Macro Links Apr 4th – Farmers in Peril
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MACRO LINKS TABLE OF CONTENTS (Click or Scroll Down)
- AMAZON, FACEBOOK, TESLA
- BITCOIN, CRYPTOCURRENCY, INITIAL COIN OFFERINGS
- BLOCKCHAIN, FINTECH, DIGITAL PAYMENTS
- TRADE, PROTECTIONISM, REGULATION, OVERSIGHT
- BUDGET, INFRASTRUCTURE, HEALTHCARE, IMMIGRATION
- GUN CONTROL, SHOOTINGS, MARIJUANA, OPIOIDS
- TAXATION, WEALTH HAVENS, INEQUALITY
- RUSSIA MEDDLING, RUSSIA PROBE, TRUMP WORLD
- INFLATION, RATES, DEBT AND CREDIT, BALANCE SHEETS
- MACRO OP-EDS, INSIGHT, EVENTS AND TRENDS
- CENTRAL BANKS & MONETARY POLICY
- USA ECONOMY DATA, CITIES AND STATES
- GLOBAL ECONOMY, INTERNATIONAL
- POSITIONING, INFLECTION, MARKET CALLS
- COLOR, EARNINGS, SENTIMENT, VALUATIONS
- CREDIT, YIELD, BUYBACKS, CORPORATES
- DEALS, MERGERS, IPOs, LBOs, RESTRUCTURINGS
- REAL ESTATE, HOUSING, REITS, COMMERCIAL
- HEDGE FUNDS, PRIVATE EQUITY, MONEY MGMT
- ENERGY CRUDE OIL, OIL SANDS, SHALE
- ENERGY RENEWABLES, NUCLEAR
- 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
- MEDIA, CABLE, SPORTS, ENTERTAINMENT
- SCIENCE, NATURE, PSYCHOLOGY
AMAZON, FACEBOOK, TESLA
President Donald Trump will dine on Tuesday with Oracle Corp. co-chief executive Safra Catz, whose company is competing with Amazon.com Inc. for a multibillion-dollar Pentagon contract, people familiar with the plans said. They’ll be joined by venture capitalist Peter Thiel, the people said.
The tweet was the fifth in as many days that Mr. Trump has aimed at Amazon, whose stock had been buffeted by the president’s focus before rebounding in Tuesday’s trading. In his latest tweet, Mr. Trump also targeted the Postal Service over what he said are the multibillion-dollar losses stemming from Amazon deliveries. The package business has helped bolster the Postal Service’s financial strength, according to officials, and the Postal Service is mandated by Congress to charge enough to cover its costs.
President Trump has argued in recent days that the U.S. Postal Service has lost a fortune delivering Amazon packages at a discount. However, some of the agency’s problems might lie with the president. The top planning and oversight board at the Postal Service has been unable to meet and consider matters such as the agency’s long-term relationship with Amazon, because the president has failed to appoint any of the nine governors to the 11-member Board of Governors of the U.S. Postal Service.
The long-time editor flatly denied the president’s claims that his paper acts as a lobbyist for Amazon. “There isn’t anybody here who is paid by Amazon,” he said. “Not one penny.” Baron also rebuffed Mr. Trump’s assertions that Bezos has a hand in leading the Post’s coverage. “I can’t say more emphatically he’s never suggested a story to anybody here, he’s never critiqued a story, he’s never suppressed a story,” he said. “If he had been involved in our news coverage, you can be sure that you would have heard about it by now,” Baron added. “It hasn’t happened. Period.”
Judging from his tweets, President Donald Trump appears to have the knives out for Amazon.com Inc. But inside the White House, there are no active discussions about turning the power of the administration against the company, according to five people familiar with the matter who spoke on condition of anonymity. None of the five people was aware of any ongoing discussion about turning Trump’s tweets into action against Amazon, not on the legal or regulatory fronts, or even regarding its reliance on the U.S. Postal Service, which has drawn the lion’s share of Trump’s wrath.
Amazon’s lobbying expansion reflects its sprawling operations in businesses that are sensitive to congressional legislation and government regulation. It has lobbyists working on drones, autonomous vehicles and air cargo; cyber security, data privacy and intellectual property infringement; cloud computing and Pentagon procurement; and tax and food stamps. By other measures Google remains the biggest tech force in Washington. Google parent company Alphabet is a more free-spending user of “hired gun” external lobbyists and its total lobbying outlay of $18m in 2017 exceeded Amazon’s by $6m.
Long before Christopher Wylie blew the whistle on how Cambridge Analytica had obtained Facebook data, harvested from 50m people and allegedly used to target voters in the 2016 US election, activists, journalists, and media analysts in south-east Asia were raising the alarm about the weaponisation of the social media website as a tribune for authoritarian leaders and a powerful vector for dangerous hate speech. In the Philippines, Cambodia and Myanmar, controversy is now building over Facebook’s outsized role as a forum for news and political discourse in countries where democratic governance has traditionally been weak. With more than 300m monthly users — roughly half the population of south-east Asia — the platform wields enormous influence.
Facebook has barred more accounts belonging to the internet Research Agency, the Russian troll farm that used the social network to try to influence the 2016 US presidential election. Chief security officer Alex Stamos said the company had taken down 70 Facebook and 65 Instagram accounts controlled by the IRA. The Russian group’s activities have been probed by Robert Mueller, the special counsel investigating Kremlin meddling in the White House race, and by congressional committees.
Things may just keep on getting worse for Tesla Inc. “Tesla shares may be unable to escape a continued selloff as a confluence of unfortunate events may seal its fate regardless of Q1 production results,” the strategists wrote in a note to clients Tuesday prior to the results. “A shift in sentiment in both the equity and debt markets the past two weeks may have altered the reward-risk dynamic of the stock, making any debt refinancing potentially more difficult and more expensive.”
Tesla is in one of the most critical phases in its history, a make-or-break period in which it must boost production of the Model 3 to prove it can create a car for the masses, or face severe financial consequences. The company finished last year with $3.4 billion in cash on hand after its negative cash flow averaged about $1 billion a quarter on average—a pace analysts have said means the company would need to raise more money this year unless it significantly boosts production.
The fantasy that Tesla will one day dominate the global automotive industry is fading. The struggling electric-car marker announced it made 2,020 Model 3 sedans in the final week of the first quarter and plans to match that output next week. Tesla produced nearly 10,000 Model 3s in the first quarter, a fourfold increase from the previous quarter. Yet even that final, frantic week’s production fell short of Tesla’s own guidance—a familiar pattern. That didn’t stop the company from congratulating itself in its press release.
“It was not funny, because it’s not a joking matter,” said Gene Munster, who leads research for the venture-capital firm Loup Ventures. “It wasn’t appropriate, because they had probably their worst week since the company was started, and it’s just not the week to be making jokes.”
BITCOIN, CRYPTOCURRENCY, INITIAL COIN OFFERINGS
Digital token sales are letting young startups raise funds fast, but avoiding the world of venture capital and Wall Street’s other established channels isn’t free: Cryptocurrency trading platforms may be charging 10 times more to list tokens than what traditional exchanges demand for securities, according to a report on Tuesday by Autonomous Research. Costs for a crypto listing range from $1 million “for a reasonably regarded token, to $3 million for an opportunity to get quick liquidity,” Autonomous Research wrote, cautioning that the figures are based on conversations among market participants and aren’t exact. That compares with the roughly $125,000 to $300,000 — plus $100,000 to $500,000 of annual fees — that exchanges charge to list fully registered equities, the report said.
