Macro Links Feb 13th – Oceans of Red Ink

Macro Links Feb 13th – Oceans of Red Ink

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BITCOIN, CRYPTOCURRENCY, INITIAL COIN OFFERINGS

Crypto Investors Face Tax of Up to 55% in Japan – Bloomberg

Japan’s National Tax Agency has caught onto the cryptocurrency mania gripping the world and investors in digital coins are about to pay the price. Unlike winnings on stocks and foreign currencies, which are taxed around 20 percent, Japan’s levy on profits from virtual money runs from 15 percent to 55 percent. The top amount applies to people with annual earnings of 40 million yen ($365,000).

Icelandic Lawmaker Floats Bitcoin Mining Tax – CoinDesk

An Icelandic lawmaker has suggested imposing a new tax on bitcoin mining companies. “Under normal circumstances, companies that are creating value in Iceland pay a certain amount of tax to the government,” McCarthy was quoted as saying. “These companies are not doing that, and we might want to ask ourselves whether they should.”

Bitcoin energy use in Iceland set to overtake homes, says local firm – BBC News

This year, electricity use at Bitcoin mining data centres is likely to exceed that of all Iceland’s homes, according to Johann Snorri Sigurbergsson. He said many potential customers were keen to get in on the act. “If all these projects are realised, we won’t have enough energy for it,” he told the BBC.

Bitcoin Mania Triggers Miner Influx to Rural Washington – WSJ

Washington state has some of the cheapest power in the U.S. making it a magnet for bitcoin miners, who generate new units of cryptocurrencies—a process that requires vast amounts of electricity. “If you ask the guys at UPS or FedEx what they’re delivering to Wenatchee, I think they’d tell you it’s a whole bunch of bitcoin mining machines,” said Frank Kuntz, mayor of Wenatchee, which has a population of nearly 34,000.

Cryptos Go Green as Market Cap Holds Above $400 Billion – CoinDesk

Sellers reigned supreme a week ago, before better-than-expected Senate hearings calmed market nerves and once more boosted demand for cryptocurrencies. Bitcoin (BTC), the world’s largest cryptocurrency by market capitalization, jumped to $9,070.64 over the weekend and was last seen trading at around $8,800.

3 EU Watchdogs Warn Over ‘High Risks’ of Crypto Investment – CoinDesk

Collectively referred to as the European Supervisory Authorities (ESAs), the regulators state there is a “high risk” that investors will lose all of their funds if they choose to invest in cryptocurrencies, specifically noting that there is an apparent bubble in the markets currently.

European banks break ranks over cryptocurrencies – FT

A handful of smaller European banks are breaking ranks with the rest of the sector by giving investors access to cryptocurrencies and advising on initial coin offerings, despite an intensifying effort by regulators to clamp down on the area. Vontobel and Falcon Bank, the Swiss private banks, are among the lenders that are agreeing to handle cryptocurrency-based investments on behalf of their clients. Germany’s Fidor Bank and Liechtenstein’s Bank Frick are also providing such services.

South Korea Considers Bitlicense-Style System for Cryptocurrency Exchanges – Bitcoin News

The South Korean government is considering introducing an approval system for cryptocurrency exchanges based on the Bitlicense model, developed by the New York State Department of Financial Services. The Korean Ministry of Strategy and Finance is reportedly planning to adopt this system.

The 65 Percent Price Dip Has Made ‘Bitcoin Whales’ A lot More BTC – Bitcoin News

The dip has ‘rekt’ a lot of cryptocurrency traders but the ‘richest bitcoin holders’ have gained thousands more BTC taking advantage of the price variances. According to data collected from Bitinfocharts.com most of the 100 richest BTC addresses haven’t lost any money during the last 65 percent dip — In fact, their stacks of BTC increased exponentially.

Dubai Trader Gets First Middle East License in Cryptocurrencies – Bloomberg

Dubai gold trader Regal RA DMCC is the first company in the Middle East to get a license to trade cryptocurrencies, the Dubai Multi Commodities Centre said. The company will offer storage of Bitcoin, Ethereum and other cryptocurrencies in a vault located in DMCC headquarters in Almas Tower in Dubai, the DMCC said in a statement. Regal RA started trading gold in Dubai in 2016.

A Pair of British Entrepreneurs Sold 50 Luxury Flats For Bitcoin In Dubai | Cointelegraph

The property on offer in Bitcoin ranges from studios that cost $130,000 a piece, approximately equal to 15.5 bitcoins at press time, to two-bedroom apartments for $380,000 each or, roughly, 45 bitcoins. As reported by CNBC last September, the pair originally pledged to sell 150 apartments for Bitcoin, which was the “first major development of this size” to be available for purchase in a digital currency.

