The Daily Parker

Last week's Economist had a semi-serious "letter from the CEO" on Plan C:

When I left the White House yesterday, after another two-hour round-table with the president, I knew in my gut that it was time to put in place “plan C” for this great company. The boxer, Mike Tyson, had a point when he said “everyone has a plan until they get punched in the mouth.” But so did Winston Churchill when he observed that “plans are of little importance, but planning is essential.” We owe it to our investors, customers and 131,000 employees globally, to have a reset.

It is now clear that dysfunction at the White House and in Congress means plan B is off the table. The markets agree. Sure, equity prices are still up. But after the election, bond yields soared in anticipation of an economic boom, only to give up half of their gains. The “Trump Bump” has faded. Yet life won’t return to normal. Our firm faces many risks. We have to fight back.

That calls for plan C, which has three elements: winning, tackling and the future. I like to use the acronym “WTF”. For a start we have to win profits from our proximity to power.

But plan C also requires us to recognise new dangers coming at us hard and fast. They need to be tackled—stopped and brought down. One of the Wall Street bankers I know likes to say that the president has three personalities: chairman, showman and con man. It is the last two we need to worry about.

If companies are thinking anything like this columnist believes, we should expect economic stagnation for the next couple of years.

A group of 800 breweries—including Sam Adams and Sierra Nevada—has joined an initiative to differentiate their brands from the big guys:

The initiative, which was spearheaded by the trade group for independent craft brewers, is intended to differentiate "true" craft beers from those made by the likes of MillerCoors, Anheuser-Busch and Heineken.

To qualify to use the seal, breweries cannot be more than 25% owned or controlled by any alcohol company that's not itself a craft brewer. Its annual production also can't exceed 6 million barrels.

Distribution contracts frequently allow major beer brands to dictate where their beer is placed on shelves, for instance. And Big Beer has successfully driven independent beers out of some stadiums, music venues and chain restaurants by asking distributors to stock their craft brands instead of independents.

Brewers say these concerns have only been exacerbated by Big Beer's incursion into craft. The acquisition of independent breweries, they argue, has eroded the few advantages the indies had: higher-quality beers in different styles and a cooler, vastly less corporate brand.

Since 2011, Anheuser-Busch has bought Goose Island, Blue Point, Karbach, Golden Road, Devil's Backbone, Elysian, Ten Barrel, Breckenridge, Four Peaks and Wicked Weed. MillerCoors now owns Terrapin; Heineken has Lagunitas; and Constellation owns Ballast Point Brewery.

We'll see how this initiative fares. Most of the beer I drink qualifies as independent, but Lagunitas still makes some pretty good brews.

Via Bruce Schneier (again), Fortune takes a look at Google's security project:

Google officially formed Project Zero in 2014, but the group’s origins stretch back another five years. It often takes an emergency to drive most companies to take security seriously. For Google, that moment was Operation Aurora.

In 2009, a cyberespionage group associated with the Chinese government hacked Google and a number of other tech titans, breaching their servers, stealing their intellectual property, and attempting to spy on their users. The pillaging outraged Google’s top executives—enough so that the company eventually exited China, the world’s biggest market, over the affair.

The event particularly bothered Google co-founder Sergey Brin. Computer-forensics firms and investigators determined that the company had been hacked not through any fault of Google’s own software, but via an unpatched flaw in Microsoft Internet Explorer 6. Why, he wondered, should Google’s security depend on other companies’ products?

Says Schneier,

I have mixed feeling about it. The project does great work, and the Internet has benefited enormously from these efforts. But as long as it is embedded inside Google, it has to deal with accusations that it targets Google competitors.

On the other hand, as Schneier's commenters point out (and as he has suggested in the past), better Google exposing the bugs than the NSA losing control of them.

Sears, which CEO Eddie Lampert has very nearly murdered, will have only one retail store left in its home town Chicago this fall:

Sears Holdings Corp. is closing 20 more stores, including a Sears in Chicago's Galewood neighborhood, in mid-September.

Those closings — including 18 Sears and two Kmart stores — follow 150 stores Hoffman Estates-based Sears shuttered in the first quarter of this year and another 66 expected to close by early September.

The latest 20 are among the 235 locations Sears sold to its real estate investment trust spinoff, Seritage Growth Properties, in 2015. Seritage reported the closings in an SEC filing Friday.

