Macro Links Dec 12th – Botched Bombing
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MACRO LINKS TABLE OF CONTENTS (Click or Scroll Down)
- BOTCHED SUICIDE BOMBING
- BITCOIN FUTURES, BUBBLE, ICOs
- RUSSIA PROBE
- GOP TAX PLAN
- NORTH KOREA, NUCLEAR WEAPONS
- BROKEN BREXIT
- ALABAMA SENATE RACE
- SAUDI ARABIA
- SEXUAL HARASSMENT
- TRADE TENSIONS
- RATES, LIQUIDITY, SYSTEMIC RISK, BALANCE SHEETS
- MACRO OP-EDS, INSIGHT, EVENTS AND TRENDS
- CENTRAL BANKS & MONETARY POLICY
- POSITIONING, INFLECTION, MARKET CALLS
- COLOR, EARNINGS, SENTIMENT, VALUATIONS
- DEALS, MERGERS, IPOs, LBOs, RESTRUCTURINGS
- REAL ESTATE, HOUSING, REITS, COMMERCIAL
- HEDGE FUNDS, PRIVATE EQUITY, MONEY MGMT
- ENERGY RENEWABLES, NUCLEAR
- POLLUTION, CLIMATE & ENVIRONMENT
- GEOPOLITICS, CRIME, TERRORISM
- PRIVACY, HACKING, CYBERWAR, SURVEILLANCE STATE
- PROPAGANDA, CORRUPTION, AUTHORITARIANISM
- TRUMP WORLD
- SCANDALS, LAWSUITS, FINES, REGULATORY
- SILICON VALLEY, UNICORNS, STARTUPS, VC
- RETAIL APPAREL, SPECIALTY, DINING, BIG BOX
- MEDIA, CABLE, SPORTS, ENTERTAINMENT
- AUTOS, ELECTRIC, SELF-DRIVING
- MEDICAL, PHARMA, BIOTECH
- ARTIFICIAL INTELLIGENCE, DRONES, FUTURE TECH
- HEALTH, PRODUCTIVITY AND WELLNESS
BOTCHED SUICIDE BOMBING
A 27-year-old immigrant from Bangladesh tried to set off a homemade pipe bomb strapped to his body as he blended into rush-hour commuters in one of New York City’s busiest transit hubs. But the explosive fizzled, burning him instead and slightly injuring three others.
The explosion, which the police said was from a pipe bomb strapped to the man, in the long corridor connecting the subway stations at Times Square and the Port Authority Bus Terminal, reverberated through the maze of tunnels and passageways of the city’s busiest transit hub. People scurried like mice, in any direction, unable to figure out where the boom came from. Some stood paralyzed.
City residents expressed fear, bewilderment and a sense of resignation after Akayed Ullah allegedly detonated an explosive device near the Port Authority Bus Terminal during the morning rush hour. But some tourists took note of how quickly New Yorkers resumed their busy lives.
“When we hear of an attack in the subways, it’s incredibly unsettling,” Mayor Bill de Blasio said. “Thank God the perpetrator did not achieve his ultimate goals.”
The would-be suicide bomber told officials he chose the location near Times Square because of its Christmas-themed posters, recalling strikes in Europe against Christmas markets.
New York Gov. Andrew Cuomo said that due to the terrorist attack in Port Authority he directed state agencies to increase security at high-profile locations around the state, including airports, bridges, tunnels and mass transit systems.
BITCOIN FUTURES, BUBBLE, ICOs
Bitcoin futures surged more than 20 per cent on their debut on Monday, forcing a major US derivatives exchange to halt trading twice as Wall Street seeks to ride a wave of interest in the controversial digital currency.
Futures on the world’s most popular cryptocurrency surged as much as 26 percent in their debut session on Cboe Global Markets Inc.’s exchange, triggering two temporary trading halts designed to calm the market. Initial volume exceeded dealers’ expectations, while traffic on Cboe’s website was so heavy that it caused delays and temporary outages. The website’s problems had no impact on trading systems, Cboe said. Bitcoin’s spot price rose.
From 6 p.m. Sunday to 9:30 a.m. today in New York, 2,923 contracts changed hands in a total of 2,494 trades, representing an overall value of $50.2 million, data compiled by Bloomberg show.
By way of comparison, about $4.9 billion worth of copper futures moved over that span, while $3.6 billion of front-month Nasdaq 100 futures did. Bitcoin futures more closely resembled stock market trading in Discovery Communications, the fourth-smallest company in the S&P 500. It saw about $60 million in shares trade in the first three hours Monday.
The total market value of bitcoin is now almost $300bn after a price surge this year, despite financial institutions shying away. Its launch on regulated exchanges such as Cboe could tempt in more traditional asset traders. Most bitcoin is traded on relatively new, unregulated cash bitcoin exchanges, some of which have suffered outages as traders overwhelm these systems.
Some of the world’s biggest cryptocurrency exchanges have experienced disruptions in recent days as interest in bitcoin surged in the weeks leading up to Sunday’s launch of bitcoin futures.
Bitcoin’s spectacular gains look like a speculative bubble and the cryptocurrency is too unstable to be useful in the future, New
Zealand’s central banker said.
Cameron Winklevoss, thought to be one of the largest holders of bitcoin, thinks the cryptocurrency’s blazing gains this year are just the start. He predicts it will rise as much as 20-fold as investors come to view it as an upgrade to gold.
The cost to complete a Bitcoin transaction has skyrocketed in recent days. A week ago, it cost around $6 on average to get a transaction accepted by the Bitcoin network. The average fee soared to $26 on Friday and was still almost $20 on Sunday.
Arbs make money when two strongly related assets converge in price, selling the one they consider pricey, buying the other, profiting off the difference.
Their job is a little complicated with these futures. Bitcoin’s wild volatility makes it harder to predict where the most-active contract, which expires in January, will settle, Tilly added. Only a few thousand contracts have traded so far, perhaps not enough to exert much influence on the cryptocurrency. And some investors might be willing to pay a premium for futures on a regulated market instead of going to the trouble of creating accounts at bitcoin exchanges, which have been repeatedly hacked with millions of dollars worth of tokens stolen.
“Very big point. Futures that don’t have deliverables require a very, very deep market. Otherwise someone long the future can push prices higher at settlement time with impunity, by “locking” profits (never having to resell a deliverable).”
The professor of risk engineering at New York University also disputed how his view on betting against bitcoin was presented by The Times of London, which is owned by MarketWatch’s parent company. “Fools” can go short, but the key is that shorting can’t be done properly, Taleb said.
With three weeks left in the fourth quarter, startups issuing tokens have already garnered $1.38 billion from investors, and are on pace to surpass the $1.74 billion raised in the third quarter, according to industry researcher Token Report.
The number of ICOs is likely to reach 500 this quarter, compared with 266 in the third quarter, according to Token Report. So far this year, startups have raised a record $3.67 billion by issuing tokens, according to another tracker, CoinSchedule. That’s even after one in five ICOs failed in the third quarter, Token Report said.
The Securities and Exchange Commission intervened to halt a $15 million initial coin offering that would have evaded laws for how securities must be sold. The case is the first in which the SEC has taken action against an ICO without making fraud claims.
The move by the Securities and Exchange Commission brings more clarity to a contentious legal question, in a further sign that the regulator is seeking to bring greater control to the ICO market, which has been dubbed the “Wild West” of investing.
Munchee, a San Francisco-based company, had told investors that they were buying a “utility” token, because the digital coin could be used within the app to buy goods and services at a later stage. In a whitepaper, Munchee had also told investors that the token “does not pose a significant risk of implicating federal securities laws.”
But the SEC said that the company led investors to believe that the value of tokens would increase and be traded on secondary markets — thereby classifying them as securities, which must be registered with the regulator.
