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The Week in Business: Southwest’s Holiday Meltdown

    Thousands of travelers were stranded at airports across the country over the holiday season as Southwest Airlines canceled more than 2,900 flights on Monday and about 5,000 on Tuesday and Wednesday, more than 60 percent off schedule. The disruptions were due to staff shortages and long-standing technology problems, exacerbated by a fierce winter storm. Many customers said Southwest had done little or nothing to get them to their destination. The airline’s CEO of 10 months, Bob Jordan, apologized and the company said it had called on more than 1,000 of its own employees to manually schedule crews for new flights. But Southwest’s reputation is in tatters, and the scale of the chaos — which one industry analyst called “the worst round of cancellations for a single airline” in recent history — prompted the Department of Transport to announce it would investigate Southwest’s compliance with its obligations to customers.

    As part of a series of drastic cost-cutting measures, Elon Musk sent members of his staff to a Sacramento data center, one of Twitter’s three main computer storage facilities, on Christmas Eve to disconnect the servers essential to keep the site running smoothly. (And many users seemed to notice.) The company is facing eviction from its Seattle office and has cut security and concierge services at others, with some employees bringing their own toilet paper to the increasingly bare-bones operation. Mr Musk has also continued to carry out small-scale layoffs following the massive layoffs he made when he first took over the company in late October: he now says there are about 2,000 people working for Twitter, far fewer than the 7,500 he started of. And employees expect even more layoffs as the company faces a bleak advertising environment and higher costs, such as debt service after the purchase of Mr. Musk.

    The Attorney General of the US Virgin Islands has filed a lawsuit against JPMorgan Chase, accusing the bank of helping to cover up the exploitation of women and girls by convicted financier Jeffrey Epstein and continuing to provide him banking services after pleading guilty to sexual charges . in 2008. Mr. Epstein had been a client of the bank for 15 years, including five years after his conviction; the bank evicted him in 2013. The lawsuit, filed Tuesday in federal court in Manhattan, described JPMorgan as “indispensable to the operation and concealment of the Epstein trading company,” arguing that the bank’s delay in cutting ties with Mr. Epstein helped with his sexual abuse. The legal filing comes from the Virgin Islands over Mr. Epstein’s illegal activities at a villa on an island in the area, Little St. James Island, that he owned.

    Perhaps in the new year we can make New Year’s resolutions for more positive habits. But will the stock markets follow suit? After a tumultuous year that marked its worst annual performance since 2008, some analysts believe the S&P 500 will look better in 2023. But the forecasts, perhaps predictably, are mixed. Some are predicting a severe downturn on the horizon, while others are optimistic that markets will pick up on a pivot from the Federal Reserve, which has aggressively raised rates in 2022 but could start to slow down as inflation eases further. According to Bloomberg, the average forecast for the index is to end the year at 4,009, the most bearish outlook in more than two decades. But the range of forecasts — from a low of 3,400 to a high of 4,500 — represents an unusually wide gap in opinion.