Talking Points

Talking Points

Soon-to-be-released study shows rich getting richer

In July 2012, Occupy Wall Street protestors walked past the New York Stock Exchange in New York demonstrating for economic justice.
Frank Franklin II/Associated Press/File 2012
In July 2012, Occupy Wall Street protestors walked past the New York Stock Exchange in New York demonstrating for economic justice.

INCOME INEQUALITY

Study finds corporate policies help transfer wealth to the richest

In 2016, US companies’ pursuit of bigger profits through higher prices transferred three percentage points of national income from low-income and middle-class families to the wealthy, according to a study that’s forthcoming in the Oxford Review of Economic Policy. It examined how growing corporate power in effect transfers resources from low-income to high-income families. In the late 20th century, the share of US households owning some form of stock rose dramatically, from 32 percent in 1989 to 52 percent in 2001, driven largely by a decline in defined-benefit pension plans and the rise of 401(k) retirement accounts. The top 20 percent of households own nearly 90 percent of the country’s total equity, according to the study. But those households account for a just under 40 percent of consumer spending. From the perspective of the poor and the middle class, the bottom 80 percent own just 10 percent of equity but spend 60 percent of the money. On net, that means it’s nearly impossible for a typical family to make up for higher prices via the performance of its stock portfolio; when prices rise, low- and middle-class families pay more but wealthy families profit. — WASHINGTON POST

MEDIA

Show about Wall Street may be especially timely

When David Caspe and Jordan Cahan began developing a fictional show about the 1987 Wall Street crash, the world was just emerging from the 2008 financial crisis, and the pair sought to illuminate that present by shining a light on the past. As the years wore on without a network greenlight, the project seemed less and less relevant as markets kept rising. So much for that. After years of historic highs, the Dow Jones industrial average had its worst week in nearly a decade in December. ‘‘To see the Dow drop four hundred points and then drop another four hundred points, and then spike and then go down again — this feels timely in a way we could not have planned,’’ said Caspe, cocreator of the TV series ‘‘Black Monday,’’ which premieres on Showtime Jan. 20. The series examines what happens when an ever-steeper climb of the financial markets is followed by a resounding crash. The half-hour dramedy centers on a boutique investment firm in 1986 run by Don Cheadle’s Maurice, a fast-talker who doesn’t like that his company is ‘‘11th-biggest’’ on the Street. His plan for fixing it comes via Andrew Rannells’s Blair, an eager business-school graduate with an algorithm he thinks can beat the market — though Maurice has a different use in mind for him. The overall impression is that of a banking community oblivious to the pain it will soon face. And that, principals say, could make it as fresh now as that October 1987 day it’s building up to. — WASHINGTON POST

AGRICULTURE

Government shutdown means no crop reports for traders

As the partial government shutdown continues, the lack of data from the Department of Agriculture is sending market participants to Twitter and other sources for crop information. Most key reports, including figures on export sales, have stopped since the shutdown began Dec. 22. The dearth of information has sent investors to the sidelines, said Steve Georgy, president of the agriculture broker and adviser Allendale Inc. in McHenry, Ill. In the new year, however, traders are going to turn to the media and Twitter, he said, and that will lead to higher market volatility. ‘‘You have nothing that is tangible from the government, and it’s all hearsay, so it’s more explosive.’’ — BLOOMBERG NEWS

MEDIA

Many TV viewers endure blackout amid Verizon-Tegna dispute

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Verizon FiOS subscribers across the country are suffering a sudden television blackout of key broadcast channels this week after the company’s rights fees negotiations with a major media company, Tegna, fell through. Affected channels include WUSA, the CBS station in the nation’s capital; WVEC, the local ABC station in Norfolk, Va.; and WGRZ, Buffalo’s NBC station. As many as 1 million FiOS customers have been affected by the outage, according to the American Television Alliance, which represents TV distributors and independent programmers. The Tegna blackout came hours after Verizon resolved a separate dispute with Disney, which prevented ESPN and ABC from going dark on FiOS customers in numerous markets. Tegna’s Stephen Kidera said Tuesday that there is no update on when an agreement may be reached. The channels went dark Monday evening after Verizon and Tegna failed to renew their programming contract before a 5 p.m. deadline. Talks stalled because Tegna demanded a ‘‘significant rate increase,’’ Verizon said. — WASHINGTON POST