We don’t know whether Trump did tell Flynn to lie. And if it happened, we don’t know whether Flynn has actually testified to this effect. But for the first time, we have a clear line of sight to a potential act of undeniable illegality by President Trump.
Court cases playing out on two continents may reveal whether the bank’s former chairman funneled money into three condos in the Manhattan luxury tower.
A federal judge on Monday lightly chastised Paul Manafort, the former chairman of the Trump campaign facing money-laundering charges, for editing an editorial that appeared to violate a gag order prohibiting public statements by prosecutors and the defense before trial.
The son of Greek immigrants who was raised in Chicago, Papadopoulos had a thin résumé that was full of exaggerations, including a nonexistent stint at Model United Nations. But during a meeting with The Washington Post’s editorial board in March 2016, Trump named him as one of five foreign policy advisers.
Hundreds of internal company documents obtained by The Washington Post reveal how Fusion, a firm led by former journalists, has used investigative reporting techniques and media connections to advance the interests of an eclectic range of clients on Wall Street, in Silicon Valley and in the nation’s capital. The firm has played an unseen role in stories that dominated headlines in recent years.
Fusion declined to comment on specific cases or identify clients, but said in a statement that it is “proud of our methodology and the rigor of our research, amply demonstrated by the records cited by The Washington Post. They show what we’ve always stated: Our secret sauce is diligent and exhaustive analysis of public information.”
It continued: “The reason we are so effective is that we unearth facts that stand up to scrutiny — presumably why we are still talking about our work detailing the connections between the Trump campaign and Russia more than a year later.”
GOP TAX PLAN
The Treasury Department released a one-page analysis of the nearly 500-page Senate tax bill on Monday that suggested the $1.5 trillion plan would more than pay for itself, assuming the economy grows much faster than any independent analysis of the bill has projected.
The Treasury acknowledged that its analysis was based on optimistic economic forecasts that assumed a host of policy changes yet to be enacted, including increased infrastructure spending, further loosening of business regulations and changes to welfare programs. The analysis left many tax experts scratching their heads and prompted criticism that the Treasury was offering misleading data.
Veterans of congressional tax overhauls, particularly the seminal revamp under President Ronald Reagan in 1986, have been stunned and in some cases outraged at how swiftly Republicans are moving on legislation that touches every corner of the economy and all Americans. And although GOP leaders make no apologies, some in their rank and file say that the process would have benefited from a more deliberate and open approach.
Some high-income business owners could face marginal tax rates exceeding 100% under the Senate’s tax bill, which lawmakers rushing to write the final measure are working to prevent.
A little-discussed provision in the Senate tax bill may lead to a higher tax bill for millions of small investors and could cause many to unload stocks before year-end to avoid those costs. Under the Senate’s $1.4 trillion tax overhaul, investors would lose the ability to choose which shares they can sell to reduce a position. Instead, investors selling partial stakes in a company would have to unload their oldest shares first, a process known as selling on a “first-in, first-out” basis.
A provision in the tax code overhaul before Congress could lead to an infusion of new players in elections, including churches and charities, and prompt a significant shift in the way political campaigns are financed.
The G.O.P. bills impose different rates on the same income based on things like organizational structure or occupation. At the losing end? Employees with paychecks.
Wall Street executives have begun lobbying against controversial provisions in the Republican tax overhaul bill that would hit high-tax states, arguing they could damage New York’s financial industry by driving out bankers and fund managers.
The measures, which would curb the ability of taxpayers in high-tax states to cut their federal bill by deducting local levies from taxable income, were inserted into legislation by Republican deficit hawks in an effort to limit its hit to US government revenues. Democrats have cried foul, arguing the provisions unfairly target states that did not vote for Republican Donald Trump in last year’s presidential election; many high-tax states are Democratic strongholds.
U.S. companies expect their investment and hiring to grow at a slower pace in 2018, and only a small share say proposed tax legislation is driving their capital-spending decisions, according to a private survey.
Long-term investors and workers hoping that the tax overhaul and repatriation holiday will encourage investment in growth and a rise in wages should brace for disappointment. A spike in share buyback and special dividend announcements this week reveals that companies are more likely to use any money saved on an all-too-familiar item: shareholder returns.
Many executives view repaying investors as a higher priority than increasing wages or hiring. Honeywell, Coca-Cola, Amgen and others have said they will use any tax windfall in part to increase dividends, buy back shares and repay debt. Hilton’s chief executive echoed those comments on Thursday. A Business Roundtable survey of chief executives released Tuesday showed a slight drop in projected hiring for the next six months.
Companies are also worried about angering activist investors, who push to increase shareholder value through cost cuts and deals. Procter & Gamble, General Electric and Whole Foods are among the companies targeted this year. Activist campaigns at companies with a market value of at least $10 billion jumped by 66 percent in the first half of 2017 from the same period last year, according to ActivistMonitor.
NORTH KOREA, NUCLEAR WEAPONS
A Chinese county along the border with North Korea is constructing refugee camps intended to house thousands of migrants fleeing a possible crisis on the Korean Peninsula, according to an internal document that appears to have been leaked from China’s main state-owned telecommunications company.
The camps are an unusual, albeit tacit, admission by China that instability in North Korea is increasingly likely, and that refugees could swarm across the Tumen River, a narrow ribbon of water that divides the two countries.
North Korea has criticised a proposed US naval blockade, saying such a move would constitute another “declaration of war”. The fiery comments in the state-run Rodong Sinmun newspaper came a day before the US, South Korea and Japan launched rocket tracking drills on Monday aimed at improving detection and monitoring of the reclusive regime’s ballistic missile tests.
The drills come in the wake of news reports that North Korea is making progress developing submarine-launched ballistic missiles, or SLBMs. The website 38 North, based at the U.S.-Korea Institute at Johns Hopkins University, obtained images of cylindrical objects, evidence that “suggests construction of a new submarine” at a facility on North Korea’s east coast.
Any North Korean capability to field submarine-launched ballistic missiles in open waters would be particularly worrying for the United States and its allies, since such missiles are hard to detect before launching. In August 2016, North Korea successfully tested such a missile from near its submarine base in Sinpo, sending it 310 miles toward Japan in a launch that came after several failed tests.
The US has warned Russia that it will start developing new nuclear missiles unless Moscow returns to compliance with an arms control treaty it is accused of breaching. US officials said Donald Trump wanted to remain in the Intermediate Range Nuclear Forces (INF) treaty but would not accept Russia continuing to flout the 1987 accord.
Some of the City’s most influential bankers say they would halt or even reverse moves out of London if there was an eleventh-hour deal to keep the UK in the single market, in a significant departure from previous warnings of an imminent “point of no return”.
The prospect of continued single market access is seen as remote but possible after the UK last week promised to maintain “full alignment” with EU internal market rules if it cannot provide an alternative solution to prevent a hard border between Northern Ireland and the Republic of Ireland after Brexit.
It is worth pausing for a moment to grasp the enormity of what was agreed in Brussels last week. During the course of a long winter’s night, Theresa May consented, for all intents and purposes, to stay in the single market. By agreeing regulatory alignment between the Republic of Ireland and Northern Ireland, and between Northern Ireland and the rest of the UK, the British government has left itself no chance to pursue regulatory divergence elsewhere.
It is easy to be cynical about UK prime minister’s attempt to sneak into the single market through the back door. At the same time, it is also a powerful reminder that Brexit is actually happening. The prime minister’s speech in Florence laid the ground for what transpired to be a much grander compromise than previously envisaged — of Brexit followed by the closest possible form of co-operation with the EU.
After striking a last-minute deal with European Union leaders last week to keep withdrawal talks going, Prime Minister Theresa May of Britain on Monday battled to sell her agreement at home, chiefly by putting out fires ignited by two members of her cabinet.
In Parliament, Mrs. May walked a political tightrope. She needs to reassure continental European governments that she is bargaining in good faith, but without alienating her hard-line supporters who fear she is making so many concessions that Britain will end up withdrawing in name only.
