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DealBook Briefing: How California Could Win the U.S. Tighter Data Privacy

Amazon’s vision: To do to drugs what it has to books (and most other things), by making it easy for people to get medicines in the mail. PillPack already operates across the U.S., and Amazon is likely to cut its prices. The health care industry is accustomed to drug prices rising steeply.

But the FT points out that Amazon will be swimming against the tide. People are abandoning most kinds of store for online shopping, but the number of prescriptions being filled at physical pharmacies is actually rising.

Still, the markets clearly think Amazon can win. Shares in drugstore chains like CVS, Rite Aid and Walgreens plummeted yesterday.

What happens to the losers of the bank stress tests

Most American banks passed the second round of the Fed’s stress tests with flying colors, according to the results published yesterday. Now that they’ve proved they have enough cash to withstand economic turmoil, the Fed will let them pay out more than $125 billion to shareholders. But three lenders fell short:

• Deutsche Bank’s U.S. arm, unsurprisingly, failed the tests because of “widespread and critical deficiencies” in its financial controls. It will be restricted in how much money it can transfer back to its German headquarters.

• Goldman Sachs and Morgan Stanley didn’t meet minimum capital levels, because of one-time accounting losses caused by the Republican tax cuts. They were ordered to keep their shareholder payouts at last year’s level and build up their capital buffers — but don’t expect them to be hamstrung next year.

The takeaway: Banks will argue that their improved health means they don’t need as many regulations. But Stephen Gandel of Bloomberg Opinion argues that bank shareholders still have reason to worry about earnings.

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The scary ending Netflix needs to avoid

Netflix’s stock price has nearly doubled since the start of the year. And, unlike other technology companies, its runaway success hasn’t stirred up public or political backlash — so far. But the Economist argues that the streaming service’s continued success could be its undoing:

Some suspect that Netflix harbors ambitions to monopolize TV. Such a move would concentrate enormous amounts of cultural power in the hands of a few content commissioners and algorithms. It would hollow out support for public-service broadcasters, by reducing their audience, and risk leaving poorer users with fewer affordable entertainment options. And it would inevitably find it much harder to avoid the attention of regulators.

The bottom line: Competition will keep consumers, regulators and lawmakers happy.

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Credit
Yana Paskova for The New York Times

A new Lehman drama is questioning capitalism

Almost a decade after Lehman Brothers fell, the investment bank is being resurrected — on a London stage, in the form of “The Lehman Trilogy.” The play, by the Italian playwright Stefano Massini, traces the history of the firm from its origins as an Alabama textiles trading shop to its collapse as a titan of Wall Street.

The actor Ben Miles, one of the three stars, explained the drama’s intent to the FT:

“It asks very good questions about when did capitalism become, in the eyes of many, a bad idea? When did it turn from a very valid pursuit into something slightly tainted? When did this small family business that grew and grew begin to transform itself into something that none of the original founders had envisaged? And why did it do that?”

Revolving door

Deloitte’s C.E.O., Cathy Engelbert, won’t be nominated for a second term, upsetting succession plans at the accounting and consulting firm. (WSJ)

Two top Paulson & Company executives, Michael Barr and Jonathan Shumaker, are spinning out its real estate funds into a new firm. (Reuters)

Google has hired Karan Bhatia, who was president of G.E.’s government affairs unit, as head of policy. (Axios)

The speed read

Deals

• Shareholders of 21st Century Fox are scheduled to vote on Walt Disney’s $71.3 billion takeover bid on July 27. At least one is asking Fox to seriously consider any counteroffer from Comcast.

• President Trump said SoftBank planned to invest $72 billion in the U.S., up from $50 billion. It wasn’t clear where the number came from. (Reuters)

• The Chinese phone maker Xiaomi raised $4.7 billion in its I.P.O. in Hong Kong, at the low end of the expected range, for a valuation of $54 billion. (Bloomberg)

• Shares of BJ’s Wholesale Club rose over 29 percent in their market debut yesterday, valuing the retailer at $2.8 billion. (WSJ)

Politics and policy

• Inside the White House’s quiet campaign to convince Justice Anthony Kennedy to retire. (NYT)

• Jerome Powell, the Fed’s chairman, assured lawmakers that the central bank was being cautious as it raises interest rates. (Bloomberg)

• Robert Mueller has subpoenaed a longtime aide to Roger Stone, one of President Trump’s outside advisers. Paul Manafort owes the Russian oligarch Oleg Deripaska $10 million.

Tech

• Safety precautions are expected to be front and center as Uber moves to restart its testing of autonomous vehicles. (Information)

• The trade war has China questioning its tech chops. (WSJ)

• Morgan Stanley says Google should give every U.S. household a smart speaker. It would only cost $3.3 billion. (CNBC)

• Tech giants are trying to sell Hollywood on cloud computing. (TechCrunch)

• Kroger will test autonomous grocery-delivery vehicles. (Verge)

Best of the rest

• America’s cheese stockpile is at a 100-year high (1.385 billion pounds, if you’re hungry). (WXYZ)

• A former Pixar employee says open sexism is rife there. (Variety)

• Here’s how a start-up aims to turn would-be homeowners into cash buyers. (Bloomberg)

• Authorities charged a former Equifax executive with insider trading around its data breach. (Hill)

• The S.E.C. plans to loosen regulations on exchange-traded funds. (FT)

• The quest to keep a French fry crispy for an hour. (NYT)

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