trump’s use of the International Emergency Economic Powers Act to impose tariffs is unlawful. Costco wants to ensure it gets a “complete refund” on import duties. The chain’s claim rests on an impending decision by the U.S. Supreme Court on whether Trump usurped Congress’s constitutional powers to levy taxes and tariffs. Legal observers said the Supremes’ Nov. 5 court hearing did not bode well for Trump. The suit doesn’t say how much Costco has paid in tariffs, but the Treasury says it’s collected more than $90 billion in tariffs.

• NYC gives Starbucks a tall order: Starbucks $SBUX ( ▲ 1.59% ) has agreed to pay $35.5 million to current and former workers in its New York City stores (plus $3.4 million in fines) for short-shifting baristas and failing to give them regular schedules, violations of New York City’s Fair Workweek Law. Hourly employees will get $50 for each work week from 2021 to 2024. Starbucks complained the city’s fair labor practices were a “compliance” issue, insisting it was not “wage theft.” Unions representing Starbucks employees have accused the company of keeping weekly hours for many employees below the threshold needed to be eligible for health insurance. 

• Is a Crypto winter coming? Bitcoin’s plunge from a high of near $120,000 to as low as $83,822 on Monday is shaking investor confidence in cryptocurrencies. No one is sure quite what’s driving the drop, but it’s coming as investors increasingly question the sky-high valuations of tech stocks, and try to divine the likelihood of another Fed rate cut. The end of the Fed's effort to tighten the money supply might have helped, as the New York Fed bought back $38.5 billion of T-bills, injecting cash into the financial system that may have helped pump up crypto prices. But in the opaque world of crypto it’s hard to know what’s happening. One thing that did show up in the charts: The Trump-family controlled American Bitcoin $ABTC ( ▲ 1.74% ) bitcoin mining firm dropped 39% on Tuesday, in what Eric Trump said was natural profit-taking by early investors.

• Who’s gonna wear the mouse ears? Disney $DIS ( ▼ 0.61% ) appears to be closing in on a successor to long-time CEO Bob Iger, who’s probably done more to shape the House of Mouse than anyone since Ol’ Walt himself. Top of the list: parks chief Josh D’Amaro and TV head Dana Walden. Iger’s shoes won’t be easy to fill. Iger served from 2005 to 2020, then led a putsch against CEO Bob Chapeck, his one-time protegé, in 2022. Disney shares spiked seven-fold in Iger’s first term to nearly $150, and his return pushed the stock up to nearly $200. But TV and streaming have dropped in popularity, and the stock is now trading at $105. Either D’Amaro or Walden will have their work cut out for them to recapture Disney’s past glory.

• Space Chase: Jeff Bezos’ Blue Origin has long been a second-place stalwart in the race to put things into space. But as NASA becomes increasingly frustrated with delays and launchpad explosions at Elon Musk’s SpaceX, Blue Origin sees a chance to eclipse its rival in the contest to return Americans to the Moon before Chinese astronauts can get there. Early in 2026, Blue Origin plans to put a small lunar rover on the Moon, and get an astronaut there by 2028. Key to the turnaround at Blue Origin: hiring operations chief Ian Richardson away from SpaceX. Musk has responded with his own plan to best Blue Origin, but has yet to win that contract from NASA. And Sam’s in, too. OpenAI CEO Sam Altman has been talking with another rocket company, Stoke Space, about an eventual controlling stake. Talks have halted as OpenAI deals with its terrestrial competition, but Altman mused recently that it may be more efficient to put solar-powered data centers into orbit than battle for scarce energy resources on Earth.

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The tech stack

• Open AI looks in the rear view mirror: And what it sees is an 18-wheeler named Google $GOOG ( ▼ 0.84% ) , prompting CEO Sam Altman to declare a “code red” effort to boost the quality of ChatGPT, the Wall Street Journal reports, citing an internal company memo. Google’s release of a new version of Gemini AI last month bested OpenAI’s models on benchmark testing, sending shares in parent company Alphabet up more than 15% in less than a week. OpenAI’s also facing the possibility of a referendum in California that could reverse its conversion from a non-profit to a for-profit company.

• Nvidia has its own rear-view mirror problem: Amazon $AMZN ( ▲ 0.98% ) . Amazon Web Services has launched a new chip, the Traimium 3, that can cut the cost of training AI models by 50%. That’s bad news for Nvidia, which has watched a series of AI chip deals go down without its involvement: OpenAI has signed with AMD $AMD ( ▼ 1.3% ) and Broadcom for their chips, Anthropic is using AWS’ Trainium2 chip for its Claude AI, and Meta is shopping for Google’s tensor processing units. Many of the buyers are still using Nvidia $NVDA ( ▲ 0.16% ) chips, just diversifying, and that pleases Wall Street. Morgan Stanley just raised its target for Nvidia shares to $250, a 38% jump from its opening price Thursday of $181.62, praising the firm’s 70% market share and reliable supply chain amid growing demand for AI. 

• Apple’s Siri problem: At 14 years old, Siri still can’t handle complex conversations,and Apple $AAPL ( ▼ 0.85% ) is shaking things up. AI head John Giannandrea is taking an apparent early retirement at 60, and Amar Subramanya, Google’s Gemini chat bot chief before a short stint at Microsoft, will take over AI. Despite the introduction of the AI-wired iPhone 16, Apple has yet to deliver an AI product that delights customers. Still, shares are up 17% this year, primarily on record sales for the iPhone 17.

• Samsung folds, again. Apple $AAPL ( ▼ 0.85% ) is set to dethrone Samsung $SSNLF ( ▲ 55.02% )  

  as the world’s best-selling smart phone this year, according to industry data source Counterpoint, for the first time in 14 years. But Samsung’s not folding. Well, it is, but not like that. It’s unveiled a tri-fold phone that folds up like a regular smartphone, or opens up as wide as a small tablet. Apple is preparing its own folding phone for 2027.

The short stack

• No tip tax break for pole dancers? The Big Beautiful Bill wiped out income tax on tips for many service industry workers, “digital content creators,” “entertainers and performers” and “dancers.” But conservative activists slapped an exception on the rule for “pornographic activity.” So much for that tax free income from your OnlyFans account. Well, it’s not really clear. In a deep dive into the topic, the New York Times notes that IRS agents would have to review your videos or watch your pole dances to decide. And of course, that may not be easy. Supreme Court Justice Potter Stewart, in a landmark 1964 case, said he couldn't define pornography, “but I know it when I see it.”

• Speaking of knowing it when you see it. Austrian businessman Bernd Bergmair, once the majority owner of a major X-rated video site, has approached the U.S. Treasury about buying international assets of sanctioned Russian oil major Lukoil. ExxonMobil $XOM ( ▲ 0.63% ) and Chevron $CVX ( ▲ 2.08% ) are also interested in Lukoil’s global network of refineries and retail gas stations. 

• Bad jobs data: It’s a bad time to be looking for work, as new data this week shows more job losses hitting the U.S. economy. Employers announced 71,321 layoffs in November, according to data from outplacement firm Challenger, Gray & Christmas. That’s up 24% from November 2024, while the Labor Department showed 191,000 initial unemployment benefit claims in the week ending Nov. 29, after 218,000 claims the week before. Earlier this week, payroll company ADP said the U.S. lost 32,000 private-sector jobs in November. Some of those numbers may overlap, but it’s all led to a feeling of doom and gloom, or shall we say, a challenging, grey Christmas, as the University of Michigan’s consumer survey shows 69% expecting more layoffs next year, double the share of employment pessimists a year ago. The stock market is also at record highs with the jobs data, ironically, bolstering hopes for a Fed rate cut next week.

Car talk

• Back to gas? For Ford $F ( ▼ 3.67% ) , the end of EV subsidies may also mean the end of the Electric F-150, America’s best-selling pickup, as Ford reported a fall of 61% in EV sales from a year earlier. President Trump’s rollback this week of auto emission standards isn’t helping, nor is Trump’s 25% tariff on all auto and parts imports. In fact, Americans appear to be fed up with high car prices. The Wall Street Journal reports that carmakers expect no growth this year or next, as cars sit longer in dealer lots, and more people default on auto loans. But used cars are no panacea—they’re in demand, and parts prices have soared from tariffs.

• Meanwhile, the Dutch government and Chinese automobile chip maker Nexperia are playing chicken. The Dutch government took control of a local subsidiary in September, concerned that the flow of chips to European carmakers could be halted. That’s become something of a self-fulfilling prophecy, with Nexperia’s Chinese owner, Wingtech Technology, saying it won't start making more chips for Europe until the government opens talks with the Dutch unit on who controls the company. 

Want more Cheddar?

You’re clearly into smart people talking about even smarter things. Lucky for you, that's literally our whole deal at Cheddar. We interview the brightest minds in business, finance, and tech. If you'd like more in-depth analysis from interesting people, lcheck out our where to watch page and turn us on 24/7! Your wallet will thank you and so, more importantly, will your mind. But also your wallet. Remember that. 

Peter S. Green is a veteran reporter and editor who has spent more than two decades covering business and finance from Eastern Europe to New York City, and has worked for Bloomberg News, The New York Post, The New York Times and The Messenger. He lives in New York City and is always looking for the next big story. Email him here.

With prices up, trade down, and only 32% of Americans feeling confident about the economy, BBTW editor Peter Green spoke with Tony Roth, chief investment officer of Wilmington Trust Investment Advisors, managing about $80 billion, about where we are and what comes next. 

Peter Green: When you look at the markets now, you look at the economy, tariffs, interest rates, how would you describe the situation?

Tony Roth: Right now, there's probably about a 45% chance of recession, which is attributable primarily to the significant deceleration that we've seen in the secondary indicators of the labor market since the data fog started. The labor market's really struggling right now. Typically, when labor numbers come down to these levels, you do have a recession. But there's a high degree of uncertainty because there's been this labor data blackout, and so we're going to start to get data soon, and we'll start to get a better read on whether or not the 45% should go up or down.

What should we be looking for in the job numbers?

Non-farm private payrolls. And quite frankly, even what would typically be considered a bad number is probably going to be good. So if we get a number between zero and 50,000 [net new jobs], that would be good for the equity market, not drastic enough to suggest a recession risk higher than 45%, but weak enough to suggest that the Fed, which has triggered the drawdown in equity markets, would be more disposed to cut interest rates in December because they're getting behind the curve on the labor market. Above 50,000 would really concretize the idea that the Fed's not going to cut in December, although there's still a lot more data to come out between now and December. Anything below zero would suggest the Fed is going to cut, but that they're cutting because the chance of recession is now above 50%.

What's causing this lack of hiring that we're seeing now?

Three things: A slowdown by consumers and uncertainty on the geopolitical horizon as it relates to the tariffs, [so] companies don't want to hire in that environment. Second, a lack of labor supply because of the immigration policies of the current administration. Over the last two or three years, 85 to 90% of new labor was coming from immigration. Third, technology and AI are starting to help companies increase productivity.

What could turn all that around? 

Some of the provisions in the big beautiful bill [can] help consumers from a tax standpoint, essentially fiscal stimulus, and provisions that favor corporations around expensing. The other thing is if the Fed cuts rates. Probably the most important, but the most uncertain, is where the 10-year bond rate goes, because in order to get a healthier economy overall, we need to see a healthier housing market.  

How does that work?

It's unlikely that home prices are going to come down in and of themselves; you're much more likely to see affordability come from lower [mortgage] rates. But to see lower [mortgage] rates, you need to see the Fed cutting, and see the market believe that over a longer-term horizon, you're not going to get currency inflation. Mortgage rates tee off with the 10-year, so we could see the Fed cut rates and see the 10-year come down, or not see the 10-year come down. That 10-year coming down into the mid-threes is very, very important to get the economy to a long-term trend rate of about 2% growth or above. And we just don't know if that'll happen.

And how do we get jobs back? 

If, in fact, companies can increase productivity from technology, then new jobs could be created from the uses of those technologies. If it gets too high, you lose too many jobs, and it hollows out the labor force and hurts consumption. You want to see productivity between 2.5% and 3.5%, the sweet spot.

You mentioned a recession risk. What would that recession look like?

I don't think it would be a very bad recession at all, because we already have some tailwinds in the Big, Beautiful Bill, in productivity coming from technology and AI, which is going to be counter-cyclical to a recession. And if we did have a recession, so long as the current Congress [can] do things through reconciliation, they would probably stimulate the economy by spending more money. But if we [have] a recession, I don't think the market is priced for it. And you’d get a significant drawdown in stock values during that period.

So, how do investors protect themselves? 

I don’t know that there's a really good way to protect yourself. If you're going to invest and look for the upside, you're going to have to bear the risk of the downside. You want to be as diversified as you can, which is to say that you want to make sure that you're not mainly exposed to the MAG7 and to the AI trade. You want to be broadly invested across the S&P. You want to make sure that you have the right amount of bonds in your portfolio. It's about having the right amount of risk and having the time horizon so that if you get hurt and the markets do come down significantly, that you can wait it out for the markets to come back.

—Peter S. Green

Big Businesses mentioned this week:

$WBD ( ▲ 0.18% )  $PSKY ( ▼ 2.57% )  $CMCSA ( ▼ 1.53% )  $NVDA ( ▲ 0.16% )  $DPZ ( ▼ 0.96% )  $DASH ( ▲ 3.22% )  $TGT ( ▲ 0.23% )  $HD ( ▼ 2.01% )  $TJX ( ▼ 0.5% )  $WMT ( ▼ 3.52% )  $DIS ( ▼ 0.61% )  $NFLX ( ▲ 0.52% )  $LLY ( ▼ 2.02% )  $NVOS ( 0.0% )  $MSFT ( ▲ 1.35% )  $NXST ( ▲ 3.3% )  $SBGI ( ▲ 1.31% )  $SSP ( ▲ 7.3% )  

This week, big business!

