I'm going to give you a little financial literacy quiz in a minute, but first riddle me this: How much would Australian bank Westpac have to pay if it were fined $15 million for each of 23 million violations of anti-money-laundering laws?
Two datapoints of note:
In this week's issue: Taylor Swift, Kylie Jenner, financial literacy, WeWork bonds and much more. All in 1,823 words — just a 7-minute read.
Photo illustration: Aaron J. Thornton/Getty; Angela Weiss/Getty; Aïda Amer/Axios
The big picture: Jenner and her family have always had complete control over her image and her work product. As someone who made over $100 million by the age of 21, Jenner was under no pressure to sell the company that was generating all those profits, which meant that she could wait for a suitably desperate suitor to come along.
Jenner was a trailblazer in her category, more or less inventing the concept of an asset-light, direct-to-consumer company making products sold primarily to her millions of Instagram followers.
The capitalists on the other side of these deals also differ greatly.
The bottom line: If you want to buy someone's entire life's work, it's best to do it with their consent.
Illustration: Aïda Amer/Axios
How does JPMorgan view extending credit to black entrepreneurs? Here's how a glowing recent "60 Minutes" segment began:
Jamie Dimon, the CEO of JPMorgan Chase, is testing out a new kind of business investment in the city of Detroit. The idea grew out of Dimon's interest in changing the way the bank was engaging in philanthropy.— Leslie Stahl, opening her "60 Minutes" segment
Apparently, the first thing that springs to mind when Dimon wants to lend money to black people in Detroit is "philanthropy." To that end, JPMorgan extended not only credit but also educational and informational resources for budding entrepreneurs.
Driving the news: The TIAA Institute quizzed African Americans on financial questions. The National Urban League's Cy Richardson, introducing the report while extolling his own financial literacy programs, told Axios that “financial illiteracy is particularly acute in communities of color," that it is "a dangerous epidemic," and that it is best addressed through what TIAA's report describes as "increasing efforts to promote financial education in school and the workplace."
My thought bubble: Insofar as financial illiteracy is real, it's a symptom of poverty much more than a cause of it. Besides, the questions in the TIAA survey do a dreadful job of measuring individuals' real-world ability to navigate a system that is stacked against them.
The bottom line: TIAA, JPMorgan and other giant financial institutions will happily commit high-profile philanthropic dollars on the premise that the poor stay poor because they don't have enough financial information or education. But as long as communities of color remain cut off from access to non-philanthropic capital, nothing will really change.
Illustration: Rebecca Zisser/Axios
Here's a representative question; see how you do. According to TIAA, "responses to the following question demonstrate the difficulty many individuals have in comprehending risk."
Investment A will deliver a return of either 10% or 6%, with each outcome equally likely. Investment B will deliver a return of either 12% or 4%, with each outcome equally likely. You can expect to earn more by investing in which?
Spoiler alert: Just about any answer is reasonable.
According to TIAA, the only correct answer is "it does not matter." Every other answer, they say, is simply false.
The bottom line: These theoretical questions mostly just measure your ability to turn English-language questions into abstract mathematical models. That kind of skill won’t get you very far when you’re trying to prioritize your credit card, auto loan and mortgage payments to minimize real-world consequences.
Illustration: Sarah Grillo/Axios
American consumers are quite familiar with many of the big-name foreign products — Toyota, Samsung, to name a couple — but brands from China are virtually invisible, writes Axios' Erica Pandey.
The big picture: Chinese companies doing business in the U.S. are doing their best to hide where they come from. If they're not actively masking their home country, they're certainly not leading with it.
Driving the news: The first very publicly Chinese-owned company to make its way into the minds and hearts of American consumers is TikTok. And it’s dealing with headache after headache due to its China ties.
Chinese brands have been trying to fly under the radar for years.
What happened between mid-August, when the yield on WeWork's 2025 junk bond was 6.8%, and this week, when it hit 16.1%?
By the numbers: The bond traded this week at a price of $709, to yield 16.1%. It has 11 coupon payments left of $39.375 each, which means that if you hold it to maturity — and if it doesn't default — then you'll receive a total of $1,433.125 in principal and interest payments by the time the bond matures in May 2025. That's more than double the current price.
The bottom line: Before the IPO was pulled, WeWork had multiple funding sources, both in debt and equity. Now, however, Softbank seems to be the only institution willing to invest. If the Japanese tech giant ever tires of throwing good money after bad, then the chances of the 2025 bonds getting repaid in full look slim indeed.
Illustration: Sarah Grillo/Axios
Christine Lagarde will give her first policy speech as European Central Bank president in Frankfurt tomorrow, writes Axios’ Courtenay Brown.
Why it matters: Lagarde hasn't yet offered any hints on her policy stance since officially taking the helm of the ECB.
Photo by Marco Serena/NurPhoto via Getty Images
The 14th Century Doge's palace (Palazzo Ducale) in St Mark's Square, Venice, was constructed when sea levels were much lower than they are now.
The city has been hit by a series of devastating floods over the past week, one of which, at 187cm (74 inches), was the worst in half a century. It doesn't help that Venice is simultaneously sinking into the sea, at a rate of a couple millimeters per year.
The bottom line: I'd urge you to see Venice before it's too late — were it not for the fact that overtourism is itself a significant problem.