May’s position was, perhaps, best summed up by straight-talking Brexiteer Edward Leigh. “When people like me — Brexiteers — look at the alternative,” he said, “namely a Labour government staying in the single market forever and having no control over immigration, it’s amazing how our minds are concentrated in support of the prime minister.”
Labour is considering relocating most of the Bank of England to Birmingham if it wins power at the next general election, a move that would shake up more than three centuries of association between the Old Lady and the City of London. Consultants commissioned by John McDonnell, the shadow chancellor, have concluded that the central bank’s base in Threadneedle Street is “unsatisfactory and leads to the regions being underweighted in policy decisions.”
ALABAMA SENATE RACE
White House aides advised the president against getting involved in the contest, and his endorsement is a testament to the futility of trying to guide a boss guided by instinct who relishes taunting the political establishment he now runs. That includes not just McConnell but members of his own staff and even his daughter Ivanka, whose harsh words for Moore worked only to push the president in the opposite direction.
On the day before voters cast their votes in Alabama’s roller-coaster Senate special election, Democrat Doug Jones is enlisting last-minute help from former President Barack Obama, while Republican Roy Moore is expected to emerge from hiding at a final-hour rally with Steve Bannon. The anticipation surrounding the highest-profile special election in years grew with a surprise poll from Fox News showing Jones ahead by double-digits — defying a slew of other surveys that had Moore clinging to a narrow lead.
In a blur of television ads, conflicting polls and presidential tweets, Doug Jones and Roy S. Moore raced on Monday to make their final pleas in Alabama’s special election for the Senate, with both candidates focused on turning out their party’s most loyal voters.
Alabama Republican Senate nominee Roy Moore appeared on a conspiracy-driven radio show twice in 2011, where he told the hosts in an interview that getting rid of constitutional amendments after the Tenth Amendment would ‘eliminate many problems’ in the way the US government is structured.
Moore also faced criticism for comments he made in September at a campaign rally. According to the Los Angeles Times, when asked by a black member of the audience when he thought the last time America was great, Moore answered, “I think it was great at the time when families were united — even though we had slavery — they cared for one another. Our families were strong, our country had a direction.”
The Trump administration’s infatuation with Saudi Arabia — a defining element of President Trump’s early foreign policy — is cooling. The kingdom’s impetuous effort last month to foment a crisis in Lebanon was the tipping point, but administration officials have been concerned for some time about the kingdom’s embargo of Qatar and its disastrous war in Yemen.
On Friday, Secretary of State Rex W. Tillerson had critical words for the Saudis.
“With respect to Saudi Arabia’s engagement with Qatar, how they’re handling the Yemen war that they’re engaged in, the Lebanon situation, we would encourage them to be a bit more measured and a bit more thoughtful in those actions to, I think, fully consider the consequences,” Mr. Tillerson said at a news conference at the French Foreign Ministry in Paris.
Disputing reports that the 32-year-old Saudi crown prince had bought the painting through a little-known distant cousin, an embassy spokeswoman said in a statement that the cousin had instead acted as an agent for the ministry of culture of Abu Dhabi, in the United Arab Emirates. The painting will hang there in a newly opened branch of the Louvre.
American officials familiar with intelligence reports on the matter, and Arabs familiar with the details of the sale, both reiterated on Friday that the crown prince, Mohammed bin Salman, was the true buyer at the time of the auction.
The purchase comes at an awkward time for the crown prince because he is leading a sweeping crackdown on corruption and self-enrichment by the Saudi elite. He has detained or frozen the assets of at least a dozen of his royal cousins and hundreds of other businessmen or officials.
“We worked very closely with the broker on this piece and we bid on it and it was acquired, thank God, with the price we felt it was right for,” Mohamed Khalifa Al Mubarak, chairman of the Abu Dhabi Department of Culture & Tourism, said on Monday at the Bloomberg Invest conference.
Saudi Arabia lifted a decades-old ban on movie theaters on Monday, paving the way for Hollywood-style entertainment in the conservative kingdom. Commercial cinemas will start operating early next year and by 2030 the kingdom expects to have 300 cinemas with over 2000 screens, according to the Saudi ministry of culture and information.
Saudi Arabia plans to raise domestic gasoline and jet fuel prices in January, part of a program to gradually eliminate energy subsidies as the kingdom seeks to overhaul its economy and balance the budget, according to a person with knowledge of the matter.
A joint-venture with Dow Chemical of the US, Sadara symbolises the Saudi drive to attract more private and international capital to develop higher-value industries such as petrochemicals, which can build on rather than replace the kingdom’s natural resources.
“Instead of looking at crude oil as the only economic engine, [the government is] looking at multiple engines and that is something good,” says Amin Nasser, chief executive of Saudi Aramco, in an interview at the company’s headquarters in Dhahran, on the Gulf coast of eastern Saudi Arabia.
His portrayal of Saudi Aramco as an ally of economic diversification, rather than an obstacle, is critical to avoiding the impression that the company’s planned stock market listing amounts to a fire-sale by a government desperate to reduce exposure to oil.
It was “heartbreaking” for women to go public with their claims against President Trump last year, only to see him ascend to the Oval Office, said Samantha Holvey, a former Miss USA contestant who in October 2016 said Trump inappropriately inspected pageant participants. “I put myself out there for the entire world, and nobody cared,” Holvey said Monday on NBC’s “Megyn Kelly Today” show.
The New Yorker magazine, one of the media outlets that has led the way in exposing sexual misconduct by prominent men, severed ties with its leading Washington reporter, Ryan Lizza, on Monday after what the magazine called “improper sexual conduct.” But Lizza vigorously denied the allegation, saying in a statement that the decision to terminate him was “a terrible mistake.”
“Although the identities of most of the individuals mentioned in these stories have not been revealed to me, much of the behavior described does, in fact, match up with ways I have acted,” he said in an emailed statement. “That behavior was wrong and there are no excuses…For this reason, I am going to step away from day-to-day operations of my businesses.”
Minutes into their conversation, she recalls, he told her, “Come work for me, I’ll pay you double what you’re making.” Moments later, someone bumped her glass, spilling wine all over her chest and down her scooped-neck shirt. She alleges that Batali began rubbing her breasts with his bare hands while saying something like, “Let me help you with that,” as he groped her chest. “He just went to town, and I was so shocked,” the chef says. “Jaw on the ground, I just stepped back from him in utter disgust and walked away.”
The chef is one of four women who allege that Batali touched them inappropriately in a pattern of behavior that appears to span at least two decades. Three of the women worked for Batali in some capacity during their careers. One former employee alleges that over the course of two years, he repeatedly grabbed her from behind and held her tightly against his body. Another former employee alleges that he groped her and that, in a separate incident, he compelled her to straddle him; another alleges that he grabbed her breasts at a party, though she no longer worked for him at the time. The woman whose allegations are described above has never worked for Batali, though she works in the restaurant industry.
The finance ministers from Europe’s five largest economies have warned the Trump administration that Republican tax cut plans would flout international agreements and undermine trade, threatening to turn a Washington policy battle into a transatlantic row.
A growing number of Chinese investments targeting US companies are stalling because of a slowdown in Washington’s national security review process, and as trade tensions rise between Beijing and Donald Trump’s administration.
The EU, Japan and the US are set to announce a new alliance to take on China more aggressively over trade issues such as overcapacity in steel and forced technology transfers, in a rare effort at international economic co-operation by the Trump administration.
RATES, LIQUIDITY, SYSTEMIC RISK, BALANCE SHEETS
Bitcoin is in the “mania” phase, with some people even borrowing money to get in on the action, securities regulator Joseph Borg told CNBC on Monday.
“We’ve seen mortgages being taken out to buy bitcoin. … People do credit cards, equity lines,” said Borg, president of the North American Securities Administrators Association, a voluntary organization devoted to investor protection. Borg is also director of the Alabama Securities Commission. “This is not something a guy who’s making $100,000 a year, who’s got a mortgage and two kids in college ought to be invested in.”