Federal authorities have arrested two founders of a virtual currency that raised $32 million from investors last year and won an endorsement from the boxer Floyd Mayweather. The co-founders of the Centra virtual currency, Sam Sharma and Robert Farkas, were arrested on Sunday, a day before the Securities and Exchange Commission released a complaint against the men and announced that it was halting the project. Centra raised $32 million last summer and fall in a so-called initial coin offering, a method of fund-raising in which companies sell custom virtual currencies. The Centra team said at the time that the Centra token would give investors access to a new virtual currency exchange and a virtual currency debit card that would operate on the Visa and Mastercard networks.
Software tycoon turned cryptocurrency enthusiast John McAfee recently revealed that he charges $105,000 for each tweet he sends out promoting digital coins or initial coin offerings (ICO). Last week, McAfee tweeted that his team had written up a guide on how his promotional tweets worked, and posted it to McAfee Crypto Team, an organization McAfee and his team put together to promote ICOs.
Overstock.com, the first major retail to accept Bitcoin (BTC) as a payment option in 2014, has decided to pull its secondary stock offering due to its continuing falling share price, the Wall Street Journal reported yesterday, April 2. The company had seen its shares skyrocket last fall as news broke that Overstock would be developing an alternative Initial Coin Offering (ICO) trading platform. However, after reports at the beginning of the month that the US Securities and Exchange Commission (SEC) was looking into tZero, Overstock’s crypto subsidiary, as part of its overall cryptocurrency probe, the company saw its share price drop around 10 percent.
Bitcoin mining hardware firm Bitmain unveiled its long-rumored ethereum mining tech on Monday. The Antminer E3 is set to ship this July, according to Bitmain’s website, at a price of $800 per unit. According to statements, the company is limiting orders to “one unit per user” with restrictions on shipping to China and Taiwan. As was perhaps expected, the listing quickly drew interest from would-be buyers. As of press time, the website indicates that the first batch has already sold out.
Asset valuations are stretched across a broad set of financial markets and some cryptocurrencies have witnessed “extreme volatility,” Federal Reserve Governor Lael Brainard said, though overall risks to the financial system are still low. “Estimates of risk premiums and spreads in a range of markets remain narrow by historical standards,” Brainard said Tuesday in prepared remarks at New York University’s Stern School of Business.
Monex Group, a Tokyo-based financial services group, is considering buying Coincheck. Shares in Monex jumped 23% off news that the retail investor was eyeing the Japanese exchange that was notoriously hacked this year. The move would benefit both parties, giving Monex an entry into the burgeoning crypto markets and granting Coincheck’s owners a way out.
The Bancor Network (Bancor), a decentralized cryptocurrency exchange, is launching its native wallet with built-in automated token conversions, Bancor privately told Cointelegraph. The wallet symbolizes the next step in the the company’s development of a liquidity solution aimed at making digital currencies operable by common users, including crypto amateurs. The company claims that users are now able to convert their virtual currencies directly from their wallets, without needing to match two parties in an exchange.
A small group of about twenty over-the-counter (OTC) traders and clients including big investors, miners, payment processors and hedge funds, has reached a monthly trading volume worth billions of dollars. Instead of using an online exchange like Coinbase or Kraken, the participants close major deals chatting on Skype and settle them by sending fiat via bank wires and cryptocurrency directly to each others’ wallets.
The key information given out by Coincheck in their first public statement after the hack was as follows. The hack only involved NEM Coins; The hackers managed to steal the private key for the hot wallet where NEM coins were stored; The stolen money belonged to the customers of the exchange; and when Coincheck became aware of the breech, they halted withdrawals in the hope of stemming the drain. The biggest issue that emerged with these details being made public was that Coincheck had kept its NEM stocks on a simple hot wallet rather than a much more secure multisig wallet. The exchange claimed that the security setup differed between various coins on the exchange. Other cryptocurrencies on the site were stored in multisig wallets, but the NEM was not. When pressed by the media, the company insisted that security standards were not low, however the lack of multisig protection for NEM did not seem to agree with that statement.
The deal, if completed, would be aimed at fully restoring Coincheck to normal operations after the January hack, in which the exchange lost 523 million units of a virtual currency called NEM, then valued at ¥58 billion ($547.5 million at current rates). In March, Coincheck spent ¥46.3 billion to compensate 260,000 customers whose currency was stolen.
Two weeks after Venezuela’s cryptocurrency scheduled sale date, many aspects of the Petro remain a mystery and initial coin offering rating sites are already calling it a fraud. Rating website ICOindex.com gave the token a “scam status,” saying the project was missing critical information, from the description of the mechanism to its technology and supposed oil-backing. “We can discourage people from wasting money on this project,” the site reads. Another rating site, ICObench, rated the Petro 1.6 points out of 5. Other ICO raters, including Cryptorated and ICOreview, haven’t even bothered to review the project, Criptonoticias reported.
Some 60 percent of mining traffic originates from computers with IP addresses linked to colleges and universities, Vectra found, with health care is the next highest industry for mining traffic at only 3 percent. That means college students — or in some cases, hackers — are mining crypto from their dorm rooms in massive amounts taking advantage of the free electricity.
BLOCKCHAIN, FINTECH, DIGITAL PAYMENTS
Blockchain technology is driving economic transformation and Liechtenstein wants to be in the front seat, according to the country’s prime minister. As such, the Liechtenstein government has set out to draw up “sensible,” comprehensive blockchain legislation to create a legal environment that’s conducive to innovation and light on regulation.
In their executive summary, Shivom states that their objective is to create the world’s largest genomic data hub. Every participant who chooses to have their genome sequenced and stored will control who accesses it, and will also have the opportunity to share it with scientists for financial incentives. The sale of genomic testing kits to donors will form part of Shivom’s revenue plan. Members of the Shivom ecosystem will have access to ‘an open marketplace for healthcare providers to add their apps and services, alongside genomic data analytics and personalised medicine.’
Two of the largest health insurance providers in the U.S. announced Monday that they would pursue a blockchain pilot aimed at improving the quality of healthcare data. UnitedHealth Group and Humana – who are largely rivals in the health insurance industry – said that they would develop the pilot in cooperation with MultiPlan and Quest Diagnostics. UnitedHealth Group will participate through two of its subsidiaries, UnitedHealthcare and Optum.
Walmart is expanding its money transfer operation to 200 countries, the latest move in the retail giant’s slow but steady push into financial services. Through the new scheme, people will be able to deliver money from Walmart’s nearly 5,000 US stores to locations abroad within 10 minutes, the company said. Like its main rival Amazon, Walmart is encroaching on territory historically dominated by big brick-and-mortar lenders. As more consumers increasingly rely on Walmart and Amazon for their daily shopping, tie-ins to their finances are another way to keep customers on the companies’ websites and visiting their stores.