• The usual suspects

• The short stack

• Want more Cheddar?

The usual suspects

• The Great WBD Garage Sale: Is Warner Bros. Discovery $WBD ( ▲ 0.18% ) headed for the chop shop? After announcing plans to split its streaming and studios from its cable networks, sharks are circling. Media M&A watchers see three potential buyers for all or part of the studio and streaming complex that CEO David Zaslav built by combining the Discovery Channel with Warner Media, and promising investors the new form would have the heft to combine with Netflix:

  • Paramount Skydance $PSKY ( ▼ 2.57% ) , led by nepo-mogul David Ellison and financed by his father, Oracle co-founder Larry, is offering $23.50 a share, backed by Saudi Arabia’s Public Investment Fund. Paramount wants everything, but regulators may balk at it owning two studios, CNN and CBS news networks, and streaming services Paramount+ (No. 4), HBO (No. 6), and Discovery+ (No. 9). 

  • NBC parent Comcast $CMCSA ( ▼ 1.53% ) , which is spinning off its own cable networks, and owns Universal Studios, is also reported angling for all or part of WBD. Trump called Comcast CEO Brian Roberts Brian Roberts, a “disgrace to the integrity of Broadcasting!!!”  but Comcast may also offer Zaslav a role overseeing its media business.

  • Netflix $NFLX ( ▲ 0.52% ) , now the biggest player in scripted programming, has the deepest pockets of any suitor, with a $470 billion market cap. It reportedly wants the movie and television studios, film and TV library, and HBO. But that could also pose monopoly risks, with a combined entity having more than 30% of global streaming share. Preliminary bids are due Thursday. Analysts say the company is worth at least $30 a share.

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• Nvidia Nvincible: Nvidia $NVDA ( ▲ 0.16% ) profits jumped 65% in the third quarter from a year ago to $31.9 billion, and revenue hit $57 billion. With 90% of the market for AI chips, the news suggests a bright future for the industry despite an increasingly shaky financing model for AI development (lots of investment announced, but not much product being sold yet). Shares were up about 4% on the news midday Thursday and more than 40% this year. 

• Pizza Play: If it doesn’t sell, change the box. That’s the conventional wisdom at Domino’s, $DPZ ( ▼ 0.96% ) where the pizza chain is rolling out a new logo and typeface, along with “stuffed crust” pizza and a partnership with DoorDash $DASH ( ▲ 3.22% ) , to boost sales. So far, its sales in the three months ended Sept. 7 grew 6.2% from a year earlier. Scale helps: Domino’s figures it can kill competition with price cutting because selling 4 million pies a day around the world gives it an edge on costs. “The competition cannot sustain the level of prices that we’re able to promote at because they’re not profitable transactions for them over a longer period of time,” CFO Sandeep Reddy told the Wall Street Journal. But shares are still down nearly 20% in the past six months.

• Diverging economy: Some stocks are doing well. Some stocks, meanwhile, are diverging from that norm. Home Depot $HD ( ▼ 2.01% ) on Tuesday cuts its full-year profit forecast to a 5% drop from last year, and said it missed analyst’s earnings targets in the third quarter, as consumers are cutting back on remodeling, slammed by tariffs and high mortgage rates. Another cause: Fewer hurricanes cut into sales of plywood and generators. Still, both the world’s least classy discounter, T.J. Maxx $TJX ( ▼ 0.5% ) and  the world’s largest retailer, Walmart $WMT ( ▼ 3.52% ) , raised their sales forecast for the year as consumers look for lower prices.

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The short stack

• Who said the art market was dead? A portrait by Viennese secessionist painter Gustav Klimt brought $236.4 million to the family of cosmetics heir Leonard Lauder, the second-highest price ever paid for a work of art (Leonardo da Vinci’s “Salvator Mundi” fetched $450.3 million in 2017). The more than $30 million of auction house fees on the sale of “Portrait of Elisabeth Lederer” also brought some relief to Sotheby’s $BID ( 0.0% ) and its embattled owner Patrick Drahi, whose media business, Optimum Communications (previously known as Altice, and a one-time owner of Cheddar) has lost 95% of its value in the last five years. Sotheby's didn’t name the buyer, but the same night, it sold Maurizio Cattelan’s 18-karat solid-gold toilet, “America,” for $12.1 million to Ripley’s Believe it or Not, or about the price of the gold it’s made from. 

Twitter tweet

• Wanna watch a baseball game? Keep subscribing. MLB has a new three-year media rights agreement, and you’ll need a spreadsheet to know what’s on where. Disney’s $DIS ( ▼ 0.61% )  ESPN will pay $550 million a year for the right to distribute MLB.TV, a package of 30 national games a season and a bunch of other stuff. Comcast’s $CMCSA ( ▼ 1.53% )  NBCUniversal pays $200 million for Sunday Night Baseball and all four postseason Wild Card series. Netflix $NFLX ( ▲ 0.52% )  pays $50 million a year for a single opening day game, the Home Run Derby and the annual Field of Dreams MLB game. 

• The GLP gulp! Can Eli Lilly $LLY ( ▼ 2.02% ) ride the weight-loss craze to a $1 trillion valuation? Sure looks like it. Lilly’s Zepbound is now getting the most new subscriptions among obesity drugs, besting Novo Nordisk’s $NVO ( ▲ 1.48% ) Wegovy. Lilly’s already secured Medicare approval. Even an agreement with the U.S. government to cut prices hasn't hurt, as it (and Novo) ready GLP-1 pills for market. Lilly’s share price is up about 35% this year, and its market cap was $986 billion on Thursday. Still, it’s trading at 34 times forward earnings, tech territory (Nvidia and Microsoft $MSFT are both trading at around 30 times earnings), while most pharma stocks average around 16 times.  

• Network news: Can broadcast compete with Big Tech? That’s the question the FCC is confronting after TV broadcaster Nexstar $NXST ( ▲ 3.3% ) , with 200 stations across the U.S., asked the regulator for a waiver to let it buy Tegna’s 64 stations. That would put Nexstar in 60% of U.S. homes, far above the legal limit of 39%. Even if those stations continue to carry different networks, that bumps up against the regulator's efforts to ensure a diversity of views enters U.S. homes. Nexstar’s openly conservative CEO, Perry Sook, ordered his stations to stop carrying Jimmy Kimmel’s show after the comic criticized President Trump’s reaction to the killing of Charlie Kirk. Arch-conservative broadcast owner Sinclair $SBGI ( ▲ 1.31% ) , which has its own local news network, is trying to add E.W. Scripps’ $SSP ( ▲ 7.3% ) 61 stations to its 178 stations. Sook says the FCC is out of step with the new tech reality. “A broadcasting giant is probably an oxymoron in today’s environment compared to big tech that can reach every screen on every device in every home, in every car, in any suit coat pocket in America,” Sook told the Wall Street Journal. “So that’s really who we compete against.”

Trumplandia

• Saudi Business: America’s top CEOs flocked to the White House Tuesday night for a state dinner to honor Saudi Crown Prince Mohammed bin Salman and angle to invest in the Kingdom, as the prince tries to diversify its economy away from oil sales. Never mind that U.S. intelligence services say bin Salman ordered the execution and dismemberment of opposition journalist Jamal Khashoggi. Money talks. Besides Paramount CEO David Ellision’s Saudi-backed bid for Warner Brothers (see above), Trump frenemy Elon Musk, GM $GM ( ▼ 3.05% ) chief Mary Barra, and Apple $AAPL ( ▼ 0.85% ) chief Tim Cook were all present. At a Saudi-US investment forum in the Kennedy Center, Nvidia’s Jensen Huang, Palantir's $PLTR ( ▼ 0.34% ) Alex Karp, Blackstone $BX ( ▲ 1.24% ) founder Steve Schwarzman, and Salesforce $CRM ( ▲ 4.3% ) boss Marc Benioff were all there to shake hands or do deals. Bin Salman told reporters in the Oval Office that his country would invest $1 trillion in the U.S., while his government said after the forum that $575 billion in deals were agreed on. It’s not clear how much of that will actually happen. That’s in part because the main Saudi investment vehicle, the Public Investment Fund, may be running out of cash, after years of bad deals, the New York Times reported, citing 11 people close to the fund. That includes the utopian city of Neom, an EV startup, and a cruise line with one ship. Still, Musk said he’ll build a 500-megawatt xAI data center in Saudi, in an effort to make the kingdom a regional AI center. Lockheed Martin $LMT ( ▼ 1.43% ) will sell F-35s to the Saudis (despite Pentagon concern the Chinese could get ahold of U.S. military tech), and of course, Donald Trump and his family will see their joint ventures in Saudi funded, including four Trump-branded developments and a $63-billion luxury development that could include a Trump property. 

• Fantasy Island, Fed Edition: The minutes of October’s Fed meeting, where rates dropped a quarter point, came out Wednesday, and what they show is not good for those banking on another rate cut in December. The big fear: That stubborn high inflation stays high. But equally, members were concerned about stalled job growth and the so-called data fog, which left the Fed without key information during the 43-day government shutdown. “A December cut is possible but far from assured, with policymakers emphasizing data dependence and internal divisions widening,” wrote EY-Parthenon senior economist Lydia Boussour. 

• Jobs and the Jobless: Employers added 119,000 jobs in September, even as unemployment rose to 4.4%, in a sign of a weakening economy that could prompt a Fed rate cut in December (See the Q&A above). But that was before the government shutdown, when hundreds of thousands of federal workers were furloughed without pay. The Labor Dept. will release what it can of October and November numbers next month. 

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You’re clearly into smart people talking about even smarter things. Lucky for you, that's literally our whole deal at Cheddar. We interview the brightest minds in business, finance, and tech. If you'd like more in-depth analysis from interesting people, lcheck out our where to watch page and turn us on 24/7! Your wallet will thank you and so, more importantly, will your mind. But also your wallet. Remember that. 

Peter S. Green is a veteran reporter and editor who has spent more than two decades covering business and finance from Eastern Europe to New York City, and has worked for Bloomberg News, The New York Post, The New York Times and The Messenger. He lives in New York City and is always looking for the next big story. Email him here.

Zohran Mamdani, the 34-year-old Democratic Socialist who was elected mayor of New York City this month, is promising to usher in a new brand of economics. To tackle the city’s inexorably rising costs and Make New York Affordable Again, he’s proposing a series of sweeping economic changes, including freezing stabilized rents, free buses, City-owned supermarkets, free day care, constructing half a million union-built, city-owned affordable housing units, and new taxes on the 1%.

We spoke with two experts about why the plans could be tough to execute.

One of the most unaffordable things in New York is housing. And while average rents on existing leases are still relatively affordable at less than $2,000 a month for a two-bedroom apartment, anyone leasing now will pay an average of $3,900 per month. The big driver is scarcity. With a 1.4% vacancy rate, and more than half of renters paying more than 30% of their income for rent, and over a quarter paying more than 50%, the city needs a new plan. “That's a severe rent burden,” Mark Willis, a housing policy expert at New York University, told BBTW. “We need more housing. Plain and simple.” 

A healthy city would have a vacancy rate above 5%, the threshold for deactivating the city’s rent stabilization law. But Willis says that’s unlikely to ever happen. Citywide averages may show landlords making $600 a month for every apartment in a stabilized building, but that ropes in buildings with only a few stabilized units. Landlords of truly affordable housing, Willis said, are getting about a month’s less rental income a year than it costs to simply maintain an old building. A freeze could bankrupt landlords, and the city needs to reduce their costs with bigger tax breaks for repairs and investments.

“You want to know why rents are high in this city? Well, the basic costs of running a building are high,” said Willis. “And if rents are lower because of rent stabilization, then you can't properly maintain the building even if you wanted to.”

Is Mamdani’s plan to build more realistic? Maybe, but not if union labor is used. His proposed $100 billion can build 200,000 units over 10 years, but using union labor would boost the price by 50% or more.

The rest of Mamdani’s agenda is even less viable, argues Nicholas Economides, a serendipitously-named professor of economics at New York University. “If you really have free buses and anybody can come in, no questions asked, the homeless are going to live there, the drug addicts are going to live there,” he told BBTW. The city’s transit operator says free buses will cost it $640 million in lost fares, about 4% of its total budget. A study for Mamdani says it will generate $1.5 billion in new economic activity, but it may be hard to funnel that cash back to the MTA.

Mamdani’s plan to open one low-cost supermarket in each of the city’s five boroughs won’t do much, noted Economides. “We're going to pay it from our taxes, but one grocery store for the whole of Manhattan and one for the whole Queens and so on, I mean, it's not going to make any difference,” he said. 

But the real problem with Zohranomics, argues Economides, is Mamdani’s plan to raise taxes on the city’s wealthy. New York already has city and state income taxes that total 14.8% of taxable income. Another two percentage points would bring that to nearly 17%. “That's a huge number,” said Economides. “People who don't have to live in New York, let's say they're retired, can go to a state in which they pay zero tax. I think that it shows an extreme level of irresponsibility by the mayor-elect to propose new taxes.”

It is also notable that versions of Mamdani’s plans already exist and that they could be expanded at lower cost than investing in splashy new programs. Low-income New Yorkers get free or reduced fare cards. Expanding that program would cost more, but tying it to SNAP benefits (what used to be called food stamps) would make administering and funding it a breeze. Publicly-owned supermarkets exist, with mixed success, in places from Kansas to Colorado and St. Paul, Minnesota. And the U.S. operates hundreds of grocery stores at military bases around the world with prices some 25% below retail. The city could give tax breaks or space in City-owned buildings to existing food pantries that can sell lower-priced and healthy groceries to SNAP recipients. No need for a City department of grocery stores. Free day care just expands the existing Pre-K program. Pre-pandemic, Mayor Bill De Blasio opened a free universal pre-K program in less than two years. The real key to making New York City affordable, say both Willis and Economides, is doing more with less.

