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Short article discussing the decline of industrial conglomerates (Link)

Well known industrial conglomerates like General Electric are now determined to shrink. Conglomerate giant 3M is also working hard to shake its conglomerate label.

Interesting read comparing China’s e-commerce revenue models to the US based e-commerce. (Link)

“Thinking about content consumption in a mobile-first way in China has enabled these new business models, which not only provide diversified revenue streams for businesses, but also allow users to make better, more flexible purchasing decisions.”

Corporate Profit margin vs. unemployment – US

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Stanley Druckenmiller comments on the wisdom of Fed tightening in this op-ed (Link)

Stanley Druckenmiller and Kevin Warsh argue the U.S. economy cannot afford a major policy error making now a good time for the Federal Reserve to pause their programme of monetary tightening.

Macro Tourist follow-up to Druckenmiller piece (Link)

Macro Tourist argues in favour of the Druckenmiller / Warsh perspective saying the days of relatively hawkish U.S. monetary policy are behind us.

The Golf Town turnaround story (Link)

A good business comeback story – When Chad McKinnon assumed the helm of GolfTown in October 2016 he inherited a trainwreck.

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The baijiu market is bigger than the rest of the global spirits market: 

Great interview with Matt Rose, BNSF Railway Chariman (Link) 

"We’ve always looked at the value proposition of the railroad as a three-legged stool. Shareholders are a very important leg of that stool because they provide the capital for us to make investments. The second leg of the stool is the employees. They provide the services that allow us to make the investments that allow us to make the returns to provide to the shareholders. And then finally, there are the customers. People are always asking, “What’s the most important?” Well, they’re all important. And if you think about a three-legged stool, if one of those legs gets a little out of whack, things don’t work very well."

China's auto sales are on track for their first annual decline since 1990s:

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Too busy during the week? Catch up with last week's readings:

Businesses

F.A.O Schwarz piano is back but with a different tune  $(Link)

Order a Whopper sandwich for a penny at McDonald's with the Burger King app (Link) 

Alternative banks $(Link)

Designing an unconventional ad agency (Link)

The CEO of Panera Bread stepped down to focus on a pet cause: warning the world about the danger of fixating on short-term profits as the cost of social stability (Link)

Doug McMillon, Wal-Mart CEO, keeps a list of the top 10 retailers over the decades to remind him you have to innovate and adapt constantly #OnlyTheParanoidSurvive (Link)

Satya Nadella, CEO of Microsoft, reveals how the company got its groove back (Link)

How the Starbucks app created so many reward-hungry obsessives (Link)

Investing

Corporate credit bond markets: To BBB or not to BBB? (Link)

BBBe careful (Link)

China

China helping build panopticon $(Link)

China underestimating its US$3 trillion dollar debt (Link) 

Charts

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Satya Nadella, CEO of Microsoft, reveals how the company got its groove back (Link)

"Signs of Nadella's progress are found everywhere. From a Microsoft voice assistant that integrates with Amazon’s Alexa to a deepening alliance with Samsung and, most crucially, in its financial statements. Revenue, at $110 billion, is growing at a double-digit percentage after slumping for most of the past decade, in large part because of the hard-charging—and high-margin—cloud suite the company has built around Office and Azure, Microsoft’s challenger to Amazon’s cloud juggernaut."

How the Starbucks app created so many reward-hungry obsessives (Link)

"The app allows users to scan and pay with it at checkout (or order in advance and skip checkout), but it also integrates the Starbucks’ Rewards program, a loyalty system through which users earn stars for every dollar spent. Hitting a certain number of stars earns them a free item. (When the star system was overhauled in 2016, it caused quite a bit of consternation among Starbucks fans: It switched its reward trigger from number of purchases to dollars spent. The previous system was the Senate; the new system is the House, is how one co-worker and app user put it to me, explaining that, as a casual user, she was previously “overrepresented” because she could get more stars with fewer and less-expensive purchases.)

Friday humour:

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Designing an unconventional ad agency (Link)

Articulating his company’s culture and values would be key to differentiating Zulu from other agencies. “I wanted a free-spirited, collaborative environment where people were driven by the work,” said Mroueh. “I didn’t want to just chase growth for growth’s sake. After 10 years in business, we’ve learned the power of not chasing growth for growth’s sake. Zulu has turned down over $100 million in potential revenue since launching during the recession. Yes, we could be much bigger than we are. But by staying true to our values, we’ve grown on our own terms, with like-minded clients who value true partnership."

The CEO of Panera Bread stepped down to focus on a pet cause: warning the world about the danger of fixating on short-term profits as the cost of social stability (Link)

"He has been travelling the country, giving speeches and talking to business leaders and policymakers, about the urgent need to return to the tradition of investing for the future … We’ve ended up in a situation, to the detriment of all of us, where our public companies are not able to do the things we want in the economy. G.D.P. growth only comes from innovation and productivity increases. And innovation and productivity increases occur because people make commitments and they make transformative events.” 

Doug McMillon, Wal-Mart CEO, keeps a list of the top 10 retailers over the decades to remind him you have to innovate and adapt constantly. #OnlyTheParanoidSurvive (Link)

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Alternative banks $(Link)

“If you look ahead five years, there’s no way there will be a financial services industry that is charging consumers $30 billion a year in overdraft fees,” said Chris Britt, the chief executive of Chime. 'We aim to shake that up, and I think a lot of other consumer companies will be doing the same thing.'  Banking regulators recently signaled that they will give the first banking charter to a neo-bank — Varo, a San Francisco start-up that is offering fee-free checking accounts without any minimum balances."

China underestimating its US$3 trillion dollar debt (Link) 

"Traders, investors and their clients have in the past taken advantage of a lucrative spread between US and Chinese interest rates to borrow cheap dollar debt and convert it into higher yielding yuan-denominated assets. But in an effort to support lending and economic growth, the People's Bank of China has raised its rates only slightly in response to interest increases implemented by the US Fed. This has caused the differential between US and Chinese rates to narrow rapidly, to the point where it no longer offsets the cost of paying back the external dollar debt in ever-more-expensive US dollars."

SUVs: game changer for Porsche