Amazon Lands Itself in the Middle East; Price of New Skin Drug Will Make Your Skin Crawl; Spoiler Alert: Uber’s Not So Diverse

Just Souq it up…

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In case you were wondering what Amazon’s been up to lately, here’s a hint: It’s got nothing to do with drones. Sort of. Instead, the online marketplace just agreed to scoop up Souq.com, the Dubai-based Amazon of the Middle East, and apparently the largest online retailer in the region. While we don’t know the exact numbers involved in the deal, we do know that 1.) There was one other bid by a billionaire from Dubai and 2.) It’s apparently the biggest tech merger & acquisition in the Arab world. Ever. At least according to somebody at Goldman Sachs. But I guess Goldman Sachs would know something like that. Rumor has it that although the Dubai billionaire, Mohamed Alabbar, counter-offered $800 million for the company, Amazon will be paying even less. What’s super-interesting about that factoid is that last year Souq.com was valued at around a billion following a funding round.

What a bargain…

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The good news is that the FDA actually approved a new treatment for severe eczema. The bad news is that it costs $37,000 a year to get it. But for some it might be worth every penny considering that one-third to two-thirds of the patients who used the drug actually regained clear or almost-clear skin.  Manufactured by Frace’s Sanofi SA and New York’s Regeneron Pharmaceuticals, the just approved drug, called Dupixent, is actually injected under the skin every two weeks, unlike previous eczema treatments, which are typically topical and often involve steroids and antihistamines. The injection apparently contains an antibody that does something to basically scare off the skin condition condition. Sort of. In any case, while $37,000 seems like a ridiculous amount of money to pay – because it is – consider that it’s still lower than Humira and Enbrel, drugs that also treat skin ailments. However, Wall Street didn’t look at it that way and instead sent shares of Regeneron down upon news of the five-figure price tag.

 

Well, what did you expect?

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Uber finally finally released its very first diversity report following a slew of issues, a ton of criticism, not to mention claims of sexual discrimination. But the only surprising thing about the report is that there weren’t any.  Surprises, that is. Sure the company employees minority groups. Unfortunately, those groups aren’t as well-represented at the top. The ride-hailing app employs about 12,000 people globally, and about 64% of them are males. Of that 12,000 figure, 36% are women and 22% of those women hold higher-level positions, while 15% of them work in the company’s tech areas. In the U.S., however, the numbers are almost embarrassing as blacks hold just 2.3% of leadership roles, while Hispanics represent .8% of those positions  – just not on the technical side.  And just to be clear, those percentages are not exclusive to Uber, but rather are fairly representative of Silicon Valley tech companies. Except now Uber pledged to throw $3 million at the problem in order to find solutions to make those numbers...better.

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Trump Tweet-Targets Nordstrom; Under Armour CEO Says It All Wrong; Wells Fargo Continues to Anger

Oh no you didn’t…

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Just one week after pulling Ivanka Trump’s fashion line from its stores, Nordstrom has managed to incur some serious Presidential social-media wrath, via Twitter of course. The Tweeter-In-Chief wrote that his daughter was “treated so unfairly” by the department store and “She is a great person — always pushing me to do the right thing! Terrible!” Nordstrom argued that the merchandise’s performance wasn’t up to snuff, and that it regularly evaluates the thousands of brands that it carries to decide which ones get the boot and which ones don’t. And Ivanka’s line got it, though the chain had been carrying the line since 2009. Back in November, Nordstrom co-president Pete Nordstrom sent out a company memo explaining that the turmoil surrounding the election is putting the retailer in a “tight spot.” It risks offending Trump-haters for keeping the line, but also risks alienating shoppers who support him. Nordstrom tried to explain that it makes a “sincere effort not to make business decisions based on politics but on performance and results,” but found itself “in a very difficult position.”  That difficult position probably had to do with calls for boycotts of the merchandise, and even the store.  And it’s not like Nordstrom was the only one who took this sort of action. Neiman Marcus Group also stopped selling her jewelry online and in one of its stores in the northeast. Shares of Nordstrom had dropped a smudge 1% following Trump’s tweet. But they quickly bounced back. So maybe the effect of Trump’s fury only goes so far.

That’s gonna come back to haunt you…

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Speaking of which…Under Armour CEO Kevin Plank played nice with Trump so of course, it’s now going to cost him. Literally. During an interview on CNBC’s “Fast Money Halftime Report,” host Scott Wapner asked the athletic apparel chief executive about his involvement in Trump’s initiative to create manufacturing jobs in the United States. Some of the pearls that escaped Plank’s mouth included, “To have such a pro-business president is something that is a real asset for the country…People can really grab that opportunity.” [cue crickets chirping]. Naturally, Under Armour had to issue a statement to clarify Kevin Plank’s remarks – lest anyone think that he really meant what he said, which would lead to a boycott. Except that sort of already happened as “Boycott Under Armour” hashtag made its way into the Twitter-sphere in no time. In the meantime, UA insisted that it engages in “policy, not politics” and Plank’s statements had to do with job creation.  I shall spare you the details of official company statement – you’re welcome! – but rest assured it included all the usual themes about the beauty of unity, diversity, welcoming immigrants etc. The fact is, UA can’t afford any boycotts, whether Plank meant what he said or not. Its shares have been falling lately and in its most recent earnings report, the company missed expectations and forecasted slower growth for 2017.