IMF Chief Christine Lagarde Says International Crypto Regulation Is ‘Inevitable’ And Necessary | Cointelegraph

International Monetary Fund (IMF) chief Christine Lagarde told CNNMoney yesterday, Feb.11, that regulation of cryptocurrencies is “inevitable” and necessary on an international level. When asked during an interview with CNNMoney emerging markets editor John Defterios, about the increasing popularity of crypto markets possibly being caused by a “starvation for high returns in the global markets,” Lagarde replied that the trend showed a “herd mentality” of those looking for high yield products as well as an element of speculation.

Abu Dhabi: Financial Services Authority Is Working On Cryptocurrency and ICO Regulations | Cointelegraph

The Financial Services Regulatory Authority (FSRA) of the Abu Dhabi Global Market (ADGM) is preparing a set of regulations for cryptocurrencies, Initial Coins Offerings (ICOs) and cryptocurrency exchanges, according to an official announcement published Sunday, Feb. 11.

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TRADE, PROTECTIONISM, REGULATION, OVERSIGHT

Trump’s Deregulation Has Had Little Economic Impact, Goldman Says – Bloomberg

The findings aren’t surprising, the bank said. Rolling back regulations can be a “slow and difficult” task, regulations don’t impose that high of a cost, and state and local actors are often responsible for red tape that really make a difference, according to Goldman Sachs.

China in push to lure overseas tech talent back home – FT

“They recognise that the economy needs to shift to higher-quality production,” said Shan Guangcun, a machine-learning specialist who recently received state funding to return to China from Germany. “So they need talent to come back from overseas, and they are willing to pay for it.”

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HEALTHCARE, BUDGET, INFRASTRUCTURE

White House Proposes $4.4 Trillion Budget That Adds $7 Trillion to Deficits – The New York Times

The blueprint has little to no chance of being enacted as written and amounts to a vision statement by Mr. Trump, who as a businessman once called himself the “king of debt” and has overseen a federal spending spree that will earn him that title in an entirely different arena.

Trump’s budget hits poor Americans the hardest – The Washington Post

President Trump proposed a budget Monday that hits the poorest Americans the hardest, slashing billions of dollars in food stamps, health insurance and federal housing subsidies while pushing legislation to institute broad work requirements for families receiving housing vouchers, expanding on moves by some states to require recipients of Medicaid and food stamps to work.

Trump launches $1.5 trillion sales pitch – POLITICO

The White House finally rolled out President Donald Trump’s long-awaited infrastructure plan Monday, swinging for the fences with a $1.5 trillion initiative that is light on new federal dollars — but could inspire a wave of toll roads, ease decades-old regulations and permanently change cities’ and states’ expectations for assistance from Washington.

Trump proposes eliminating federal funding for PBS, NPR | TheHill

President Trump’s newly proposed budget includes a proposal to end federal funding for the Corporation for Public Broadcasting (CPB), part of a package that includes $300 billion in new spending overall. CPB provides federal funding for PBS and National Public Radio stations. “The Budget proposes to eliminate Federal funding for the Corporation for Public Broadcasting (CPB) over a two year period,” according to the proposal.

Trump’s budget would end student loan forgiveness program – CNBC

Higher education faces massive changes in President Trump’s spending plan released on Monday. The proposal would sharply curtail income-based loan repayment plans, scratch the Public Service Loan Forgiveness Program, embolden the government to go after students who don’t pay their loans and cut funding for federal work study in half.

Trump administration wants to sell National and Dulles airports, other assets around U.S. – The Washington Post

The Trump administration is pushing federal officials to sell off, privatize or otherwise dispose of a broad array of government assets, from Reagan National Airport and the George Washington Memorial Parkway along the Potomac River to properties held by federal agencies across the country.

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TAXATION, WEALTH HAVENS, INEQUALITY

Trump Says He Plans ‘Reciprocal Tax’ on Some U.S. Trading Partners – WSJ

President Donald Trump said Monday he planned to announce as soon as this week what he called a ‘reciprocal tax’ on trade, aimed at countries that he said are taking advantage of the U.S.