Remember, Lampert is destroying the greatest retailer in American history so he can sell its parts for scrap. When historians write about this era centuries from now, Lampert will be regarded as we think of Nero. But as a nihilist Ayn Rand disciple, he really doesn't care.

Real estate firm Cushman & Wakefield has published a list of the top-25 tech cities in the U.S. It turns out, we're not Silicon Valley:

The report’s authors analyzed data from a variety of sources to measure factors such as universities, capital, talent and high-growth companies. The authors evaluated the cities on the potential for tech to affect the commercial real estate business, they wrote in the report.

Chicago’s overall rank, No. 16, placed it behind Portland and New York and ahead of Atlanta and Los Angeles. The authors addressed the low rankings of the country’s two largest cities in a release, saying New York faced a historic lack of engineers — which may change as investment in local universities and tech schools increases — and that Los Angeles’ economy is too diverse for tech to be a driving factor. They wrote that Seattle, home to tech giants Microsoft and Amazon, is likely the biggest competitor to the Bay Area.

The percentage of Chicago’s workforce made up of tech workers is also relatively low compared to other tech cities on the list, at about 5 percent. That places Chicago just behind Indianapolis and just ahead of New York, according to data from the Bureau of Labor Statistics and Moody’s Analytics. Compare that to Silicon Valley, where more than 27.4 percent are tech workers.

We're still living in the Greatest City in North America. But as far as tech goes, we're a little behind the Bay Area, Boston, and Raleigh-Durham.

Washington Post retail reporter Sarah Halzack reviews the history of Sears and how it's done the last few years:

Decades of missed opportunities have brought Sears to this. It lost its focus with ventures into Discover credit cards and Coldwell Banker real estate in an attempt to diversify. Then big boxes such as Home Depot and Best Buy chipped away at lucrative product niches. But maybe the biggest whiff: Executives knew as far back as the early 1990s that they had to wean Sears off its dependency on shopping malls — but its many forays into other store formats never quite worked.

As e-commerce moves toward its golden age, Sears is an also-ran.

In this war of attrition, chief executive Edward S. Lampert has said, “We’re fighting like hell.” Lampert, a controversial hedge fund billionaire, has invested heavily in bolstering Sears’s Internet business but has let the retail stores languish. He’s now propping up the company with loans and other feats of financial engineering — moves that may soften his landing if the chain fails.

Halzack summarizes Sears' history well enough but has a lot more sympathy towards Lampert than I do. She acknowledges that Lampert has structured the company so that his own exit will be lucrative, but she says nothing about his management practices and personal outlook that suggest this was his plan all along.

British Airways cancelled all of its flights out of its two biggest hubs in London today because of a power-supply failure:

The airline hoped to be able to operate some long haul inbound flights on Saturday, landing in London on Sunday, Mr Cruz added.

The GMB union has suggested the failure could have been avoided, had the airline not outsourced its IT work.

BA refuted the claim, saying: "We would never compromise the integrity and security of our IT systems".

All passengers affected by the failure - which coincides with the first weekend of the half-term holiday for many in the UK - will be offered the option of rescheduling or a refund.

The airline, which had previously said flights would be cancelled until 18:00 BST, has now cancelled all flights for Saturday and asked passengers not to come to Gatwick or Heathrow airports.

Some things never change.

"A dying culture invariably exhibits personal rudeness. Bad manners. Lack of consideration for others in minor matters. A loss of politeness, of gentle manners, is more significant than is a riot."

—Robert Heinlein, Friday

Montana's at-large congressional district will stay Republican after millionaire Greg Gianforte won yesterday's special election by 6 points. This is despite him assaulting a reporter Wednesday afternoon and being charged with the crime:

The Republican candidate for Montana’s congressional seat has been charged with misdemeanor assault after he is alleged to have slammed a Guardian reporter to the floor on the eve of the state’s special election, breaking his glasses and shouting: “Get the hell out of here.”

Ben Jacobs, a Guardian political reporter, was asking Greg Gianforte, a tech millionaire endorsed by Donald Trump, about the Republican healthcare plan when the candidate allegedly “body-slammed” the reporter.

“He took me to the ground,” Jacobs said by phone from the back of an ambulance. “I think he whaled on me once or twice … He got on me and I think he hit me … This is the strangest thing that has ever happened to me in reporting on politics.”

A Fox News TV team corroborated Jacobs' report.

