Situational awareness: Dunkin' Donuts is becoming Dunkin'. Fog Creek Software is becoming Glitch. Weight Watchers is becoming WW. As fans of #brevity, we at Axios can't help but approve, even when one of the names sounds like a web address that has been truncated to the point of uselessness.
Meanwhile, if this week taught us anything, it's that being brutally attacked by the billionaire co-founder of your most valuable subsidiary will generate bad press but no real damage. Getting sued by the SEC, on the other hand, hurts.
Illustration: Sarah Grillo/Axios
The rise of U.S. unilateralism has given new urgency to the perceived need for a world financial order that isn't dominated by America. When China becomes the world's largest economy, will the financial world still be dominated by the dollar, the Treasury and the Fed? Not if China has any say in the matter.
Why it matters: Even when the U.S. can credibly claim to have the best interests of the rest of the world at heart, its allies chafe at the global hegemon's hubris and overreach, especially when it uses the architecture of international financial plumbing to advance its own geopolitical agenda.
Already, the Chinese yuan is the third largest of the five currencies that make up the SDR, the closest thing the world has to a global monetary yardstick. Come April 2019, Chinese government bonds (CGBs) will similarly be the third-largest component of the Bloomberg Barclays Global Aggregate bond index.
CGBs are increasingly proving to be not only attractive investments but also important financial benchmarks, traded on rates desks alongside Bunds, JGBs, and treasuries.
The bottom line: "The ultimate goal," writes Andrew Capon in an excellent guide to the Chinese government bond market in the latest issue of Euromoney, is for CGBs "to supplant U.S. treasuries as the global benchmark."
A look at ultra-rich families finds they aren't necessarily looking to maximize their investment returns. Most of them concentrate in whole or in part on simply preserving the capital they already possess. Their main concern: never running out of money.
By the numbers: The UBS Global Family Office Report 2018 looks at where 311 family offices invest their money. Top two takeaways:
Even with that large cash allocation, 2017's returns were excellent. Investments rose 15.5% overall, thanks to a great performance from public equities. That was a significant improvement over 2016, when family-office investments rose 7%, and from 2015, when they were basically flat.
There's also a lot of new money here: 67% of the family offices were founded in 2000 or later.
The asset allocation trends are surprising.
"If you look at hedge funds over the last five to eight years, they offer much lower returns than the rest of the market. The purpose of a hedge fund is to limit your downside risk, but you’re not going to get the upside as well."— The CEO of a family office, quoted in the report
Illustration: Rebecca Zisser/Axios
"I love deadlines. I love the whooshing noise they make as they go by."— Douglas Adams, "The Salmon of Doubt"
Today is NAFTA deadline day, and it's down to the wire. It's the date that a deal supposedly has to be done, with or without Canada. Something's getting sent to Congress, and it's either going to be a bilateral deal with Mexico or it's going to be a full-fledged renegotiated pact including Canada.
The details: A deal is reportedly very close, but there's no indication that President Trump has any desire whatsoever to sign a deal with Canada. On the other hand, there's also no indication that there's any appetite in Congress for a bilateral deal with Mexico.
The big question: What happens if a deal with Canada can't be done? Trump wants to cripple the Canadians and kick them out of NAFTA, but he doesn't have fast-track authority to take an action that drastic.
Answers on a postcard please: What's stronger, the supply chains connecting the U.S. and Canada or the apron strings connecting Congressional Republicans to Trump?
Elon Musk is a chaos monkey who creates problems more quickly than he can resolve them.
When companies die, it's nearly always because they can't raise money. That, ultimately, is why Musk swallowed his pride and settled with the SEC. He can't afford to be in a fight with the SEC when he inevitably returns to the debt markets to ask for more money.
The most galling part of the settlement, for Musk: He has to hire an "experienced securities lawyer" who will vet his tweets and make sure they comply with independent board oversight of his Twitter activity.
The bottom line: Twitter itself never booted Musk off the platform, although there's an argument that it should have. But where Twitter balked, the SEC has now stepped in.
Also hitting new record highs: Americans' credit scores.
It’s not just stock prices and FICO scores that are hitting record highs. In the first quarter of this year, 403 of the stocks in the S&P 500 delivered earnings higher than Wall Street analysts had forecast — a record that was promptly broken in the second quarter, when 407 stocks achieved that feat.
The big question: How are so many companies managing to beat expectations, quarter in and quarter out?
The bottom line: Wall Street is enjoying a rare period of being very happy with the companies it invests in and the amount of money they're making.
Sirius XM announced the acquisition of Pandora for $3.5 billion this week, in a deal that will increase its market capitalization by some $3 billion while simultaneously hurting its share price. (Shares in Sirius XM have fallen about 8.5% since the deal was announced.)
That combination is common, at Sirius XM — one of those companies whose share price bears almost no resemblance to its market capitalization.
The eight most important CEOs in the banking industry, as we noted last week, are all middle-aged white guys. So for a refreshing indication of how it doesn't have to be that way, here's a snapshot of the five most important CEOs in the defense industry, as of the end of this year. (Caret isn't the CEO of Boeing, but she does lead its defense division.)
Only 19% of CEOs in the defense industry are women. But that's a much better showing than the S&P 1500 as a whole, where the figure is 5%.
As predicted last week, Fox (aka Disney) is selling its minority stake in Sky to Comcast. Think of this as media giants carving up the Murdoch world: Disney gets India, via Fox's Star India, while Comcast gets Europe. Rupert's famous tweet wasn't false, it was just early!
Murdoch and his sons earned $150.2 million last year in salary, bonuses and other awards, a 114% raise from the previous year.
The jobs report is released on Friday. Expect the government to announce that 185,000 new jobs were created in September, with the unemployment rate ticking down to 3.8%.
The margin of error on the jobs number is very large — if 185,000 jobs were genuinely created in September, then the best we'll be able to say with 95% confidence is that it's somewhere between 70,000 and 300,000.
The United Nations Secretariat Building, a collaboration between Brazil's Oscar Niemeyer, Switzerland's Le Corbusier and many others, is a symbol of what can be achieved with international cooperation. The first major International Style building in New York, it was completed in 1952. The 18-acre site, donated to the UN by John D. Rockefeller, Jr, is technically international territory, which means that New York State has a hole in the middle.