The Japanese exchange at the heart of bitcoin’s recent surge has said its investors are fuelling the cryptocurrency’s feeding frenzy as they buy in with leverage up to 15 times their cash deposit.
Bitcoin’s meteoric rise continued to shock markets last week as the currency soared another 50 per cent to hit new highs over $17,000. Wild trading saw different prices around the world: while the price was about $16,000 a bitcoin on Friday afternoon in Tokyo, it fell to about $15,000 during the European day.
“I think Japan is leading the market higher,” said Mr Kano.
So, you’ve helped mom buy some bitcoins and grandma is starting to feel left out as well. Being the great grandson you are, you feel obligated to making her feel included in the latest family craze! But grandma doesn’t believe in spending ridiculous amounts of money on an Iphone, she uses an affordable, tasteful Android. Now let’s introduce grandma to cryptocurrencies in three easy steps.
China’s sweeping deleveraging push is poised to inflict more pain next year. Authorities tightening funding in financial markets and reining in excessive borrowing will likely deal a blow to investment in infrastructure and property, while soaring corporate funding costs may damp business expansion. That could add to headwinds facing an economy expected to grow at the slowest pace in more than a quarter century next year, complicating the balancing act for policy makers who want to defuse the country’s debt bomb without derailing the expansion.
In the Beijing leadership compound of Zhongnanhai, officials are putting in place a contingency plan to combat consequences for China of U.S. tax changes as well as expected interest-rate increases by the Federal Reserve, according to people with knowledge of the matter. What they fear is a double whammy sapping money out of China by making the U.S. a more attractive place to invest.
Under the plan, the people say, the People’s Bank of China stands ready to deploy a combination of tools—higher interest rates, tighter capital controls and more-frequent currency intervention—to keep money at home and support the yuan.
An official involved in Beijing’s deliberations called Washington’s tax plan a “gray rhino,” an obvious danger in China’s economy that shouldn’t be ignored. “We’ll likely have some tough battles in the first quarter,” the official said.
Blank-check companies, otherwise known as special purpose acquisition companies, or SPACs, are listed companies that raise money from investors to go and buy a company as yet unidentified. The returns to investors can be stellar—but on average they aren’t great. Investing blind looks to be as high-risk as it sounds.
This year, there have been almost $14 billion worth of new listed shares in blank-check companies, a record, outstripping 2007’s $12.3 billion global issuance, and giving it all a peak-of-the-markets feel. Between 2007 and 2017, listings were fewer and issuance averaged less than $3 billion a year.
MACRO OP-EDS, INSIGHT, EVENTS AND TRENDS
The hard turn toward authoritarianism is already at hand. The President and his state-run media apparatchiks at Fox News are already hard at work gaslighting the 30 million or so fanatics that they can count on no matter what. It went from “no contact with Russians” to “okay, some contact but it was about adoptions” to “yes, collusion, but the President’s inner circle didn’t know about it” to “collusion is okay because Hillary.” People with American flag emojis in their social media profile are working overtime to justify a successful Russian plot to undermine our democracy.
A large portion of the country has lost its mind. If you told these people three years ago that they would be rooting for the KGB to defeat the FBI, for a millionaires’ tax cut subsidized by the middle class, and for a child molester to win a seat in the US Senate, they’d have laughed in your face. But here we are.
And now there is talk in the air of a Constitutional Crisis when (not if) Mueller gets too close to the truth and gets removed from the investigation. My personal belief is that this possibility is not being priced into risk assets. And lest you think this is an event that the rest of the country will accept tacitly, sending off a few tweets and then going to bed, you may want to rethink this.
Because Congress will not act to defend the Constitution, the people are going flip out when it goes down. The somewhat amorphous #Resistance movement is going to explode into the streets, making last fall’s Womens March look like a May Day Parade.
With Twitter as his Excalibur, the president takes on his doubters, powered by long spells of cable news and a dozen Diet Cokes. But if Mr. Trump has yet to bend the presidency to his will, he is at least wrestling it to a draw.
Around 5:30 each morning, President Trump wakes and tunes into the television in the White House’s master bedroom. He flips to CNN for news, moves to “Fox & Friends” for comfort and messaging ideas, and sometimes watches MSNBC’s “Morning Joe” because, friends suspect, it fires him up for the day.
Energized, infuriated — often a gumbo of both — Mr. Trump grabs his iPhone. Sometimes he tweets while propped on his pillow, according to aides. Other times he tweets from the den next door, watching another television. Less frequently, he makes his way up the hall to the ornate Treaty Room, sometimes dressed for the day, sometimes still in night clothes, where he begins his official and unofficial calls.
Bitcoin’s market cap is simply its current price in dollars, times the total number of Bitcoins currently in circulation. But it makes little sense to compare this to the market capitalization of businesses like Citigroup or Visa, currently $201 billion and $255 billion, respectively. Market capitalization measures the equity value of a business, or what investors are willing to pay for its future profits. Bitcoin isn’t a business and has no profits.
This comparison gives an exaggerated impression of Bitcoin’s relative size. For Citigroup, the more apt comparison would be to its total assets, which were $1.8 trillion at the end of September. For Visa, the more interesting comparison would probably be the amount of payments processed by the card network vs. Bitcoin’s blockchain. There are currently around 337,000 Bitcoin transactions a day, according to blockchain.info. Visa processed 468 million transactions a day in the three months through September.
In other words, on any valid comparison to established global financial institutions, Bitcoin is still small fry.
If we are already worrying about our technological subservience today, then what will happen during the next stage of the internet’s evolution when billions of connected devices come online? Our watches, clothes, cars and digital assistants may cater to our every convenience but they will also monitor every spasm of our daily lives, leaving us naked in front of our emerging algocracy.
Is this internet of things going to set us free or lock us up?
Mr Howard argues that the internet of things is emerging as the most powerful political tool ever created, challenging and, in some respects, supplanting the authority of the most successful form of political organisation for the past 500 years, the nation state. “By 2020 there will be some 30bn devices connected to the internet, and political power over the 8bn people on the planet will rest with the people who control those devices,” he writes.
If the Trump administration launches a trade war with China Mr Lighthizer will be the general leading the assault. If the president decides to act on his threat to withdraw from the North American Free Trade Agreement with Canada and Mexico it will be because Mr Lighthizer has driven negotiations to a stalemate.
As Mr Lighthizer and ministers from the 163 other members of the World Trade Organization meet in Buenos Aires this week no other attendee wields more power over the future of the institution or the international trading system it anchors.
“If Bob went in to see the president and said, ‘I think you ought to go into the Rose Garden this afternoon and say that you are terminating our membership in the WTO’, I really think the president would be there in a heartbeat before anybody could stop him,” says one official.
The World Trade Organization knits together countries around the world by working to reduce trade barriers and resolve disputes among its members but it has come under criticism not just from globalization’s critics. Its supporters have said it has fallen short of its ambitious goals to create trade agreements among scores of countries with different economies, cultures and income levels.
But it has never faced such uncertainty as it does now, when its longtime leader and champion, the United States, has turned into a skeptic — putting the future of the group and the kind of broad trade agreements it is aimed at forging in doubt.
Hoping to woo companies that will move employees from London, leaders in Paris are trying to replace red tape with a red carpet. The country is in the midst of a sweeping attempt at national rebranding. Labor laws are being changed to make hiring and firing easier. New legislation has slashed a “wealth tax” that was said to drive millionaires out of the country. Courts with English-speaking judges are in the works, and a new international school is under construction to cater to the children of foreign executives.
There’s a sense of urgency behind these changes. Hundreds of financial companies may need to relocate thousands of London-based workers before Britain leaves the European Union by the end of March 2019, the withdrawal known as Brexit. Otherwise, these companies could lose their financial passporting rights, which grants them privileged access to the 27 countries that will remain in the European Union.
