Science has determined that people need to know 7.5 things per day, on average, about the world of business. You can't argue with science. Lucky for you, The Huffington Post has an email newsletter, delivered first thing every weekday morning, boiling down the day's biggest business news into the 7.5 things you absolutely need to know. And we're giving it away free, because we love you, and also science. Here you go:
Mark Gongloff is off the newsletter this week, so today's 7.5 Things are brought to you by Jillian Berman.
Thing One: Bad News For BP Apparently the fallout from a disastrous oil spill can get in the way of making money. BP posted a 72 percent drop in profit last quarter, largely over fines the company agreed to pay to settle criminal charges related to the 2010 Deepwater Horizon oil spill, according to the Wall Street Journal. As is typical, the company was able to avoid paying taxes on the money used for the settlement. BP was charged $4.3 billion pre taxes over the oil spill and $3.85 billion of that was used to pay to settle criminal charges.
Unfortunately for BP, there’s still likely more money to pay, and the company probably won’t know how much more for a while. A trial scheduled to start later this month will determine how much the oil giant will pay in civil and environmental damages, according to the Financial Times. And BP could be sitting on its hands waiting for the outcome of the trial until next year. Experts told the FT that BP’s best option would be to settle, since a prolonged trial would create bad publicity for the company.
(Speaking of bad publicity, BP was also recently hit with a lawsuit from an ex-employee accusing the company of manipulating gas prices. BP denies the allegations.)
Thing Two: S&P Sued: After years of waiting, critics and angry investors may finally get their revenge against Standard & Poor’s. The Justice Department sued the credit rating agency over claims it knowingly gave mortgage bonds higher ratings than they deserved, according to Bloomberg. Those bonds ultimately went sour and blew up during the financial crisis.
The suit is the feds’ first major action against the ratings industry, according to The New York Times, and comes after officials tried to negotiate a settlement with the company. S&P ultimately rejected the settlement after prosecutors said their terms would include a fine of more than $1 billion and require the company to admit wrongdoing, the NYT writes.
S&P will likely use the same defense the industry has been using for years to explain the seemingly misguided ratings -- their right to free speech. S&P and other credit rating agencies have claimed that their ratings were merely free speech and are therefore protected under the First Amendment. But S&P may have trouble using that tired defense in court, The Huffington Post’s Ben Hallman reports, as many have grown skeptical.
Thing Three: Dell Tries To Save Itself: What does it take to save the PC? One company is hoping that going private will do the trick. Dell is close to selling itself for more than $23 billion to a group that includes the company’s founder Michael Dell, investment firm Silver Lake and Microsoft, according to The New York Times. If the deal goes through, it would be the largest buyout in the wake of the financial crisis. The goal of the buyout would be to give the company an opportunity to turn itself around outside of the scrutiny of Wall Street, according to the Wall Street Journal. It would give the Dell’s founder -- who has had trouble revitalizing the company -- the largest stake, meaning he would have control over any changes. Unfortunately the buyout won’t turn Dell into Apple.
Thing Four: Obama Enlisting Lloyd Blankfein: Major CEOs, including Goldman Sachs’ chief Lloyd Blankfein and Yahoo! CEO Marissa Mayer will descend on the White House today as President Obama tries to convince them to tell everyone that his immigration reform plan is good for the economy, the Financial Times reports. This isn’t the first time Obama has tried to enlist the help of major business leaders to push his agenda. The president invited several corporate chiefs, including the CEOs of Xerox and Walmart, as he negotiated a fiscal cliff deal with Congressional leaders.
Thing Five: Barclays Tries To Get On Everyone's Good Side: Barclays just wants to be loved again. As part of a plan to rebuild the bank’s reputation, Barclays said it would increase the amount of money it’s setting aside to pay back customers for mis-sold financial products by $1.58 billion, according to the Wall Street Journal. That brings the total the bank will be paying to customers over mis-sold products to 3.4 billion Pounds, according to the Financial Times. The announcement comes after the U.K.’s top regulator ordered the country’s 4 biggest banks to review their sales of some of their products.
Thing Six: The Mall Is, Like, Totally Disappearing: An icon of suburbia and '80s movies is slowly disappearing. Fifteen percent of malls are slated to close in the next five years, as the meccas of brick and mortar stores face crippling competition from online retailers, according to the Financial Times. Malls that include movie theaters and restaurants will likely be spared from the downturn, but second-tier malls could be hit hard. Meanwhile another type of retailer is also in jeopardy: The dollar store. Dollar chains’ rapid expansion has hurt their sales growth and margins as competition for the recession-pinched customer has increased, according to the Wall Street Journal.
Thing Seven: Tax Evasion Crackdown: The Obama administration is cracking down on tax evasion. The White House may ask Congress for the power to force U.S. banks to disclose more information about foreign clients’ bank accounts to their home countries, according to Reuters. Obviously many in the banking industry aren’t too happy about it.
Thing Seven And One Half: Remember Linsanity? It’s now been exactly one year and one day since we all first started obsessing over Jeremy Lin. Unfortunately for America, the fascination with the underdog who proved everyone wrong only lasted as long as he was playing well. If you’re itching for a little Linsanity, you can find him in Houston where he has taken his talents for now.
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@robdelaney: .@BarackObama It’s worth looking into whether or not Lance’s dad Neil used drugs to ride his space bike to the moon. Thank me later. #USA
@pattonoswalt: "Exeunt, buried under car park" -- Shakespeare's RICHARD III, 1st Folio
@EpicureanDeal: JD flunked AP History. MT @saraeisenFX "If not for American productivity you'd all be living in tents and eating buffalo" Jamie Dimon