Saudi Crown Prince
Mohammed bin Salman
wants to transform a
barren stretch of his
country’s coastline into
a $500 billion city-state
filled with flying cars
and an artificial moon,
said Justin Scheck in
The Wall Street Journal.
The fake rising moon—
an illusion created
nightly by “a fleet of
drones”—is partly why
the futuristic project
called Neom sounds
more like a “Jetsons-
style world of automa-
tion.” Residents will
“fly drone taxis to work
while robots clean their
homes”; children will be
taught by “holograms”;
and “cloud seeding”
will produce enough
rain to keep tempera-
tures cool. There are
Orwellian elements
too: “To keep Neom
safe, cameras, drones,
and facial-recognition
technology will let
Saudi intelligence ser-
vices track everyone.”
The Saudi government
has been working with
American consultants
on the project, which
could require 20,000
people living in the area
to relocate by 2022.A fairy-tale city with
no place to hideBUSINESS
Capital One bank disclosed
this week that a hacker had
gained access to informa-
tion from roughly 106 mil-
lion credit card customers
and applicants, said Peter
Rudegeair in The Wall Street
Journal. The data breach
is one of the largest ever
recorded—and it exposed
a bank with a “long-held reputation for digital
prowess.” Five years ago, Capital One, the fifth-
largest U.S. credit-card issuer, became one of the
first big banks to “migrate reams of customer and
corporate data and applications off its own data
centers” and onto Amazon’s cloud computing ser-
vices. The hacker, identified as Paige Thompson,
was a former Amazon Web Services employee.Capital One “wore its cutting-
edge approach as a badge of
honor,” said Stacy Cowley
and Nicole Perlroth in The
New York Times. Still, it was
only alerted to the hack by
a tipster three months after
it happened. Thompson had
exploited a gap in the fire-
wall software—a lapse “akin
to leaving a window open overnight at the local
bank.” Such mistakes are nearly unavoidable.
Banks are bombarded on a daily basis; already
“there have been 3,494 successful cyberattacks
against financial institutions” this year, and mil-
lions of attempts. This hack “is a reminder of the
intricacy of the computer networks at large finan-
cial institutions, as well as their vulnerability.”Security: Massive data breach at Capital One
China: Little headway in new trade talks
U.S. and Chinese negotiators held face-to-face trade talks this week
for the first time since an agreement broke down in May, said Chao
Deng in The Wall Street Journal. Though U.S. Trade Representative
Robert Lighthizer and Treasury Secretary Steven Mnuchin traveled to
Shanghai, little progress seems to have been made in two days of talks.
In a series of tweets, President Trump said China had failed to honor a
pledge to buy more agricultural products. China, meanwhile, “thinks
it can extract better terms by not hurrying into concessions.”
Te c h : SoftBank raises another megafund
SoftBank said last week it will raise $108 billion from investors to
launch a second Vision Fund, said Kana Inagaki and Arash Massoudi
in the Financial Times. “A splurge of investments in Uber, WeWork,
and other technology companies” through SoftBank’s first, $97 billion
Vision Fund has made the Japanese telecom conglomerate the world’s
biggest tech investment powerhouse—thanks, in part, to heavy back-
ing by the sovereign wealth funds of Saudi Arabia and Abu Dhabi.
Microsoft, Foxconn, and Apple have invested in the new fund, which
aims to “facilitate the ‘continued acceleration of the AI revolution.’”
Telecom: U.S. approves wireless deal
The Justice Department approved the merger of T-Mobile and Sprint
last week in “a deal that would reshape the nation’s wireless industry,”
said Edmund Lee and Katie Benner in The New York Times. In the
transaction, T-Mobile, the nation’s third-largest wireless carrier, will
effectively buy competitor Sprint in a $26.5 billion deal. The companies
also agreed to sell off parts of their businesses to the Dish Network.
One last but important hurdle remains for the merger: Thirteen states
and the District of Columbia have sued to block the transaction.
Tesla: Co-founder leaves as losses rise
Tesla took two hits last week, announcing a larger-than-expected quar-
terly loss coupled with the departure of one of its co-founders, said
Ashlee Vance in Bloomberg.com. J.B. Straubel, a member of Tesla’s
founding team in 2004, said he will leave his longtime role as chief
technology officer to become an adviser. An inventor responsible for
many parts of Tesla’s innovative vehicles, Straubel was also “the quiet,
grounded complement” to CEO Elon Musk’s “drama-filled, visionary
persona.” Additionally, despite a record number of vehicle deliveries in
the second quarter, Tesla reported weaker earnings as the average sale
price dropped.32
The news at a glance
Getty, NewscomAn open window into customer dataQApple earned $53.8 billion
in revenue in the second
quarter. Of that, $25.99 billion
came from iPhone sales—the
first time the iPhone repre-
sented less than half Apple’s
quarterly earnings since- Services such as the
App Store and Apple Music
brought in $11.46 billion.
TheVerge.com
QSome 490 million people in
China watched NBA games
last season on the live-
streaming platform Tencent.
That’s more than a third of
China’s population of 1.3 bil-
lion. Tencent recently paid
an estimated $1.5 billion to
extend its partnership with
the NBA until 2025.
Qz.com
QAbout 37 percent of home-
owners have paid off their
mortgages, according to a
Zillow data analysis—an in-
crease of 5.5 percent in the
last decade even as the medi-
an price of a home has gone
up more than 60 percent. The
state with the nation’s highest
rate of mortgage-free owners
is West Virginia (54 percent).
Bloomberg.com
QThe average legroom in
economy class has fallen by
5 inches
since
2006,
to 30
inches,
and the
average
seat
width has narrowed to 17 inch es.
Cebu Pa cif ic, the Phil ip pines’
biggest budget carrier, is
cramming a record 460 seats
into a new Airbus jet, twice
as many as it was designed
to fit.
Bloomberg.com
Q Buying the SPDR S&P 500
ETF, or SPY, at the close of
trading and selling it at the
next day’s market open—
essentially, keeping the shares
overnight—has yielded more
than 670 percent, excluding
dividends, since 1993. That
compares with a loss of more
than 11 percent if you bought
the fund at the open and sold
at the close on the same day.
Bloomberg.com
The bottom line