Macro Links Apr 3rd – White House Invite
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MACRO LINKS TABLE OF CONTENTS (Click or Scroll Down)
- WHITE HOUSE INVITE, SPY POISONING, RUSSIA
- TECH PAIN, FACEBOOK, TESLA, AMAZON
- BITCOIN, CRYPTOCURRENCY, INITIAL COIN OFFERINGS
- BLOCKCHAIN, FINTECH, DIGITAL PAYMENTS
- FOREX, CARRY TRADES, EXCHANGE RATES
- TRADE, PROTECTIONISM, REGULATION, OVERSIGHT
- BUDGET, INFRASTRUCTURE, HEALTHCARE, IMMIGRATION
- GUN CONTROL, SHOOTINGS, MARIJUANA, OPIOIDS
- RUSSIA MEDDLING, RUSSIA PROBE, TRUMP WORLD
- KOREAN PENINSULA, MIDDLE EAST, NUCLEAR WEAPONS
- INFLATION, RATES, DEBT AND CREDIT, BALANCE SHEETS
- VOLATILITY, BLACK SWANS, LIQUIDITY, TAIL RISKS
- MACRO OP-EDS, INSIGHT, EVENTS AND TRENDS
- USA ECONOMY DATA, CITIES AND STATES
- GLOBAL ECONOMY, INTERNATIONAL
- POSITIONING, INFLECTION, MARKET CALLS
- DEALS, MERGERS, IPOs, LBOs, RESTRUCTURINGS
- HEDGE FUNDS, PRIVATE EQUITY, MONEY MGMT
- ENERGY COMPANIES, NOCs, INDUSTRY
- POLLUTION, CLIMATE & ENVIRONMENT
- BREXIT, SCOXIT, LONDON, UK ECONOMY
- GEOPOLITICS, CRIME, TERRORISM
- PRIVACY, HACKING, CYBERWAR, SURVEILLANCE STATE
- PROPAGANDA, CORRUPTION, AUTHORITARIANISM
- ELECTORAL POLITICS
- SCANDALS, LAWSUITS, FINES, REGULATORY
- SILICON VALLEY, UNICORNS, STARTUPS, VC
- CONSUMER TECH, SOCIAL MEDIA, E-COMMERCE, MOBILE
- MEDIA, CABLE, SPORTS, ENTERTAINMENT
- AUTOS, ELECTRIC, SELF-DRIVING
- AIRLINES, SHIPPERS, RAIL, TRANSPORTS
- AEROSPACE, MILITARY & DEFENSE
WHITE HOUSE INVITE, SPY POISONING, RUSSIA
“When our presidents spoke on the phone, Trump suggested having the meeting in Washington at the White House,” Kremlin foreign policy aide Yuri Ushakov told reporters on Monday. “This is quite an interesting, positive idea.” White House Press Secretary Sarah Huckabee Sanders said later that the two leaders had discussed a meeting “at a number of potential venues, including the White House.”
Leon Aron, a resident scholar and the director of Russian studies at the conservative American Enterprise Institute, said Monday he was stunned by reports that Trump so willingly suggested a White House meeting. “Are you kidding me? Are you kidding me?” Aron said. “It’s really mind-boggling. I’m usually not this emotional.”
Meetings with a US president are a major honor for any world leader, even one as powerful in his home country as Putin. Trump was offering the Russian strongman a reward at the same time the US was working with other countries to punish Russia for the nerve agent attack on a former Soviet spy.
Russian Foreign Minister Sergei Lavrov suggested on Monday that the British government might have poisoned Sergei Skripal to cover up difficulties over Brexit. Britain has insisted the Russian government was behind the nerve-agent poisoning of the former Russian spy and his daughter March 4 in the English city of Salisbury, a charge the Russians vehemently deny.
British officials now believe the nerve-agent attack on a former spy in England had approval from the top levels of Russian government. Sources told CNN the nature of the attack—likely to have been carried out by applying the nerve agent to Sergei Skripal’s front door—shows that it was done by someone with key training in the lethal Novichok substance developed by the Soviet Union. The apparent sophistication of the attack has led British authorities to believe it could not have been carried out by a rogue group who simply got hold of the nerve agent in question, and must have had the approval at the top level of the Kremlin.
Because the nerve agent is so potent, the officials said, the task could have been carried out only by trained professionals familiar with chemical weapons. British and American officials are skeptical that independent actors could have carried out such a risky operation or obtained the agent without approval at the highest levels of the Russian government — almost exactly the same phrase that American intelligence agencies used in October 2016, when they first attributed the hacking of emails from the Democratic National Committee to a team of Russian hackers.
TECH PAIN, FACEBOOK, TESLA, AMAZON
Monday’s decline left stocks down more than 4 percent so far in 2018. They are now down more than 10 percent from their peak in late January. That means the market has entered a so-called correction — a term used to indicate that the downward trend is more severe and lasting than simply a few days of bearish trading.
If you feel like the second quarter began badly, you’d be right. U.S. stocks had their worst April start since 1929, according to data compiled by Bloomberg. The S&P 500 index slumped 2.2 percent, a rout exceeded only by its 2.5 percent decline 89 years ago, a prelude to the devastating crash later that year that brought on the Great Depression. (Back then, the index only comprised 90 stocks.)
“Between tariffs and Amazon, the president is not doing himself any favours with regard to the equity market,” said Andrew Brenner, a partner at National Alliance Securities. The NYSE Fang index, which tracks the biggest technology companies, dropped 3.4 per cent as a rout triggered by online privacy concerns at Facebook spread to include everything from fears about the Trump administration’s attitude towards Amazon to the prospects for self-driving cars.
Shares of the biggest names in the technology industry extended their three-week decline Monday, raising fears among investors that cracks could finally be appearing in what had been one of the most enduring trades of the past year. As the rout intensified, shares of companies ranging from chip makers to electronic-payment providers to biotechnology firms tumbled too, highlighting the indiscriminate selling spreading across the technology industry. Every stock in the S&P 500 technology sector ended lower for the day.
Emmanuel Macron has suggested that Facebook and Google are “too big to be governed” and compared their dominance to that of the oil barons in the early 20th century, saying they may have to be dismantled. The French president’s comments are among the most forceful from a Western leader on the subject of the two companies’ growing influence, which is coming under increased scrutiny from regulators. “At a point of time, your government, your people, may say: ‘Wake up. They are too big.’,” Mr Macron told Wired magazine. “Not just too big to fail, but too big to be governed. Which is brand new.”
Brussels is preparing to crack down on social media companies who have been accused of spreading “fake news”, issuing a stark warning that scandals such as the Facebook data leak threaten to “subvert our democratic systems”. The European Commission fears that next year’s elections to the European Parliament are vulnerable to mass eurosceptic online “disinformation”. Its concern sharpened after a whistleblower alleged that Cambridge Analytica gathered personal information from up to 50m Facebook users and used it to target voters in the US presidential election. Cambridge Analytica has denied using Facebook data in its modelling.
Although technology companies have their differences, a spirit of comity prevails among its leaders in moments of crisis. For example, technology chiefs have mostly kept quiet about Uber’s travails — from its efforts to sidestep law enforcement to a pedestrian death caused by one of its self-driving cars — even if they might express their opinions privately. Representatives from companies as varied as Amazon, Microsoft and Slack declined to comment for this story. Part of the silence, people in the industry say, comes from a desire to avoid the business equivalent of bad karma — knowing that they, too, may one day face the buzz saw of public censure.
Facebook should shake up its board and replace Mark Zuckerberg with a new chairman to restore the public’s faith in its privacy safeguards, says the official who oversees New York City’s pension fund investments. Scott Stringer, New York City’s comptroller, who supervises funds with an almost $1bn stake in Facebook, said changes at the board were needed following the leak of data from 50m users of the social network to Cambridge Analytica.