And here’s one more reason to hate Wells Fargo…

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In case you weren’t incensed enough by Wells Fargo’s fraudulent account scandal, CEO Tim Sloan said that the bank is committed to helping the Dakota Pipeline project. While it would be nice to focus all rage on Wells Fargo, who loaned $120 million toward this project, the fact is the bank is just one of 17 that gave loans to help fund the $3.8 billion project. Obama had initially halted the project, but President Trump swiftly reversed that action and is looking forward to its completion. Come June, the pipeline is expected to ship half a million barrels of crude every day from North Dakota to Illinois. Unfortunately the 1,200 mile pipeline cuts through an Indian reservation with deep cultural significance, and it’s likely the pipeline will incur damage on the site. The pipeline also poses major environmental hazards where it crosses the Missouri River. The Standing Rock Sioux reservation is downstream from the crossing and the pipeline could end up polluting the Tribe’s drinking water. The Seattle Council is doing its part to combat Wells Fargo’s involvement by pulling about $3 billion in city funds.  Seattle has a contract with the bank that expires in 2018, and it most definitely will not be renewed. In the meantime, the council is on the hunt for a more “socially responsible bank.” Good luck with that one.

The Middle’s Not Where It’s At; Unemployment Blame Game; The Fed’s Milky White Problem

Stuck in the middle…

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The middle class is shrinking and that’s not necessarily a good thing. Studies done by the Pew Research Center show that between 2000 and 2014, the middle class actually shrank in 9 out of ten U.S. cities. Of the 229 U.S. cities cited in the study, the amount of households classified as middle class dropped in 203 of those cities. Sure, some of those households left their socioeconomic perches because they graduated to the upper class. But that’s mostly not the case. In fact, the middle class now makes up less than half the population in the cities studied while the income inequality gap keeps growing. That could trigger some ugly economic consequences. The wider the gap gets, the more it is likely to inhibit economic growth. At least that’s what some experts think. What’s worse is that children raised in areas that are predominantly low-income, are less likely to reach the middle class. In case you were wondering, the middle class is defined as a household that earns an annual income between 2/3 to two times the median income. In 2014, a three-person household was considered middle class if its annual income was between $42,000 to $125,000. The largest middle class populations were found to be in the good old midwest. I’m sure there is irony in there somewhere. The largest low-income populations were found to be in the southwest, particularly near the Mexico border, while the highest populations of upper class were found to be in the northeast and the west coast. No matter where you stand on the issue, it’s one that is going to figure prominently in the November elections.

On the Verizon…

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Nothing like unemployment numbers to ruin an otherwise pleasant Thursday. The number of first time applicants rose by 20,000 to a grand total of 294,000 seeking jobless benefits. Unfortunately it marked the third straight week of increases of first-time applicants. But at least that number was still below the 300,00 mark  – for 62 weeks straight, mind you  – so the situation isn’t that alarming. Well, except maybe for those who find themselves out of work. Also, economists are actually pointing the finger at Verizon – or rather the 40,000 Verizon workers who went on strike back in April. They are likely the ones who have applied for jobless benefits while on strike.  Economists predicted that the number of applicants would fall to about 270,000, which makes perfect mathematical sense if you figure that the Verizon strike is apparently responsible for that unwelcome surge and without it the numbers would have dropped.

White as a sheet…

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The Fed’s been taking a lot of heat lately. And some of that heat has absolutely nothing to do with the fact that it hasn’t raised rates, yet again. Instead, top lawmakers penned a letter to Janet Yellen and company calling out the lack of diversity at the Central Bank which is “disproportionately white and male.” Ha! Who would have thought the Central Bank and the Academy Awards have something in common? Signed by 116 members of the House and 11 senators, the letter expressed disappointment over the Fed’s failure to “represent the public” and would like it to consider a number of factors, including race, when filling posts in the future. The letter did, however, praise Yellen for her strong leadership. So props to her on that. So just how disproportionately white and male is the Fed? Well, of the five current Fed governors, all of them are white. However, to be fair, two of them are women, including Janet Yellen, who happens to be the first women to head the Central Bank in its 100 year history. If that’s not disproportionately white and male, then I don’t know what is. Since monetary policy strongly correlates with hard-working Americans of every ilk, it does seem odd that the Fed is primarily made up of mostly one ilk. Give or take. At least minorities make up 24% of regional Fed bank boards. While that’s not an ideal representation, it’s still a 16% increase from 2010.