BIOTECH

Moderna stock struggles after high-flying IPO

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Moderna Inc.’s shares have lost more than 38 percent of their value since a lofty IPO price tag left some analysts bewildered. This week, Wall Street will look at prospects for the company’s potential new class of medicines to assess its new valuation. An analyst quiet period that expires on Wednesday applies to perhaps the most friendly analysts on the Street: those working at the banks that underwrote Moderna’s initial public offering. Initiations are likely to be published by firms including Morgan Stanley, Goldman Sachs, JPMorgan, Barclays, Bank of America Merrill Lynch, Piper Jaffray, Oppenheimer, and Needham. Among six IPOs by drug makers that raised at least $100 million this year, Moderna is the only one trading below its offering price, according to data compiled by Bloomberg. After pricing at $23 a share on Dec. 6, the stock fell as low as $13.03 on Dec. 26 before closing at $14.15 on Friday. As reflected in its ticker MRNA, the Cambridge biotech company is developing 21 different vaccines and therapies based on messenger RNA technology, which it calls the “software of life.” Moderna’s most advanced program is a partnership with AstraZeneca PLC that’s called AZD8601, currently the subject of a midstage study to treat ischemic heart disease. — BLOOMBERG NEWS

SEAFOOD

Quota for Atlantic deep-sea red crab to remain unchanged

Federal fishing managers are holding the line on the quota for a commercial important species of crab that is fished off of the East Coast. The National Oceanic and Atmospheric Administration said the quota for Atlantic deep-sea red crab will be about 3.9 million pounds, which is the same as it has been since 2011. The crabs are fished using traps, and the fishery mostly takes place off southern New England and the Mid-Atlantic Bight, which stretches to North Carolina. The crabs are used for fresh picked meat and frozen legs. The quota takes effect on March 1. — ASSOCIATED PRESS

PLASTIC

Japanese companies look for alternatives to plastic utensils, packaging

Japanese manufacturers are searching for alternatives to plastic as restaurants and retailers reduce their reliance on plastic products amid global concern over polluted oceans. Companies from different industries have begun to view the trend as a new business opportunity and are making inroads into the burgeoning market. The nation’s leading paper manufacturer, Oji Holdings Corp., will start producing food packaging made of paper at the end of January. The product’s surface will be coated with special chemicals to prevent oxygen and liquid from seeping in and keep the food fresh. Nippon Paper Industries Co. is also gearing up to produce water-resistant paper straws. The paper industry hopes that the movement to replace plastic will bring new demand and help offset sliding demand for paper. Meanwhile, material makers that produce plastic products have begun to focus on biodegradable plastic. Mitsubishi Chemical Corp. began selling biodegradable plastic for cups in October, and is currently developing straws and other products made from the material. Also in October, Toyobo Co. began producing biodegradable resins on commission from US chemical giant DuPont. Biodegradable plastic costs several times more than regular plastic to produce. According to a European industry group, biodegradable plastic comprises less than 1 percent of all plastic produced, but the figure is projected to increase by more than 20 percent in the next five years. — WASHINGTON POST

SEAFOOD

Maine regulators shut down scallop fishing areas

Maine fishery regulators are shutting down a couple of scallop fishing areas for the first time this season. Maine is home to some of the most lucrative scallops in the country, and the state maintains the population of the shellfish by closing some areas to fishing over the course of the season. The Maine Department of Marine Resources said it is closing Machias and Little Machias Bays for the rest of the season. The closures went into effect on Dec. 30. Scallops constitute one of the most valuable fisheries in Maine, despite it having collapsed in the mid-2000s. State regulators say they brought the fishery back from the brink by using conservative management tactics, such as targeted closures. Last year’s harvest was the largest in two decades. — ASSOCIATED PRESS