Mark Zuckerberg has hit back at veiled criticism of Facebook’s data policies from the boss of Apple, saying the suggestion that his company did not care about its users was “extremely glib” and “not at all aligned with the truth”. Tim Cook, Apple’s chief executive, took a swipe at the Facebook founder last week in the aftermath of the Cambridge Analytica scandal, when asked what he would do if he were in the Mr Zuckerberg’s position. Mr Cook drew a distinction between Apple and Facebook, saying: “I wouldn’t be in this situation.” He said the iPhone maker was refusing to use data to target advertising to its customers, adding: “We care about the user experience and we’re not going to traffic in your personal life.”
“I think we will dig through this hole, but it will take a few years,” Zuckerberg said. “I wish I could solve all these issues in three months or six months, but I just think the reality is that solving some of these questions is just going to take a longer period of time.”
For the past week, as the electric-car maker Tesla has been buffeted by a barrage of negative news, Elon Musk, its chief executive, has offered no public comments on the company’s shaky finances, its slumping stock price or the increasing questions about the safety of its self-driving technology. He finally responded on Sunday — with an April Fool’s joke that the company was going bankrupt. “Despite intense efforts to raise money, including a last-ditch mass sale of Easter Eggs, we are sad to report that Tesla has gone completely and totally bankrupt,” Mr. Musk wrote on Twitter. “So bankrupt, you can’t believe it.”
“It’s about the magnitude of the miss,” Philippe Houchois, a Jefferies Group LLC analyst who rates the shares a hold, wrote in a report to clients Monday. Tesla probably fell short of a company-supplied consensus estimate of 10,000 Model 3 deliveries in the first quarter and may have trailed its target to end March making the sedan at 2,500-unit weekly rate, he said.
Tesla and the U.S. National Transportation Safety Board (NTSB) are both investigating the fatal accident involving a Model X Autopilot in Mountain View last month, but now another Tesla owner also conducted his own little investigation into the accident by following a similar scenario on Autopilot and almost crashed on video by doing so.
Investors punished Tesla on Monday after the electric carmaker was reprimanded by federal regulators over a fatal crash and the company’s mounting losses unnerved financial markets ahead of closely watched production numbers. Late on Monday, Elon Musk, chief executive, also confirmed a report that he had personally taken over manufacturing responsibility as Tesla struggles with the Model 3, the car it hopes will open a door to the mass market. “My job as CEO is to focus on what’s most critical, which is currently Model 3 production,” he tweeted, before adding: “Uhh, hello, I need to build cars.”
“Only fools, or worse, are saying that our money losing Post Office makes money with Amazon,” Trump tweeted. “They lose a fortune, and this will be changed. Also, our fully tax paying retailers are closing stores all over the country…not a level playing field!” Shares of the company were down 5.9 percent at $1,362.48, wiping out nearly $45 billion from its market value. Trump has been vocal about his opposition to Amazon’s use of the postal service and Monday’s tweet adds to investor worries that the company could see more regulation. Amazon did not immediately respond to requests for a comment.
Amazon.com Inc., down about 6 percent on Monday after a fresh round of political attacks, has fallen 15 percent since reaching an all-time high March 12. A lot of U.S. mutual funds are feeling the retail giant’s pain. Forty diversified equity funds with more than $1 billion in assets have at least 6 percent of their money in Amazon, according to data compiled by Bloomberg. The list excludes index products and specialized industry funds such as Fidelity Select Retailing Portfolio, which had 24 percent of its assets in the stock as of Feb. 28.
“A number of tech companies are facing reputational challenges, including Facebook, Google and now Amazon, with the president’s latest salvo about their purported unfair competition,” said Rob Atkinson, president of the Information Technology and Innovation Foundation, a think tank that counts tech executives on its board. “The market appears to believe that these will translate into new policy challenges for the sector, including potentially European-style antitrust enforcement and privacy regulation.”
BITCOIN, CRYPTOCURRENCY, INITIAL COIN OFFERINGS
By pulling from past data, the researchers say they can now better track and spot potential future crashes. On at least four different occasions — one each in 2011, 2012 and 2013 plus the most recent at the end of 2017 — the model had determined a fundamental value was heavily exceeded by bubbles that grew and burst. Their analysis “indicates current support levels for the Bitcoin market in the range of $22–$44 billion, at least four times less than the current level,” the researchers said, according to a March 29 MIT Technology Review article.
The first quarter of 2018 dealt heavy losses to the cryptocurrency markets, with Coinmarketcap data indicating that the capitalization of the combined crypto markets has dropped by 59% since the start of January. Q1 2018 has also been among the bloodiest quarters in recent memory for the bitcoin markets – with BTC suffering an approximately 50% loss in value since the start of 2018. Despite bitcoin’s heavy drop, it has performed better than many leading altcoins – many which have slumped by over 70% since January.
The crypto markets had a rough ride in the first quarter of 2018, with just two tokens bucking the downtrend. The buying frenzy seen at the turn of the year quickly ran out of steam in the first half of January, and what appeared to be a healthy pullback soon turned into a bear market on fears South Korea and China would announce deeper regulations.
The reckoning is starting for crypto hedge funds. Demand and profits are drying up at many of the more than 150 funds that popped during last year’s spectacular surge in Bitcoin — which brought cryptocurrencies to the attention of scores of institutional and individual investors. This year’s 50 percent plunge in the value of Bitcoin has many investors thinking twice. At about $7,000, the currency is at its lowest since November.
Just trolling – but maybe we should do it anyway. That’s the gist of a tweetstorm Monday from Vitalik Buterin, in which the ethereum creator said his proposal to create a hard cap on the supply of ether tokens was intended as an April Fool’s “meta-joke.” While he said he originally just wanted to see people argue over the merits of fixing the supply, Buterin added that he now believes the idea is “worth considering.” Ethereum Improvement Proposal 960, published April 1, suggested that the ether supply be capped at 120,204,432 units, twice the amount originally sold in 2014. Addressing the cryptocurrency’s presently unclear monetary policy, the proposal suggested that a hard cap would “ensure the economic sustainability” of ethereum.
Zhong Mo, a tech company employee, allegedly used his position to steal 100 bitcoins from his employer. The Haidian police recently confirmed his arrest for the crime of illegally acquiring computer information. Haidian is the area where most universities are located in Beijing and contains the Zhongguancun electronics district where many tech companies have their Chinese headquarters, locally known as “China’s Silicon Valley.”
Localbitcoins trading volume has witnessed volume spikes across miscellaneous markets in recent weeks, with global volume bouncing to $75 million USD this past week. The Canadian and European markets both produced record volume this past week – after both markets produced seemingly anomalous spikes in trading activity.
Over the past few weeks, the bitcoin cash (BCH) community and developers have been discussing zero-confirmation or instant transactions. Many BCH supporters believe if the concept was broadly accepted, payments and transaction speed would be extremely fast bringing a significant competitive edge to the BCH network.
The website “When Lambo” – a phrase described on the site as “probably the most used phrase in the crypto universe, right next to ‘When Moon?’” – shows crypto investors a fictional date that they will be able to purchase a $200,000 Lamborghini Aventador. Visiting the site, you enter in any amount of your choice of 50 cryptocurrencies and then press “When Lambo?” to see when you will be able to afford the car.
Google has banned cryptocurrency mining browser extensions from the Chrome store. The U.S. tech giant announced its decision on Monday, and said that in July it will start removing existing browser extensions that facilitate mining. Other blockchain-related extensions are still allowed. Google previously permitted Chrome mining extensions as long as they were solely dedicated to mining and explicitly informed users of their purpose. But that policy wasn’t enough to deter or keep out noncompliant add-ons.
Bitcoin investing is popular in Japan, but the nation has also had several high-profile cryptocurrency heists. Now, the central bank has come up with a rather negative Q&A for those seeking answers on cryptos.