“Maybe we can't afford to build the highest quality for everybody. Maybe just providing people with basic amenities, and that's it,” said Willis. He said allowing more home-sharing and even bringing back single-room occupancy buildings could help.

“We should live within our budgets and make things work better and give better services to consumers,” said Economides. “The rest of the world, the rest of the United States, is much more efficient, and that's what we need to do. New York has to become much more efficient, less corrupt, and more productive.”

—Peter S. Green

Big Businesses mentioned this week:

• $QSR ( ▲ 2.76% )  

• $WEN ( ▲ 1.4% )  

• $ANTHROPIC ( 0.0% )  

• $AMZN ( ▲ 0.98% )  

• $SFTBY ( ▼ 4.02% )  

• $NVDA ( ▲ 0.16% )  

• $META ( ▼ 1.07% )  

• $BRK.A ( ▲ 2.74% )  

• $APO ( ▲ 1.32% )  

• $GS ( ▼ 3.67% )  

• $BLK ( ▼ 1.36% )  

• $STT ( ▼ 1.11% )  

• $JPM ( ▼ 1.95% )  

This week, big business!

• The usual suspects

• The short stack

• Elon’s World

• Want more Cheddar?

The usual suspects

• Who’s gonna keep getting clobbered by the shutdown? Airlines. Even if the government is back open by the time you read this, it will still take several weeks for all the U.S. air traffic controllers to return to full schedules. The FAA ordered a 6% cut in traffic this week and already, airlines have collectively cancelled about 1,000 flights a day, with thousands more were delayed. “Even before the shutdown, there was widespread recognition that we were dealing with an ailing air traffic control system,” an airline trade group wrote Tuesday. America's 14,000 air traffic controllers need another 3,000 hires just to be staffed for current travel demand. But the flight cuts have been a boon for people with their own Learjets or those who lease them. Those planes use about 10% of the air traffic network resources, but thanks to some swift lobbying, they only pay 2% of the cost. And their traffic is rising. Private jet departures rose 5% last month from a year earlier, the New York Times reports, citing business aviation tracker WingX. Jet share company Flexjet said flying hours were up 42% in the first week of November over last year. 

• Burger Blues: Restaurant Brands’ $QSR ( ▲ 2.76% ) Burger King, the patty everyone's forgotten in America, has just struck a deal in China, where local PE firm CPE promises to invest $350 million to open new burger joints. CPE says it wants to double Burger King’s restaurant count in China to around 2,500 in five years, and to at least 4,000 within 10 years. Meanwhile, Wendy’s $WEN ( ▲ 1.4% ) said it's closing hundreds of its 6,000 U.S. locations because of what CEO Ken Cook called “pressure on the lower-income consumer,” and said the company sees no sign of that letting up. Wendy’s share price has fallen more than 50% in the past year. Burgermakers might get some relief if the feds actually break up what President Trump suggested is a “cartel” keeping meat prices artificially high. The White House says JBS, Cargill, Tyson Foods, and National Beef are targets of a “price-fixing” probe. Together, they slaughter 85% of American beef. Ranchers note that they get paid less per head every year, even as beef prices continue to rise.

• Chips off the AI block: Another day, another huge AI investment deal. On Wednesday, Anthropic $ANTHROPIC ( 0.0% ) said it will spend $50 billion on a nationwide AI infrastructure construction spree, starting with centers in New York and Texas. While that pales alongside OpenAI’s promised $1.4 trillion buildout, it shows Anthropic hopes to compete with the big players. Last month, Amazon $AMZN ( ▲ 0.98% ) opened a 1,200-acre, $11 billion AI computing center for Anthropic in Indiana, near Lake Michigan, and using only Amazon's own chips, one of the first AI megacenters to go operational. Anthropic says it's on track to make a profit in 2028, while OpenAI predicts an operating loss of $74 billion that year, about 75% of revenue, and says it won't see a profit until 2030. The difference appears to validate Anthropic’s go-slow approach, using revenue rather than debt and investment to fuel growth. But both add to the growing concern of a circular finance bubble in AI, with chipmakers buying stakes in AI companies, which use the investment to buy… chips.

• AI stocks slip: Softbank $SFTBY ( ▼ 4.02% ) , in fact, just sold its entire $5.8 billion stake in Nvidia $NVDA ( ▲ 0.16% ) to plow the money into OpenAI, which uses its cash largely to buy chips from Nvidia. One result of this circle has been a slip in the sky-high P/E values of AI stocks this week. Bellwether Nvidia $NVDA ( ▲ 0.16% ) was down more than 6% since Nov. 3, and Meta $META ( ▼ 1.07% ) shares plummeted 19% since the end of October, despite higher-than-expected revenue, as the company projected massive spending on new AI data centers next year. If you have any doubt that the bubble is forming, look no further than financing. Unable to raise cash to cover the $7 trillion needed to fuel AI data centers over the next five years, data-center owners are using a stack of exotic (translation: over-leveraged) debt financing tools, including the famous commercial mortgage-backed securities, secured by the data centers themselves. Those are the babies that collapsed the last time tenants couldn't pay the rent on overvalued real estate, and launched the Great Mortgage-Backed Recession of 2008.

• Build it and they’ll sail? The Trump Administration's effort to revive U.S. shipbuilding by charging Chinese-made freighters a fee every time they dock in America just got sucker-punched. As part of the China trade reset, those fees are cancelled. Now, U.S. shipyards are in a pickle: American boats still cost four times the price of Chinese boats.

• Buffett’s Farewell? Outgoing Berkshire Hathaway $BRK.A ( ▲ 2.74% )  CEO Warren Buffett said he’ll be keeping somewhat quiet when he leaves at year's end, and will give away his $150 billion fortune to his children’s philanthropic foundations. In his annual Thanksgiving letter, Buffett wrote that the U.S. is “capricious and sometimes venal in distributing its rewards,” but investors should “remember to thank America for maximizing your opportunities.” And while he’ll no longer write the company’s annual report and his famous letter to investors, the Thanksgiving notes will keep coming.

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The short stack

• Basta, Pasta! It’s not the red sauce that’s killing Italian pasta; it’s the red ink they'll face when the U.S. formalizes 107% duties on Italian pasta imports. That’s a 92% anti-dumping tariff on Tuscan tagliatelli, plus a 15% tariff on all European Union exports. Pasta makers say they’ll go broke paying tariffs like that: “It’s an incredibly important market for us,” Giuseppe Ferro, CEO of family-run pasta-maker La Molisana, told the Wall Street Journal. “But no one has those kinds of margins.” Italy sells $770 million worth of noodles to America. The potential tariff was triggered by complaints that the Italians were selling pasta below cost, which came from two U.S. spaghetti-spinners: Ronzoni owner 8th Avenue Food & Provisions, and Prince spaghetti owner Winland Foods. If the tariffs go ahead, every day will be Prince Spaghetti Day!

• Goal! Spanish soccer league La Liga’s second-best Madrid team, Atletico Madrid, is selling a majority stake to U.S. asset management fund Apollo Global Management $APO ( ▲ 1.32% ) in a deal that values the team at $2.5 billion. Buying European soccer teams has become a big business for U.S. investors. In 2022,  Clearlake Capital paid more than $5 billion for London club Chelsea, and RedBird Capital paid $1.2 billion to take over Italy’s AC Milan. The Glazer family that owns the NFL’s Tampa Bay Buccaneers has a controlling stake in the UK’s Manchester United soccer team. Winning teams can earn $100 million a season in European football, but that takes time and an expensive roster.

• Kim’s Skims take shape. Kim Kardashian has big plans for her line of Skim’s body-shaping clothing, after a new $225 million investment led by Goldman Sachs $GS ( ▼ 3.67% ) valued the company at $5 billion. With net sales expected to top $1 billion this year, CEO Jens Grede is planning to expand the firm’s footprint beyond its 19 brick-and-mortar locations, enlarge its Nike partnership to footwear, and grow the beauty products line. Kardashian, the brand’s chief creative officer,”said she wants Skims to become a “global omnichannel retail brand.”

Trumplandia

• More state capitalism? President Donald Trump is exploring how to free corporate boards from what he calls “pressure” from proxy advisory firms and index-fund managers, including BlackRock $BLK ( ▼ 1.36% ) , Vanguard, and State Street $STT ( ▼ 1.11% ) . The advisors and managers help many small investors manage their portfolios or vote their shares. But lined up against the advisors are Trump frenemies Elon Musk and JPMorgan Chase $JPM ( ▼ 1.95% ) CEO Jamie Dimon. Dimon says the advisors have conflicts of interest, and Musk called them corporate terrorists when two top advisers, ISS and Glass-Lewis, recommended a vote against his trillion-dollar pay package. The fund managers have drawn the ire of aging activist investor Carl Icahn, 89, who calls the three index managers a “cartel,” and wants to block them from voting the shares they hold. 

• The 50-year mortgage? Embattled Federal Housing Finance Agency chief Bill Pulte is proposing to fight the high cost of homeownership for first-time buyers by offering 50-year mortgages. That may sound like the ultimate purgatory, though the idea’s gotten traction with President Trump. But run the numbers, and it gets real hairy real quick. On a $400,000 home with 10% down, monthly payments of $2,183 would rack up $335,720 in interest by 2055. Stretch that out, and the $1,634 monthly payments might be a relief, but the house wouldn't be paid off until 2075, and the total interest would balloon 85% to $629,939. Pulte may be feeling the heat of his alleged efforts — which he denies — to dish confidential dirt from mortgage records on Fed governor Lisa Cook, Sen. Adam Schiff, and New York state AG Letitia James. Pulte referred all three to federal prosecutors for criminal investigation, alleging possible mortgage fraud. Only James has been charged, and all three note that no proof of fraud or attempted fraud has been filed. But the Wall Street Journal reports that members of the ethics and investigations team at Fannie Mae, which Pulte oversees, were removed from their jobs while looking into how Pulte had obtained the files on Trump's foes.

• Will they or won't they? Fed Edition: After October’s quarter-point rate cut, will we see another December cut? A Reuters poll of 105 economists found 84 said the Fed will cut its overnight lending rate in December, with unemployment concerns outweighing inflation fears. But within the Fed’s decision-making Open Markets Committee, the split appears to be wider, the Wall Street Journal reports, made worse by the lack of data as furloughed government data geeks stayed home.

• Is Trump killing capitalism? That’s what his one-time eminence grise, Steve Bannon, says. “What young people in this country – being logical – have looked around [and] they haven’t actually seen [is] capitalism at work. They’ve seen crony capitalism or corporatism with the devil taking the hindmost approach. It has to stop,” Bannon said on his war room podcast this week.

Elon’s World

• It’s official: On Monday, Tesla filed a Form 4 with the SEC, formally approving Musk’s trillion-dollar pay package and laying out the 12 Herculean labors he needs to complete to take home more than 423 million shares of stock. But Elon’s never one to sit on his laurels. On a podcast with Joe Rogan last month, he said the long-delayed Tesla Roadster won’t actually need a road and will be able to fly. OK, Zoomer?! At last week’s Tesla shareholder meeting, Musk said Tesla’s Opimus robot would also “eliminate poverty,” give everyone “amazing” medical care, and prevent crime by letting convicted felons roam free while a robot walks behind to keep them on the straight and narrow.  

Want more Cheddar?

You’re clearly into smart people talking about even smarter things. Lucky for you, that's literally our whole deal at Cheddar. We interview the brightest minds in business, finance, and tech. If you'd like more in-depth analysis from interesting people, lcheck out our where to watch page and turn us on 24/7! Your wallet will thank you and so, more importantly, will your mind. But also your wallet. Remember that. 

Peter S. Green is a veteran reporter and editor who has spent more than two decades covering business and finance from Eastern Europe to New York City, and has worked for Bloomberg News, The New York Post, The New York Times and The Messenger. He lives in New York City and is always looking for the next big story. Email him here.

America during Donald Trump’s presidency has embraced interventionist economic policy in a way not seen since FDR’s New Deal, from golden shares in steelmakers, profit sharing with chipmakers, sector-specific tariffs, to waivers for firms that invest in the U.S.

To make sense of what’s happening, BBTW editor Peter Green spoke with Jan Svejnar, the Richard N. Gardner Professor of Economics and International Affairs at Columbia University, and an economic adviser to the post-Communist Czech government’s transition to free markets. 

We have a very different kind of economic direction under President Trump than we have seen under almost any American president in the modern era. What do you call this economy?

Jan Svejnar: I don't think we really have a term that has been coined and accepted yet broadly, but there's no question that it's a much more state-capitalism oriented model than it was before. The laissez-faire aspect is gone. There is intervention, of course. It started in a major way in the international trade arena, but it's moved beyond that. It's targeted. So you could call it industrial policy, except it's selectively applied. It's a situation where the executive branch not only regulates according to certain rules, but selectively goes and intervenes in the economy.

The French had a system like this and the Russians used to have one that was called the five-year plan. Is that where we are? 

Yes, we are, although both the five-year planning cycle and the French dirigisme, indicative planning as they called it in the 70s, was broadly based, consistent, applying to everybody, whereas here it's much more selective. The government will buy into a company or two or three. So the policies don't apply across the board evenly to everybody.

A lot of the people on Trump's side have previously declared themselves as free marketeers. Is there a contradiction here?

I think so. There is a turnaround. These people have really changed and are willing to go with the strong executive, which Trump is, and go against principles that they espoused before. So in that sense, we have a system which is very unpredictable because Trump is unpredictable.  One day he sets tariffs, a  month later, he abolishes them: look at the situation vis-a-vis China. 

How durable are these shifts, and how sustainable is this kind of economy?

