The biggest business stories of the week
The middle class has been shrinking consistently for the last 50 years; however, this was usually chalked up to more individuals climbing the ladder of success. As of 2000, this seems to have changed, as we saw more individuals falling down the ladder than climbing up. In addition, as the middle class has shrunk, its demographic has changed – led by the 65-and-up crowd, rather than families of four. With the changes to health care and social security, especially in the U.S., the safety net that was cast for all seems to be missing many, and with an increase in lower-paying jobs, it seems the younger middle class is facing some major financial hurdles.
Microsoft recently announced that it will launch a set of googles named the HoloLens, which will superimpose the operating system on the real world. Though many – especially in the world of markets and business – are interested by the new technology and what it will mean for the value of the company, others are interested in the effects these HoloLens will have on relationships with screens and virtual worlds. Though this could mean a jump in stock strength and value, many are questioning whether this new visual technology is the line between virtual and real.
The newly sworn-in Prime Minister of Greece, Alexis Tsipras, is trying to make good on his campaign promise of re-negotiating and lowering Greece’s debt. With the country’s bailout coming in around $270 billion, Tsipras has been attempting to negotiate with Eurozone finance ministers and the IMF. However, as of yet, the response seems to be that there will be no quick fix, and the purposed write-down of the Greek debt will not come to fruition in the near future. Greece, who in recent years has seen high unemployment rates and huge financial debt, voted Tsipras in to power in hopes of getting the situation under control. Only time will tell if they made the right choice.
Investment companies have been benefiting from the poor through used car loans, making substantial returns. After September 2014 saw the creation of a bond deal based on sub-prime auto loans, the demand for a piece of the action surpassed $1.75 billion and sent business booming. Seen previously in the markets with mortgages, the car loans, experts warn, could leave the investors and market open to substantial fluctuation and losses. Though these types of loans, when bundled and sold, can warrant high returns in low-interest times, analysts and regulators caution that these loans can lead to unwanted stress on the borrowers and on the market itself.
J.D., China’s second-largest e-commerce company, has been making headway in differentiating itself from major competitor Alibaba. Through shadowing the likes of Amazon, while also adding home delivery with a company owned and operated fleet of trucks, the giant boasted a year-end revenue of $20 billion, with 49 million active users. The company, which is publicly traded in the U.S., has been working towards these goals for some time now, and is now China’s largest direct-sale retailer. However, some analysts predict that the company will not turn a profit until 2017, with the weight of a costly start up in its not-so-distant past. Even Alibaba Chairman Jack Ma commented on the situation, saying the company was “inherently flawed” and destined to die out. J.D. Mall Chief Executive Shen Haoyu, in contrast, says the company could be profitable today, but they are choosing instead to focus on growing their user base.