Bitcoin investing is popular in Japan, but the nation has also had several high-profile cryptocurrency heists. Now, the central bank has come up with a rather negative Q&A for those seeking answers on cryptos. The page is called “Let’s think about cryptocurrencies!” and was released on a financial education site run by the Bank of Japan. It’s broadly aimed at the general public and includes questions about whether cryptocurrencies can be considered money, whether you can profit off them, and whether it’s likely they will be stolen again.
The South Korean city of Seoul is developing its own cryptocurrency – the “S-Coin” – to be used in city-funded social benefits programs, says its mayor. Mayor Park Won-soon announced the plan during an interview with CoinDesk Korea last week, where he also revealed that the city will create a fund to support the advancement of blockchain technology and related startups. “As Seoul is the world’s leading city in the field of information and communications, including the Fourth Industrial Revolution, I think we should study new technologies such as blockchains,” he said.
Russia’s third-largest state-owned bank wants to let its wealthy clients trade cryptocurrencies, an official said. Gazprombank deputy chairman Alexander Sobol said the bank may launch a pilot program this year, though it is early in the planning stages. As such, there are no firm details yet on whether Gazprombank itself will invest in cryptocurrencies or just allow its customers to do so. Sobol said his team is “trying to follow the situation actively,” according to Russian daily news organization Vedomosti.
Tech giant Intel is seeking to patent a hardware “accelerator” for bitcoin mining chips, a newly-published filing reveals. The application for a “Bitcoin Mining Hardware Accelerator With Optimized Message Digest and Message Scheduler Datapath” was published on Thursday, though it was originally submitted to the U.S. Patent and Trademark Office (USPTO) in September 2016. In the filing, Intel outlines a method by which it could augment the existing bitcoin mining process, consuming less electricity – thereby spending less money – in the process.
According to the data, searches for “bitcoin” peaked at 39 searches per million on Indeed in the week ending December 14. And that same week searches for “cryptocurrency” peaked at 46 searches per million. But starting in mid-December both began to fall. From mid-December through March 15, searches for “bitcoin” have declined 76% and “cryptocurrency” by 41% (see chart below for details).
BLOCKCHAIN, FINTECH, DIGITAL PAYMENTS
A subsidiary of Sinochem Corporation, one of China’s four major state-owned oil companies, has completed a shipment of gasoline from China to Singapore entirely using Blockchain technology, Reuters reports April 2. Sinochem Energy Technology sent a shipment from Quanzhou, China to Singapore, claiming that it was the “first time that Blockchain applications have been applied to all key participants in the commodity trading process.” In December of last year, the Sinochem Group completed the “first crude oil” Blockchain import transaction, according to Reuters.
A blockchain shipping future could change several paradigms in the current industry. Blockchains could manage the complexity of a global trade network by establishing a single, transparent source of truth. From there, a blockchain shipping industry would encourage competition, efficiency, and fewer errors. This article looks at how shipping is poised for massive change.
One of JPMorgan Chase & Co.’s top blockchain executives is leaving the bank. Amber Baldet is departing “to pursue an entrepreneurial opportunity” and will be replaced as head of the Blockchain Center of Excellence by Christine Moy, according to a memo from JPMorgan’s Umar Farooq.
FOREX, CARRY TRADES, EXCHANGE RATES
The dip suggests that a recent rise in the yen to ¥106 against the dollar has taken the shine off the outlook for large manufacturers. But the rest of the report shows Japan’s economic expansion is still on track. Naohiko Baba, chief economist at Goldman Sachs in Tokyo, said the survey showed a “gradual peak-out” in business conditions. “This is likely attributable to the impact from recent increases in raw material prices and yen appreciation,” he said.
TRADE, PROTECTIONISM, REGULATION, OVERSIGHT
The Trump administration this week will unveil a list of advanced technology Chinese imports targeted for U.S. tariffs to punish Beijing over technology transfer policies, a move expected to intensify trade tensions between the world’s two largest economies. U.S. tariffs on $50 billion to $60 billion worth of annual imports is expected to be levied on products benefiting from Beijing’s “Made in China 2025” industrial development program, but it may be more than two months before the import curbs take effect, administration officials have said.
China has increased tariffs by up to 25 percent on 128 U.S. products, from frozen pork and wine to certain fruits and nuts, escalating a dispute between the world’s biggest economies in response to U.S. duties on imports of aluminum and steel.
By chance or by design, targeting agricultural specialty products reverberates as sharply as soyabeans would in the rural communities where Donald Trump carried the vote. Tariffs on American pork exports help breeders in China, where pig prices are at a cyclical low. But they hit hard in Iowa, home to one-third of US pork production and the US ambassador to China, former governor Terry Branstad. Every county in Iowa saw sharp gains for Republicans in the 2016 compared with 2012. Meanwhile, almonds, and other dried fruits and nuts hit by the Chinese tariffs, are staple products of California’s fertile but drought-prone Central Valley. Farmers there voted heavily for Mr Trump despite the state of California as a whole leaning Democrat.
The escalating trade tensions between Beijing and Washington have pulled America’s farmers and agricultural exporters into the melee. To the dismay of pork producers and fruit growers across the U.S., China on Sunday announced tariffs of as much as 25% on American pork and eight other kinds of goods, as well as 15% tariffs on fruit and 120 types of commodities, which China has said would apply to about $3 billion in products. China’s tariffs were retaliation for the 25% steel and 10% aluminum tariffs imposed by the Trump administration last month.
While China is a “volatile” buyer, the country is the largest market for pork byproducts and there are few alternative destinations, Jeremy Scott, an analyst at Mizuho Securities, said in a report. “Healthy export flows, particularly of offal product, is necessary to clear the supply ramp from the new pork packing capacity coming online this year,” he said.
“San Diego has always attracted very wealthy families from Mexico buying second homes, but as the crime in Mexico has become more pronounced, businessmen are increasingly looking to base their firms and families in the US and commute to Mexico,” says Seth O’Byrne of Pacific Sotheby’s International Realty, a local agent. “The worry is that the trade barriers will hurt the Mexican economy and that would reduce the disposable income of Mexican visitors,” says Dr Alan Gin, an economics professor at the University of San Diego. A dent in their company’s profits is likely to trim the wings of the rich Mexicans shopping for one of those fine homes in La Jolla.
BUDGET, INFRASTRUCTURE, HEALTHCARE, IMMIGRATION
President Trump said a program protecting hundreds of thousands of undocumented immigrants brought to the U.S. as children was “dead” and blamed Democrats who “didn’t care or act.” GOP and Democratic lawmakers counter that Mr. Trump has rejected bipartisan compromises to save the program, which he moved to end last year.
The Trump administration will pressure U.S. immigration judges to process cases faster by establishing a quota system tied to their annual performance reviews, according to new Justice Department directives. The judges will be expected to clear at least 700 cases a year to receive a “satisfactory” performance rating, a standard that their union called an “unprecedented” step that risks undermining judicial independence and opens the courts to potential challenges.
The Justice Department sued California on Monday, seeking to block a new state law that restricts the U.S. government’s ability to sell and manage federal public lands. The lawsuit, filed in U.S. District Court in Sacramento, challenges a 2017 law that requires the federal government to offer a “first right of refusal” to the California State Lands Commission prior to the sale or lease of any federally-owned public lands here.
The 30 or so teachers joined tens of thousands at the state Capitol, part of a statewide walkout that has shuttered schools across the state. Teachers in Muskogee, where the gym roof is so leaky that volleyball games get “rained out,” arrived to urge lawmakers to restore education funding, which has fallen 30 percent over the last decade. Many of them came bearing a threat: Increase education funding, or teachers will not return to work.
Aides to Environmental Protection Agency Administrator Scott Pruitt last year considered leasing a private jet on a month-to-month basis to accommodate his travel needs, according to current and former agency officials.
The Trump administration wants to limit a federal regulator’s independence in policing the consumer-finance industry, the latest salvo by the White House to roll back Obama-era oversight put in place after the financial crisis. The changes would be a substantial departure from the CFPB’s structure, which currently gives it wide latitude to oversee consumer financial products without interference from Congress or the White House, and make it less independent than other banking and markets regulators.