They are not [durable] in the sense that we don't know. They keep changing,  from day to day, month to month, quarter to quarter. And the unpredictability of it is something that really is making economic decision-making more difficult. While the economy is surprisingly still doing quite well,the uncertainty always reduces investment, always reduces economic activity. 

That lack of predictability is evident in political relations, too. Especially with our biggest trading partners, Canada, and Western Europe. What does that do for our trade?

It's not clear that the Western alliance is holding together. China has grown and is becoming a major trading partner. With tariffs, Europe is naturally looking to other parts of the world to establish strong partnerships in trade with South America, for example.  .

President Trump says it’s like a shock therapy for the United States and that once we're through these changes, we will be stronger and there'll be more revenue, more growth. Is that borne out by  the data?

Theory would predict that it will not happen. And in [terms of] the data, we're too early. The first two, three, quarters of putting this new regime in place is too early because companies bought inputs beforehand, expecting that tariffs may go up. So the full force of the tariffs and the uncertainty of tariffs being on and off is yet to be felt. Smaller businesses already are feeling it. The larger ones so far are doing relatively well. It’s confounded by the fact that we are going through major technological change with artificial intelligence . So that is keeping the US economy going stronger than it would otherwise. So the negative effect of the tariffs and the industrial policy, which. doesn't have a high degree of consistency, are not fully felt because we have the positive effects of the technological change.

Is there trouble ahead?  

There is a lot of uncertainty that's being introduced, a lot of intervention in the international trade arena where free trade has been an engine for growth for the United States, as well as for other countries. Imposing a constraint on international trade by the tariffs is going to reduce the welfare of the American population. We should be ready for a significant correction. And since a lot of people have their wealth in the stock market, which distinguishes the United States from many other countries, we are much more vulnerable to a big downturn.

This interview has been condensed and edited.

—Peter S. Green

Big Businesses mentioned this week:

• $KMB ( ▲ 0.17% )  (Kimberly-Clark)

• $KVUE ( ▲ 0.33% )  (Kenvue)

• $SBUX ( ▲ 1.59% )  (Starbucks)

• $YUM ( ▼ 0.23% )  (Yum Brands)

• $IBM ( ▲ 2.6% )  (IBM)

• $SNAP ( ▼ 0.56% )  (Snapchat)

• $NYT ( ▲ 1.02% )  (The New York Times Co.)

• $CMCSA ( ▼ 1.53% )  (Comcast)

• $PFE ( ▼ 0.04% )  (Pfizer)

• $NVO ( ▲ 1.48% )  (Novo Nordisk)

This week, big business!

• The usual suspects

• Trumplandia

• Elon’s World

• Want more Cheddar?

The usual suspects

• Tylenol may not cause autism (although that’s not what Texas AG Ken Paxton claims), but as a takeover target, it’s nothing to sneeze at. Kleenex maker Kimberly-Clark $KMB ( ▲ 0.17% ) B says it’s agreed to pay about $47 billion to buy Tylenol maker Kenvue $KVUE ( ▲ 0.33% ) , at a relative bargain of $15 to $20 a share (Most of the purchase will be made with Kimberly shares, which are fluctuating). Kenvue, the consumer products spin-off of Johnson & Johnson, includes the eponymous baby shampoo, Band-Aid, and Listerine brands. When President Trump and Health Secretary Robert F. Kennedy, Jr. said Tylenol caused autism when taken by pregnant mothers, Kenvue shares fell about 30%. Kimberly’s shares fell 12% when the deal was announced. Last month, Kennedy said there is no evidence to back his claim. Analysts at Morningstar point to the litigation risk, but say the acquisition may take time to digest. Kimberly shares are undervalued, wrote equity director Erin Lash, reflecting concern over “integration risk.” 

• No contract no coffee: Unionized workers at about 550 of Starbucks’ $SBUX ( ▲ 1.59% ) 10,000 U.S. stores say they’ll strike on November 13th if they don't get a contract. Union members have been working without one since they organized in 2020. Starbucks’ HR chief says the unions are demanding too much: an immediate 65% pay hike, rising to 77% over three years, and extra pay for weekends and days when Starbucks has special orders. The union says too many baristas never get the 20 hours a week they need to qualify for benefits. 

• Wanna slice of the pizza market? Yum Brands $YUM ( ▼ 0.23% ) , which also owns KFC and Taco Bell, wants to offload struggling bad-pizza joint Pizza Hut. Inflation and job woes have reined in consumer spending, especially at the lower end of the market, Pizza Hut’s core customers. With 19,000 Pizza Huts world wide, 40% of them in the U.S., its got double the footprint of cheap-eats Taco Bell. But in the third quarter, the Hut saw revenue of only $240 million to Taco Bell’s $730 million.

• Big blues: IBM, $IBM ( ▲ 2.6% ) , America’s original tech co., says it’ll fire “a low-single-digit” percentage of its 270,000 global workers, as it moves to more AI offerings. IBM joins Amazon, Meta, Google and other tech firms laying off tens of thousands of employees as they race to invest in the AI boom. IBM’s 3Q revenue was up 9% to 16.3 billion. Shares are up 40% this year.

• But we just went private: Fresh off its conversion from a non-profit to a private, for-profit company, OpenAI’s CFO says the company is not going public again - and certainly not with an IPO. “Not on the cards,” CFO Sarah Friar siad this week….

• Remember Snapchat $SNAP ( ▼ 0.56% ), the fading message app? Its stock surged as much as 25% on news it’s reached 943 million monthly active users, up 7%, and hit $1.5 billion in revenue. It’s still losing money ($182 million this quarter), even though Snappers used an AI face swap lens more than 1 billion times last quarter.  But the biggest news is the arrival of a $400 million partnership with AI search firm Perplexity to integrate conversational search.  

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• Good Times! No failing at the New York Times Co. $NYT ( ▲ 1.02% ) which reports it now has 12.3 million subscribers to its various offerings from news to Wordle, a jump of 460,000 digital subscribers in the third quarter alone. Revenue was up 9.5% over a year earlier, to $700.8 million, and operating profit jumped 26%. The company credits subscription bundles and a first-ever operating profit for The Athletic sports site it acquired in 2022 for $550 million. And while those numbers are well below the company’s peak in the mid 2000s ($3.16 billion in revenue and $500 million in profits in 2004, its most profitable year ever,) it’s enough to make investors happy. Shares were flat on the news, dropping 0.24%, but the new subscriptions prompted Business Insider founder Henry Blodgett to tweet: “NYT is the Netflix of journalism. Next stop, 25 million digital subs…”

• The price of fame? $20 million. That’s how much Comcast $CMCSA ( ▼ 1.53% ) , the owner of lefty news gabfest MSNBC, is spending on ads to rebrand the network as MS NOW, as it spins off some of its cable news offerings into a new company, and avoid any confusion with NBC News. Ads promoting the new moniker, promising “Same Mission, New Name,” feature Rachel Maddow, who’s down to hosting an hour a week. Audiences are sliding at MSNBC (-34% since last year) and CNN (-21%), but up at right-wing network Fox News (+18%). Shares in Comcast are down 25% this year. Meanehile Gannett, the Rochester, N.Y.-based parent of USA Today and some 200 other newspapers, is changing its name to…USA Today.

• Weight wars: Pharma giant Pfizer $PFE ( ▼ 0.04% ) thought it had a deal sewn up with a new weight-loss drug maker called Metsera, but then Wegovy maker Novo Nordisk $NVO ( ▲ 1.48% ) weighed in with a better offer. Now the bids, and the lawsuits,are flying. Novo’s offer values the company at $10 billion, a 159% premium to it price on Sept. 19, the day before the Pfizer deal was announced. Pfizer’s now boosted its bid toabout $8.1 billion from $7.3 billion. After the Novo Nordisk offer was announced Tuesday, Metsera shares jumped 20%, Pfizer fell 1.5% and Novo’s shares dropped 1.8%. Meanwhile, Pfizer has sued Mestera to force it to honor its agreement, and sued Pfizer claiming an antitrust violation. It’s all worth it to the three firms, because the $72 billion-a-year global market for weigh-loss drugs could reach $139 billion by 2030. That’s a lot of billions.

Trumplandia

• SCOTUS weighs tariffs—On Wednesday, the Supreme Court heard arguments in the case against the tariffs. The big question: Does President Trump have legal authority to impose tariffs, which the Constitution explicitly grants to Congress? So far, lower courts have sided with businesses that say the tariffs are illegal, including the big hitters at the normally conservative-leaning U.S. Chamber of Commerce. Lower courts have agreed that Trump has exceeded his powers under the International Emergency Economic Powers Act. Trump says the trade deficit is the emergency and the tariffs are a “life or death” matter for the U.S. The Supremes have tended lately to agree with Trump, but signaled on Wednesday that they may not do so over this issue. So what happens if the tariffs are ruled illegal? Well, the Treasury would have to refund them. Tresury Sec. Scott Bessent says the government would have to refund as much as $750 billion to $1 trillion if the court doesn’t issue a ruling until June. Congress may also try to retroactively authorize the tariffs. “It seems to me like it could be a mess,” said Justice Amy Coney Barrett, who was appointed by Mr. Trump.

• Bessent calls a recession. Increasingly desperate to get the Fed to lower interest rates, Treasury Secretary Scott Bessent says we might actually be in a recession. “I think that there are sectors of the economy that are in recession,” Bessent said on CNN on Sunday. Lowering rates could boost the housing market and restart employment (private-sector figures show a net job gain of only 42,000 in September—the government data agencies are all closed).

Elon’s World

• The Trillion-dollar man? By the time you read this, Elon Musk may be on his way to becoming the world’s first trillion-dollar man. Or not. On Thursday, Tesla counted the votes of shareholders on whether to authorize a pay package worth nearly $1 trillion. The offer, from the company’s board, which includes brother Kimbal Musk (who’s recusing himself) and Rupert Murdoch’s least-favorite son, James, along with board chair Robyn Denholm, is contingent on Musk meeting some scary-high targets, including raising its market cap 500%, from $1.4 trillion to $8.5 trillion, over 10 years. He’s also got to sell a million humanoid robots and 10 million subscriptions to self-driving software. The plan would pay Musk in stock, giving him 29% of the company (about 25% after taxes). Norway’s sovereign wealth fund, which holds about 1.4% of Tesla says it’s voted against the package, warning that it’s “concerned about the total size of the award, dilution and lack of mitigation of key person risk.” Denholm says the package is the only way to motivate Musk to stick with the company, and Musk hinted that if he doesn't get the pay package, he’ll leave. But would he? Tesla shares now trade at about 308 times forward earnings, while GM is trading at a P/E ratio of 12.8. If Musk left Tesla, that premium could vanish and Tesla’s share value would tumble, along with Musk’s own net worth. Denholm concedes as much in a letter urging shareholders to support the package. “Without Elon, Tesla could lose significant value, as our company may no longer be valued for what we aim to become: a transformative force reimagining the fundamental building blocks of mobility, energy and labor,” she wrote.  But you know who else gains on the share price keeping its impossible P/E? Tesla directors, including Denholm, whose shares would plummet in value. The Nasdaq’s average P/E right now is about 26. That would make Musk’s 10% stake, now worth $235 billion, worth a little over $20 billion. So, there’s some thought that he may just stick around. 

Want more Cheddar?

You’re clearly into smart people talking about even smarter things. Lucky for you, that's literally our whole deal at Cheddar. We interview the brightest minds in business, finance, and tech. If you'd like more in-depth analysis from interesting people, lcheck out our where to watch page and turn us on 24/7! Your wallet will thank you and so, more importantly, will your mind. But also your wallet. Remember that. 

Peter S. Green is a veteran reporter and editor who has spent more than two decades covering business and finance from Eastern Europe to New York City, and has worked for Bloomberg News, The New York Post, The New York Times and The Messenger. He lives in New York City and is always looking for the next big story. Email him here.

Maybe it's not high-tech that’s the answer to improving the world, maybe it’s actually…
“deep tech.” Pablos Holman ran a deep tech lab for investors, including Bill Gates and Nathan Myhrvold, and built spaceships for Jeff Bezos’ Deep Blue. He’s written a book this year called “Deep Future: Creating Technology That Matters.” BBTW editor Peter Green sat down with Holman for a chat.

Peter Green: We talk a lot about how tech is going to save the world, and we’ve seen software and now AI effect massive change and transformation on our world — and make its founders and funders very rich. But what is “deep tech” and why does it matter?

Pablos Holman: With software, we’re just going places we’ve already been before. You’re going to move some puzzle pieces around, but they’re the same puzzle pieces, the same businesses. Starbucks $SBUX ( ▲ 1.59% ) is going to have to tear out all their IT and put in new IT that has AI in it, but it’s still the same service they’re providing. I’m talking about what we call deep tech. Using advanced technology and science breakthroughs to reinvent things that humans do. Old industries. It’s about how do we make mining 10 times cleaner? How do we make shipping 10 times cheaper? How do we make airplanes 10 times cleaner and faster and cheaper? Things like that.

Software is what we’ve been doing for 25 years or more. Now we have to go there with AI, but we’re just going places we’ve already been before. Software is not going to solve the processed foods that are growing fat on your liver. We’re going to have to come up with new technologies that help us to solve those kinds of problems. That’s what I mean when I say deep tech.

How is the deep tech revolution going so far?

We have a whole raft of breakthroughs that have come out of scientific research in the last few decades. But they get dropped on the floor because all of the capital in the world that’s there for doing new things, venture capital, is only being used for making software. And investors and capital allocators, when they see hardware coming, their brain says, ‘that looks hard.’ That’s why it’s called hardware.

But 30-40 years ago, Silicon Valley invented the PC and the smartphone. What’s stopping them from reinventing the hardware?

One is all the easy stuff’s been done. All the big opportunities have been soaked up by somebody. So now they have to refocus their attention on where are the bigger opportunities? Well, the bigger opportunities are everything that software ignores and that software can’t fix.