That has set off a high-stakes international competition among a handful of cities hoping to become Europe’s financial capital. Decision time is looming. The Brexit negotiation breakthrough announced on Friday merely solved preliminary issues that allow the next round of talks to commence. Under the current timetable, a final agreement must be signed well before the March 2019 deadline.
She has been called “a small lady with a large I.Q.” She has been mocked for wearing the same outfit to both her official White House nomination and her confirmation hearing. (“At least we know her mind won’t be preoccupied with haute couture,” a Washington gossip columnist wrote.) And when President Barack Obama once referred to Janet L. Yellen as “Mr. Yellen,” she didn’t bother correcting him.
Ms. Yellen, the first woman to serve as the head of the Federal Reserve Board, didn’t ask to become a feminist icon, and she almost never talks about gender in the abstract or her historic role as the agency’s chairman (she bristles at being called “chairwoman”). And yet, during a tenure characterized by a plummeting unemployment rate and consistently low inflation, Ms. Yellen became a pop culture phenomenon.
Simons, a noted mathematician, is also the founder of Renaissance Technologies, one of the world’s largest hedge funds. His income last year was $1.6 billion, the highest in the hedge-fund industry. You might assume that he had to show up every day at Renaissance in order to make that kind of money, but Simons, who is seventy-nine, retired eight years ago from the firm, which he started in the late seventies. His Brobdingnagian compensation is a result of a substantial stake in the company. He told me that, although he has little to do with Renaissance’s day-to-day activities, he occasionally offers ideas. He said, “I gave them one three months ago”—a suggestion for simplifying the historical data behind one of the firm’s trading algorithms. Beyond saying that it didn’t work, he wouldn’t discuss the details—Renaissance’s methods are proprietary and secret—but he did share with me the key to his investing success: he “never overrode the model.” Once he settled on what should happen, he held tight until it did.
The “golden age of gas” has not turned out quite as the forecasters and the gas producers who promoted the slogan a few years ago expected. Gas was supposed to be the irresistible fuel of the future. After the disaster at Fukushima, nuclear power stations across Japan were closed and natural gas imports surged with the result that prices in the north Asian market more than doubled, at times touching $20/mmbtu. Gas was the safe, reliable fuel and it was cleaner than coal – making it the obvious replacement as the world became more serious about tackling the risks of global warming and climate change.
After hubris comes nemesis. Global gas demand has increased but by much less than predicted. Gas demand in Europe is 12 per cent lower than it was 10 years ago. Chinese and Indian demand continues to grow but the dramatic gains by solar power, where costs have fallen 85 per cent since 2009, are opening up the market while in both countries the strongly entrenched position of coal – a source of millions of direct and indirect jobs – will be very tough to break down.
Where gas can compete it will play a significant role in the energy mix. But prices and margins will not be high. Those who dreamed of ever-rising volumes and prices will be disappointed. The golden age has proved to be a golden bubble.
When Mr. Putin confirmed last week that he would run again, he might as well have been firing the starting gun for the race toward his succession. He is barred by the Constitution from seeking a third consecutive term, his fifth total, in 2024.
“The election itself does not matter at all,” said Gleb O. Pavlovsky, a political analyst and former Kremlin consultant. The people around the president, he added, “are deciding the question of who they themselves will be after Putin. That is the main motive behind this fight: It is a struggle for a place in the system after Putin is gone.”
Our analysis shows that chancellor Brüning’s austerity measures were positively associated with increasing vote shares for the Nazi party. Depending on how we measure austerity and the elections we consider, each 1 standard deviation increase in austerity is associated with a 2 to 5 percentage point increase in vote share for the Nazis. Consistent with existing evidence, we find that unemployment rates were linked with greater votes for the Communist party. Our findings are robust to a range of specifications including a border-pair policy discontinuity design and alternative measures of radicalization such as Nazi party membership. The coalition that allowed a majority to form government in March 1933 might not have been able to form had fiscal policy been more expansionary.
If 2017 looked like the year when moderate politicians took back Europe, look again. The election of centrist French President Emmanuel Macron and the reelection of German Chancellor Angela Merkel mask a rising tide of anti-immigrant and populist sentiment that is sweeping aside or weakening mainstream party politics across the continent.
A Bloomberg analysis of decades of election results across 22 European countries reveals that support for populist radical-right parties is higher than it’s been at any time over the past 30 years. These parties won 16 percent of the overall vote on average in the most recent parliamentary election in each country, up from 11 percent a decade earlier and 5 percent in 1997.
While some parties evolved along the way, they are all now seen as anti-elite, nativist, and having a strong law and order focus, as defined by academics who helped shape this analysis.
Across Europe, nearly 55,000 agencies recruit hundreds of thousands of temporary workers each year for cheap manual labor and service jobs. The agencies allow employers to tap into a more flexible work force — and avoid some of the region’s more onerous labor costs.
Those agencies recruiting manual labor scour the Continent for people willing to pick vegetables in Britain, pour concrete in France or work assembly lines in Eastern Europe. While they receive monthly pay, they often work long days, so their wages can average out to as little as 3.50 euros, or about $4.10, an hour — less than the minimum wage in some of the countries. Some agencies control entire labor supply chains, transporting recruits across borders, lodging them, busing them to and from job sites, and then moving them elsewhere when they’re no longer needed.
Mexico began lifting tariffs and allowing more foreign investment in the 1980s, a transition to free trade given an exclamation point in 1994, when Mexico, the United States and Canada enacted the North American Free Trade Agreement. Opponents in Mexico warned the country would lose its cultural and economic independence.
But few critics predicted it would transform the Mexican diet and food ecosystem to increasingly mirror those of the United States. In 1980, 7 percent of Mexicans were obese, a figure that tripled to 20.3 percent by 2016, according to the Institute for Health Metrics and Evaluation at the University of Washington. Diabetes is now Mexico’s top killer, claiming 80,000 lives a year, the World Health Organization has reported.
With coding skills, a foreign degree, fluent English and an apartment barely big enough for his espresso maker and two cats, Si Ruomu thought he was the kind of go-getting young tech worker that Beijing needs to thrive in the 21st century.
That was before the police arrived at his apartment building and ordered him and hundreds of others to vacate within 48 hours. Like most of his fellow tenants, Mr. Si had come from elsewhere in China to find work in the capital, which often treats migrants virtually as second-class citizens.
“One minute you’re drinking espressos, the next you’re being evicted,” said Mr. Si, 28, a bespectacled programmer who grew up in northern China and studied computer science in New Zealand. “I’m starting to think whether people like me have a future in Beijing.”
As Beijing has launched its most aggressive drive in decades to rid itself of unwanted migrants, the brunt of the crackdown has fallen on laborers from the countryside. But it has also hurt a different kind of migrant: educated and ambitious white-collar workers drawn to the city’s new economy of tech, finance and hospitality industries.
Flying at more than 20,000 feet, the hulking long-range bomber circled ominously above a militant-infested swath of Afghan territory near the rugged border with Pakistan, hunting for Taliban or Islamic State fighters who could threaten friendly troops nearby.
A ride in the cockpit on a recent 13-hour combat mission provided a rare bird’s-eye view of the Trump administration’s newly revamped Afghanistan policy of sending thousands of additional American troops closer to the front lines — and more warplanes like this one to protect them. That includes striking Taliban drug depots to cripple the group’s financial lifeline, as the Pentagon did in Iraq and Syria in hitting the Islamic State’s oil tankers and cash-storage sites.
During the Obama administration, American commanders were barred from carrying out offensive airstrikes against the Taliban. Attacks had to be defensive, aimed at protecting Afghan forces on the ground, conditions that commanders complained tied their hands and led to a stalemate. Now the gloves are off, and American warplanes have already dropped more than 3,900 bombs and missiles against targets in Afghanistan this year, three times as many as last year.