GUN CONTROL, SHOOTINGS, MARIJUANA, OPIOIDS
The fine wines flowing in a Manhattan banquet hall on a recent evening lubricated talk of another intoxicant: pot. More adventurous corners of Wall Street are experimenting with marijuana as an investment even though recreational use of the drug is illegal in New York and the US attorney-general has reminded the industry that cannabis is outlawed by federal statute. The North American legal cannabis market grew by a third to nearly $10bn last year, according to ArcView Market Research, and is forecast to more than double in size by 2021. Nine states including California, Colorado and Massachusetts have allowed sales of cannabis for adult recreational use. Others are debating a move in that direction. Canada plans to legalise recreational use this year.
The Drug Enforcement Administration arrested 28 drug prescribers and pharmacists, and revoked the licenses of 147 people who handle controlled substances, as part of a nationwide crackdown on the illegal use and distribution of opioids and other prescription medications, the Justice Department announced Monday. The 45-day enforcement “surge” stemmed from a review, ordered by Attorney General Jeff Sessions, of 80 million drug transactions. The review revealed dispensers who sold disproportionately large amounts of drugs, particularly opioid painkillers, and sparked 188 investigations.
RUSSIA MEDDLING, RUSSIA PROBE, TRUMP WORLD
Although Mr Prince’s meeting with Kirill Dmitriev in the Seychelles, which is being examined by special counsel Robert Mueller, has been previously disclosed, Mr Dmitriev’s ties to the Putin clan have not been widely known. According to six people close to Mr Dmitriev, his wife is close friends with Mr Putin’s younger daughter.
The special counsel investigating alleged links between Trump campaign associates and Russians is looking into longtime adviser Roger Stone’s 2016 claim that he had met with WikiLeaks founder Julian Assange.
Ecuador’s government put a social media squeeze on WikiLeaks founder Julian Assange, announcing Wednesday that his Internet connection in its embassy in London had been cut off. The decision came after an angry clash of words between Assange and a British minister over the British government’s response to an alleged Russian nerve agent attack on Sergei Skripal and his daughter Yulia in Salisbury. Alan Duncan described Assange as a “miserable little worm” who should leave the embassy and turn himself in to British authorities.
Their claim — that they are targets of a covert Russian operation to silence them because they know too much — might seem outlandish, but their case certainly includes some unusual circumstances. They have influential enemies in Russia. They were arrested with the help of a “foreign spy,” according to the Thai police, and locked up on what is a fairly minor offense: working without a permit. And the F.B.I. says it tried to talk to the pair, suggesting that American investigators had not dismissed their account out of hand.
President Trump called CNN “fake” again on Monday, but a new Monmouth University poll shows that a plurality of Americans put more trust in the network than in the president. Trump also lost head-to-head trust comparisons with MSNBC, 45 percent to 32 percent, and Fox News, 30 percent to 20 percent.
The publisher of the National Enquirer asked a California court Monday to dismiss a lawsuit brought by a former Playboy centerfold who claims she had an affair with Donald Trump, arguing that the deal it struck with Karen McDougal is protected under the First Amendment. The 199-page response by American Media Inc. comes less than two weeks after McDougal sued in Los Angeles Superior Court to get out of the deal in which she sold the rights to her story for $150,000. McDougal argued that the National Enquirer violated campaign finance law when it bought her story not to publish it but to bury it, sparing Trump from an embarrassing revelation in the run-up to the 2016 election.
Dobbs doesn’t get to just interview and socialize with the president; he is involved in some of the administration’s more sensitive discussions. During the first year of the Trump era, the president has patched in Dobbs via speakerphone to multiple meetings in the Oval Office so that he could offer his two cents, according to three sources familiar with these conversations. Trump will ask Dobbs for his opinion before and after his senior aides or Cabinet members have spoken. Occasionally, he will cut off an official so the Fox Business host can jump in. Dobbs, these sources all independently recounted, has been patched in to senior-level meetings on issues such as trade and tax policy—meetings that featured officials such as senior policy adviser Stephen Miller, former top economic adviser Gary Cohn, former chief strategist Steve Bannon, trade adviser Peter Navarro, and Treasury Secretary Steve Mnuchin.
KOREAN PENINSULA, MIDDLE EAST, NUCLEAR WEAPONS
It is extremely rare for North Korea to offer such a public apology to the South, or, for that matter, to apologize for anything. The rare gesture from a senior official reflected the North’s efforts to work toward a political détente on the Korean Peninsula that Kim Jong-un helped start in February by sending a delegation to the Winter Olympics in Pyeongchang, South Korea. Still, the apology was all the more striking not only because the totalitarian state does not have a free press but also because it came from Kim Yong-chol, an army general considered hard-line even by North Korean standards.
INFLATION, RATES, DEBT AND CREDIT, BALANCE SHEETS
The U.S. labor market is the tightest it has been in nearly two decades. The national unemployment rate held at a 17-year low of 4.1% for five straight months, and the number of job openings is at a record. In the Midwest, the worker shortage is even more pronounced. If every unemployed person in the Midwest was placed into an open job, there would still be more than 180,000 unfilled positions, according to the most recent Labor Department data. The 12-state region is the only area of the country where job openings outnumber out-of-work job seekers. “The crux of the problem is that we don’t have the people here,” said Dave Zrostlik, president of commercial truck manufacturer Stellar Industries Inc., based in Garner, a rural city of about 3,000 people near Mason City.
Americans have a history of loading up on debt in good times, then paying dearly when the bills come due. Adding to the pain: A booming economy is often accompanied by rising interest rates, which make mortgages, credit cards and other debt much more expensive. As the U.S. Federal Reserve raises rates, there are signs that consumers could be putting themselves in peril. “When consumers are confident, or over-confident, is when they get into credit-card trouble,” said Todd Christensen, education manager at Debt Reduction Services Inc. in Boise, Idaho. The nonprofit credit counseling service has seen a noticeable uptick in people looking for help with their debt, he said.
The tariff announcement helped send a measure of raw-material prices paid to an almost seven-year high in March, the Institute for Supply Management’s manufacturing survey showed Monday. About 32 percent of the respondents’ comments related to the threat of duties, ranging from the potential for higher costs to concern about limited availability around production schedules, according to Timothy Fiore, chairman of the group’s factory survey committee. The tariffs hadn’t yet gone into effect when the comments were collected, he added.
Initial unemployment claims hit the lowest level since 1973. Employers are increasingly reluctant to lay off workers in this environment of tightening labor markets. On a 3-month basis, the US core PCE climbed by the highest percentage in over a decade.
The American consumers who were stretching themselves to buy or lease a new car are starting to go missing from showrooms. Rising interest rates and new-vehicle prices are squeezing shoppers with shaky credit and tight budgets out of the market. In the first two months of this year, sales were flat among the highest-rated borrowers, while deliveries to those with subprime scores slumped 9 percent, according to J.D. Power.
Japan’s 105 regional banks are approaching “grave conditions” as loan demand remains weak, competition intensifies and the country enters its third year under a negative interest rate policy, the new head of the Japan Bankers’ Association has warned. In his first interview as chairman of the JBA, Koji Fujiwara predicted an increase of mergers and alliances as a wave of defensive tactics reshaped a crowded banking sector suffering from thin profit margins. The structure of those partnerships, he added, would become more inventive as Japan’s conservative financial industry embraces digital technology.
VOLATILITY, BLACK SWANS, LIQUIDITY, TAIL RISKS
The US Treasury is planning to hold closed-door meetings with high-speed traders this month to discuss options for increasing transparency in a government bond market long dominated by large banks and brokers. The talks are intended to gather opinions on whether to make trade records in the $14tn Treasury market available to the public, a change that could shift power from the banks to technology-savvy market makers that thrive on data-driven algorithms.