The Tax Law Is About to Make Analyzing Earnings Trickier – WSJ

Investors like to see a company’s earnings fully backed by the cash its operations are generating. It demonstrates the company has the money to pay shareholder dividends and invest in its own future. But stretching out payments of the “transition tax” on foreign earnings will muddy that comparison, accounting experts say.

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RUSSIA PROBE

Top Justice Department official Brand quit partly over fear she might be asked to oversee Russia probe – NBC News

The Justice Department’s No. 3 attorney had been unhappy with her job for months before the department announced her departure on Friday, according to multiple sources close to Associate Attorney General Rachel Brand. Brand grew frustrated by vacancies at the department and feared she would be asked to oversee the Russia investigation, the sources said.

Obama worried about sharing Russia info with incoming Trump officials – POLITICO

The warning Obama delivered on Jan. 5, 2017, came during an Oval Office conversation shortly after senior intelligence officials briefed him on Russian cyber-meddling in the 2016 election. It was documented in an email then-national security adviser Susan Rice sent to herself on Jan. 20, the day of Trump’s inauguration.

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NORTH / SOUTH KOREA, IRAN, NUCLEAR WEAPONS

US open to direct talks with North Korea, says Pence – FT

Mr Pence told the Washington Post that the US view was “if you want to talk, we’ll talk”, but that the US did not intend to ease the economic pressure that the Trump administration has been putting on Pyongyang with the help of other countries. His comments followed a flurry of diplomatic activity at the Winter Olympics in South Korea that culminated in North Korean dictator Kim Jong Un inviting Moon Jae-in, the South Korean president, to Pyongyang for a summit.

South Koreans Remain Wary of North’s Olympic Overtures – WSJ

The glow of a start to the Olympics where athletes from both Koreas marched together under one flag appears to have buoyed South Korean President Moon Jae-in, but the prospect of a summit is deepening divisions in Seoul. The main stumbling block: Pyongyang hasn’t demonstrated a willingness to discuss its nuclear-weapons program, whose advances in the past year have drawn increasingly stringent sanctions. The U.S., Seoul’s ally, has insisted that any resolution must begin with a demonstrated willingness from Pyongyang to denuclearize.

In Pyeongchang, High Winds Are No Breeze for Athletes – WSJ

Three days into competition, Pyeongchang has yet to host an Alpine skiing event, with both the men’s downhill and women’s giant slalom postponed for wind gusts of up to 45 miles per hour. The cancellation knocked the Pyeongchang debut of American ski star Mikaela Shiffrin back to Wednesday, when she is scheduled to ski the slalom.

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INFLATION, LIQUIDITY, SYSTEMIC RISK, BALANCE SHEETS

US inflation figures to set tone after week of turmoil – FT

If the violent swings of the past few days have put portfolio managers on notice that the era of tranquil markets is over, the degree of inflationary pressure building in the US economy will be crucial in shaping what exactly the new environment looks like for fixed-income and equity investors.

18G13 - FED INFLATION MEASURE

A Long Era of Low Health Care Inflation May Be Coming to End – Bloomberg

Since the late 2000s Great Recession, historically low increases in health-care prices have helped hold down inflation. That may be about to change. While overall medical inflation was restrained last year, the report warns that “we could very well be at the cusp” of a return to a more typical pattern where increases in health-care prices outpace the broader inflation rate.

Fed Survey Shows Americans Expect Biggest Pay Hikes in Years – Bloomberg

U.S. consumers said they expected to see the fastest wage growth in several years when polled in January, according to a monthly Federal Reserve Bank of New York survey. January was only the third month in the survey’s 56-month history in which expected wage growth topped expected consumer price inflation, which fell slightly, to 2.71 percent.

Households Are Borrowing More to Fuel Spending, Wells Fargo Says – Bloomberg

U.S. households may be borrowing more to fuel their spending as wages grow slowly, according to Wells Fargo & Co. “Debt may be filling the gap for many households when incomes have not kept pace with rising living expenses,” the analysts wrote. “A reversal may be ahead if income growth does not catch up to consumer expectations.”

Dalio Says ‘We’re Past the Top’ in Bonds, Sees Rising Risks of a U.S. Recession – Bloomberg

“We don’t know exactly how far we are from the top in the stock market and then the economy, though it is clear that we are past the top in the bond market,” said Dalio, manager of the world’s largest hedge fund.

