Today, Greece seems likely to become the first developed country ever to default on an IMF loan.
In theory, this should be a non-event for global markets and business. Greece is a tiny country, its “crisis” has been brewing for six years, and its debt is now mostly to official sources – governments and central banks – not private creditors. But as New York Fed President Bill Dudley told the Financial Times Friday, people tend to “underestimate all the different channels in terms of how contagion works.” We’ll be covering the day’s events in our live blog.
Separately, the rise of the “freelance economy” has become a popular storyline for journalists and tech investors, as Uber, Taskrabbit, Airbnb and other online marketplaces show exploding growth. The Dismal Scientist blog yesterday doused some useful cold water on the trend. Using the government’s Current Population Survey, Adam Ozimek pointed out that 1) self-employment in the U.S. is declining, and at its lowest point in the last 70 years; 2) the share of the employed reporting they have multiple jobs is also declining and at a 20-year low; and 3) full-time employment, while down sharply after the financial crisis, is on the rise and heading back to normal.
I’m inclined to believe technology is transforming the nature of work. But for the bulk of the population, it just hasn’t registered yet. Remember Amara’s Law: We tend to overestimate the effects of technology in the short run and underestimate them in the long run. The same could be said for the value of technology companies.
• Inside the Greek PM’s great gamble
Greek Prime Minister Alexis Tsipras, who shocked Europe’s leaders by taking the issue of “austerity” directly to voters, is advocating a “no” vote and hoping the nation can send a clear message to other European nations. The referendum is his ultimate pressure tactic to lure German Chancellor Angela Merkel and others to embrace his position and overrule the IMF, EU and others.
• Obama wants overtime expanded
President Obama detailed a proposal that would widen the circle of salaried employees able to receive overtime benefits for millions of additional Americans. In a piece Obama wrote in The Huffington Post, Obama says an exemption that had been intended for highly paid white collar employees was affecting workers making as little as $23,660. He wants to put overtime protections in place that would go to salaried employees who make up to $50,400 per year.
• What’s Uber’s bottom line?
Because the car-sharing startup is a private enterprise, we still don’t know for sure. That hasn’t stopped media firms from trying to come up with firm numbers, and Bloomberg is claiming Uber generated a $470 million operating loss on $415 million in revenue for an undisclosed period. Uber says those numbers are old, but Fortune digs into what those figures could mean.
• Willis Group, Towers Watson to merge
Willis Group, an insurance broker, and professional services group Towers Watson have agreed to an all-stock merger that values the combined firm at $18 billion. This deal is almost completely a merger of equals, with Willis Group shareholders getting 50.1% of the combined company. Even the top leadership duties are being split: Willis Chairman James McCann will be chairman and Towers Watson Chairman and Chief Executive John Haley will be its CEO.
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Around the Water Cooler
• Cisco touts Internet of Things market
Cisco sees a big financial opportunity in the emerging Internet of Things market, unveiling initiatives to help the networking giant capitalize on it. Internet of Things is a term that applies to household appliances and business equipment that is connected online so users can control them remotely. Cisco’s new system is inter-related software that will help companies and cities set up cameras, switches and other infrastructure to manage data flowing between their connected equipment.
• What held up Macy’s outlet chain
Sometimes even a well-regarded CEO can get in the way of success. Take the example of Macy’s, where CEO Terry Lundgren has admitted Macy’s took a little too long to debut an “off price” discount outlet to compete with the likes T.J. Maxx. “I was the obstacle in the way here because I didn’t really want this business,” Lundgren admitted. He concedes research shows some customers are going that direction, which is why Macy’s is opening a few smaller discount fashion outlets later this year.
• AOL-Microsoft strike ad deal
AOL has struck a deal with Microsoft to take over the sales of the company’s display, mobile and video ads in the U.S. and either other markets. The deal essentially completes Microsoft’s slow whittling away of its ambitions in digital advertising, a business in which it sought to steal market share from Google and other big players. Meanwhile, Microsoft’s Bing search engine will power search results and advertising on AOL’s properties for a decade, displacing Google.
• The Blackstone-BlackRock rivalry
While Blackstone (the world’s largest alternative asset manager) and BlackRock (the largest traditional money management firm) say they aren’t direct rivals, there is evidence that as they boost their assets and expand into new activities, they are increasingly competing with each other. Bloomberg looks into the rivalry between the firms that has developed after a split between partners Steve Schwarzman and Larry Fink that occurred two decades ago.