Credit traders haven’t been this apprehensive about junk bonds for more than a year. A measure of credit risk for U.S. high-yield bonds reached the highest levels since December 2016, as jittery investors cut risk amid a stock market plunge. The cost to protect a basket of junk bonds against default rose as much as 12.7 basis points to more than 373 basis points on Monday afternoon in New York, according to data provider CMA.
A surge in demand for U.S. government debt from foreign investors is providing a bulwark against a further rise in Treasury yields. Foreign investors in February bought their largest share of Treasury notes and bonds in U.S. government debt auctions since May 2016, according to Treasury Department data. Those purchases continued even while Treasury yields, which rise as bond prices fall, were climbing to multiyear highs. Yields have climbed as the U.S. ramped up bond sales to fund tax cuts and increased government spending, boosting the supply of debt, even as some investors bet such policies would lift growth and inflation, hurting the value of bonds.
While the heightened volatility has been largely contained in the stock market, that increase may suppress the risk appetite in other assets over the coming months, potentially spurring widespread turbulence, according to Goldman Sachs. “A shift towards risk reduction and expectation of higher volatility is likely to change the trading dynamics in 2018 and increase the value of time spent on hedging,” the strategists wrote in a note to clients. “The spike in VIX and realized volatility was large enough for investors outside the equity market to take notice.”
U.S. companies have been bulking up on debt, introducing another wild card into financial markets already rattled by the recent tech selloff and the prospect of rising interest rates. One slice of the high-grade corporate bond universe is fast becoming the epicenter of these concerns. There is $2.5 trillion in outstanding U.S. debt rated triple-B, according to Morgan Stanley , up from $1.3 trillion five years ago and $686 billion a decade ago. That is the most ever for companies rated triple-B, which is the lowest rung of the ratings ladder for companies that are above more speculative, or junk, bonds.
In 2016, the SEC adopted the new rules requiring funds to review liquidity risks and hold a minimum amount of liquid securities, while formalizing a cap on the amount of illiquid holding to 15% of the fund’s net assets. The provision also compelled firms to give the SEC regular snapshots of their funds’ buckets. It’s a complicated task, with many factors that can affect a bond’s liquidity. Newer bonds tend to trade more often than older ones, and larger issues are bought and sold more than smaller bonds, said Eric Jacobson, a senior manager research analyst at Morningstar Research Services LLC. Many higher-quality bonds are also traded by more investors than riskier credits, he added.
MACRO OP-EDS, INSIGHT, EVENTS AND TRENDS
At least $2.4 trillion was raised privately in the U.S. last year. That widened a gap that emerged in 2011 with the public markets, which raised $2.1 trillion, according to the Journal’s analysis of tens of thousands of securities filings and data provider Dealogic. Deals known as private placements, the largest chunk of the private markets, raised at least $1.6 trillion for businesses last year, according to the Journal’s analysis of more than 40,000 filings. The private markets are fueled both by companies eager to raise money without the regulatory burdens of going public and by investors looking for new ways to score large payouts outside of the stock and bond markets. As private capital increases, public markets are shrinking: The number of public companies has fallen by more than half since 1996.
The NRA spent an unprecedented $30 million to install Trump in the White House. Putin has a long track record of illegally financing nationalist opposition groups in the West. If the Kremlin’s NRA outreach culminated in pumping vast sums into the group’s coffers, America’s lax campaign-finance regulations would have posed no obstacle. “There are so many ways that a group like the NRA could be used to channel Russian money into a race, it’s shocking,” says Robert Maguire, who investigates “dark money” for the Center for Responsive Politics. In a letter to Congress, the NRA has denied wrongdoing; it has not denied accepting Russian money.
When Republican officeholders in places like Georgia, North Carolina, Ohio and Indiana come to realize that an A-rating from the NRA is a liability, not an asset, the NRA’s Maginot line will break. The NRA has faced difficult times before, but from our vantage point this is the most vulnerable they’ve been in our professional lifetimes. That’s why they are flipping out.
Brazil’s pension system is unusually generous. Helping make it unaffordable is a demographic shift likely to weigh on Brazil and other emerging economies for decades to come: the steady aging of the population, which is happening faster than in the developed world, leaving these economies less time to adjust. In other words, they’re getting old before they get rich. Throughout Latin America and Asia, decades of falling birth rates and growing life expectancies have produced more retirees with fewer workers to underwrite their care. For government policy makers, this means challenges as burgeoning pension and health costs leave less money for economic development.
California has long possessed the unique authority under the 1970 Clean Air Act to write its own air pollution rules. Traditionally, a dozen other states follow California’s air pollution rules and together they represent one-third of the nation’s auto market. That puts California in an extraordinary position to stage a regulatory revolt, with much of the country’s car market in tow. State officials indicated they would fight the Trump administration. “This is a politically motivated effort to weaken clean vehicle standards,” said Mary Nichols, California’s top air pollution regulator. California, she said, “will vigorously defend the existing clean vehicle standards.”
As M.B.S. grew into adulthood, he brazenly used his status to enrich himself. In his teens, according to people who know him, he visited a series of wealthy businessmen and asked them to put money into his personal investment fund. In a matter of weeks, he raised thirty million dollars. “He’s the son of Salman,” M.B.S.’s friend told me. “It’s not like anyone was going to say no.” According to a story that circulates in Riyadh, M.B.S. demanded that a Saudi land-registry official help him appropriate a property. After the official refused, he received an envelope with a single bullet inside. The episode earned M.B.S. the street name Abu Rasasa, or “father of the bullet.” “The story is true,” the friend said. “I think that M.B.S. realizes that he went too far toward some people in those days, and he has tried to make amends.” (A spokesman for the Saudi Embassy denied the story, but largely declined to coöperate with fact-checking for the rest of the article, describing it as full of “old, incorrect rumors.”)
As President Trump has his tweets, the leader of Turkey has his speeches. President Recep Tayyip Erdogan makes up to three every weekday — two a day on weekends — and his charismatic, combative talks are the primary vehicle of his success. He calls democracy advocates “marauders.” He mocks the German foreign minister as a “disaster.” He is as comfortable in the vernacular as he is reciting poetry. He takes on his enemies publicly by name, pivoting seamlessly from pious to pushy. Even after 15 years at the helm, Mr. Erdogan, whose skills as an orator even his opponents envy, treats every event like a campaign rally — and he turns just about every day into one. He remains the country’s most popular politician and is poised to seek re-election, possibly this year, with polling showing him with over 40 percent support. Much of that appeal can be credited to his ubiquitous media presence and a speaking style that supporters find inspiring, and detractors divisive. Neither side doubts that it has struck a chord with Turkey’s conservative working class.
For countries needing infrastructure, the BRI holds the promise of investment in new railways, roads, ports and other projects. But as the Nikkei Asian Review and The Banker magazine discovered in producing this special report, participating countries also have worries, ranging from a lack of participation by local workers and banks to unmanageable debt hangovers.
I’m focusing on the area I know, rural Iowa, but if the president stays on course with the tariffs, the impacts will hit many rural areas all over America, what I call Trumplandia. “It gives Democrats a generational opportunity to do the political work with farmers they haven’t done since the 1980s farm crisis,” said Matt Russell, a rural sociologist and farmer in Iowa. “Democrats do farm policy really well but are terrible at farm politics. Republicans do farm politics really well but have a history of doing terrible farm policy.” Harvest will be coming in when members of Congress, in recess, return to Iowa to campaign. They will be getting earfuls from rural constituents about the economic impacts of Mr. Trump’s tariffs.
Trump’s “Space Force” has support in Congress as China and Russia try to catch up, but the Air Force says it has the planet covered. Even before Trump’s comments, the Defense Department was under orders to formulate a “concept of operations” document for space war fighting, due this June. That exercise will help to inform how the government develops and acquires new space capabilities, Air Force General John Hyten, commander of U.S. Strategic Command, said Tuesday. “We must normalize space and cyberspace as warfighting domains,” Hyten testified before the Senate Armed Services Committee. “There is no war in space, just as there is no war in cyberspace. There is only war, and war can extend into any domain.”
