I wrote about the World Bank this week. If you have an idea who will be the next president, let me know. And please encourage your friends and colleagues to subscribe to this entirely free newsletter.
As for executives making a base salary higher than the $18 million that Ted Sarandos is earning at Netflix, so far I've found no precedent for such a thing, outside professional athletes.
Illustration: Sarah Grillo/Axios
This week brought news from WeWork, the co-working unicorn, that it has decided to downgrade its main business to a mere subsidiary. WeWork has a famously complex corporate structure, but lift your eyes above the newly demoted WeWork to the very apex and behold — The We.
WeWork is not the only company to demote its flagship brand and name the holding company something silly, or worse.
Historically, companies were proud to name themselves after brands they had managed to elevate to a place of global name recognition. If you had a weird non-brand name like Gulf & Western or MacAndrews & Forbes, that was a sign that you were mostly in the business of buying and selling companies — that ultimately you weren't committed to your brands.
The bottom line: This kind of move is generally presented as a way of telegraphing ambitions much greater than owning a single consumer-facing brand, no matter how successful that product might be. But it often comes across as a signifier of ambivalence and shame. In some ways, it's the modern-day equivalent of the rentier distancing himself from his coal mines.
WeWork timed its April 2018 bond issue perfectly, receiving $2.5 billion of orders for what turned out to be a $702 million bond priced to yield 7.785%. Since then, high-yield bonds in general have sold off, but WeWork's bonds have tumbled even more: By Monday, they had lost 14.5% of their value and were trading at $85.50. That's a yield of 11.13%.
Our thought bubble: The main prerequisite for success in real estate is deep pockets. WeWork has a large balance sheet — but it has an even larger corporate footprint, claiming "more than 400,000 members at 425 locations in 100 cities across 27 countries". If the equity does run out, then don't expect the recovery value on the bonds to be very high.
In a sign of the times, the Lord & Taylor department store has closed its flagship New York City location; the building will become a WeWork. Other department stores are struggling too, not least Sears, which is in bankruptcy and is also this close to liquidation. (Sears includes Kmart, which declared bankruptcy in 2002.)
The big picture: As Deloitte detailed in an influential 2017 report on "the great retail bifurcation," brick-and-mortar retail as a whole is not suffering. But all of the growth is either at the low end (stores competing purely on price, like Walmart or 99-cent stores) or at the high end (stores offering premium experiences, like free beer for people who pick up their Nordstrom orders in person). Stores in the middle, attempting to be all things to all people, are in a long secular decline.
Go deeper: Axios has a great deep dive on the future of retail.
Illustration: Sarah Grillo/Axios
The head of state wants to renegotiate a major free-trade agreement, and there is a deal on the table that has been agreed to by all parties. Now all that's needed is for domestic lawmakers to approve the deal. There are signs they might not be willing to do so. In order to concentrate the legislators' minds, the leader exits the old agreement, leaving a stark choice: Either accept the new one, or embrace the chaos of a no-deal exit.
As we're currently seeing in Britain, parliamentarians tend to react badly to such ultimatums. And as Britain is beginning to demonstrate, the implicit threat is not always credible.
Similarly, Trump would need Congress to ratify any NAFTA withdrawal under Article 2205, and a noisy withdrawal now should be largely shrugged off both by America's manufacturers and by Capitol Hill. It would be full of sound and fury, but would ultimately signify nothing.
The bottom line: The best way to get a legislature to pass any deal is the old-fashioned way, by persuading them to vote for it willingly. Extreme negotiating tactics have a tendency to backfire.
If furloughed workers are not on the government payroll, then there's an extremely high chance that the record 99-month streak of positive payrolls growth will come to an end this month.
Be smart: Federal workers haven't started breaking out their yellow vests quite yet. But this shutdown stings much more than any gasoline tax did in France — and look where that ended up.
Illustration: Aïda Amer/Axios
Slack is considering a direct listing at some point this year, according to reports in both the WSJ and the FT on Friday. The move would allow Slack stock to be traded on the stock exchange, but it's not an IPO — no new shares would be issued, and the company would not raise any money.
The bottom line: A lot of people would love the opportunity to invest in Slack, while many others, including employees, would love the opportunity to be able to sell their stock at will and diversify their investments.
Illustration: Rebecca Zisser/Axios
The big story of the week will be Brexit, writes Axios' Courtenay Brown, as the "meaningful vote" on Theresa May’s deal is expected on Tuesday.
Corporate earnings season begins on Monday. Netflix, Bank of America, Wells Fargo and BlackRock, to name a few, will declare results this week.
Economic reports will be delayed this week thanks to the government shutdown. So don't hold your breath waiting for statistics on retail sales, housing starts or business inventories data.
The National Gallery's Sainsbury Wing was built by Robert Venturi and Denise Scott Brown in 1991 to house Britain's early Italian and Northern Renaissance paintings.