Treasury Yields Will Climb to 3.5% on Fed, Goldman Sachs Asset Management Says – Bloomberg

Treasury 10-year yields will rise as high as 3.5 percent in the next six months as the market prices in a steeper pace of Federal Reserve tightening, according to Goldman Sachs Asset Management. The U.S. central bank will probably raise interest rates four times this year, defying the consensus for around three, said Philip Moffitt, Asia-Pacific head of fixed income in Sydney at the firm, which oversees more than $1 trillion. Yields will also increase as the Fed trims the holdings of Treasuries it purchased through quantitative easing, he said.

Wall St blames turmoil on insurers’ volatility strategY – FT

While complex volatility-linked funds and algorithmic traders have been widely blamed for the wild price swings, strategists and investors said a significant portion of the selling could be traced to variable annuities, a popular tax-advantaged insurance-company product that offers customers guaranteed returns.

‘50 Cent’ VIX Trade Just Paid Off to the Tune of $200 Million – Bloomberg

Pravit Chintawongvanich, head of derivatives strategy at Macro Risk Advisors, estimates that the trader dubbed “50 Cent” (a play on the rapper known as “50 Cent,” Curtis Jackson), has made nearly $200 million total on this trade since the start of 2017 — thanks to a swing of $400 million in a single month.

Hedge Funds’ Biggest Short in Bonds Faces Make-or-Break Moment – Bloomberg

Hedge funds and other large speculators are more convinced than ever that the 2018 bond-market rout will resume in the days ahead. The question facing Treasuries traders throughout the 2018 selloff is whether something is truly different this time that will push yields ever higher. After all, asset managers have been adding to long positions for months, and 10-year yields just keep setting multi-year highs. At the very least, investors may be recalibrating to a higher yield range.

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MACRO OP-EDS, INSIGHT, EVENTS AND TRENDS

The only certainty in Trump’s budget: Oceans of red ink – POLITICO

The biggest single difference between President Donald Trump’s new budget and his first one nine months ago is this: The White House can no longer hide the immense deficits it would create, not after the tax cuts and military buildup Trump championed and secured.

Sizing Up the Trumponomics Gamble on Deficit Spending and Inflation – WSJ

By adding to deficits, Mr. Trump has undertaken a fiscal policy experiment with little precedent for a peacetime U.S. economy, and one with risks. Fiscal largess risks putting added upward pressure on inflation and interest rates that could boomerang and undercut the growth the Trump administration has set out to achieve, hurting stock and real-estate values in the process. A related risk for Mr. Trump’s experiment: It could be for naught if it prompts the Federal Reserve to raise short-term interest rates even faster because officials worry the economy will overheat.

Global trade and the dollar | VOX, CEPR’s Policy Portal

The dollar’s role as an invoicing currency is indeed special as it handily beats the explanatory power of the euro in price and volume regressions. The strength of the US dollar is a key predictor of rest-of-world aggregate trade volume and inflation. A 1% US dollar appreciation against all other currencies in the world predicts a 0.6-0.8% decline within a year in the volume of total trade between countries in the rest of the world, controlling for the global business cycle.

Why volatility is here to stay – FT

The ending of the post-crisis era of central bank stimulus means three things for markets: volatility is here to stay, deleveraging will continue and no asset class is immune to the convergence between ultra-easy financial conditions and strong global economic fundamentals. Market ructions have exposed the cracks in the foundation of the rally in riskier assets such as stocks. An elevated concentration of risk in low-volatility strategies that are sensitive to the level of interest rates has met its nemesis in the form of a vanishing backstop from central banks.

VIX Blowup a Brutal Lesson That Payoff Matters, Not Forecasts – Bloomberg

Volatility is back, for now. The blowup in short-volatility related VIX exchange-traded products is a lesson that what matters is the payoff, not forecasting. Ignoring negative convexity, the tendency for volatility to outpace the relative decline in equities, can be destructive.

Tech companies are the new investment banks – FT

The much-lauded overseas “cash” pile held by the richest American companies, a treasure that Republicans cited as the key reason they passed their ill-advised tax “reform” plan, is actually a giant bond portfolio. What does this mean? Many significant things. But let us start with the obvious, which is that bonds are not cash. If companies are to bring back those overseas earnings and invest them in growth-enhancing projects in the US, as Donald Trump keeps promising us they will, they would have to sell their bond stash.

Bitcoin Risks Crashing to $900 If Dot-Com Mania Is Any Guide – Bloomberg

While the creators of Bitcoin intended to limit supply to 21 million coins, forks mean that there are already more than 50 million outstanding coins based on the original blockchain. There’s also nothing preventing rivals from spawning an infinite amount of clones, he said. The number of tradable cryptocurrencies jumped 120 percent in the past year. “Parabolically increasing supply is the primary limitation to cryptocurrency market-price appreciation,” McGlone said. “There’s strong gravitational pull toward $900, the average price since inception and the start of 2017.”