A global race to automate stores is underway among several of the world’s top retailers and small tech start-ups, which are motivated to shave labor costs and minimize shoppers’ frustrations, like waiting for cashiers. They are also trying to prevent Amazon from dominating the physical retail world as it does online shopping. Companies are testing robots that help keep shelves stocked, as well as apps that let shoppers ring up items with a smartphone. High-tech systems like the one used by Amazon Go completely automate the checkout process. China, which has its own ambitious e-commerce companies, is emerging as an especially fertile place for these retail experiments. If they succeed, these new technologies could add further uncertainty to the retail work force, which is already in flux because of the growth of online shopping. An analysis last year by the World Economic Forum said 30 to 50 percent of the world’s retail jobs could be at risk once technologies like automated checkout were fully embraced.
Earlier this month, CNN’s Brian Stelter broke the news that Sinclair Broadcast Group, owner or operator of nearly 200 television stations in the U.S., would be forcing its news anchors to record a promo about “the troubling trend of irresponsible, one sided news stories plaguing our country.” The script, which parrots Donald Trump’s oft-declarations of developments negative to his presidency as “fake news,” brought upheaval to newsrooms already dismayed with Sinclair’s consistent interference to bring right-wing propaganda to local television broadcasts.
Economic growth, cultural change and decades of work by nongovernmental organizations and successive governments have helped women get more access to education, the internet, bank accounts, loans and subsidies. Recent government surveys of Indian family life suggest women are gaining more financial autonomy as this access has grown. “The change is happening very rapidly,” said Anirudha Dutta, an analyst and author of “Half a Billion Rising: The Emergence of the Indian Woman.” “Even in the same family, you can see what the elder daughter did and the younger daughter is doing is different,” he said.
The independence of central banks has again become a prominent subject in academia, politics and the media. However, this time, in contrast to the past, critical voices dominate. How can this turnaround in public opinion be explained? One possibility is excessive, unrealistic expectations about what central banks can achieve. The biggest threat for independence lies in possible actions by the central bank itself. A permanent threat for independence relates to the coordination with fiscal policies. In a democratic society, independence for the central bank can be justified only if actions are limited to fulfilling a specific mandate.
The fences that crisscross the vast ranches of the U.S. and Australian Outback seem like an unlikely candidate for tech disruption. But several startups are betting that high-tech collars for cattle, goats and other livestock could render the fences obsolete, enabling farmers to round up animals more easily than they do now with workers, dogs and even helicopters. Virtual-fencing startups on at least three continents are looking to sell the collars, which track an animal’s location and use audio signals and mild electric shocks to direct movement. The companies say their products could make shifting a herd as easy as drawing a line on a smartphone app.
USA ECONOMY DATA, CITIES AND STATES
Empty space in regional shopping malls reached a six-year high in the first quarter, adding further stress to regions being hit by a retail earthquake that is shaking up the job market across the U.S. The vacancy rate in big U.S. malls increased to 8.4% in the first quarter of 2018, up from 8.3% in the fourth quarter and the highest since the fourth quarter of 2012, according to real-estate data firm Reis Inc., which studies 77 metropolitan areas. Meanwhile, neighborhood and community shopping centers in 41 of the 77 areas experienced an increase in vacancy during the 12 months ending on March 31.
The Institute for Supply Management said Monday its index of factory activity settled at 59.3 in March, down slightly from 60.8 the prior month. Any reading above 50 indicates rising activity, as measured by factors such as product sales, hiring and production. The latest reading, based on a survey of factories, was slightly below economists’ expectations of a reading of 59.8. But it remained near the highest levels of the past decade. In February, the index stood at the highest level since 2004.
GLOBAL ECONOMY, INTERNATIONAL
It’s been a dramatic reversal in sentiment for Canada’s consumers. Consumer sentiment has now declined every month this year, driven lower by worries over growth, with almost one-in-three Canadians anticipating the economy will weaken over the next six months. Over the past three months, the drop in confidence from near-record highs reflects a deterioration in financial conditions for households. That includes rate hikes by the Bank of Canada, a weakening Canadian dollar, sharp declines in stock prices and renewed worries about the housing market.
POSITIONING, INFLECTION, MARKET CALLS
Obstacles are piling up in Japan, everything from political scandal to a rising yen. Foreign investors are fleeing and now Goldman Sachs Group Inc. says its forecasts for stocks were too high. The brokerage lowered its three-month target for the Topix gauge by 5.6 percent to 1,700, implying a slight decline from its current level. Goldman also reduced its six-month and 12-month targets 2.7 percent and 2.5 percent respectively.
“Yes, you have trade war issues, you have uncertainty around the tech sector, but if things stay where they are and the first-quarter earnings show solid growth, stocks will have a good reason to rise,” Don Selkin, a 75-year-old chief strategist at Newbridge Securities Corp., said by phone. “It’s ironic that the markets are going down ahead of the earnings season as the earnings growth estimates are going up.”
DEALS, MERGERS, IPOs, LBOs, RESTRUCTURINGS
Spotify is not selling any new shares and there will be no IPO price as the starting point for its debut. However, market makers on the NYSE floor and Spotify’s financial advisers led by Morgan Stanley will work together to match buyers and sellers to settle on an opening price, which could take hours. A price range will emerge and eventually tighten to an opening level. Shares are unlikely to open at least until midday, people with knowledge of the plans said.
Early-stage deal talks between Walmart Inc. and Humana Inc. are deepening anxiety in the hospital sector, which already has been grappling with sluggish growth and competition from cheaper health-care options. Hospitals have been eyeing Walmart nervously for years as it advances into health care, seeking to leverage its enormous purchasing heft, physical reach and focus on price. The Bentonville, Ark., retailer already operates pharmacies and primary-care clinics and plans to begin offering lab-testing services. It has also recently increased its direct negotiations with hospitals for competitive prices on some procedures for its employees.
General Electric Co. has reached a deal to sell part of its health-care information-technology business to private-equity firm Veritas Capital for $1.05 billion in cash, the latest move from the conglomerate to streamline its operations.
CBS Corp. will offer less than the current market value of Viacom Inc. in its opening bid for the owner of MTV and Nickelodeon, according to a person with knowledge of the matter, showing how far apart the companies are as they explore recombining.
HEDGE FUNDS, PRIVATE EQUITY, MONEY MGMT
Devet is an extreme example of a hedge fund finding a way to stay afloat in a sector where big is increasingly seen as best. Institutional investors like pension funds and endowments, now the biggest investors in hedge funds, often put money with bigger, better-known managers, rather than risk backing a startup. Bigger funds are usually more able to absorb rising compliance costs and benefit from economies of scale.
Three and a half years after joining, Mr Gross’s flagship fund at Janus Henderson — the newly merged group — has just $2.2bn in assets in a blow to the company’s plans for growth. Mr Gross once oversaw close to $300bn in the Pimco total return fund, formerly the world’s largest bond fund. Randy Waesche, president and chief executive of Resource Management, a financial advice group, said Janus Henderson would be “absolutely” disappointed that Mr Gross had failed to draw new investors. “He was a darling of Wall Street. They were expecting enormous flights of capital to Janus,” he said.
ENERGY COMPANIES, NOCs, INDUSTRY
Big oil is starting to think small. Once defined by massive spending and ambitious exploration, some of the world’s biggest energy companies have begun to preach frugality. Investors increasingly favor producers that promise to increase cash payouts, rather than boosting spending to drill for more oil. An increasing number of investors want conservative, stable returns—not unlike why some look to the utility industry. As surging U.S. crude production continues to threaten price rallies with new supply, investors have become far more skeptical about growth. Instead, the push for cash is catching on.