TRADE, PROTECTIONISM, REGULATION, OVERSIGHT
In addition to advanced technologies such as communication satellites, the list includes products ranging from various types of steel to television components, medical devices, dishwashers, snow blowers and flame throwers. The proposed tariffs cover a number of sectors, from health care to aviation and auto parts. “Wars start with battles, and the battles have started,” Gutierrez, co-chair of the consulting firm Albright Stonebridge Group, said in an interview in Mexico City. Chinese President Xi Jinping “can’t afford to look like he’s getting pushed around.”
The 25 percent tariff on pork that China imposed on Monday is expected to be particularly harmful, including in regions that supported the president, like Iowa, North Carolina and Indiana. Last year, American farmers sent more than a billion dollars’ worth of pork to China, their largest export market by value after Japan and Mexico. “Because we’re so blessed to have America feed the world, we’re also the first industry to get slammed whenever there are trade difficulties between the U.S. and other countries,” Denise Bode, the coordinator for the American Fruit and Vegetable Processors and Growers Coalition.
We do not know yet if it’s fair to say the United States and China are in a trade war. War is used here as a metaphor in any case, but it’s a useful word to keep in mind because in a war, people get hurt. Some American farmers say they are paying the price for the aggressive trade actions of President Trump, actions he’s taken against China.
The Trump administration revealed plans for a 25 per cent tariff on 1,333 Chinese products ranging from industrial robots to locomotives in retaliation for what it said had been decades of state-backed intellectual property theft by Beijing. The list released on Tuesday covers imports worth some $50bn last year and represents the most aggressive US trade response to China’s actions since President Richard Nixon normalised diplomatic relations in the 1970s.
Trump’s latest protectionist move threatens to upend global supply chains for corporations such as Apple and Dell, raise prices for American consumers who have grown accustomed to inexpensive electronics and aggravate tensions between the world’s two largest economies. “The pain will be very visible and the potential gains will be very abstract. The administration hasn’t prepared the U.S. for the downsides of a trade war,” said Brad Setser, a former White House economist in the Obama administration.
“What the Trump administration doesn’t understand is that China has enormous leverage in this co-dependent economic relationship,” said Stephen Roach, former chairman of Morgan Stanley Asia and now a senior fellow at Yale University. “China is America’s third-largest and most rapidly growing export market, as well as the largest foreign owner of U.S. Treasuries. The harder we squeeze them, the more we can expect them to exploit these vulnerabilities of the U.S. economy.”
China’s imports of American wine reached $82 million last year — not including bottles entering duty-free through Hong Kong — a sevenfold increase in the last decade. But growing visibility may have turned Napa wine into easy prey. “Wine is something people can relate to,” said Jim Boyce, who has been covering the industry from Beijing for a decade on his blog, the Grape Wall of China. “It’s like putting a tariff on Chinese dumplings. It’s something you can feel on an emotional and personal level.” The 15 percent tariff, announced Monday, on top of existing tariffs and taxes, is a gut punch to winemakers marketing their wares to the mushrooming legions of young, recently wealthy Chinese.
As President Donald Trump railed against a growing trade deficit last year, two countries in Asia quietly cut their bilateral surpluses with the U.S. It’s unclear what they got in return. India and South Korea were among a handful of nations worldwide that narrowed their trade surpluses with the U.S. in 2017 by raising imports of U.S. goods, long before Trump announced tariffs aimed at offsetting the U.S. deficit and balancing trade with partners.
Trump threatened to tax German-made cars sold in the U.S. in a stump speech near Pittsburgh last month, escalating a spat with the European Union over steel and aluminum tariffs. The barbs keep coming despite German automakers taking pains to showcase their U.S. production footprint, with BMW inviting the president to its plant in South Carolina last year and Volkswagen AG expanding production in Tennessee.
The United States was instrumental in the creation of the first International Coffee Agreement (ICA) in 1962, which set export quotas based on an indicator price established by the ICO. The goal was to stabilize coffee commodity prices worldwide for the benefit of both producing countries (sellers) and consuming countries (buyers). Though it has not had regulatory teeth regarding export quotas since failed negotiations in 1989, the agreement has been renewed seven times since its creation, and is currently supported by countries representing 98 percent of the world’s coffee production, and 83 percent of the world’s coffee consumption, the latter including the support of all of the European Union, Japan, Russia, Norway, Switzerland and Tunisia.
BUDGET, INFRASTRUCTURE, HEALTHCARE, IMMIGRATION
President Trump on Tuesday said the military will be sent to guard the U.S.-Mexico border, further escalating his rhetoric on illegal immigration but offering few details on how and when such a plan might be implemented. Trump has for days taken to Twitter and used his public remarks to warn of threats posed by immigration, but the prospect of sending military personnel to the southern border added a new dimension to Trump’s strategy, which had centered on threats to walk away from the North American Free Trade Agreement and pressuring Congress to send him funding for a border wall.
While the president couched his idea as an urgent response to an onslaught at the nation’s southern border, the numbers do not point to a crisis. Last year, the number of illegal immigrants caught at the border was the lowest since 1971, said the United States Border Patrol. Still, Mr. Trump seized on what has become an annual seasonal uptick in Central American migrants making their way north to make his case.
The move would rely on a little-used executive power known as “rescission” that allows the president to ask Congress to cut spending it has already authorized. “It’s a bit unclear how this would play out since it hasn’t happened in a long time,” the aide said. “That said, this is an idea congressional leaders are taking seriously.” Still, the request is unlikely to make it very far on Capitol Hill. The spending deal passed both chambers with bipartisan support after weeks of delicate negotiations. Republicans would need support from Democrats to make any changes to the legislation now.
GUN CONTROL, SHOOTINGS, MARIJUANA, OPIOIDS
The woman was identified as Nasim Aghdam, according to law-enforcement officials familiar with the investigation. Investigators are looking at online postings ranting against YouTube that appear to be by the woman, a law-enforcement official said.
Four people have suffered gunshot wounds following a shooting at YouTube headquarters in San Bruno, Calif., according to authorities. One of those people is believed by police to be the suspect, who has been killed. San Bruno police chief Ed Barberini said at a news conference that officers encountered three victims who are “being treated for injuries that are treatable.” Two of the victims had fled into a nearby business, the police later said. The suspected shooter, a female, suffered a fatal wound that Barberini said “may have been self-inflicted.”
Health officials in Illinois are warning people about mock marijuana that is spreading across Chicago and the central part of the state, causing severe bleeding among users and, in some cases, death. Synthetic cannabinoids, also known as K2 or Spice, has been linked to 56 cases in which people in the state experienced severe bleeding after using the substance, officials with the Illinois Department of Public Health said in a statement. The users were hospitalized — and two of them died — after coughing up blood, finding blood in their urine or bleeding from their noses or gums, officials said.
TAXATION, WEALTH HAVENS, INEQUALITY
Long before most clarifying regulations have been issued, the new law has led to a burst of activity in tax circles as lawyers, accountants and businesses look for ways around some of the proposals meant to pinch them—and for ways to extend the reach of new tax breaks. For owners of closely held businesses, that can mean splitting operations apart, reclassifying them and re-categorizing their activities, all in an effort to get as much of their income taxed at the new low rates as possible.