CENTRAL BANKS & MONETARY POLICY
Wall Street economists are telling investors to brace for the biggest tightening of monetary policy in more than a decade. With the world economy heading into its strongest period since 2011, Citigroup Inc. and JPMorgan Chase & Co. predict average interest rates across advanced economies will climb to at least 1 percent next year in what would be the largest increase since 2006.
The Federal Reserve is expected to end the year by raising its benchmark interest rate for just the fifth time since the financial crisis, as it continues to slowly unwind its post-crisis stimulus campaign. But pressures are building that could prompt the Fed to start moving a little more quickly.
Robust job creation in November is the latest sign of stronger economic growth, and it comes as Republicans are preparing a $1.5 trillion tax cut that President Trump has described as economic “rocket fuel.”
The Fed is widely expected to acknowledge the strength of the economy by increasing its benchmark rate by one quarter of a percentage point on Wednesday, after its final policy meeting of the year. Investors, however, already are looking beyond that decision. They want to know what comes next and whether the Fed, which will soon have a new chairman and several new governors, will deviate from the patient approach of the current Fed chairwoman, Janet L. Yellen.
An expected interest rate rise by the Federal Reserve this week will open the door to further increases in the new year as the prospect of tax cuts helps underpin an improving outlook for US growth, economists say.
POSITIONING, INFLECTION, MARKET CALLS
U.S. stocks rose to another record last week, and in the process reached their most overbought level in more than two decades, according to the relative-strength index. The technical indicator of market momentum signals an increased potential for a pullback when it rises above 70. The S&P 500 closed Friday with an RSI level just below 82.
The world’s biggest companies could be hiding the biggest risks. That’s because companies such as Amazon.com Inc. and Alibaba Group Holding Ltd are overvalued, according to Robert Naess, who manages about $42 billion in stocks at Nordea Bank AB, Scandinavia’s largest bank.
“I’m a bit worried about the valuation of these very popular companies,” Naess, portfolio manager, said in an interview in Oslo on Friday. “The big stocks have become more expensive. There’s danger of a bubble in them.”
Enthusiasm for a tax overhaul could be driving institutional investors to flee mutual funds and pile into exchange-traded funds tracking stock market indexes. Last week, there was “an acceleration in the rotation from equity mutual funds into equity ETFs,” Goldman Sachs Group Inc. equity research analysts wrote in a note to clients Monday. Investors pulled $11.6 billion from mutual funds, the second largest weekly outflow this year, while pouring $14.6 billion into ETFs, according to the bank’s data.
Wall Street’s eight-year love affair with stocks kicked into overdrive this year, spurred by a stronger economy, the likelihood of tax cuts, and a lack of compelling investment alternatives. Wall Street strategists expect stocks to climb 7% in 2018, helped by corporate earnings growth.
COLOR, EARNINGS, SENTIMENT, VALUATIONS
Boeing Co. is handing out more goodies to investors already flush from the company’s leap this year to the top of the Dow Jones Industrial Average. The quarterly dividend will rise 20 percent to $1.71 a share, Boeing said in a statement Monday, almost doubling analyst expectations. Directors also authorized $18 billion in share buybacks, up from a $14 billion program they put in place a year ago.
The US toymaker on Monday revised its outlook for the full-year, warning that sales in the holiday quarter will continue to be “negatively impacted” by tighter inventory at key retailers and as a result of its underperforming brands.
DEALS, MERGERS, IPOs, LBOs, RESTRUCTURINGS
Ascension and Providence St. Joseph Health are in talks about a possible merger that would put 191 hospitals in 27 states under a single owner, as a series of major deals are poised to consolidate control of the health-care landscape into fewer hands.
Walt Disney Co. may announce a deal as soon as this week to acquire a large piece of 21st Century Fox Inc., according to a person familiar with the matter, transferring legendary Hollywood properties to new owners.
Apple has acquired Shazam Entertainment, giving it one of the popular song-recognition apps at a time the iPhone maker is looking to boost its music-subscription service.
Activist investor Carl Icahn plans to launch a new board fight with Xerox in an attempt to change management of the company, his second offensive against the copy-machine maker in a roughly two-year span.
Walt Disney would likely significantly scale back Fox’s movie studio if the company nails down a deal to buy most of the assets of 21st Century Fox, as part of Chief Executive Robert Iger’s plan to transform the company into a direct-to-consumer digital powerhouse to rival Netflix.
REAL ESTATE, HOUSING, REITS, COMMERCIAL
This week Wellington will publish legislation to ban foreigners from buying existing homes — the first plank in a suite of policies designed to tackle a chronic shortage of affordable homes that has sparked a homeless crisis.
The problem is mirrored across many western nations — including Canada, the UK and Australia — where low interest rates have supercharged house prices, removing the prospect of home ownership for many on lower incomes. An influx of foreign home buyers, fast-rising rents, stagnant wages and cutbacks to public housing schemes following the 2008 financial crisis are all taking a toll on housing supply and affordability.
HEDGE FUNDS, PRIVATE EQUITY, MONEY MGMT
Voleon is among funds deploying machine learning, a technology in which computers develop trading strategies. It’s harder than it sounds, given that markets are noisy and clients often want a better understanding of how their money is being invested.
The firm’s uneven results, complicated strategy—and Mr. Kharitonov’s habit of occasionally pausing client meetings to hold phone conversations in Russian—haven’t stopped Voleon from growing. It is broadening its investing target beyond U.S. and European stocks and has expanded into another building near the University of California, Berkeley, campus.
Some investment firms that have tried machine learning use it only for limited tasks, among them AQR Capital Management LLC, which is experimenting with the technique to find the optimal time to roll over futures contracts. Voleon not only is fully focused on machine learning— trading more than $1 billion worth of stocks a day using the technique— but stands out for its complete lack of interest in the reason its system buys one stock and sells another.
The more predictive a machine-learning system is, the more difficult it is for people to comprehend what it is up to, according to Mr. Kharitonov. “You can have maximum explainability or maximum predictive power,” he said, paraphrasing the late Berkeley statistician Leo Breiman.
At the root of this, mathematicians say, is that the human mind is set up to understand scenarios with about three dimensions, while dozens or hundreds are within the grasp of machine-learning systems. Their power comes in discovering connections, often nonlinear, among those dimensions.
“That report on the earnings call means that an analyst that’s struggling to keep up with covering 10 or 12 companies can cover 30 or 50,” Schnidman said in an interview by phone. It’s about “machines helping to aid the human decision process,” he said. “We’re still a long way off a point where machines are driving decision-making totally.”
The recommendation last month from the world’s largest sovereign wealth fund that it sell its oil and gas stocks is forcing top Norwegian policymakers to grapple with the question of what the fund and the country wants to stand for.
Officials say there is a good chance that the proposal could be delayed, even shelved. But they also say that there is a discussion coming that policymakers cannot avoid.
“I think the government will try to park this discussion. But they can’t avoid it for ever because Norway will still be massively exposed to the oil price. What is Norway about? What is the fund going to be? This debate is coming one way or the other,” said one Norwegian official.
ENERGY RENEWABLES, NUCLEAR
California battery startup Stem Inc. is deploying a network of energy storage systems in Japan with Mitsui & Co. Ltd., marking its first foray into Asian markets. The companies, which gained an endorsement from Japan’s Ministry of Energy, Trade and Infrastructure, will install a “virtual power plant” made up initially of aggregated storage systems that’ll supply 750 kilowatt-hours of capacity to the grid.
POLLUTION, CLIMATE & ENVIRONMENT
With a possibility of the volcano erupting again any time, scores of hotel rooms and flights to Bali have been left empty into the year end, casting doubt on one of the resort-island’s busiest seasons.
Southern California’s largest wildfire exploded to 230,000 acres over the weekend, threatening new areas Monday as it pushed west into Santa Barbara County.