The new inventions, the new technologies, the insights that make it possible to make something 10 times better, that’s new technology. Those are deep tech breakthroughs. And they come from all different kinds of places. They come from labs and garages, and they come from basements with nerds who are tinkering. Once they have that insight, you ask, does this make anything humans do 10 times better? And if the answer is yes, then you start looking at, all right, how do we bring that to life?

So how do you bring that to life, when all the capital is focused elsewhere?

I co-opt the machinery of startups, of venture capital, because that’s the machinery that’s good at doing new things. I try to find these things, and then I invest in them early to get them out of a lab and into a startup. A startup is the package that the world knows what to do with. Then we can attract capital. The startup machinery is amazing because it’s a kind of milestone-based success thing. That’s the good part about Silicon Valley. They’re just aiming it in the wrong direction.

What are some of the projects you’ve got going in deep tech?

We have a nuclear reactor that goes in a borehole. It’s buried a mile deep. Even if the thing were to have a catastrophic meltdown, there’d be no radioactivity at the surface. It’s also super cheap. What you put on the surface is a turbine and generator: 54-inch diameter, 15-megawatt electric. That’s enough power for a skyscraper or a data center, and if it’s not enough, we drill another hole next to it, and deploy arrays of these things. We have a company in California. They’ve figured out how to automate apparel manufacturing. Instead of using stitches, they use glue on a seam. And the glue is now stronger than sewn seams. It’s stretchy. Now the robots can assemble the clothes. They can produce on demand, and the bonding for the seams is reversible: You heat them up, they fall apart, and you can recycle the fiber. Another great example: Cargo ships that can sail themselves. We have electric backup. With zero emissions, no fuel, and no crew. So we make fleets of smaller ships, and they go directly to where the cargo is needed without trans-shipping at a major port. I try to learn about all the big problems in the world. I’m kind of collecting problems, and big industries are basically a euphemism for big problems. So to me, that’s where it starts.

This interview has been condensed and edited.

—Peter S. Green

Big Businesses mentioned this week:

$NVDA ( ▲ 0.16% )  $PSKY ( ▼ 2.57% )  $ORCL ( ▲ 1.59% )  $CMCSA ( ▼ 1.53% )  $UPS ( ▼ 5.82% )  $AMZN ( ▲ 0.98% )  $RIVN ( ▲ 1.81% )  $TAP ( ▼ 0.49% )  $GM ( ▼ 3.05% )  $BRK.A ( ▲ 2.74% )  $BAM ( ▲ 1.4% )  $CCJ ( ▼ 4.99% )  $GOOG ( ▼ 0.84% )  

This week, big business!

• The usual suspects

• AI energy news

• Trumplandia

• Elon’s World

• Want more Cheddar?

The usual suspects

• How high is up? For Nvidia’s $NVDA ( ▲ 0.16% ) share price, the answer is all the way up. On Thursday, Nvidia became the first private company worth $5 trillion, with its shares closing at 207.16 on Wednesday, up nearly 50% in the past 12 months. That’s because the U.S. economy is making a massive bet on AI.  So forget the shoulda, wouldda, couldda. Will Nvidia keep rising? "It is justified only if margins and profits continue on the current trajectory or even get better,” David Kotok, co-founder of Cumberland Advisors, told the Wall Street Journal. Nvidia is now trading at about 33 times its projected earnings for the 2027 fiscal year, while the S&P average is 24x. That said, Tesla is trading at 243 times earnings. Morningstar analyst Brian Colello says Nvidia will keep growing. “A 40%-plus growth year is [likely] in the cards for fiscal 2027,” he wrote on Wednesday. 

• The cuts just keep on coming… or do they? It’s Powell Power time: The Fed’s Open Market Committee cut its benchmark overnight interest rate by another quarter of a percentage point, to 3.75% to 4%. But don’t expect that to show up anytime soon in your mortgage or credit card bill. That’s just the rate at which the Fed lends money to banks overnight. Mortgages and other consumer (and business) loans are shaped more by market forces than anything else. And those forces are not suggesting there’s any hurry to lower mortgage rates. The standard 30-year mortgage was at 6.19% before the cut, and on Thursday stood at 6.14%. That’s in part because home sales are rising again and mortgage demand is also rising as a result. Mortgage rates were down just a tenth of a percent, to 6.39% from 6.49% earlier this month, while the latest numbers on existing home sales showed a 4.1% jump from a year earlier, largely, says a CNBC survey of realtors, because home prices are dropping. Wednesday’s cut doesn’t mean there will be another at the Fed’s December meeting. For one thing, with the federal government shut down, the Fed is flying blind when it comes to real inflation and job numbers. And then there’s the fact that two of the 12 members were against the cut (one wanted no cut, and Trump appointee Stephen Miran wanted a half-point cut). Powell said, "There were strongly differing views about how to proceed in December. A further reduction in the policy rate at the December meeting is not a foregone conclusion. Far from it.”

• Cuts At Paramount: Well, that was quick: David Ellison, the new head of Paramount $PSKY ( ▼ 2.57% ) and son of Oracle $ORCL ( ▲ 1.59% ) founder Larry, has just made his first cuts since acquiring the fabled Hollywood studio and its assets, including CBS. More than 2,000 people are getting pink slips, including about 1,000 in the U.S. They include CBS Saturday Morning co-hosts Michelle Miller and Dana Jacobson. CBS Evening News anchor John Dickerson said he’s walking by the end of the year, and Paramount’s movie and TV unit is losing “Yellowstone” and “Landman” producer Taylor Sheridan, who’s off to Comcast’s $CMCSA ( ▼ 1.53% ) NBCUniversal, where studio boss Donna Langley offered him a film and TV deal worth $1 billion over eight years. Hollywood news site The Wrap said Ellison “started butting into” Sheridan’s creative process, a longtime Hollywood no-no.

• Making the cuts: And more job cuts are coming: UPS $UPS ( ▼ 5.82% ) has cut its half-million-member workforce by 48,000 people over the past year, the company said Tuesday, pointing to its share price, which is down about 27% in the past year. Tariffs have cut the number of packages sent to the U.S. from China by 30% in the third quarter, and Amazon $AMZN ( ▲ 0.98% ) is shipping more of its own packages. Amazon cut 14,000 managerial jobs. Target’s cutting 1,800 of its 22,000 corporate roles, and pink slips are going to white-collar workers at Rivian $RIVN ( ▲ 1.81% ) , Molson Coors $TAP ( ▼ 0.49% ) , Booz Allen Hamilton, and General Motors $GM ( ▼ 3.05% ) . Behind the trend: Shareholder and board pressure to use AI to boost profits, and general uncertainty about the future of the U.S. economy.

• Has Buffett had all he can eat? The departure of America’s favorite investor, 94-year-old Warren Buffett, from his holding company Berkshire Hathaway $BRK.A ( ▲ 2.74% ) has some Wall Street analysts concerned the company may not be as good a bet without him. Analysts at Keefe, Bruyette & Woods downgraded Berkshire to “underperform,” saying lower car insurance margins, tariffs, falling interest rates, fewer clean energy tax credits, and Buffett’s own planned departure are hurting profits. KBW lowered its target price for Class A shares to $700,000 from $740,000. Berkshire shares have fallen 3.2% in the past five days, closing Wednesday at $713,036.

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AI energy news

• More Nukes? AI needs power, but building new power plants is expensive and speculative, so where private industry fears to tread, the Trump Administration has gone in: On Tuesday, Energy Secretary Chris Wright announced an $80 billion deal with the owners of nuclear powerplant constructor Westinghouse, Brookfield Asset Management $BAM ( ▲ 1.4% ) and Cameco $CCJ ( ▼ 4.99% ) , to build an unspecified number of reactors to help fuel the AI boom. It’s not clear how the $80 billion in taxpayer money will be spent, and the cost of the last two reactors built by Westinghouse, in Georgia, cost $35 billion, about double initial estimates. They were also finished seven years late. 

• Who’s gonna pay for all that power? You and me and anyone else who wants to invest. OpenAI this week completed its conversion to a for-profit company, and is now preparing to go public, raising $60 billion at a $1 trillion valuation next year, according to press reports.

Twitter tweet

• The heat is on OpenAI: Rival AI firm Anthropic says it’s reached a deal with Google $GOOG ( ▼ 0.84% )  to buy up to 1 million of Google’s custom-designed Tensor Processing Units, adding a gigawatt of compute capacity by 2026. That’s a lot smaller than OpenAI’s planned 33 gW Stargate data center, but Anthropic’s picked the slow and steady lane, and its algorithms work across chips made by multiple designers, allowing for less expensive and more efficient computing. 

Trumplandia

• It’s never a quiet day in Trumplandia. Remember when Joe Biden was president and world trade hummed along fairly smoothly? As Canada’s Toronto Blue Jays trounced the L.A. Dodgers in the opening game of the World Series last weekend, Ontario Premier Doug Ford ran an ad on U.S. TV showing Ronald Regan speaking out against tariffs. Trump was outraged, and said he’s cutting off trade talks with Canada. Neither Ford nor Canadian PM Mark Carney seemed particularly upset. Meanwhile Trump’s three-day visit to Japan ended with an ill-defined pledge from Japanese leaders to invest some $550 billion, about one-eighth of its annual GDP, in the U.S. “No specific projects have been finalized at this point," Finance Minister Satsuki Katayama said Tuesday. In South Korea, Trump tried to extract a $350 billion investment, or about 20% of the country’s annual economic output. But after being gifted a replica of an ancient Korean royal crown, he touted an as-yet-unsigned and undocumented agreement to invest the $350 billion at the rate of $20 billion a year. Any more, the Koreans said, and it might blow up their currency. 

• Then came the big reveal: China, where Trump rolled back all his tariffs in exchange for China dropping the tariffs and rare-earth export ban it had imposed in response. China said it would buy U.S. soybeans again, and made vague promises to end the export of chemicals used to make fentanyl. The big business question is whether Trump will let Nvidia sell its Blackwell AI chip to China. Access to those AI wafers could let China get a permanent jump on the U.S. “The defining fight of the 21st century will be who controls artificial intelligence,” said Democratic Sen. Chris Coons. “It would be a tragic mistake for President Trump, in order to get some soybean orders out of China, to sell them these critical cutting-edge A.I. chips.” 

• Shutside Story - The longer the government shutdown goes on, the more it costs, and the non-partisan Congressional Budget Office, working without a paycheck for the past four weeks, says the U.S. economy will never recover between $7 billion and $14 billion in lost productivity, between missing paychecks for 750,000 federal workers and interrupting food benefits for low-income Americans. “Depending on its length, the government shutdown will reduce annualized real GDP growth in that quarter by 1.0 to 2.0 percentage points,” the report adds. 

• Apprentice Fed Chair Edition: it’s down to the Final Five, Treasury Sec. Scott Bessent said Monday, naming the finalists to replace Fed Chair Jerome Powell, when his term expires in May. The five are current Fed Governors Christopher Waller and Michelle Bowman, BlackRock executive Rick Rieder, and two guys named Kevin: National Economic Council Director Kevin Hassett and former Fed Governor Kevin Warsh. Bessent has been interviewing the candidates himself and said he’d present Trump with a super-short list after Thanksgiving. 

Elon’s World

• Alienation: Elon Musk’s controversial entry into being more outspoken about politics cost Tesla between 1 and 1.26  million car sales in two and a half years, according to a new study for the Bureau of Economic Research by four Yale professors. Tracking county-level data on car sales and partisan voting trends, they found that Musk’s increasingly extreme political views simply drove away potential Tesla buyers. He “antagonized his most loyal customer base, for, as we show, Democrats are far more likely than Republicans to purchase a Tesla,” they wrote.

Want more Cheddar?

You’re clearly into smart people talking about even smarter things. Lucky for you, that's literally our whole deal at Cheddar. We interview the brightest minds in business, finance, and tech. If you'd like more in-depth analysis from interesting people, lcheck out our where to watch page and turn us on 24/7! Your wallet will thank you and so, more importantly, will your mind. But also your wallet. Remember that. 

Peter S. Green is a veteran reporter and editor who has spent more than two decades covering business and finance from Eastern Europe to New York City, and has worked for Bloomberg News, The New York Post, The New York Times and The Messenger. He lives in New York City and is always looking for the next big story. Email him here.

BROUGHT TO YOU THIS WEEK BY:

At the core of the ongoing government shutdown is a fight over the decision to end subsidies that let some 12 million Americans and legal immigrants get affordable healthcare coverage. To understand why this is so important, BBTW editor Peter Green spoke with long-time health care executive John Driscoll, who is now board chair of the University of Connecticut’s health care system.

Peter Green: One of the main arguments behind the shutdown is over extending government funding of health insurance for American citizens and legal residents. Why does this matter so much?

John Driscoll: Right now, over 7 million people will lose their subsidies, and around 5 million will lose their health insurance completely. And the way the reductions work is you're reducing the higher coverage levels, which typically are the healthier people. At a time when health insurance costs are going to go up, you're taking the better risks and throwing them off the rolls, which will increase the cost going forward for healthcare in general. In addition to destabilizing the marketplace by taking so many people off the rolls so quickly, you're also changing the risk profile of the underlying covered lives. 

How does that work?

What they're doing is cutting the ACA subsidies for over 400% of the federal poverty level [Currently $32,150 for a family of four]. As you increase the number of people who make more money in the subsidy pool, your risk profile decreases. In addition, with 5 million people losing coverage, what happens is they don't stop getting care; they just get care when they're very sick.

How does that raise costs? 

Those 5 million-ish people will end up accessing care through emergency rooms, getting hospitalized at the highest possible cost level. We know that uninsured people are 40% more likely to die because they don't have access to primary care or specialists, and only half of them take the drugs that they're prescribed. It's a doom loop. 

But isn’t Obamacare too expensive? 