A power struggle between two of President Trump’s top cabinet members threatens to delay implementation of the new tax law and could give lobbyists and political hands in the White House greater ability to shape critical decisions about which types of businesses benefit from the law. The White House’s Office of Management and Budget, headed by Mick Mulvaney, and the Treasury Department, run by Steven Mnuchin, are at odds over whether to end Treasury’s traditional independence in writing tax regulations and to give the budget office more oversight of those rules. If an agreement is not reached soon, the president may have to weigh in and make the decision himself.
RUSSIA MEDDLING, RUSSIA PROBE, TRUMP WORLD
President Donald Trump on Tuesday said he might get along quite well with Russian President Vladimir Putin — or that he might not. “I think I could have a very good relationship with President Putin,” Trump said. “There is also a great possibility that that won’t happen. Who knows, OK?” Speaking at a White House joint news conference with the presidents of three Baltic states, Trump boasted that “nobody has been tougher on Russia,” but insisted more open lines of communication between himself and the controversial Russian leader would benefit the U.S. “I think we’ll be able to have great dialogue, I hope,” Trump said. “Remember this — getting along with Russia is a good thing.”
Donald Trump has said only “stupid people” don’t want to get along better with Russia. “If we got along with Russia, that would be a good thing not a bad thing”, he said during a working lunch with Baltic leaders. “And just about everybody agrees with that, except very stupid people.” While Mr Trump expelled 60 Russian diplomats last week, many still do not believe he is being tough enough on Vladimir Putin. On Tuesday, the president said that “probably nobody’s been tougher to Russia than Donald Trump.”
“People are realizing what a major hit they took,” said John R. Beyrle, a former American ambassador to Russia. “It’s a way to say, ‘See, it’s not so bad, Putin is still welcome in polite society.’ I was in Moscow last month just before the elections and was struck by how fed up some members of the Russian elite are getting at their perpetual pariah status — and this was before Skripal.”
Michael Cohen, that most loyal capo to the president, has marched into a minefield for his boss over the settlement with Stormy Daniels, with grave threats to his license, potential civil liability and even a tangible prospect of criminal charges.
Mueller’s description of the president’s status has sparked friction within Trump’s inner circle as his advisers have debated his legal standing. The president and some of his allies seized on the special counsel’s words as an assurance that Trump’s risk of criminal jeopardy is low. Other advisers, however, noted that subjects of investigations can easily become indicted targets — and expressed concern that the special prosecutor was baiting Trump into an interview that could put the president in legal peril.
Special counsel Robert S. Mueller III was authorized by a top Justice Department official to investigate whether Paul Manafort, the onetime chairman of Donald Trump’s presidential campaign, illegally coordinated with Russia to interfere in the 2016 election, new court filings show.
Alex Van der Zwaan, a lawyer who admitted to lying to federal investigators probing alleged Russian election interference, was sentenced to 30 days in prison in the first punishment to be imposed in special counsel Robert Mueller’s probe. U.S. District Judge Amy Berman Jackson largely sided with prosecutors, saying that Mr. van der Zwaan admitted to his misdeeds once his law firm “essentially caught” him “red-handed.” “These are not mistakes, they are lies,” Judge Jackson said in a packed Washington courtroom Tuesday morning.
INFLATION, RATES, DEBT AND CREDIT, BALANCE SHEETS
The mobile-home market is showing signs of stress. The delinquency rate on mobile-home loans has increased by 200 basis points, or 2 percentage points, over the past year, according to research cited by UBS. The 30-day-plus delinquency level is now about 5%, the highest level since 2005. The increase in the number of struggling mobile-home borrowers suggests that a large chunk of these people haven’t benefitted from the economic growth of the past few years, despite the low unemployment level.
Until now, banks have been able to keep a lid on deposit offers because so few customers were demanding higher rates. Indeed, just 7 percent of deposit customers pay close attention to rates on their accounts and would move their money if they found a better offer, according to a recent study by the financial advisory firm Raddon. But Bill Handel, Raddon’s director of research, said he is reminding banking clients that 15 percent of their customers typically control as much as 90 percent of their deposits. And they are very much aware of the interest they’re getting.
MACRO OP-EDS, INSIGHT, EVENTS AND TRENDS
During President Donald Trump’s first year in office, there were stretches when it appeared that, aside from his unorthodox style, he actually was governing as a fairly conventional conservative Republican. No more. Instead, Washington has moved into the period of Trump Unbound. Never was that more clear than on Tuesday, when Mr. Trump made three startling pronouncements that, taken together, almost perfectly encapsulate the way he now has set out to implement his nationalist, America-first agenda in more pure form.
The United States is granting fewer visitor visas to people from around the world — not just Muslims — as President Donald Trump ratchets up his anti-immigration rhetoric. By one measure, the U.S. granted 13 percent fewer visitor visas over the past 12 months when compared with fiscal year 2016, according to State Department data analyzed by POLITICO — a downward trend that appears to have accelerated in the past six months. Evidence plainly indicates that Trump’s desire to restrict foreigners’ access to the U.S. has become a reality. Critics say that, by imposing new procedural and security hurdles, Trump and his aides are building a figurative wall to keep people out of America, even those who just want to come for a brief visit. The critics fear the drop in visas could damage industries, ranging from tourism to higher education.
A range of corporations and governments are trying to apply the blockchain model — for projects from the prosaic to the radical. Various departments of the United Nations now have blockchain experiments looking to tackle climate change, the delivery of humanitarian aid and the identity challenges faced by stateless people. Coca-Cola and the State Department recently announced a project to register foreign employees on a blockchain in an attempt to eliminate forced labor. These experiments have drawn skepticism from Bitcoin aficionados, who say blockchains are being applied to problems that could be more easily solved with old-fashioned databases. Other critics say the rapid pace of blockchain development could lead to the same problem facing the broader tech industry: a willingness to disrupt and overthrow old systems before the replacement has been thoroughly tested.
China’s measured response is designed to inflict political and economic pain on the United States. The goal was to demonstrate resolve without escalation and to encourage disadvantaged farmers and workers to complain to their elected representatives. Beijing is prepared to engage in a slugging match, but its preferred solution to the deepening trade dispute remains a diplomatic outcome, analysts said. China also is being careful to act within the rules of the global trading system that were established under U.S. leadership over the past seven decades. As it broadens its global role, Beijing is eager to portray itself as a responsible actor in contrast to a rogue United States that is withdrawing from treaties and shunning multilateral cooperation.
Facing the most severe economic drought in recent history, New York’s dairy farmers are battling economic and emotional distress. There has been a spate of suicides in the state as the dairy industry has nose-dived, resulting in the closing of hundreds of small farms. While the dairy industry nationwide is in the grip of an economic crisis — fueled by decreasing demand as customers turn to milk alternatives — the picture is particularly bleak in New York where dairy sales represent about half of total farm sales every year.
There’s no doubt Europe needs to come up with a united front against China. Beijing is approaching trade and investment in Europe like it does in places like the South China Sea and Africa — by capitalizing on political divisions and creating economic dependence. China’s investment strategy is not just about business. There is a geopolitical undertone to every yuan China spends abroad. But so far, the numbers don’t match up with the perceived scale of the threat: Only 5 percent of Hungary’s imports come from China, while over 27 percent of its exports go to Germany. Of far greater concern should be the fact that Slovakia, the Czech Republic and even Hungary, are nearly wholly reliant on Russian gas imports to fuel their economies — an arguably far greater risk to their economies and to their security. The attempted assassination of a former Russian spy in the U.K. earlier this month is further proof that Russia plays by a different rule book and has little respect for the sovereignty of its neighbors.