In 2014, the US shale industry helped tip itself into a downturn when booming production created a glut on world markets. Now investors are urging it to avoid making the same mistake a second time. Capital discipline and shareholder returns should be the watchwords for the exploration and production industry, management teams have been told, and many of them have responded. The message from equity investors to the industry has been unambiguous. “Don’t just drill, drill, drill,” says Kevin Holt of Invesco, the fund management group. “You have got to have a value proposition.”
POLLUTION, CLIMATE & ENVIRONMENT
Antarctica’s ocean-front glaciers are retreating, according a new satellite survey that raises additional concerns about the massive continent’s potential contribution to rising sea levels. Antarctica, which contains enough ice to raise the oceans by about 200 feet, is a continent of ice that flows outward to the ocean at numerous large glaciers. These mostly submerged glaciers rest deep on the seafloor at a point called the “grounding line,” where ocean, ice and bedrock meet. But at 10.7 percent of these glaciers, the ice masses are moving at a significant speed back toward the center of the continent as they melt from below, often because of the incursion of warm ocean water, which causes the grounding line to retreat. Only about 1.9 percent of glaciers were growing at a significant speed, suggesting a net retreat.
Revising the standards could have a significant effect on US oil consumption. Securing America’s Future Energy (SAFE), a policy group, suggested that if the standards were frozen so that they were no tighter in 2025 than in 2021, US oil consumption could be as much as 1.5m barrels a day higher than if the Obama-era plan to ratchet them higher had remained in place. Other estimates of the impact are much lower, however. Jason Bordoff of the Center on Global Energy Policy at Columbia University suggested that if 2022-2025 increases in standards were cancelled, the effect would raise consumption by about 200,000 barrels a day by 2025, although it would increase further over time as more new cars came on to the roads.
It took officials 12 months to identify the source of the outbreak, which has led to nearly 200 deaths in South Africa. Health officials believe they have identified it: bologna. Since January last year, 982 confirmed cases of listeriosis had been recorded, the National Institute for Communicable Diseases in South Africa reported on Thursday. The infection, caused by food that has been contaminated with the bacterium Listeria monocytogenes, is often lethal.
BREXIT, SCOXIT, LONDON, UK ECONOMY
More than a fifth of manufacturing firms are planning to lay off workers to cope with the costs of Brexit, according to a survey that suggests the sector is already losing business. More than one in 10 (11%) of manufacturers say that they have already lost contracts, according to Chartered Institute of Procurement and Supply data shared with the Observer. Unions warned companies not to use Brexit as “an excuse to lay people off”.
Swiss bankers’ hopes of securing improved access to EU markets have been dashed by Britain’s plans to quit the bloc, the head of Switzerland’s banking association has said. Herbert Scheidt, said Brexit had politicised technical talks about encouraging business across the Swiss-EU border. “It makes it harder to improve market access at the speed we had hoped before Brexit,” the chairman of the Swiss Bankers Association told the Financial Times.
The move reflects a stark shift in government focus. After decades of urbanisation and rural neglect, China’s Communist party is seeking to revitalise the countryside, where wages and standards of living have stagnated compared with those of big cities. “In the long term, China’s continued economic development will depend on people in fourth-tier cities, county towns and villages joining the consumer class,” says Even Pay, an agriculture analyst at the Beijing-based research firm China Policy. “This is the real aim of the rural revitalisation strategy.”
After years of delay and quiet opposition from vested interests, China will push ahead with a property tax that is viewed as crucial to taming the country’s housing bubble. House prices in major Chinese cities are among the highest in the world in terms of price-income ratios, with speculative demand from Chinese investors — who see few other good places to park their savings — as a major driver. The result is an estimated 50m empty homes, according to a broad survey by researchers from Southwestern University of Finance and Economics in Chengdu.
GEOPOLITICS, CRIME, TERRORISM
The heat was stifling, the power out. So the transients, mostly women and children displaced from nearby towns, ventured outside their temporary housing on Monday for some air, witnesses said. Then the Saudi warplanes struck. In what medics and residents in Yemen’s western port city of Al Hudaydah described as an instant midmorning slaughter in a residential housing area, the warplanes fired missiles at the civilians, literally cutting them to pieces as they sought relief from the 92-degree temperature. At least 14 were killed and nine wounded.
Saudi Arabia’s crown prince said Israelis are entitled to live peacefully on their own land in an interview published on Monday in U.S. magazine The Atlantic, another public sign of ties between Riyadh and Tel Aviv appearing to grow closer. Asked if he believes the Jewish people have a right to a nation-state in at least part of their ancestral homeland, Mohammed bin Salman was quoted as saying: “I believe the Palestinians and the Israelis have the right to have their own land. But we have to have a peace agreement to assure the stability for everyone and to have normal relations.”
In a head-spinning turnaround, Prime Minister Benjamin Netanyahu of Israel announced on Monday that he had reached an extraordinary deal with the United Nations refugee agency to resettle thousands of African asylum seekers in Western countries. Within hours Mr. Netanyahu suspended the deal after coming under heavy criticism from his coalition partners. The flip-flop appeared to reflect Mr. Netanyahu’s fear of losing support from those partners or from his right-wing constituency, who call the asylum seekers infiltrators and want them gone. His opponents on the left described the prime minister’s behavior as an embarrassing and cowardly surrender under pressure.
PRIVACY, HACKING, CYBERWAR, SURVEILLANCE STATE
A data analysis conducted by an outside research firm, and independently verified by BuzzFeed News, shows that a popular gay dating app is sharing sensitive information about its users’ HIV status with two other companies.
Telegram has told Russian regulators that it is technically unable to hand the encryption keys to user accounts to the country’s secret services, just weeks after the messaging platform was ordered to do so or risk being banned in the country Roskomnadzor, Russia’s communications watchdog, told the company last month that it had two weeks to give the FSB, successor to the KGB security agency, access to the company’s encrypted messages or face the possibility of being blocked.
PROPAGANDA, CORRUPTION, AUTHORITARIANISM
Last month, anchors at local news stations across the country made identical comments about media bias. The script came from their owner, Sinclair Broadcast Group. Although it is the country’s largest broadcaster, Sinclair is not a household name and viewers may be unaware of who owns their local news station. Critics have accused the company of using its stations to advance a mostly right-leaning agenda.
Last year, Sinclair announced that it would buy Tribune Media for $3.9 billion. If the deal goes through, Sinclair, already one of the largest owners of local news stations in the country, will become even bigger. It could wind up with more than 200 stations. The deal was made possible partly because the Federal Communications Commission under the Trump administration has been relaxing or eliminating a number of rules for broadcasters, including one that limits how many local news stations a single company can own.
Trump has good reason to stick up for Sinclair. He has few safe spaces in legit news media, places where he can be relatively sure that his policies or scandals won’t be pressed too hard. So far, Sinclair stations have been one of those safe spaces. That’s all the more insidious because people expect that kind of contortionist support for Trump when they tune in to something like Fox News, but probably have some assumption of objectivity from their local news. And as Politico reports, last December Jared Kushner was openly bragging about striking a deal between Sinclair and the Trump campaign.
The police registered 1,453 anti-Semitic incidents in Germany last year, more than in five of the previous seven years, and organizations including the American Jewish Congress say fewer than a third of such incidents get reported. Their stubborn persistence in the country where the Holocaust was plotted and executed is raising concern that decades of work to eradicate anti-Semitism are slowly being undone as prejudice against Jews spreads beyond its traditional home in the far right.
Costa Ricans elected a candidate from the ruling party to be their next president, confounding polls which had predicted a win for an evangelical preacher who’d campaigned on his opposition to gay marriage. Carlos Alvarado, 38, a novelist and former labor minister will take office on May 8, after winning 61 percent of the vote, with 95 percent of polling stations reporting.
Mexican left-wing presidential candidate Andres Manuel Lopez Obrador has an 18-point lead ahead of the July 1 election, according to a poll published on Monday that showed him with a growing advantage at the start of formal campaigning. A Lopez Obrador victory could usher in a Mexican government less accommodating toward the United States, where President Donald Trump has stoked trade tensions with Mexico and aggressively moved to curb immigration. Lopez Obrador has backed the North American Free Trade Agreement, but his plan to review newly issued oil contracts sparked worries he will deter foreign investment.