Obamacare was really a public-private compact to extend coverage, but without funding, it's not like the private sector is going to run in. And the irony here is that two-thirds of those who are the beneficiaries of enhanced subsidies are living in red states.

So how do we keep healthcare costs down? The U.S. spends about $14,000 a year per person, while the European average is about $7,500. 

We don't solve high costs in the healthcare system by dumping people off of insurance, particularly when the trade is lower taxes for millionaires and billionaires. Your mortality is much higher if you're uninsured.

What do you do to bring costs down? 

Uncovered people are by definition more expensive. And you have to solve the problem of extremely high prescription drug costs, and then invest in chronic care and chronic care support. If you cover everyone and can bring down the cost of prescription drugs, and you start to actually invest in integrated chronic care, you could substantially reduce the cost trend. 

Integrated chronic care? How does that work?

You give me a budget, but I get to manage all the costs. The only way you reduce the excess costs and the excess trend is if you manage all the costs through one clinical entity that has its patient care at the center. Everybody's got to get covered and everybody's got to have access to care they can afford. Otherwise more people are going to suffer. And that shouldn't be true in the richest country in the world.

This interview has been condensed and edited.

—Peter S. Green

Big Businesses mentioned this week:

$NVDA ( ▲ 0.16% )  $AMD ( ▼ 1.3% )  $AAPL ( ▼ 0.85% )  $NFLX ( ▲ 0.52% )  $AMZN ( ▲ 0.98% )  $GOOGL ( ▼ 0.74% )  $PSKY ( ▼ 2.57% )  $WBD ( ▲ 0.18% )  $CMCSA ( ▼ 1.53% )  $MBGAF ( ▼ 2.58% )  $VOW.X ( ▲ 2.51% )  $RIVN ( ▲ 1.81% )  $GM ( ▼ 3.05% )  $BYND ( ▼ 1.6% )  $FUN ( ▲ 4.66% )  $META ( ▼ 1.07% )  $TSLA ( ▼ 0.1% )  

This week, big business!

• The usual suspects

• The media mirror

• Car talk

• The short stack

• Trumplandia

• Elon’s world

• Want more Cheddar?

The usual suspects

• Forget the Singularity, it’s the Circularity. Are the multiple trillions of dollars in AI spending a virtuous circle, or just a shell game of circular financing, where Nvidia $NVDA ( ▲ 0.16% ) invests in OpenAI, which then uses the money to buy…Nvidia chips? That's increasingly what it looks like. The whole machine is built on the premise that a lot more companies will be using a lot more AI, and that they’ll need huge data centers, using vast numbers of chips to make it all happen. But if the demand isn't there fast enough, or isn't even there at all, that’s a lot of debt that won’t get serviced, and massive capital expenditures that won’t get amortized. It’s “a bit odd,” hedgie Jim Chanos wrote on X after a recent deal between chipmaker AMD $AMD ( ▼ 1.3% ) and OpenAI, “that when the narrative is ‘demand for compute is infinite,’ the sellers keep subsidizing the buyers?” 

• I phone, you phone, we all use our iPhone: Apple $AAPL ( ▼ 0.85% ) shares hit a record Monday after a report that sales of the new AI-powered iPhone 17 outsold the iPhone 16 by 14% in its first 10 days on the market. Shares rose about 4% on the news before dropping slightly, and Apple briefly had a market cap above $4 trillion.

• Sing along with Netflix $NFLX ( ▲ 0.52% ) : The streaming app said third-quarter revenue rose 17%, and profits rose 8%, largely on the back of tween sing-along sensation “KPop Demon Hunters,” the Sony Animation film released direct to streaming that’s gotten 325 million views since its late August release. The movie also sparked a cinema renaissance, as the top box office draw on its one-weekend theatrical release. Merchandising deals with Mattel and Hasbro were announced this week, and co-CEO Ted Sarandos said sing-along parties were boosting viewership. But despite the good news, higher expenses and some tax issues mean operating margins are falling, and strong competition from Amazon $AMZN ( ▲ 0.98% ) , Alphabet’s YouTube $GOOG ( ▼ 0.84% ) , and Paramount $PSKY ( ▼ 2.57% ) sent shares down nearly 10 percent after the earnings report.

• It’s coming for your job, and it’s not AI: Amazon $AMZN ( ▲ 0.98% ) plans to replace 600,000 jobs by 2023 and replace them with robots, according to internal company documents viewed by the New York Times. The company now has 1.2 million workers, and the documents show that filling new jobs with machines would save 30 cents on every package. The end goal is to automate 75% of its operations. Amazon doesn't release the number of items it ships from its warehouses, but it processed 6.3 billion U.S. delivery orders in 2024. Amazon called the documents “incomplete.” If Amazon goes ahead, warned Nobel-prizewinning economist Daren Acemoglu of MIT, “one of the biggest employers in the United States will become a net job destroyer, not a net job creator.”

• AI, yei yei! AI is coming for your job, at Meta $META ( ▼ 1.07% ) . Chief AI officer Alexandr Wang just fired nearly 600 employees, according to a memo seen by CNBC. The cuts largely target people working in AI before CEO Mark Zuckerberg poured $14.3 billion into Wang’s Scale AI, and appear to cement Wang’s role as Meta’s chief AI geek. With the cuts, Meta’s got about 3,000 people working on AI, in what it calls the Superintelligence Labs. Not that this will do much to hurt Wang. Forbes says’s he’s worth $3.2 billion. 

• Luddites or prophets? Top tech pioneers and AI leaders have signed on to a public statement warning that super-intelligent AI could destroy the world, and urging a halt in AI progress until there’s a consensus that it can be built and controlled safely. AT least 26,000 people have signed the call, including Apple cofounder Steve Wozniak, Virgin founder Richard Branson, and AI pioneers including Yoshua Bengio, Geoff Hinton, and  Stuart Russell. Even Trump-friendly media figures Steve Bannon and Glenn Beck, and of course, the singer Kate Bush, have joined the call.

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The media mirror

• A would-be mogul sinks Warner: That’s it for media dealmaker David Zaslav, who merged the Discovery Channel with Warner Brothers to create Warner Bros. Discovery $WBD ( ▲ 0.18% ) , and made himself one of the powerful moguls of Hollywood, lording over everything from DC Comics and HBO to CNN and Warner Bros. Pictures. Alas, the deal failed to produce the promised results, and on Tuesday, Zaslav said what Hollywood’s known for months — the shop’s for sale. Chief among prospective buyers is Larry Ellison’s son David, who just last month completed the purchase of Paramount Studios and CBS from fellow nepo-mogul Shari Restone. So far, WBD has rejected three offers from Paramount $PSKY ( ▼ 2.57% ) , the last for $24 a share. Analysts say the studio’s worth at least $30 a share. Amazon $AMZN ( ▲ 0.98% ) , Netflix $NFLX ( ▲ 0.52% ) , YouTube (part of Alphabet’s Google- verse) $GOOG ( ▼ 0.84% ) , and even NBC-Universal owner Comcast $CMCSA ( ▼ 1.53% ) are also reported to be bidding for all or part of WBD. WBD shares are down some 60% since Zaslav took over in 2021. Some of that’s due to a changing entertainment industry, but a lot of it’s due to the debt taken on to combine the two companies and some really bad decisions, like losing the exclusive rights to NBA games. What happens next will depend a lot on whether regulators will allow more consolidation, and those regulators happen to be the same ones who just approved Ellison’s purchase of Paramount.

Car talk

• Chip Challenged: A move by the Dutch government last month to take control of Chinese-owned chipmaker Nexperia has rattled the car industry. Nexperia chips are used to control everything from lights to brakes, and the Dutch takeover, for national security reasons, prompted the Chinese government to ban the export of some Nexperia chips that aren’t made in Holland. Mercedes $MBGAF ( ▼ 2.58% ) said it’s secured a short-term supply of chips, and Volkswagen $VLKAY ( ▼ 0.99% ) said it could be forced to temporarily halt some production. Shares in both Mercedes and VW were down more than 2% on Wednesday. 

• U.S. EV maker Rivian $RIVN ( ▲ 1.81% )  says it’s laying off more than 600 people, about 4% of its workforce, hammered by the expiration of the EV tax credit and changes in the sale of climate credits, which could cost it $100 million. Rivian’s EV sales grew 32% to 13,201 vehicles in the third quarter, and it plans to introduce a lower-cost, $45,000 SUV “soon.” 

• GM $GM ( ▼ 3.05% )  surprised analysts and investors with higher-than-expected revenue and profits in the third quarter, pushing its stock up 15% Tuesday, its best day since 2020. Tariffs on imported medium- and heavy-duty trucks helped, the company said, but the numbers don’t include a $1.6 billion charge for cutting back EV production. Nor do they include the cost of killing 1,200 jobs in Canada and halting production there of the BrightDrop electric delivery van, after 25% tariffs on Canadian-made vehicles and no more subsidies for EVs. 

The short stack

• Meme gets cooked: The latest meme stock to grab the market's attention, Beyond Meat $BYND ( ▼ 1.6% ) , the faux-burger brand that’s been unable to compete on price with he real thing, soared 625% from Monday to Wednesday, topping out at $7.69 before crashing back down some 60% to around $3 on Thursday morning. What drove the stock? First, it was added to a meme index, but second was a big short squeeze. That’s still left the shares up 400% in the past five days. 

• Kelce Koaster? Shakeup fund Jana Partners has teamed with TayTay fiancé Travis Kelce to buy a stake in Six Flags $FUN ( ▲ 4.66% ) , promising to revive the stalled theme park operator. Kelce says he grew up going to theme parks back home in Ohio, and wants to help breathe some life into the tiring brand. Six Flags shares rose nearly 20% on the news. 

Instagram post

• All bets are on: The NHL has a licensing deal with sports betting markets known euphemistically as prediction markets, Kalshi and Polymarket. The deal lets the two use NHL logos and data. But rival gambling sites, like FanDuel and DraftKings, say the prediction markets violate state gambling laws and are too loosely regulated. The NHL hit back saying that the more access fans have to betting, the better for everyone. Prediction markets say they’re really option exchanges and are regulated by the federal Commodity Futures Trading Commission. The Feds have been concerned about gambling on games, and on Thursday arrested Miami Heat guard Terry Rozier and Portland Trail Blazers head coach Chauncey Billups for allegedly taking part in a complex Mafia-linked sports gambling scheme. What are the odds?

Trumplandia

• Tariff costs: A new study released by S&P Global says two-thirds of the cost of the Trump tariffs is going to be passed along to consumers, and the total price: $1.2 trillion for 2025 alone. The rest will hit business. “Tariffs and trade barriers act as taxes on supply chains and divert cash to governments; logistics delays and freight costs compound the effect,” wrote the report’s author, Daniel Sandberg.

Elon’s world

• Tesla’s tumble: It was not a good quarter for Tesla $TSLA ( ▼ 0.1% ) , even as expiring EV credits pushed many American drivers to finally buy that Model Y. Price cuts slashed profits by 37%, as overall revenue rose 12% to $28 billion, with revenue at the battery storage unit up 44%. But investors’ doubts about Tesla’s ability to keep up the sales growth without a new model sent shares down 5% by midday Thursday. Musk said in a conference call on Wednesday that self-driving cars will power Tesla to a record. “Honestly, it will be like a shockwave,” he said. The real shockwave may be Elon’s pay package: Next month, shareholders will vote on a proposed $1 trillion pay package — awarded if Tesla hits some gargantuan targets over the next decade. Shareholder advisory firms ISS and Glass Lewis are urging a no vote, but Musk says he’ll walk if shareholders turn him down. The proposal would leave him with 25% of the company, up from his current 13%. Still, he’s not hurting. He was worth $487 billion on Wednesday, according to Forbes. 

Twitter tweet

• Petty cash: Trying to find more cash flow at his companies, Musk has had SpaceX and xAI buy fleets of Tesla cybertrucks. With a production geared for 250,000 trucks a year, and sales that have fallen below 20,000 trucks, that may be the only way to clear a buildup of inventory. 

Twitter tweet

• X-ing out SpaceX? Travelling at the speed of Elon may not be fast enough for NASA, whose chief, Sean Duffy said the agency could go back to the moon using lunar landers not made by Musk, noting that SpaceX is far behind schedule on building a viable moon lander. “We’re not going to wait for one company,” Duffy said on Monday. “Sean Dummy is trying to kill NASA,” said Musk.

• Secret Sats? What’s that secret SpaceX network of spy satellites being run for the U.S.’s National Reconnaissance Office? That’s what amateur satellite tracker Scott Tilley says he’s discovered from his home in Canada’s British Columbia. In a published paper, Tilley says he’s found radio transmissions from the Starshield Constellation using low-tech radio spectrum to beam detailed photos back to Earth. Crucially, Tilley says he’s found “no evidence of authorization” to use the bandwidth, suggesting it’s not meant to be noticed. Shhhh!

Want more Cheddar?

You’re clearly into smart people talking about even smarter things. Lucky for you, that's literally our whole deal at Cheddar. We interview the brightest minds in business, finance, and tech. If you'd like more in-depth analysis from interesting people, lcheck out our where to watch page and turn us on 24/7! Your wallet will thank you and so, more importantly, will your mind. But also your wallet. Remember that. 

Peter S. Green is a veteran reporter and editor who has spent more than two decades covering business and finance from Eastern Europe to New York City, and has worked for Bloomberg News, The New York Post, The New York Times and The Messenger. He lives in New York City and is always looking for the next big story. Email him here.

As the federal government shutdown enters its third week, BBTW editor Peter S. Green spoke with Jeffrey Campbell, the Frances D. Rasmus and Jerome A. Castellini Professor of Economics at the University of Notre Dame, about the impact of the shutdown on the U.S. economy. Mr. Campbell is also a former senior economist at the Chicago Fed.