Russian ships are skulking around underwater communications cables, causing the U.S. and its allies to worry the Kremlin might be taking information warfare to new depths. Is Moscow interested in cutting or tapping the cables? Does it want the West to worry it might? Is there a more innocent explanation? Unsurprisingly, Russia isn’t saying. But whatever Moscow’s intentions, U.S. and Western officials are increasingly troubled by their rival’s interest in the 400 fiber-optic cables that carry most of world’s calls, emails and texts, as well as $10 trillion worth of daily financial transactions.
Kyle Corkum imagines a “smart city” with futuristic amenities like driverless shuttle services, heated sidewalks and a super-resilient energy grid that keeps humming through the harshest of storms. As chief executive of LStar Ventures, a developer of planned communities, he has a chance to build the neighborhood of his dreams from the ground up on the site of a long-shuttered naval air station in this town just 12 miles south of Boston’s booming technology hub. LStar, based in Raleigh, N.C., has enlisted General Electric as its partner. Because they are starting from scratch, Mr. Corkum said, the companies can embed smart technology into the energy, water, lighting and transportation systems that will serve the community.
The study from researchers at Ohio State University finds that fake news probably played a significant role in depressing Hillary Clinton’s support on Election Day. The study, which has not been peer-reviewed but which may be the first look at how fake news affected voter choices, suggests that about 4 percent of President Barack Obama’s 2012 supporters were dissuaded from voting for Clinton in 2016 by belief in fake news stories.
Your financial health may have more bearing on your physical health than you realize. American adults who experienced a sudden and substantial loss of wealth were 50% more likely to die in a 20-year period than were others in their age group whose financial picture remained relatively stable, or improved. As bad as things were for those who experienced a “negative wealth shock,” they were even worse for Americans who didn’t have any wealth in the first place. These folks were 67% more likely than their financially secure counterparts to die during a 20-year study period. The findings, published Tuesday in the Journal of the American Medical Assn., suggest that you should treat your bank account balance as a vital sign. The same goes for the value of your stock market investments, your individual retirement account, your home, your vehicles, your business or your “other substantial assets.”
With unemployment at a nearly two-decade low, the downsides of life behind the wheel are making recruitment tough. Many workers are opting for construction or energy jobs that offer more time at home or better pay. The trucking workforce is aging, and young people who might want to try trucking have to wait until they are 21 years old to get an interstate commercial driver’s license. “I get a lot of guys out of high school. They come down for an interview, I say come back and talk when you’re 21,” Mr. Timmer said. “I rarely see them again.”
Consumption is at last becoming the most important driver of demand in the Chinese economy. This is a long-awaited and desirable adjustment. It promises to shift China away from its excessive reliance on inefficient, debt-fuelled investment. But it still has a long way to go. As the shift is being completed, the country will need to manage an overhang of bad debt. But the adjustment has begun.
China is one of the countries most at risk of facing a banking crisis, the Bank for International Settlements warned recently, and Xi’s newly appointed top economic officials aim to prevent such an outcome. Stricter regulations, curbs on lending between financial institutions, and a gradual increase in borrowing costs over the past year have all contributed to the deceleration of credit growth, and that campaign has now expanded beyond the financial sector. “The deleveraging campaign will be comprehensive this year — local governments, state-owned firms, households. There is no escape,” said Shen Jianguang, chief Asia economist at Mizuho Securities Asia Ltd. in Hong Kong. Shen projects that the debt ratio peaked last year and will decline because of the government’s actions and robust corporate earnings.
Once described as an ill-equipped band of insurgents, the Taliban are increasingly attacking security forces across Afghanistan using night-vision goggles and lasers that United States military officials said were either stolen from Afghan and international troops or bought on the black market. The devices allow the Taliban to maneuver on forces under the cover of darkness as they track the whirling blades of coalition helicopters, the infrared lasers on American rifles, or even the bedtime movements of local police officers. With this new battlefield visibility, the Taliban more than doubled nighttime attacks from 2014 to 2017, according to one United States military official who described internal Pentagon data on the condition of anonymity. The number of Afghans who were wounded or killed during nighttime attacks during that period nearly tripled. That has forced American commanders to rethink the limited access they give Afghan security forces to the night-vision devices. Commanders now worry that denying the expensive equipment to those forces puts them at a technological disadvantage, with potentially lethal consequences.
A jeweler to the stars, Mr. Modi attained wealth and fame at home in India in a few short years. He socialized with British royalty and rubbed elbows with Donald Trump Jr. He opened an opulent outlet on Madison Avenue in New York. In January, he met with Narendra Modi, India’s prime minister and no relation, at the annual gathering of the world’s elite in Davos, Switzerland. Today, he is on the run. About a week after Mr. Modi grinned for the cameras with the prime minister, a state-run Indian bank told regulators that it had found nearly $1.8 billion in fraudulent transactions linked to the jeweler’s account. Indian officials now accuse Mr. Modi, his family and business associates of assembling a global empire with nearly $3 billion in money obtained illegally, mostly from government-run banks. He denies wrongdoing. The chase has enraged and captivated India at a time when the public increasingly believes the country’s debt-laden government banks are enriching its flashiest, most corrupt business tycoons. Parliament sessions have deteriorated into screaming matches, with political opponents exchanging accusations of collusion with the jeweler.
CENTRAL BANKS & MONETARY POLICY
White House trade adviser Peter Navarro on Monday criticized the Federal Reserve, saying he was “puzzled” by the central bank’s forecast for more rate hikes this year. Navarro said there is no inflation in sight and President Donald Trump’s policies will keep it subdued, suggesting few, if any, more rate hikes are needed. Administrations since President Bill Clinton have managed, largely, to avoid criticizing the Fed, but analysts have been expecting this unwritten rule to disappear, knowing the Trump administration doesn’t much care for such conventions.
Federal Reserve Bank of San Francisco President John Williams was selected to run the U.S. central bank’s powerful New York branch, installing a monetary economist in Fed Chairman Jerome Powell’s inner circle and a banking-industry outsider to help oversee Wall Street.
The New York Fed’s search for a new president began with an emphasis on attracting a diverse candidate pool. It ended focused on building out the leadership team for a new Federal Reserve chairman who isn’t an economist.
“There are few arguments for the central bank to take a pause in the hiking cycle,” said Ciprian Dascalu, chief economist at ING Groep Bank in Bucharest. “The central bank will probably send the same message that it’s trying to contain inflation expectations and their impact on the inflation outlook.”
Alberta’s households will be hit the hardest by interest-rate increases, adding a major hurdle in the province’s ability to recover from the oil crash, according to the Royal Bank of Canada. The Bank of Canada’s expected moves in coming months will affect families in Alberta more than in provinces with notoriously overpriced housing markets because a borrowing spree during the oil industry’s boom raised their average indebtedness to the highest in the country, RBC Senior Economist Robert Hogue said Tuesday in a research report.