British Columbia is forging ahead with a controversial mega dam in a decision that’s likely to put pressure on the western Canadian province’s finances and prompt a political backlash.
“This is not about energy,” Zinke told reporters Tuesday. “There is no mine within Bears Ears.” But the nation’s sole uranium processing mill sits directly next to the boundaries that President Barack Obama designated a year ago when he established Bears Ears. The documents show that Energy Fuels Resources (USA) Inc., a subsidiary of a Canadian firm, urged the Trump administration to limit the monument to the smallest size needed to protect key objects and areas, such as archeological sites, to make it easier to access the radioactive ore.
The awarding of the grants comes as the Trump administration has proposed slashing federal science budgets and has dropped out of the Paris climate accord.
The U.S. exports about one-third of its recycling, and nearly half goes to China. For decades, China has used recyclables from around the world to supply its manufacturing boom. But this summer it declared that this “foreign waste” includes too many other nonrecyclable materials that are “dirty,” even “hazardous.” In a filing with the World Trade Organization the country listed 24 kinds of solid wastes it would ban “to protect China’s environmental interests and people’s health.”
The complete ban takes effect Jan. 1, but already some Chinese importers have not had their licenses renewed. That is leaving U.S. recycling companies scrambling to adapt.
“As the country’s economy develops, industries are using more water,” said Huanguang Qiu, a professor with the School of Agricultural Economics and Rural Development at Renmin University. “And the competition will become even more fierce.”
Ma Jun’s years as an environmental activist taught him one lesson: if you want factories to clean up their act, shaming then in front of Apple Inc. and Wal-Mart Stores Inc. works better than government fines.
GEOPOLITICS, CRIME, TERRORISM
Spanish authorities have outraged Catalan separatists with a dramatic assertion of their direct control over Catalonia: using the cover of night to remove artefacts from a museum and spirit them out of the region.
The seizure of a series of medieval tombs and fragments of Renaissance altarpieces from a museum in Lleida led to clashes between police and separatists and has inflamed anger before a crucial regional election on December 21.
The EU has rebuffed a call by Benjamin Netanyahu to echo President Donald Trump’s recognition of Jerusalem as Israel’s capital. Hours after the Israeli prime minister opened a landmark trip to Brussels by urging European countries to follow the US lead, Federica Mogherini, EU foreign policy chief, warned that such a move “cannot come”.
President Vladimir V. Putin of Russia undertook a whirlwind tour to his new allies in the Middle East on Monday, underscoring the extension of Russia’s influence in the region and the continuing shrinkage of the United States’ role.
Mr. Putin touched down in rapid succession in Syria and Egypt, where he met briefly with their leaders, and landed in Ankara, the capital of Turkey, later in the day.
His excursion came as anger at the United States was running high over President Trump’s unilateral decision to recognize Jerusalem, the third holiest city in Islam, as the capital of Israel. That decision has helped isolate the United States and Israel, angering allies in Europe and the Arab world while helping to convince the Arab public that the United States is solidly anti-Muslim.
PRIVACY, HACKING, CYBERWAR, SURVEILLANCE STATE
The Trump administration is considering a set of proposals developed by Blackwater founder Erik Prince and a retired CIA officer — with assistance from Oliver North, a key figure in the Iran-Contra scandal — to provide CIA Director Mike Pompeo and the White House with a global, private spy network that would circumvent official U.S. intelligence agencies, according to several current and former U.S. intelligence officials and others familiar with the proposals. The sources say the plans have been pitched to the White House as a means of countering “deep state” enemies in the intelligence community seeking to undermine Donald Trump’s presidency.
German’s domestic intelligence agency has accused China of using LinkedIn and other social media sites to infiltrate the German government, a charge that the Chinese government promptly denied.
In a scathing investigation released on Sunday, the intelligence agency, the Office for the Protection of the Constitution, accused Beijing of using social media to target more than 10,000 citizens, including lawmakers and other government employees. To win their trust, the agency said, Chinese agents posed as leaders of think tanks and headhunters, and offered all-expenses-paid trips to China and meetings with influential clients.
PROPAGANDA, CORRUPTION, AUTHORITARIANISM
Philippine President Rodrigo Duterte asked legislators to extend martial law in the southern Philippines for a year, sticking with a policy he said was necessary to fight Islamic extremism despite vehement opposition from rights groups.
The Philippine president, known for his strongman style of governance and defiance of establishment politics, said in a letter to Congress that martial law had helped the government combat a long list of violent acts. He said the violence had been perpetrated in the past year by several armed groups, including some inspired by Islamic State, and that an extension was necessary to quell the rebellion of communist and Islamist groups in the restive south.
Venezuela’s President, Nicolás Maduro, says the country’s main opposition parties are banned from taking part in next year’s presidential election. He said only parties which took part in Sunday’s mayoral polls would be able to contest the presidency.
Leaders from the Justice First, Popular Will and Democratic Action parties boycotted the vote because they said the electoral system was biased.
President Maduro insists the Venezuelan system is entirely trustworthy.
Another former Facebook executive has spoken out about the harm the social network is doing to civil society around the world. Chamath Palihapitiya, who joined Facebook in 2007 and became its vice president for user growth, said he feels “tremendous guilt” about the company he helped make. “I think we have created tools that are ripping apart the social fabric of how society works,” he told an audience at Stanford Graduate School of Business, before recommending people take a “hard break” from social media.
Palihapitiya’s criticisms were aimed not only at Facebook, but the wider online ecosystem. “The short-term, dopamine-driven feedback loops we’ve created are destroying how society works,” he said, referring to online interactions driven by “hearts, likes, thumbs-up.” “No civil discourse, no cooperation; misinformation, mistruth. And it’s not an American problem — this is not about Russians ads. This is a global problem.”
Former President Barack Obama says Americans must be vigilant in their defense of democracy or risk following the path of Nazi Germany in the 1930s. At a speech earlier this week, the former president told the Economic Club of Chicago that “things can fall apart fairly quickly” if Americans don’t “tend to this garden of democracy.”
During the speech Tuesday, Obama pointed to Hitler’s rise to power in Germany as he implored the audience to “pay attention … and vote.” Obama also defended the media. He said the press “often drove me nuts” but that he understood that a free press was vital to democracy.
As the Trump administration nears its one-year mark, White House officials are touting cuts to regulations as one of their top achievements. “In the history of our country, no president, during their entire term, has cut more regulations than we’ve cut,” President Donald Trump said last month. His Press Secretary Sarah Sanders puts the total at nearly 1,000, an astounding accomplishment for the notoriously slow-moving federal bureaucracy.
But government records—and in some cases the agencies carrying out Trump’s policies—tell a very different story.
Mr. Trump was reacting to an article on Saturday that provided an inside look at the president’s typical day, describing how he watches television at least four hours a day and sometimes twice that amount, typically starting his day watching CNN or MSNBC.
A spokeswoman for The Times, Danielle Rhodes Ha, rejected the idea that the article was false. “We stand by our reporting, sourced from interviews with 60 advisers, associates, friends and members of Congress, including many who interact with President Trump every day,” she said.
SCANDALS, LAWSUITS, FINES, REGULATORY
The bank said the Justice Department was expected to seek dismissal of a case related to money laundering as part of a so-called deferred prosecution agreement.
More than three years after the $4.9 billion PokerStars deal turned his company into one of the world’s largest online gambling businesses, David Baazov was in court Monday to face insider trading and market manipulation charges.
SILICON VALLEY, UNICORNS, STARTUPS, VC
France is to impose a total ban on pupils using mobile phones in primary and secondary schools starting in September 2018, its education minister has confirmed.
Phones are already forbidden in French classrooms but starting next school year, pupils will be barred from taking them out at breaks, lunch times and between lessons. Teachers and parents are divided over a total ban, however, with some saying children must be able to “live in their time”. In France, some 93 per cent of 12 to 17-year-olds own mobile phones.
