The World Catches a Dangerous Virus of the Mind

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The virus is proving an expensive house guest as it hits corporate revenue, profit margins, and balance sheets. As El-Erian points out, the three major components of global gross domestic product—consumption, trade, and investment—are taking a hit to some degree from the spread of the virus. Even before the age of the new coronavirus dawned, global trade had fallen last year for the first time since 2009 because of a tariff war between the U.S. and China and a manufacturing recession. Now the world economy is on track for its weakest year since the financial crisis as the new coronavirus takes its toll, according to analysts at Bank of America Corp. Global growth will slip to 2.8%, from a previous estimate of 3.1%, and the Chinese economy will advance at 5.2%, which would be the worst performance since 1990.

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Brian Bremner — Bloomberg Businessweek

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Brexit Has Brought Britain to a Standstill

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Is this a temporary grief?

Brexit may have been a demonstration of the wider country’s frustration at not having its voice heard, but the result is even more centralization of power in London. “Almost all the work of Parliament is built around Brexit,” says Vince Cable, the Liberal Democrat leader who served as business secretary in Cameron’s five-year coalition government. “Big decisions that should be grappled with are all being put on hold because they are difficult and are going to involve some friction between ministers.”

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Jess Shankleman, Alex Morales & Suzi Ring — Bloomberg Businessweek

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Tears ‘R’ Us: The World’s Biggest Toy Store Didn’t Have to Die

Toys R US To Close 87 Stores

All stores will be empty by the end of June, but until then customers can stand in front of a “selfie banner featuring Geoffrey,” the retailer said in May. Soon after, Brandon and four other senior executives, now deemed nonessential, left the company. Brandon received almost $7 million in compensation in 2017, including a $2.8 million retention bonus paid just before the bankruptcy filing. He’s already started a consulting company. Former employees have started a Facebook page, Dead Giraffe Society. Some rallied outside the offices of Bain, KKR, and Vornado to protest losing their jobs without severance and occupied a soon-to-be-closed Toys “R” Us store in Union, N.J. Twenty miles away, the company began to liquidate its headquarters. Photos of what’s for sale, including a giant Sully from Monsters, Inc. posed next to a pool table, are available online.

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Bloomberg Businessweek

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Stability Is Good for Business. Trump’s Whims Threaten It

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Trump and uncertainty go together. Ever since becoming the President, he has tried doing lot of things he promised in his election campaign. Businesses like to plan ahead for the future. With Trump and his executive orders, planning is becoming difficult.

When the president can damage your business with a tweet—and will, if you disagree with him publicly—then dissent is more difficult. Business decisions, too, are now complicated by the fact that a company that decides to close a factory must now answer personally to the president. As my colleague Peter Coy wrote in these pages in the last issue, businesses spent eight years under President Barack Obama complaining about “uncertainty” in the tax code, in the Affordable Care Act, and in regulation. President Trump’s first week, of drastic and inconsistent ad hoc regulation, seems unlikely to inspire any certainty.

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Matt Levine — Bloomberg Businessweek

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