USA ECONOMY DATA, CITIES AND STATES
Home buyers are busting budgets — and in some cases selling things they love — to snag their dream houses. A third of home buyers blew through the upper limit of what they planned to spend, topping that cap by an average $16,510, according to a Owners.com survey of 1,214 Americans who purchased a house within the last four years. The survey was conducted Jan. 31 to Feb. 8. The main reason? Price. Price. Price. “Clearly, we’re in an environment of rising prices,” especially for starter homes, says Daniel Maloney, national head of sales for Owners.com, a real estate brokerage. Many houses on the market are drawing multiple offers, forcing buyers to bid up.
A growing percentage of apartment renters aren’t interested in buying a home as affordability challenges take a bigger toll on American aspirations of homeownership. In all, 20% of renters said they have no interest in owning a home, up from 17% in August and 13% in 2016, according to results of a semiannual survey of renters by mortgage company Freddie Mac in January. Two-thirds of renters who plan to continue renting said they are doing so for financial reasons, up from 59% two years ago, according to the survey. “Housing is becoming less and less affordable. Renting is perceived to be the more affordable housing option,” said David Brickman, an executive vice president at Freddie Mac and head of its multifamily division.
Auto sales came in “quite a bit stronger than the market estimated,” said Sal Guatieri, senior economist at BMO Capital Markets in Toronto. “It does raise hopes that the consumer is responding to the tax windfall.” The latest data also support his forecast of 2.3 percent first-quarter growth, he said. “We were leaning toward another downward revision. We would hold off on that now.”
GLOBAL ECONOMY, INTERNATIONAL
Japan is joining the global hiring frenzy for technology engineers, as the nation known for modest pay and lifetime employment competes for cutting-edge talent with China and the U.S. It’s an unusual move in Japan, where workers often take lower pay in exchange for secure employment. That’s evident even among the relatively well-paid IT professionals, with top software engineers earning on average about $113,000 a year, compared with $250,000 in the U.S., according to hiring firm Robert Walters. “There’s no precedent for this,” said Tomokazu Betzold, head of tech hiring at Robert Walters Japan. “There’s a long-standing stigma that Japanese companies don’t pay competitively. So this is a really positive development.”
For a nation of just 25 million people, Australia punches above its weight in sport, science and medicine. But when it comes to success overseas, many of the country’s biggest companies are falling short. Confidence, irreverence and a refusal to conform — traits that have arguably defined Australians for centuries — may be partly to blame, say behavior analysts and business consultants. Those characteristics, nurtured in one of Asia’s smallest and most remote consumer markets, can leave companies ill-prepared to compete offshore.
Ecuador’s president Lenín Moreno has announced a package of economic measures that aims to pare back the country’s bloated state apparatus and promote private enterprise, in a further departure from his socialist roots. In a televised address on Monday evening, Mr Moreno said his government would embark on a programme of public-private partnerships in the infrastructure, oil, energy, mining and telecoms sectors that would generate $7bn of investment by 2021, raising $1.6bn for state coffers.
POSITIONING, INFLECTION, MARKET CALLS
It has been a grim start to a new quarter on Wall Street and since the S&P 500 tumbled below its 200-day moving average on Monday, the focus has been on the technicals that govern short-term trading. But that is the least of investors’ worries. Before “buying the dip”, investors have plenty to consider, including the steady retreat of central bank stimulus, rising trade tension and concerns that economic growth may have peaked after the best period of synchronised global expansion in a decade.
A strong earnings season could reinforce the underpinnings of the nine-year bull market in U.S. stocks. Share prices have tumbled in recent weeks, with the S&P 500 index down 9% from its Jan. 26 peak, stoking fears that the rally’s best days are behind it. Investors have recently fretted about a wide range of uncertainties, from the threat of a trade war to heightened scrutiny of technology giants. But throughout the turbulence, earnings have held up.
Short-sellers who placed bets that the shares of four big tech leaders, known as the FANG group, as spelled out by their first initials, were due for a fall have made more than $4 billion in profits over the last two weeks and more than $1 billion during the first two trading days in April, financial analytics firm S3 Partners LLC said on Tuesday.
It isn’t just a technology selloff in emerging markets. It’s a full-fledged rotation away from cyclical stocks and into defensive ones. Let’s bust that jargon: Companies whose fortunes are closely tied to economic growth, such as those making car parts, have fallen out of favor in the past month. Firms whose products are in demand regardless of economic cycles (no matter what, people will shave) are rallying in their stead.
COLOR, EARNINGS, SENTIMENT, VALUATIONS
Goldman Sachs Group Inc. is quietly plotting a move into commercial banking, hiring a senior JPMorgan Chase & Co. engineer to build a suite of cash management tools, deposit accounts and other products for big companies, according to people familiar with the plans. It is a somewhat unorthodox move for Goldman, which is better known for its advice on mergers and capital raising. The business of helping companies manage and move their cash is generally the province of big commercial banks like JPMorgan and Citigroup Inc., which use giant balance sheets and global footprints to help companies manage their day-to-day finances.
In a rare tip of the hat to its crosstown rival, Ford Motor Co. is considering following General Motors Co.’s lead in halting monthly vehicle sales reports, a move that will complicate analyst and investor efforts to assess the health of the auto market. GM contends that the practice of monthly sales reporting — a standard in the industry since the 1990s — provides too narrow a view of the market and distorts actual trends. Tesla Inc. already reports its global deliveries on a quarterly basis, though it doesn’t break out U.S.-specific results like other automakers.
CREDIT, YIELD, BUYBACKS, CORPORATES
Illinois’s finances are so troubled that investors can make nearly as much money betting on the worst-rated U.S. state as they can on the American Dream mall project, perhaps the most despised structure in New Jersey. The yield on Illinois general-obligation bonds that mature in 2028 averaged 4.5 percent in March, compared to an average of 4.99 percent on unrated bonds due in 2050 sold for the American Dream mall project, the shopping and entertainment center that’s years behind schedule, according to data compiled by Bloomberg.
Of all the wild, head-scratching moves in financial markets this year, there are few that have surprised investors quite as much as the rally in defaulted Puerto Rico bonds. “It just blows my mind,” says Matt Dalton, chief executive officer of Belle Haven Investments. Since sinking to a mere 20.8 cents on the dollar in December, prices on the island’s most frequently traded securities have climbed steadily and reached a high of 45 cents last week before paring gains during the past few days. Not only are Puerto Rico’s bonds the top performer in the $3.9 trillion municipal market, they’ve gained more than any other dollar-denominated debt in the world, according to data compiled by Bloomberg.
DEALS, MERGERS, IPOs, LBOs, RESTRUCTURINGS
Shares opened at $165.90 a share, well above a reference price of $132 and levels seen in recent private trades. As the session wore on, the price dropped more than 10 per cent to close at $149.01, for a valuation of $26.5bn. The strong valuation in opening trading, which arrived in the early afternoon after three hours of horse-trading by market makers, came despite a two-week tech sell-off that has wiped billions off Amazon, Facebook and Twitter. Traders cheered and clapped when trading in the stock finally began.