Peter Green: How is this shutdown different from any previous shutdowns, and will it have a big effect on the U.S. economy, or real-world implications for people?

Jeffrey Campbell: In previous shutdowns it was very clear that federal employees would be not only made whole but better off than they would have been because they got a vacation and then they got paid. [Here], it's very difficult to see that happening.

But still you've got 1.4 million federal employees not getting paychecks. Landlords are already worried that rent won’t be paid. 

Most of those workers will get paid retroactively and will be able to pay back rent but some landlords are probably going to take this on the chin. The equity holders and the rental companies are going to end up taking the hit. Suppose that we need a refrigerator to be up to code. The rental housing company is going to install the refrigerator because they've got to be up to code regardless of who they rent it to. So a cash flow can impact individuals’ expenditures when that individual doesn't have a lot of savings or doesn't have a lot of credit, but a larger rental company generally does have access to both savings and credit and their equity holders are the ones who are going to take it on the chin.

And what about credit card companies and banks that might see greater defaults? 

They're going to have markdowns on that, absolutely , and again it's going to be the equity and security holders that are going to take the hit. 

Will there be a knock-on effect? 

The damage is  going to be to the very specific people who are involved and a set of people I'll call their creditors, which is if you rent your house you're a creditor to those people, if you issue the credit card to a federal employee you're a creditor, small businesses in Maryland and Virginia will probably be hit because that's where all the federal employees work, but is this going to impact Kentucky? No, not really.

If the shutdown drags on, how does the federal government carry out necessary functions, like paying FDA inspectors to check the meat or the FAA making sure more doors don't fall out of Boeing 737s? 

There's a difference between being funded and getting your inspection, and they're going to maximize that wiggle room. Paying soldiers is a great example of that. The Trump administration has proven with their flood the zone strategy that they're quite willing to do things that  lawyers would advise against in order to threaten their opponents. The classic one right now is paying the military, finding the money and then asking their political opponents, okay sue me for paying our soldiers. That's not a good look. They're going to try a lot of that to keep the shutdown going.

How is it going to impact economic growth?

For things like this I would always say two-tenths of a percentage point. I don't think it's going to be that big of a deal compared to the private sector growth. What's fueling private sector growth is technological change, that we figure out new and better ways of doing things and that's what allows us to become wealthier and wealthier. Look at Joel Mokyr’s Nobel Prize. The manifestation of that right now is AI. We're figuring out how to deploy AI to make us richer essentially to give us the things we want at lower cost to us and in that i would say if anything having the government shut down is probably a bonus because they're probably going to obstruct the deployment of new technology, slowing down technological deployment that's a perfectly reasonable thing to do it's just it slows down back on the growth and government is the tool for that and so i'm making a prediction that if government's not available to be a tool for that economic growth will be higher.

This interview has been condensed and edited.

—Peter S. Green

Big Businesses mentioned this week:

$ORCL ( ▲ 1.59% )  $MSFT ( ▲ 1.35% )  $AAPL ( ▼ 0.85% )  $RYN ( ▼ 1.92% )  $PCH ( ▲ 0.02% )  $WY ( ▼ 0.77% )  $STLA ( ▼ 2.68% )  $UBS ( ▼ 1.26% )  $JEF ( ▼ 0.7% )  $AZO ( ▲ 0.67% )  

This week, big business!

• If the shutdown drags on, how does the federal gov …

• How is it going to impact economic growth?

• The usual suspects

• Tech troubles

• The short stack

• Car Talk

• Trumplandia

• Want more Cheddar?

The usual suspects

• Kid Talk: Meta $META ( ▼ 1.07% ) says it's going to keep teens under 18 away from content that’s “sexually suggestive,” violent or shows pictures of bongs. Movie-like PG13 and special PG13+ restrictions, moderated by a panel of thousands of parents and newly-trained AI chatbots will keep kids from viewing “risky stunts” and other material the panel considers inappropriate. And users will have to show ID to open an Instagram account. OK, boomer.

• Bubble, Schmubble: Oracle’s $ORCL ( ▲ 1.59% ) new co-CEOs are defending the company’s plan for massive new investments in data centers to run AI applications, even as the AI bubble appears ready to burst. Oracle's shares jumped 40% last month after the company said it had signed a contract with OpenAI for $300 billion. But OpenAI says it won't make a profit until 2029, and doesn't have anything like that much cash on hand. Moody’s called the dependence on OpenAI “risky,” and Oracle needs to show it can make a profit offering AI applications despite the massive cash investment required and the inevitably short lifespan of each generation of AI chips. 

• Nobel-nomics: Joseph Schumpeter, the Austrian economist whose theory of “creative destruction” and the role innovation plays in economic progress underpins much of the modern economy, never won a Nobel prize. But this week, the award went to three economists who built on Schumpeter’s work and explained how innovation and science lie at the heart of the technological revolution that has created unprecedented growth and prosperity for the past 200 years. Joel Mokyr at Northwestern University won half the $1.2 million prize money, and Pierre Aghion at the London School of Economics split the other half with Peter Howitt of Brown University. The award comes as economists, businesses, investors and policy makers are trying to understand how the explosive growth in AI may reshape the economy, and whether business is ready to take advantage of AI.

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Tech troubles

• The Windows 10 disaster: On Tuesday, Microsoft $MSFT ( ▲ 1.35% ) discontinued updates and security fixes for Windows 10, telling users to just upgrade to Windows 11. Sounds like an easy fix? Well, no. As the Public Interest Research Group’s Right to Repair campaign points out, some 400 million PCs are physically incapable of upgrading. It’s the biggest eWaste stream in history. PIRG calls that “a bad deal for both users and the planet.” The biggest losers? Schools, government agencies, non-profits, and similar groups that can’t afford to buy new tech. The biggest winners? Hackers, of course. Microsoft is offering a year’s paid support to keep Windows 10 machines safe, but so far, that’s not really working out:

• Apple’s $AAPL ( ▼ 0.85% ) incremental obsolescence strikes again, with a new M5 chip that powers a new laptop, iPad and set of VR glasses, all for a few hundred dollars more than the previous version. The new Vision Pro goggles are more than $3,000, of course. The chip is four times faster than the M4, adding a boost to AI workloads, the company said. It’ll also boost Apple’s bottom line, the company hopes. Net income fell 3.36% last year, and 2.8% in 2023. Shares are up only 2.25% this year.

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The short stack

• TIIIIMBER! Two of the largest U.S. timberland owners, Rayonier $RYN ( ▼ 1.92% ) and PotlatchDeltic $PCH ( ▲ 0.02% ) have agreed to merge to form the second-largest U.S. landowner after Weyerhaeuser $WY ( ▼ 0.77% ) . The timber industry has been on a roller-coaster ride this year, as tariffs on Canadian wood, now 35%, help U.S. tree fellers, but an oversupply of softwood in the U.S. southeast has slashed profits for landowners. At the same time, thousands of clear-cut acres are being leased to solar power developers at 10 times the return from growing trees. 

• Go East, Young Man!  With viewership declining in the U.S., the NBA is looking back to China, where it had been attracting a growing audience before Covid and some pushback from the Chinese government. The NBA has 425 million social media followers in China, more than 5,000 partner retailers, and a new deal with online retailer Ali Baba, whose chairman, Joe Tsai, owns the Brooklyn Nets. The Nets play the Phoenix Suns in Macao on Friday, and tickets are going for as much as $3,000, CNBC reports.

• Grindr Buyback: Two of Grindr’s largest shareholders say they just can’t quit the gay hookup app, and want to take the company private. There’s no formal offer yet, but then that’s often how Grindr works (I’m told). Semafor reported that the offer would value the firm at $15 a share, or about $3 billion. Grindr’s focus on same-sex partnering has seen usage and revenue rise, even as Gen Z users have tired of online dating, eschewing apps like Tinder and Hinge, which have seen paying users decline:

• FlyBy: Boeing $BA ( ▼ 2.31% ) , America’s largest manufacturer, delivered 55 planes in September, putting it on track to deliver the most planes in a year since 2018, when all its troubles began, with the first of two back-to-back crashes of the 737MAX. CEO Kelly Ortberg says Boeing expects to up production of the lucrative 737 series to 42 a month, under an accord with the FAA, which limited production after a door panel fell out of a 737 last year. Shares in Boeing are up 24% this year, although they’re still yet to go back up to their 2020 prices.

Car Talk

• Stellantis $STLA ( ▼ 2.68% ) , the Italian-based group that owns Chrysler, says it’s moving some Jeep production from Canada to the U.S., which Canadian officials say could cost 3,000 jobs. Stellantis, which didn’t mention Canada in announcing the investment in the U.S., says it will spend $13 billion in the U.S., launching five new models and adding 5,000 jobs (well, 2,000 new ones, if you’re counting), even as its profits keep falling. Meanwhile, the Canadian government says it will sue Stellantis, after it gave the company some of a 15 billion Canadian dollar benefit package to build EVs and batteries in Canada. “Auto jobs are being sacrificed on the Trump altar,” said Canadian autoworker union leader Lana Payne. Why is Stallantis ditching Molsonville? In July, Stellantis said U.S. tariffs had already cost its Canadian operations $350 million, and it saw profits plummet to $20 billion last year from $38 billion a year earlier. Stellantis’ share price is down 34% this year. 

• Fired up: Ford $F ( ▼ 3.67% ) has halted production on its lucrative three-row SUVs, including the Lincoln Navigator, after a fire destroyed an aluminum car parts factory in upstate New York last week. The plant produced about 40% of the sheet aluminum used in U.S. cars, and the F-150 pickup is going to be hardest hit, as one of the most aluminum-filled cars in the U.S. It can take several months for a supplier to meet the exacting demands of a modern carmaker. Meanwhile, a key U.S. auto parts supplier, First Brands Group, has filed for bankruptcy, unable to account for about $2 billion in spending after borrowing more than $10 billion in a series of convoluted financial arrangements that have left Swiss bank UBS $UBS ( ▼ 1.26% ) and Jeffries Financial Group $JEF ( ▼ 0.7% ) exposed to big losses through loans made off its balance sheet and guaranteed by revenue it expected to get from customers like Auto Parts Zone $AZO ( ▲ 0.67% ) , the Wall Street Journal reported.

Trumplandia

• The Cut: Is the Fed on track to make another rate cut this month? Sure looks like those are the signals emerging from a recent speech by Fed Chair Jerome Powell, who told an economics conference in Philadelphia that cutting rates too quickly could “leave the inflation job unfinished,” but moving too slowly to reduce borrowing costs could spur “painful losses in the employment market.” The Fed’s Open Market Committee, which sets the rate, meets next on October 28-29, but with the ongoing shutdown, the FOMC doesn’t have precise data on either jobs or inflation. Not that seems to be stopping Pres. Trump‘s latest appointee to the Fed, Stephen Miran, who argues that tariffs don't contribute to inflation. 

• Tariff Turmoil: China’s playing hardball with President Trump on tariffs, and giving no sign of stepping back. Last week, just ahead of a planned U.S.-China summit, China restricted exports of rare earths vital to the U.S. electronic and EV industries, and Trump responded with a threat to put 100% tariffs on Chinese imports. But China's supreme leader, Xi Jinping, may have some sharp insight into what makes Donald run. Xi appears to be betting that Chinese sanctions could start to tank the U.S. stock market, and that Trump’s fixation on the market will force the U.S. to roll back many of the tariffs Trump imposed last Spring. Those tariffs are not working out too well for U.S. consumers, Powell noted in his Philadelphia speech (see above). With inflation at a stubborn 2.9%, he said, “Available data and surveys continue to show that goods price increases primarily reflect tariffs rather than broader inflationary pressures. Consistent with these effects, near-term inflation expectations have generally increased this year.” 

• Gloom and Doom: Consumers believe things are going to get worse. That’s the feeling among U.S. consumers surveyed by consulting firm Deloitte, which found 57% said they expect the economy to weaken in the next six months, the most negative outlook since the survey began in 1997. Consumers said they plan to spend about 10% less than they did last year on holiday gifts. Worst hit are Gen Z shoppers who will spend 34% less than last year. Trump’s tariffs have been sapping the resiliency of the U.S. consumer, Deloitte said. 

• Argentina for Fun and Profit:  More details are emerging on the U.S. bailout of the world's fiscal nightmare Argentina, and they are raising questions about what now appears to be $40 billion spent by the U.S. Treasury to prop up Argentina’s peso. The spending is effectively a bailout, and among the people it's helping is Treasury Secretary Scott Besent’s former colleague at George Soros’ hedge fund, Robert Citrone. Citrone owns a pile of Argentine debt, and without the U.S. bailout, Argentina could default on that debt. Argentine President and Trump bestie Javier Milei took his remarkable hairstyle to Washington this week to thank Trump for the bailout. But in Congress, despite the shutdown-initiated recess, Democrats asked why the U.S. is bailing out Argentina, when Milei has been selling so many soybeans to China at such a great discount that U.S. farmers have sold nothing to China this year and are getting a bailout, instead. “It is inexplicable that President Trump is propping up a foreign government, while he shuts down our own,” said Senator Elizabeth Warren, the Massachusetts Democrat. 

• More drug deals: Add U.K. pharma giant AstraZeneca $AZN ( ▼ 1.99% )  to the list, after U.S.-based Pfizer $PFE ( ▼ 0.04% )  , of pharma companies that have agreed to stop charging Medicare higher prices than they charge European countries. Both Biden and Obama tried to cut drug prices, but a well-lobbied GOP-controlled Congress stymied both those efforts. The drugmaker also agreed to invest $50 billion in U.S. manufacturing over five years, and won a three-year reprieve from tariffs on imported drugs. The agreement will cut into profits, but be less of a hit than if Trump had followed through with new tariffs on pharma imports.

Want more Cheddar?

