Have you received your share of the $62 billion in tax refunds paid out so far this year? You might be feeling a bit disappointed; the same number at this time last year was $101 billion. But treat yourself to something special anyway, just for getting that tax return in nice and early.
Illustration: Sarah Grillo/Axios
American banks are minting money. In 2018, they made $237 billion in profits, bringing their average return on assets to an extremely healthy 1.35%. That's up from 0.97% in 2017. With banking so profitable, a lot of new players are looking to get in on the game, or to increase their market share.
The big picture: In a tech-obsessed world, a broad range of institutions have decided that the future of banking lies in apps. The logic is simple: Increasingly, Americans want to bank on their phones, rather than in expensive-to-maintain branches, so banks should give them what they want.
The bottom line: None of these products are particularly revolutionary, except insofar as their users tend not to hate them. If and when winners start to emerge, expect them to be acquired by the major banks, at which point Actually Pleasant Banking might start to become a mass-market phenomenon.
Most mobile-first banks target millennial customers, on the grounds that they are less wedded to their existing banks and are more likely to constantly be on their phones. But a new survey from Marqeta, a fintech startup backed by Goldman Sachs and Visa, shows that Gen Xers are just as likely to have moved to such a bank, and are just as likely to want to move.
Illustration: Sarah Grillo/Axios
Ken Fisher doesn't care about millennials, or apps, or disrupting anything; he's in all respects the epitome of the kind of investment manager that younger, cooler startups are attempting to disrupt. So far, there's no sign that they've made so much as a dent in his revenues.
Fisher's comparative advantage is in sales and marketing. His advertising budget has been so large for so long that his name recognition is super-high; he is also happy to use his own billionaire status as a way to attract clients. His product is designed to appeal to older investors, often retirees, who like to talk to a fellow human about their finances, and who don't mind paying more than 1% of their assets every year in order to be able to do so.
The bottom line: It's going to be decades before millennials have the kind of wealth that Fisher's clients enjoy, which means that Fisher Investments has the luxury of time on its side. Meanwhile, the venture capitalists who have invested in smaller shops are not just chasing younger, poorer investors; they're also much less patient. For the time being, then, the dinosaurs still have the advantage.
Illustration: Lazaro Gamio/Axios
Have you met the minotaurs? A minotaur — the term was coined by Axios editor-in-chief Nick Johnston — is a venture-backed company that has raised more than $1 billion in equity capital. We've found 56 of them, of whom 26 are American and 4 are in financial services.
Stripe is worth less than Square, another payments company that went public in 2015 at a valuation of $2.9 billion.
It was as bold and audacious as takeover bids get: In February 2017, Kraft Heinz bid $143 billion to buy Unilever in a cash-and-stock offer valued at $50 per share.
With the benefit of hindsight, Unilever was unambiguously correct to reject the Kraft Heinz bid.
Kraft Heinz is operated by 3G Capital, a Brazilian company notorious for its cost-cutting. The company's playbook worked well, until it didn't. Profits go up in the short term when you cut costs, but 3G is very bad at investing in future growth. Instead, it tends to grow via acquisition, and that turns out to be hard when no one wants to be bought by you.
The bottom line: Cutting costs does nothing to improve brand value, as Unilever knew in 2017 and as Kraft Heinz has now discovered. Once brand value has been eroded (to the tune of roughly $15 billion, in the case of Kraft Heinz), it's extremely hard to recover.
Warren Buffett's annual letter to shareholders is out, which is always most interesting when the Oracle of Omaha admits to past mistakes. (He doesn't admit to his $9.8 billion investment in Kraft Heinz as being a mistake; look for that next year, or possibly in interviews on Monday.)
Buffett has a lesson, in his letter, for "those who regularly preach doom because of government budget deficits". He admits that he was one of those individuals himself, but he's not any more.
The bottom line: There is no evidence from 240 years of American history that the level of the national debt has ever really mattered. The U.S. prints its own currency, and can borrow as much as it likes, increasingly from domestic investors. Per Buffett, deficit hawks have preached doom for decades. They have never been proven correct.
Go deeper: In "How America Learned to Stop Worrying and Love Deficits and Debt," the NYT's Neil Irwin explains how the most respected economists in the world, including Larry Summers and Olivier Blanchard, have recalibrated their fiscal opinions in the light of recent data.
Illustration: Lazaro Gamio/Axios
Driving the news: Malaysia is seeking a $7.5 billion fine from Goldman Sachs; France is seeking a $4.2 billion fine from UBS. Both cases are unabashedly political, and are accompanied by criminal charges against the relevant bankers.
My thought bubble: Foreign banks make for a very appealing piñata in most countries at most times. Global banks such as Goldman and UBS should expect more fines and prosecutions in future, whether they're deserved or not. After all, there are 195 countries in the world today. It stands to reason that at any given moment, one or two of those countries will find bank prosecutions rather appealing.
Illustration: Rebecca Zisser/Axios
Two big congressional hearings take place this week, writes Axios' Courtenay Brown.
Trump will be in Hanoi on Wednesday and Thursday for his second meeting with Kim Jong-un about North Korea’s commitment to denuclearization.
The long-awaited fourth-quarter GDP report finally arrives on Thursday after a month-long delay thanks to the government shutdown. It's expected to show that the economy grew 2.4% in the fourth quarter.
Brexit progress will be minimal: The meaningful vote everybody expected this week has now been postponed to March.
The tallest residential building in the world, Rafael Viñoly's 432 Park Avenue, in midtown Manhattan, tops out at just under 1,400 feet. Each floor is 8,255 square feet, a good size for a single ultra-luxury apartment with four spectacular exposures.
Finally, for those of you who made it this far, here's the latest on the World Bank leadership front: Lebanese investment banker Ziad Hayek is contesting David Malpass's nomination to be the new president of the World Bank Group. So far, however, there's still no real heavyweight opposition.