To go public, Spotify executed an unusual move called a direct listing, forgoing investment-banking underwriters and opting not to raise any money for itself. In the process, Spotify saved tens of millions of dollars in fees while still giving its employees and early investors the chance to cash out. That a company so large was able to mark a win for its investors through such a listing could lead more firms to opt for that route. Dozens of venture-backed companies, flush with cash, remain on the sidelines as they haven’t had to tap public markets, but may want to do so to allow employees or investors to cash out.
Spotify shares closed about 10 percent below the opening price, at $149.01 each, valuing the startup at almost $27 billion and Tiger Global’s holding at $1.91 billion. The investment firm hasn’t sold any shares, said the person, who asked not to be identified because the information isn’t public. The position makes Coleman’s firm the fourth-largest holder of Spotify, following co-founders Martin Lorentzon and Daniel Ek and Tencent Holdings Ltd., filings show.
Both CBS and Viacom are controlled by media mogul Sumner Redstone’s holding company National Amusements Inc., which has a nearly 80% voting stake in each firm. Shari Redstone, Mr. Redstone’s daughter and the president of National Amusements, is a vice chair of both both CBS and Viacom and has been pushing for the two companies to recombine. CBS’s proposal could be the beginning of a negotiation, if Viacom rebuffs the offer and pushes for better terms. A spokesman for Viacom declined to comment.
REAL ESTATE, HOUSING, REITS, COMMERCIAL
Why this proliferation of laundromats? The reason is Hong Kong’s increasingly acute shortage of affordable housing. As prices keep soaring in what is already the world’s most expensive property market, residents have been forced to squeeze into ever smaller apartments, leaving little room for washers and dryers. The average size of a newly constructed apartment in 2017 was 354 square feet, according to the city’s building department, down from 420 square feet in 2013. And the units are only getting tinier: Thousands of so-called micro-apartments, smaller than 200 square feet, are expected to be built by 2020, according to JLL, a global real estate services firm.
A venture led by Sam Zell’s Equity International and Goldman Sachs Group Inc. is investing more than $300 million in Argentine real estate, a vote of confidence in the economic overhaul being pursued by the three-year-old government of Mauricio Macri. The venture has purchased a portfolio of commercial property including an office park and mall in the Buenos Aires area and land for future development. It is also buying the developer of those two projects, a company named Rukan, which is being renamed ARG Realty Group.
The drop in sales spanned from the highest reaches of the luxury market to workaday studios and one-bedrooms. Buyers, who have noticed that home prices are no longer climbing as sharply as they have been, are realizing they can afford to be picky. Rising borrowing costs and new federal limits on tax deductions for mortgage interest and state and local levies also are making homeownership more expensive, giving shoppers even more reasons to push back on a listing’s price — or walk away.
Sales of Manhattan apartments — some of the priciest properties in the US — have declined by the most in almost a decade, as potential buyers hesitate following the introduction of the new tax law. The number of co-op and condominium sales in Manhattan fell nearly 25 per cent during the first quarter compared to the same period last year, according to new research by Miller Samuel real estate appraisers and Douglas Elliman real estate brokers.
HEDGE FUNDS, PRIVATE EQUITY, MONEY MGMT
Einhorn told his investors Tuesday that the market went against his largest wagers, with his long positions losing money despite posting positive earnings, and his short bets climbing while missing earnings. In an analysis of his largest stock wagers, Einhorn said his 20 biggest long positions fell 5.6 percent, and his 20 largest shorts fell 5.5 percent. Greenlight’s flagship fund dropped about 14 percent in the first quarter, Bloomberg reported Friday. “It is difficult to explain what caused the results,” he said in the letter. “Despite recent results, our portfolio should perform well over time. To some extent, this quarter’s result stems from the continued extreme outperformance of growth over value.”
Activist fund manager Elliott Advisors has disclosed a $1bn stake in Hyundai Motors and its affiliated companies, just days after the South Korean carmaker announced moves to simplify its complex corporate structure. Elliott on Tuesday said it had a “significant shareholding” in Hyundai Motors, Kia Motors and Hyundai Mobis, the parts company, which are all individual businesses that own shares in each other.
ENERGY CRUDE OIL, OIL SANDS, SHALE
Oil has started the second quarter at a crossroads after trading in a narrow range so far in 2018 with the industry split over whether crude can sustain any rise of more than $70 a barrel. Prices dropped by as much as 4 per cent in holiday-thinned trading on the first day of the new quarter on Monday, pulling international benchmark Brent crude back to less than $68 a barrel.
ENERGY RENEWABLES, NUCLEAR
Emerging market countries are lagging behind the developed world in rolling out renewable energy, despite their generally sunnier climes lending themselves to potentially cheap and reliable solar power. However, some developing countries such as Lithuania and Uruguay and Indian states such as Tamil Nadu are rapidly developing wind and solar power, demonstrating that middle and lower-income nations can make progress in adopting green energy.
A project off Northern California’s coast is vying to become America’s first commercial-scale floating wind farm. An agency that leads sustainable energy efforts for cities and counties along the state’s Redwood Coast chose a consortium of companies — including Energias de Portugal SA’s EDPR Offshore North America LLC and Principle Power Inc. — to build a floating wind farm that may generate as much as 150 megawatts of power, according to a statement from EDPR. The group was one of six bidders, it said.
Russian billionaire Oleg Deripaska is investing in research into next-generation batteries to replace the lithium-ion units that are currently used in phones and cars, and to store power from solar plants.
POLLUTION, CLIMATE & ENVIRONMENT
Strains of so-called “nightmare bacteria” that harbor extremely rare forms of antibiotic resistance are more common than previously known in the U.S., public-health officials said Tuesday. But they said aggressive measures can stop the bacteria from becoming widespread.
BREXIT, SCOXIT, LONDON, UK ECONOMY
The number of wealthy Chinese acquiring UK “golden visas” that give residency in return for investing £2m or more in assets rose sharply last year as worries over Brexit paled next to Britain’s attractiveness as a secure bolthole for international money. So dominant were mainland Chinese in the investor visa scheme last year that they outnumbered Russians, the next biggest recipients by country, by 250 per cent. If Hong Kong and Macau recipients are counted, then 146 Chinese got investor visas last year, up 82.5 per cent on 2016.
The confrontation has become a symbol of Mr Macron’s desire to put an end to “privileges” secured by some categories of workers after the second world war, that he has held responsible for France’s declining competitiveness.Building on a day of protest last month, the unions are seeking to force the French president to withdraw his plans to end rail workers’ special employment status, that include employment for life, early retirement and free train tickets.
With all four rail unions participating in the strike, state-owned operator SNCF said 88% of France’s high-speed trains and 80% of its regional trains have been cancelled. The strike action started with a mass walkout on Monday evening and will last through Wednesday morning. The company said 34% of its staff were on strike. Rail workers are protesting Mr. Macron’s plans to end a special status they’ve enjoyed for decades that gives them automatic annual pay rises and protection from being dismissed. The move—which Mr. Macron is set to pass by decree—aims to prepare the heavily indebted SNCF for competition in the rail sector.
GEOPOLITICS, CRIME, TERRORISM
Turkish President Recep Tayyip Erdogan said Tuesday that his country’s plan to purchase Russia’s long-range missile defense system is a “done deal,” brushing aside concerns from some NATO allies. Erdogan appeared at a joint news conference with Russian President Vladimir Putin, who was in Ankara for his first foreign visit since his March 18 re-election. Both the defense system agreement and Putin’s visit underscore the intensifying ties between Turkey and Russia.