Reactions immediately split along Republican/everyone else lines:

The Montana donnybrook quickly became a Rorschach Test that highlighted the divide within the conservative media between the serious and unserious outlets. It also showcased how many prominent figures on the right reflexively rally behind Republican politicians, whether the president or a House candidate, even when they are very clearly in the wrong. This is part of a growing tribalism that contributes to the polarization of our political system.

Laura Ingraham aggressively questioned the Fox reporter on her radio show: “You can’t body-slam someone by holding both hands on the neck. That’s impossible…Didn’t he grab him near the neck and throw him down? Just asking.” Acuna held firm: “I saw both his hands go up not around his neck in a strangling type of way, but more just on each side of his neck, just grabbed him. I guess it could have been on his clothes, I don’t know. I can’t say that for sure. But he grabbed him and slammed him down. … He had one hand on each side of his neck.”

And while the news division at Fox covered the story seriously and showed integrity, at least one commentator said on the air that the reporter had it coming.

And then there was this gem, demonstrating what happens when a media outlet becomes a monopoly in a market:

The Montana NBC Affiliate reportedly refused to cover the Gianforte story at all on Wednesday night, a shocking blackout. Irate sources inside 30 Rock appear to have called up New York Magazine’s Yashar Ali to complain: “KECI news director Julie Weindel was called by NBC News to see if KECI would cover the story or had any footage of the Gianforte incident that NBC News and its affiliates could use. … She was unyielding in her refusal to share any footage she may have had access to, or run a report on the story. … Weindel said that they weren’t covering the story, though it was running in outlets across the country at the time, explaining, ‘The person that tweeted [Jacobs] and was allegedly body slammed is a reporter for a politically biased publication.’ Weindel then added, ‘You are on your own for this.’ … The station was acquired, last month, by the conservative media conglomerate Sinclair Broadcasting.”

Here’s why that’s a big deal: Sinclair Broadcasting just struck a deal with Tribune Media to buy dozens of local TV stations. “Already, Sinclair is the largest owner of local TV stations in the nation. If the $3.9 billion deal gets regulatory approval, Sinclair would have 7 of every 10 Americans in its potential audience,” Margaret Sullivan explained in a column last weekend. “Sinclair would have 215 stations, including ones in big markets such as Los Angeles, New York City and Chicago, instead of the 173 it has now. There’s no reason to think that the FCC’s new chairman, Ajit Pai, will stand in the way. Already, his commission has reinstated a regulatory loophole — closed under his predecessor, Tom Wheeler — that allows a single corporation to own more stations than the current 39 percent nationwide cap…"

Meanwhile, the president appeared to shove the prime minister of Montenegro out of the way at a photo-op yesterday.

Who said Donald Trump would spread poison to everything he touched? Oh right. Everyone paying attention.

The Tribune reported late yesterday that the John Hancock Center is for sale:

Chicago-based developer Hearn Co. plans to put the North Michigan Avenue tower's office space and parking garage up for sale, possibly by late summer, company President and CEO Stephen Hearn said.

Hearn said he believes the real estate is worth more than $330 million, or more than double what his firm paid in 2013.

Hearn has been in talks with companies interested in putting their name on the skyscraper since the structure's namesake no longer pays for that right. "We've had interest in it, but have not made a deal yet," Hearn said.

That process could be resumed by a new owner.

Hearn declined to say how much he believes naming rights are worth, but people familiar with the property estimate it could generate $1 million to $2 million annually.

When it opened in 1969, it was the second-tallest building in the world. Today it has the best view of any building in Chicago.

I'm sad that an urban area with 8 million people can no longer support two regional, daily newspapers. This makes me very uncomfortable:

Tronc, the parent company of the Tribune, has entered into a nonbinding letter of intent to acquire Wrapports Holdings, which owns the Sun-Times as well other assets such as the Chicago Reader alternative weekly, the Aggrego digital content business and the syndicated column The Straight Dope.

The announcement follows months of discussions between Wrapports and Tronc and after both organizations worked closely with the Department of Justice's antitrust division.

The tentative deal means Chicago would remain one of the last two-newspaper cities in the country, though those papers would operate under a single corporate owner. Terms of the potential deal were not disclosed.

We still have DNA Info (for now), and competing national newspapers like the New York Times and Washington Post have reporters here. (So does the Economist, for that matter.) But one corporation owning all the print newspapers in an area the size of Chicago? Scary.