“The Obama coalition came out for Obama, but not when he wasn’t on the ballot. I think it’s the same for Trump,” said Chris Krueger, a strategist at Cowen & Co., a financial services and research firm. “They embraced the cult of personality around the candidate, not the party.” The question is particularly pressing in places such as southeast Iowa, which makes up one of the 20 congressional districts that had backed Mr. Obama twice before supporting Mr. Trump. Seventeen of those party-switching districts are battlegrounds for the House this year, analysts say, giving them a central role in the battle between the parties for control of the House.
SCANDALS, LAWSUITS, FINES, REGULATORY
Mozido’s focus was providing mobile wallets and other payments products to roughly two billion people globally who lack bank accounts. The company was an active acquirer of other fintech companies, including one that made technology for small businesses to cash checks in their physical stores and another that made it easier for foreign merchants operating in China to accept payments online. Mr. Liberty, 57 years old, convinced sophisticated investors including asset-management giant Wellington Management Co., hedge-fund titan Julian Robertson and Mastercard Inc. to pour hundreds of millions of dollars in total into Mozido. That money, according to the SEC, was later shifted among a series of shell companies as the company unraveled. A spokesman for Mr. Robertson declined to comment, and a Mastercard representative had no immediate comment.
A new Netflix series about a sprawling corruption investigation has muscled its way into Brazil’s heated politics, outraging supporters of a leftist former president who is trying to make a comeback and stirring debate about how closely a docudrama should adhere to the facts. The series, “The Mechanism,” has drawn heat since it was released on March 23. Critics say its inaccuracies are unfair to a former president, Luiz Inácio Lula da Silva, who is the leading candidate in the polls for the election this fall. Others see in the show a more or less fair, if depressing, depiction of an intricate investigation that has so far seen more than 100 people convicted, including senior political figures like Mr. da Silva.
SILICON VALLEY, UNICORNS, STARTUPS, VC
Magic Leap Inc. has quietly begun sending its mysterious augmented reality headsets into the wild. A small group of software developers recently received devices at their offices, according to people familiar with the matter. Magic Leap is the most prominent start-up working on augmented reality, technology that makes it appear as though three-dimensional digital objects exist in the physical world. It has raised more than $2.3 billion, making it one of America’s top-funded tech start-ups in recent years. It’s developing and manufacturing parts for the headsets in facilities in Florida while seeking to create a software platform.
The Indonesian government said Monday that ride-hailing firms Grab Inc. and PT Go-Jek Indonesia must be registered as transportation companies to ensure safety and provide job protections for their drivers. The move removes the option for the firms to be designated as technology companies, which facilitated easier use of drivers as partners and sparked resistance from traditional taxi operators and, increasingly, their own drivers.
CONSUMER TECH, SOCIAL MEDIA, E-COMMERCE, MOBILE
Apple Inc. is planning to use its own chips in Mac computers beginning as early as 2020, replacing processors from Intel Corp., according to people familiar with the plans. The initiative, code named Kalamata, is still in the early developmental stages, but comes as part of a larger strategy to make all of Apple’s devices — including Macs, iPhones, and iPads — work more similarly and seamlessly together, said the people, who asked not to be identified discussing private information. The project, which executives have approved, will likely result in a multi-step transition.
MEDIA, CABLE, SPORTS, ENTERTAINMENT
This year’s box office so far has been a story of one completely dominant movie, “Black Panther,” highlighting a potentially troubling trend for Hollywood in which ticket sales are increasingly concentrated among just a few ultrasuccessful pictures. With $650.7 million and counting, “Black Panther” is on track to become the third highest grossing movie ever in the U.S. and Canada. It accounted for 23% of all ticket sales in the first three months of the year, ending Saturday, according to comScore. That is the second-highest percentage ever behind only “Titanic,” which took 25% in the winter of 1998.
Eight years after the merger, the ticketing business is still dominated by Live Nation and its operations extend into nearly every aspect of the concert world. Ticket prices are at record highs. Service fees are far from reduced. And Ticketmaster, part of the Live Nation empire, still tickets 80 of the top 100 arenas in the country. No other company has more than a handful. No competitor has risen to challenge its pre-eminence. Now Department of Justice officials are looking into serious accusations about Live Nation’s behavior in the marketplace.
AUTOS, ELECTRIC, SELF-DRIVING
In a driverless world, carmakers are still clutching for the steering wheel. The advent of self-driving vehicles will force manufacturers to make a choice: do they want control of their vehicles as they become service providers to consumers directly or are they happy to become a supplier to tomorrow’s robo-taxi operators? Competing in this market — something that companies such as the Nissan-Renault-Mitsubishi Alliance and General Motors aim to do — takes vehicle manufacturers far out of their comfort zone.
Making bold safety claims and announcing new partnerships in the wake of the industry’s worst accident yet could come across as tone deaf. It might even seem like a victory dance. Waymo spent the last year suing over Uber’s driverless technology before settling in February, and now that technology is being scrutinized by politicians, investigators, and even Uber’s own suppliers. Can Waymo really be so sure its own technology is impervious to tragic error? That’s a question Krafcik, 56, will grapple with in his emergence as an important face of autonomous driving. He must now convince an industry and public given another reason to be skeptical of unproven technology undergoing growing pains on crowded roads.
AIRLINES, SHIPPERS, RAIL, TRANSPORTS
A U.S. trucking shortage that has pushed up freight costs for everything from cereal to toothbrushes is about to get worse. On Sunday, police nationwide began enforcing rules requiring most big rigs to use electronic logging devices to record driver hours. While truckers have long been barred from driving more than 11 hours a day, the new ELDs prevent them from fudging their times on paper logs. That means more trucks are likely to be parked when drivers hit their limits.
Aviators are angry that UPS has turned to third-party cargo airlines to help make up for a shortage of aircraft capacity. Accusing UPS of years of poor planning and insufficient investment, the Independent Pilots Association has complained to an industry arbitrator that the courier is violating its labor contract by outsourcing flying that should be done by its own pilots.
AEROSPACE, MILITARY & DEFENSE
Space Exploration Technologies Corp. launched a rocket carrying 5,800 pounds of supplies Monday afternoon as part of its longstanding contract with NASA to ferry cargo to the International Space Station.
Indian authorities have confirmed they have lost contact with a powerful communications satellite, two days after it was launched. The indigenously built GSAT-6A satellite was designed to improve communications for the armed forces. The head of the Indian Space and Research Organisation (Isro) told reporters that “an unfortunate power supply anomaly” was to blame. India has not lost a satellite in more than a decade.
Condoms might make for safer sex — but they’re at the center of the riskiest new social media challenge. The viral video craze — dubbed “The Condom Challenge” — is striking fear into parents as teenagers record themselves dangerously snorting the rubbers and pulling them through their throats. A number of clips emerging on YouTube show kids choking as they attempt to replicate the trend.
A museum wasn’t sure whose head they had put on display. That’s when the F.B.I.’s forensic scientists were called in to crack the agency’s oldest case. The F.B.I. had never before worked on a specimen so old. If its scientists could extract genetic material from the 4,000-year-old mummy, they would add a powerful DNA collecting technique to their forensics arsenal and also unlock a new way of deciphering Egypt’s ancient past.
If Nelson Mandela was the saint of the anti-apartheid movement, Winnie Madikizela-Mandela, his wife of 38 years who has died at the age of 81, was its fallen angel. While his 27 years in prison from 1963 shielded Nelson Mandela from the daily realities of fighting a racist white regime, she was thrust pell-mell into the ugly, violent and dark vortexes of the struggle against oppression. It was a fight from which she emerged with her reputation badly damaged even if, for many, she was forever to remain the “mother of the nation”.
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