Turkish citizens fleeing the country are finding safe haven in a place they were told hated them: Greece. The neighbors have a long history of conflict and mutual distrust and present ties are far from warm. Amid disputes over borders and Cyprus, relations have deteriorated only months after President Recep Tayyip Erdoğan traveled to Greece on the first Turkish state visit to Athens in 65 years. Yet according to the Greek asylum service nearly 2,000 Turkish citizens have sought asylum in Greece since the July 2016 coup attempt — adding to rising tensions.
PRIVACY, HACKING, CYBERWAR, SURVEILLANCE STATE
For the first time, the U.S. government has publicly acknowledged the existence in Washington of what appear to be rogue devices that foreign spies and criminals could be using to track individual cellphones and intercept calls and messages. The use of what are known as cellphone-site simulators by foreign powers has long been a concern, but American intelligence and law enforcement agencies — which use such eavesdropping equipment themselves — have been silent on the issue until now.
An obscure, private equity-backed company in Massachusetts is behind the system targeted by a cyberattack that halted electronic communications for the operators thousands of miles of natural gas pipeline in the U.S. Here are three things to know about Energy Services Group LLC and its business unit Latitude Technologies.
PROPAGANDA, CORRUPTION, AUTHORITARIANISM
David Smith, whose anchors recite right-wing scripts, said newspapers and magazines are “so left wing as to be meaningless dribble.” Smith may not be as identifiable as Rupert Murdoch or Jeff Bezos, but he’s as powerful; his influence saturates American homes through the 193 television stations he owns or controls, peppered throughout 39 states, spanning from New York to California (though concentrated in the South and Midwest).
While they were also subject to a six-month noncompete clause and forced arbitration, three current and former Sinclair employees said it was the potential financial penalty that had the greatest impact on those thinking of quitting. Under the clause, there’s a specific window of time during which employees can give notice. One current employee who requested anonymity because he wasn’t authorized to speak publicly said the clause’s limitations are the reason he hasn’t quit. A former employee who also requested anonymity said both the noncompete and the damages clause dissuaded her at first from looking for work elsewhere.
Members of India’s freewheeling press expressed shock and outrage at the announcement, seeing the hidden hand of Prime Minister Narendra Modi — who enjoys warm relations with Mr. Trump — to quell negative media coverage ahead of India’s general election next year. Within hours of the reaction, Mr. Modi’s government annulled the announcement without explanation on Tuesday morning. “Press Release regarding Fake News uploaded last evening stands withdrawn,” the Ministry of Information and Broadcasting said on its website.
China will not allow any foreign interference in religious affairs in the country, a senior official said on Tuesday, dousing expectations of an imminent deal with the Vatican over control of the Roman Catholic Church here. “I think there is no religion in human society that is above the state,” the official, Chen Zongrong, said during a briefing on religious affairs in China, underscoring the government’s intention to maintain strict control over all religious organizations and their believers.
The contest is taking place against a backdrop of escalating hostilities, signaling what will most likely be years of legal and political fights between the Trump White House and California. On Monday alone, the administration moved to roll back California’s landmark auto emissions reduction program and challenged a state law intended to curb the sale of federal lands. As has become increasingly clear in recent days, Mr. Brown’s successor will face a thicket of high-stakes challenges.
As metaphors for the Trump-led Republican Party go, it’s difficult to beat Rep. Todd Rokita’s new ad in the Indiana Senate race. In 30 seconds, the Republican congressman from Indiana discusses no policy issues and says basically nothing besides “I will support Trump the most,” before throwing on a Make America Great Again hat for emphasis.
SCANDALS, LAWSUITS, FINES, REGULATORY
The changes come as the Hyperloop startup tries to steer itself out of tumult. Co-founder Shervin Pishevar took a leave of absence in December after Bloomberg reported on multiple claims of sexual misconduct. He denied all allegations of inappropriate conduct. Virgin’s Richard Branson replaced Pishevar as chairman. Earlier this year, Bloomberg reported that chief financial officer Brent Callinicos had left. Carl Jenkins, the senior vice president for hardware engineering, also departed.
A WPP spokesman on Tuesday confirmed in a statement that it has appointed an independent counsel to probe “an allegation of personal misconduct” against Mr. Sorrell. He said the amounts involved weren’t material to the company.
The billionaire Steven A. Cohen has won the dismissal of an $8 billion lawsuit accusing him and his former firm SAC Capital Advisors LP of conspiring with other hedge funds to spread false rumors about Fairfax Financial Holdings Ltd, hoping to “crush” or “kill” the insurer.
SILICON VALLEY, UNICORNS, STARTUPS, VC
The hire is a victory for Apple, which many Silicon Valley executives and analysts view as lagging its peers in artificial intelligence, an increasingly crucial technology for companies that enable computers to handle more complex tasks, like understanding voice commands or identifying people in images.
MEDIA, CABLE, SPORTS, ENTERTAINMENT
The film is directed by John Krasinski, an actor who played perhaps the least scary character ever to appear on television, Jim Halpert on “The Office.” Mr. Krasinski hadn’t previously thought of himself as a horror filmmaker. But the script landed in his lap just three weeks after the birth of his second daughter, and the story struck him as an allegory for the terrifying responsibility parents feel when faced with the job of protecting their children.
SCIENCE, NATURE, HISTORY, PSYCHOLOGY
Perhaps about 4.3 billion years ago, Mars would have had enough water to cover its entire surface in a liquid layer about 450 feet (137 meters) deep. More likely, the water would have formed an ocean occupying almost half of Mars’ northern hemisphere, in some regions reaching depths greater than a mile (1.6 kilometers). The new estimate is based on detailed observations made at the European Southern Observatory’s Very Large Telescope in Chile, and the W.M. Keck Observatory and NASA Infrared Telescope Facility in Hawaii. With these powerful instruments, the researchers distinguished the chemical signatures of two slightly different forms of water in Mars’ atmosphere. One is the familiar H2O. The other is HDO, a naturally occurring variation in which one hydrogen is replaced by a heavier form, called deuterium.
The shorelines on Mars are probably giving us critical insight to when these ancient oceans formed and existed. That information, if it can be supported by other data on ages and geophysical events, helps us build a more complete picture of the environment on Mars four billion years ago. A time when it is conceivable that life was emerging for the first time in the solar system.
The speed with which he has returned to contention, coming off a fourth back surgery that left him unsure if he would ever play again, has surprised even his true believers. Woods’s return, coupled with recent wins by Rory McIlroy and Phil Mickelson, has made this the most anticipated Masters in years. Tournament golf was supposed to be a major adjustment for Woods, a slog that could easily take him the entire year. But beyond his legendary golf intellect and newfound health, he also has an advantage that few people ever saw: Nobody does more to simulate tournament conditions within steps of their own backdoor. Some other golfers have home putting and chipping greens. Woods has 3.5 acres designed by his company and maintained by a full-time superintendent who was formerly on staff at Augusta National. Green speeds are set to mimic wherever Woods is playing next. Even the type of sand used in each bunker varies to match the types found at different tournament sites.
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