Tech firms have largely been spared the recent onslaught of sexual harassment allegations, but reports of the legendary “bro” culture continue to surface.
Amid the seemingly daily revelations of improper behavior, sources recently told The Post that on an autumn day in 2015, a trio of Snap execs were overheard discussing their weekend plans — which included ordering up prostitutes — while on a partnerships conference call with a well-known digital media company.
The Los Angeles-based tech bros must have thought they were on mute, according to our tipster, because they began to detail their party plans among themselves, but did not realize that someone from the media company had already dialed into the call and was waiting on the line.
RETAIL APPAREL, SPECIALTY, DINING, BIG BOX
This year Amazon will leapfrog T.J. Maxx owner TJX Cos. and Macy’s Inc. to become the second-biggest seller of apparel and footwear in the U.S., Wells Fargo estimates. In some categories—like the active wear that Americans increasingly wear all day, whether or not they hit the gym—private labels combined account for 20 percent of the market, according to researcher NPD. That makes store brands in aggregate larger than any single brand, which should strike fear in the executive suites of Lululemon Athletica, Nike, and Under Armour.
MEDIA, CABLE, SPORTS, ENTERTAINMENT
Over the course of 2017, the search engine has become publishers’ main source of external page views, according to new data from Parse.ly, a digital analytics company.
It’s basically a flip from the beginning of the year: In January, Facebook provided nearly 40 percent of publishers’ external traffic; now that’s down to 26 percent. And Google, which started the year at 34 percent, now generates 44 percent of traffic. Parse.ly’s data comes from some 2,500 publishers that use its analytics service, including the Wall Street Journal, Time Inc., Mashable and Huffington Post.
Verizon Communications Inc (VZ.N) will pay around $2.25 billion for a five-year partnership with the National Football League that allows users to stream games on its Yahoo and go90 platforms as well as on mobile devices, a source told Reuters on Monday.
One example of how things could work is the mobile wireless market, where some providers already have used pricing tactics to favor certain websites and services over others.
The 2015 Obama-era rules didn’t explicitly prohibit these tactics, which generally allow customers to access certain websites without having it count against their monthly data cap. Wireless carriers, which often subject their users to strict data limits, were aggressive in experimenting with such plans, also known as “zero rating.”
AUTOS, ELECTRIC, SELF-DRIVING
General Motors Co Chief Executive Mary Barra said on Monday that if Congress decides to eliminate an electric vehicle tax credit it “will have an impact” on sales of electric vehicles such as GM’s Chevrolet Bolt.
MEDICAL, PHARMA, BIOTECH
A US drugmaker is charging almost $300 for a bottle of prescription vitamins that can be bought online for less than $5, in the latest attempt at price gouging in the world’s largest healthcare market.
Avondale Pharmaceuticals raised the price of Niacor, a prescription-only version of niacin, by 809 per cent last month, taking a bottle of 100 tablets from $32.46 to $295, according to figures seen by the Financial Times.
ARTIFICIAL INTELLIGENCE, DRONES, FUTURE TECH
Researchers put AI software into a series of simple, two-dimensional video games composed of blocks of pixels, like a chess board, called a gridworld. It assesses nine safety features, including whether AI systems can modify themselves and learn to cheat.
AI algorithms that exhibit unsafe behavior in gridworld probably aren’t safe for the real world either, Jan Leike, DeepMind’s lead researcher on the project said in a recent interview at the the Neural Information Processing Systems (NIPS) conference, an annual gathering of experts in the field.
DeepMind’s proposed safety tests come at a time when the field is increasingly concerned about the unintended consequences of AI. As the technology spreads, it’s becoming clear that many algorithms are trained on biased data sets, while its difficult to show why some systems reach certain conclusions. AI safety was a major topic at NIPS.
China’s world-leading drone industry faces a burgeoning problem: its recreational aircraft, in addition to taking breathtaking clifftop selfies, are being used by terrorists to kill people.
As of the end of last year, 32 models from six countries had been identified in the Syria and Iraq conflict, according to research by the Center for the Study of the Drone at Bard College in New York state. While most are military drones such as the US Predator and its Chinese copy the Caihong CH-4, the conflict has seen the first widespread use of hobby drones as weapons — and almost all were Chinese brands.
In the race to commercialize a new type of powerful computer, Microsoft Corp. has just pulled up to the starting line with a slick-looking set of wheels. There’s just one problem: it doesn’t have an engine – at least not yet.
The Redmond, Washington-based tech giant is competing with Alphabet Inc.’s Google, International Business Machines Corp. and a clutch of small, specialized companies to develop quantum computers – machines that, in theory, will be many times more powerful than existing computers by bending the laws of physics.
Lewis, a University of Alabama graduate who grew up in Huntsville, used social media, computer skills and mail-order parts to invent an artificial pancreas for people with diabetes. Along with co-inventor and husband Scott Leibrand, she’s now giving her discovery away.
The device is a success – hundreds of people are using it, including Lewis – and it is bringing the young inventors increasing attention. Just this spring, Fast Company put the 28-year-old Lewis on its 2017 list of America’s 100 “most creative people in business.”
HEALTH, PRODUCTIVITY AND WELLNESS
The defect that causes the neurodegenerative disease Huntington’s has been corrected in patients for the first time, the BBC has learned. An experimental drug, injected into spinal fluid, safely lowered levels of toxic proteins in the brain. The research team, at University College London, say there is now hope the deadly disease can be stopped. Experts say it could be the biggest breakthrough in neurodegenerative diseases for 50 years.
It’s called medication nonadherence, and it’s a well-documented and longstanding problem, particularly for patients with chronic conditions. The drugs they’re prescribed are intended to prevent costly complications, reduce hospitalization, even keep them alive. But even when the stakes are high, many patients don’t take their meds.
Maybe people forget to take their meds — about 60 percent of people say as much — so we just need to remind them. Maybe people don’t understand the value of what they’re prescribed, so we just need to educate them. Maybe drug regimens are too complex, so we just need to simplify dosing.
All these methods have been tried. It’s not so clear any of them work very well. Only one approach has repeatedly been shown to be effective: reducing the cost of medications.
The biggest differences between the Mensa group and the general population were seen for mood disorders and anxiety disorders. More than a quarter (26.7%) of the sample reported that they had been formally diagnosed with a mood disorder, while 20% reported an anxiety disorder—far higher than the national averages of around 10% for each. The differences were smaller, but still statistically significant and practically meaningful, for most of the other disorders. The prevalence of environmental allergies was triple the national average (33% vs. 11%).
To explain their findings, Karpinski and colleagues propose the hyper brain/hyper body theory. This theory holds that, for all of its advantages, being highly intelligent is associated with psychological and physiological “overexcitabilities”, or OEs. A concept introduced by the Polish psychiatrist and psychologist Kazimierz Dbrowski in the 1960s, an OE is an unusually intense reaction to an environmental threat or insult. This can include anything from a startling sound to confrontation with another person.
Psychological OEs include a heighted tendency to ruminate and worry, whereas physiological OEs arise from the body’s response to stress. According to the hyper brain/hyper body theory, these two types of OEs are more common in highly intelligent people and interact with each other in a “vicious cycle” to cause both psychological and physiological dysfunction. For example, a highly intelligent person may overanalyze a disapproving comment made by a boss, imagining negative outcomes that simply wouldn’t occur to someone less intelligent. That may trigger the body’s stress response, which may make the person even more anxious.
Wu Yongning, 26, was doing pull-ups at the top of the Huayuan International Centre in Changsha, the capital of Huan Province, when he lost his grip and fell. Harrowing footage captured the moment he let go, plunging 45ft on to a terrace below where his body was later found by a window cleaner.
In an age of nonstop breaches and hacks, here are ways to improve your online security based on your level of risk, from average user to NSA contractor.
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