You’re clearly into smart people talking about even smarter things. Lucky for you, that's literally our whole deal at Cheddar. We interview the brightest minds in business, finance, and tech. If you'd like more in-depth analysis from interesting people, lcheck out our where to watch page and turn us on 24/7! Your wallet will thank you and so, more importantly, will your mind. But also your wallet. Remember that. 

Peter S. Green is a veteran reporter and editor who has spent more than two decades covering business and finance from Eastern Europe to New York City, and has worked for Bloomberg News, The New York Post, The New York Times and The Messenger. He lives in New York City and is always looking for the next big story. Email him here.

Big Businesses mentioned this week:

$ORCL ( ▲ 1.59% )  $AMD ( ▼ 1.3% )  $NVDA ( ▲ 0.16% )  $ICE ( ▼ 1.38% )  $PSKY ( ▼ 2.57% )  $TSLA ( ▼ 0.1% )  $GM ( ▼ 3.05% )  $MBG ( ▼ 0.29% )  $BMWYY ( 0.0% )  

This week, big business!

• The usual suspects

• The short stack

• Trumplandia

• Elon’s World

• Want more Cheddar?

The usual suspects

• Oracle and the AI bubble: When stocks in one sector suddenly start jumping, and investors and industry players are pouring in hundreds of billions of dollars, we gotta ask: Is it a bubble? One of the first bellwethers may be Oracle $ORCL ( ▲ 1.59% ) , the database and hosting company that saw its shares rocket 36% in one day last month when it predicted that a $300 billion deal with OpenAI would see a 7X rise in its cloud-computing revenue over the next three years. But now comes a report in the usually well-informed tech newsletter The Information, that Oracle's profit margins are getting squeezed. Oracle shares fell about 5.5% on Tuesday. Still, they’re up 74% so far this year, so if it’s a bubble, it’s got a long way to go before it bursts. 

• Betting on the also-ran: OpenAI, which appears to be starved for the chips it needs to make all its AI dreams come true, has cut a complicated deal with also-ran chipmaker AMD $AMD ( ▼ 1.3% ) to buy chips that can compete with Nvidia’s $NVDA ( ▲ 0.16% ) AI wafers. In all, OpenAI has pledged to buy 6 gigawatts worth of AMD chips, which could mean tens of billions of dollars in new revenue for AMD. But ramping up AMD to compete will be tough: AMD’s data center business is less than a tenth the size of Nvidia’s, and while OpenAI’s revenue is ballooning, from an expected $12.7 billion in 2025 to more than $125 billion by 2029, the company is burning through cash and says it won’t be turning a profit before 2029.

• Golden daze: The price of gold broke $4,000 an ounce this week for the first time in history, up 53% this year. That’s been fueled by everything from the West’s seizure of Russian assets to the ongoing trade wars, which have shaken faith in the stability of the global economy. There are also the Fed rate cuts, which some traders see as a sign the U.S. economy is headed for trouble. As Bart Melek, head of commodity strategy at TD Securities, told CBS News, gold "may be a better safe-haven than Treasuries.”

• Wanna bet? Big Board owner Interncontinental Exchange $ICE ( ▼ 1.38% ) says it will invest up to $2 billion in prediction market Polymarket. ICE says it will distribute Polymarket’s data, and the venerable exchange owner will add a patina of respectability to what some critics call a gambling site. Polymarket lets users bet on yes-or-no questions about anything from sports to politics, and is regarded in many countries as an unlicensed offshore gambling platform. U.S. citizens are banned from Polymarket, but in August, Donald Trump Jr. joined its advisory board, so that may not last too much longer.

• What would Walter say? CBS News has its first editor-in-chief, the anti-woke opinion writer Bari Weiss, who snagged the job while selling CBS parent Paramount $PSKY ( ▼ 2.57% ) her website The Free Press for $150 million. It’s not yet clear what Weiss’s role will look like. CBS News is retaining its president, Tom Cibrowski, who’ll be managing the network’s actual newsgathering operation. Among Weiss’s first jobs will be launching a debate show that sounds a lot like the CNN’s Crossfire. The new owner of the venerable news outlet, mogul David Ellison, whose Dad Larry’s Oracle cash helped him buy CBS parent Paramount, says he wants to engage centrists, but he and his pa are known as close pals of President Trump, raising the question about how much of a watchdog CBS will be over the administration. In July CBS paid Trump $16 million to withdraw his lawsuit over how 60 Minutes edited an interview with Kamala Harris. Weiss, 41, famously left the New York Times op-ed page in 2020, claiming she was being bullied for her views, and declared she was “done” with mainstream media. It may not matter. CBS’s evening news show is a distant third among the networks, with viewership down 10% in the 2024-25 season over a year earlier.

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The short stack

• Last rites: Drug Store chain Rite Aid $RADCQ ( ▲ 80.0% ) has filled its last prescription, the company said in a terse announcement on its website. Failing to emerge from bankruptcy reorganization earlier this year, Rite Aid shut its last 89 stores this week. The 63-year-old chain once had more than 5,000 stores. Just two years ago, it had 2,000 outlets and 45,000 employees, including 6,100 pharmacists. Cause of death? Competition from deeper pockets at CVS $CVS ( ▼ 2.33% ) and Walgreens $WBA ( ▲ 0.5% ) , and more than 1,000 lawsuits for filling illegal painkiller prescriptions. These are hard times for pharmacies. Mail-order drugs and high rents shuttered a third of U.S. drugstores from 2011 to 2021, and even CVS and Walgreens shut about 1,000 locations each this decade. But the biggest threat to pharmacies is pharmacy benefit managers, who work to keep drug costs down for major health plans by limiting the profit margins for retail pharmacies. Some 80% of all U.S. insurance-paid prescriptions pass through the top three PBMs, CVS Health’s CVS Caremark, Cigna’s Express Scripts, and UnitedHealth’s Optum Rx.

Twitter tweet

• Car talk: It’s time for a new episode of The (Car) Price is Right! With the federal $7,500 EV credit gone, EV makers are dropping their prices to keep customers. Tesla $TSLA ( ▼ 0.1% ) is promising a new, slightly-stripped down Model Y at $40K (originally $45K) and $37K for a Model 3. Hyundai $HYMTF ( ▼ 7.44% ) says it's cutting the 2026 Ioniq by $9K for a base-model sticker price of $35K. GM’s Chevy Equinox and Nissan’s $NSANY ( ▼ 4.5% ) $7201.T 2026 Leaf start at under $35K, and GM $GM ( ▼ 3.05% ) says it’s bringing out a new compact Chevy Bolt for less than $30K. That comes even as GM chief Mary Barra says she’s holding off on new EV models and putting her chips on more gas-guzzling pickups. Still, numbers of fast-charging ports — which can charge a car in 20 minutes — are up more than 80% in the two years that ended in August to more than 60,300 across the country.

• Janis Joplin won’t help: Mercedes-Benz $MBGAF ( ▼ 2.58% ) says car and van sales dropped 12% at the German luxury carmaker, as Trump’s tariffs sent U.S. sales down 17% and the explosion of electric cars in China knocked sales there down 27%. Still, sales grew 3% at home as EV sales rose 9% from a year earlier. And that China market is causing headaches for BMW $BMWYY ( 0.0% ) , which said Chinese consumers are buying fewer of the company’s cars, including its Mini and Rolls-Royce brands, cutting into profits. Shares of BMW are down more than 8% since the announcement. And Korean carmaker Hyundai, still reeling from the recent immigration raid that saw ICE snap the cuffs on some 300 white collar Korean workers, says it is getting savaged by the tariffs. Despite giving $1 million to Trump’s inauguration, pledging $21 billion in investments in the U.S., and record-breaking sales in the third quarter, net profit dropped 22%, the company said, blaming tariffs. 

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Trumplandia

• The shutdown shuffle: Into the second week of the federal government shutdown, we’re all beginning to feel the pain. President Trump is threatening not pay Federal employees who’ve been furloughed, causing knock-on effects for everyone from mortgage companies to retail businesses. And while ICE Agents are getting paid, some 10,800 air traffic controllers are not. Airline industry expert Chris Dane says the shutdown is expected to cost the U.S. economy nearly $1 billion a week, while 58,000 TSA security officials work without pay. Government-backed small business loans are halted, government inspections needed to continue construction projects or manufacture drugs and medical equipment are halted, and IPOs are postponed, awaiting regulatory action. (Data provider Dealogic noted that IPO activity dropped 90% in the month following the Dec 2019 government shutdown, and warned that despite a buoyant stock market, the same thing could happen this year. We’re also coming up on open-enrollment for the majority of Americans without employer-sponsored health care plans, and the key issue of the shutdown — extending the federal funding that keeps insurance affordable — is unresolved. It’s a stark reminder of how tightly the federal government is woven into our daily lives. Without government job market or other economic data, the Fed is flying blind, just as it’s looking at a new rate cut. And without Fed-sanctioned data, businesses are hesitant to spend, as they see tariff-induced price hikes finally kicking in. The good news is that the situation is getting so acute, EY-Parthenon Chief Economist Gregory Daco says we’re likely looking at back-to-back rate cuts in October and December.

• Family business: Just how much money have the Trump family and their friends made from business dealings while Donald Sr. has been president? According to the investigative journalism site Whale Hunting, the total is over $3 billion, inlcuding $800 million by Trump sons Eric and Donald Jr.; $200 million by Kyle and Brandon Lutnick, the sons of  Commerce Secretary Howard Lutnick (including tariff refund agreements that are essentially bets on the tariffs Mr. Lutnick is in charge of); and Jared Kushner’s $2.75 billion cut of the Electronic Arts $EA ( ▼ 0.48% ) deal.

• Hill of bans: Apparently angered by U.S. tariffs, China is passing this year on its annual purchases of U.S. soy beans, which it usually buys to feed livestock and poultry, or convert into cooking oil and tofu. That’s left U.S. farmers afraid they’ll be saddled with rotting piles of worthless beans. Trump says he will act this week to help the growers, and is looking at adding another $10 to $14 billion to last December’s farm bailout. Trump’s pledged to fund that farm relief with revenue from tariffs. The whole thing is a little more complicated, though: One reason China’s not buying U.S. grain is because it can find it cheaper elsewhere. Where? Argentina. China’s announcement it’s buying 40 cargoes worth of soy from Argentina came just hours before U.S. treasury Secretary Scott Bessent said he’d agreed to buy $20 billion of Argentine bonds so its populist president Javier Milei, known as the Trump of Beunos Aires, could get out of yet another debt pickle. And why is Argentine grain suddenly so cheap? In order to raise the dollars it needs to pay off the bonds, Argentina suspended its export tariffs. “The painful reality may be that U.S. agriculture becomes the biggest casualty of the trade war,” wrote the trade publication Farm Progress.

Twitter tweet

• I’m the taxman: Not a lot of people seem to want to run the IRS. Treasury Secretary Scott Bessent, now acting commissioner, is the revenue service’s seventh boss this year. That changed this week, when former Fiserv CEO Frank Bisignano agreed to add CEO of the tax agency to his day job as head of the Social Security Administration. Bisignano has previously told associates that he took the job at Social Security to modernize the agency and avoid the headaches he’s seen his own family members experience, BBTW has learned. He could bring that approach to the IRS, but the agency is still reeling from the loss of 26,000 employees this year, and Bisignano’s been named in a class action lawsuit alleging that Fiserv “misled investors by artificially inflating its growth numbers,” by migrating clients from an older point-of-sale system to its updated Clover system, and claiming those were new signups. Fiserv denies the allegations.

• Taytay the Rock crusher: Taylor Swift’s 90-minute music video “The Official Release party of a Showgirl,” won the box office race last weekend, collecting $33 million at 3,702 theaters, while The Rock’s “Smashing Machine,” a $40 million action flick, was second, taking in only $6 million. Swift’s film, essentially a string of promos from her latest album, “The Life of a Showgirl,” filled its seats with practically no marketing, letting theater-owners know it was coming just two weeks before it opened, and running only for that one weekend.

Elon’s World

• Sleeping satellites: With some 8,000 Starlink satellites floating above our heads, there were bound to be some failures. But Smithsonian astrophysicist Jonathan McDowell says the MuskSats are falling out of the sky at the rate of one or two every day. The Starlink sats have lifespan of just five to seven years, meaning that by the time Elon Musk turns 60, nearly every satellite up there today will have crashed,  burned, and been replaced. SpaceX has launched more than 2000 satellites so far this year. 

• Severance: Musk edition — Musk has agreed to settle a lawsuit brought by four former Twitter executives he fired, and who claim they’re owed $128 million in severance and penalties. The settlement details haven’t been announced, but in August, Musk agreed to pay severance to 6,000 other Twitter employees he fired back in 2022.

• Chipping away: xAI is reportedly in talks to raise $20 billion from investors, including AI chipmaker Nvidia. Much like Nvidia’s deal last month with OpenAI, Nvidia’s investment will be used by xAI to help buy Nvidia chips for a Tennessee data center, according to press reports. The chips will also be used to secure the debt portion of the financing, worth about $12.5 billion. Musk is rushing to finish the data center, which has been dogged by a lack of both chips and electric power, and local opposition to numerous temporary natural gas-fueled generators to power the center. 

Want more Cheddar?

You’re clearly into smart people talking about even smarter things. Lucky for you, that's literally our whole deal at Cheddar. We interview the brightest minds in business, finance, and tech. If you'd like more in-depth analysis from interesting people, lcheck out our where to watch page and turn us on 24/7! Your wallet will thank you and so, more importantly, will your mind. But also your wallet. Remember that. 

Peter S. Green is a veteran reporter and editor who has spent more than two decades covering business and finance from Eastern Europe to New York City, and has worked for Bloomberg News, The New York Post, The New York Times and The Messenger. He lives in New York City and is always looking for the next big story. Email him here.