Kim Jong Un, North Korea’s ‘10-foot-tall baby’ – POLITICO

Kim sure seemed a lot more like a calculating, cold-blooded leader than a crazy man when he sent his athletes to join a united Korean team for the Games and dispatched his photogenic younger sister to smile, wave and present a personal invite to Pyongyang for South Korea’s president, upstaging Trump’s grim-visaged vice president in the process.

The Fall of a Chinese Tesla Killer Threatens a California Town’s Electric Dream – Bloomberg

Jia Yueting promised to take on Elon Musk with his Faraday electric-car factory. Then his business empire crashed. Jia’s internet empire, known as LeEco, began showing cash-flow problems as early as 2016, prompting him to apologize to shareholders. The company and affiliates received $2.5 billion in lifelines last year from fellow tycoon Sun Hongbin, the chairman of real estate company Sunac China Holdings Ltd., who served prison time for embezzlement before his conviction was overturned. Yet even Sun signaled last month there were limits to rescuing Leshi. “Sometimes one also has to admit failure on a losing bet,” he said.

The Lessons of Black Monday by Barry Eichengreen – Project Syndicate

When interpreting sharp drops in stock prices and their impact, many will think back to 2008 and the market turbulence surrounding Lehman Brothers’ bankruptcy filing. But a better historical precedent for current conditions is the huge one-day drop on October 19, 1987.

This is the stock market crash we needed | The Spectator

Ordinary savers have been hammered. With interest rates below inflation, real returns have been negative, with those putting money aside seriously losing out. Rock-bottom annuity rates resulting from the impact of QE have similarly condemned countless retirees to lower pension incomes for the rest of their lives. The resulting asset boom, however, saw stock and property owners becoming much richer. Most voters have had to watch the financiers, having wrecked the economy, get rich all over again — courtesy of the world’s leading central banks. This has been the trademark of western economies now for a decade.

Inside Facebook’s Hellish Two Years—and Mark Zuckerberg’s Struggle to Fix it All | WIRED

The stories varied, but most people told the same basic tale: of a company, and a CEO, whose techno-optimism has been crushed as they’ve learned the myriad ways their platform can be used for ill. Of an election that shocked Facebook, even as its fallout put the company under siege. Of a series of external threats, defensive internal calculations, and false starts that delayed Facebook’s reckoning with its impact on global affairs and its users’ minds. And—in the tale’s final chapters—of the company’s earnest attempt to redeem itself.

Record oil production – Reuters

The United States will likely soon exceed its crude oil production record of more than 10 million bpd as its influence on export markets, trade balances and global politics continues to soar. US crude output reached a record high of 10.04 million bpd in November 1970.

Drillers turn to big data in the hunt for more, cheaper oil – FT

Matt Rogers of McKinsey, the consultancy, says forecasters have failed to grasp fully the scale of the coming changes. “I don’t think we’ve built into our supply-side models just how much more oil this will provide,” he says. “The world in 10 years will feel very different . . . It’s going to feel like we’re in Star Wars compared to where we are now.”

There’s a Global Race to Control Batteries—and China Is Winning – WSJ

There is a world-wide race to lock up the supply chain for cobalt, which will likely be in even greater demand as electric-car production rises. So far, China is way ahead. Chinese imports of cobalt from Congo, the world’s biggest producer of cobalt, totaled $1.2 billion in the first nine months of 2017, compared with just $3.2 million by India, the second-largest importer, government data show.

Chinese local governments rush to admit fake data- Nikkei Asian Review

One incentive for the governments of provinces and municipalities to offer more accurate economic and fiscal statistics has come from the administration of President Xi Jinping, which has switched to a quality-over-quantity economic policy. The policy shift is promoting honesty in data reporting among local governments because it is also being reflected in a change in the priorities in evaluating the job performances of bureaucrats.

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POT BOOM, MARIJUANA LEGALIZATION, DRUG POLICY

Marijuana’s 4/20 Holiday Tied to Rise in Fatal Car Crashes – Bloomberg

Marijuana users’ self-proclaimed holiday is linked with a slight increase in fatal U.S. car crashes, an analysis of 25 years of data found. The study lacks evidence on whether pot was involved in any of the April 20 crashes, but marijuana can impair driving ability. Previous studies have shown that many pot-using motorists drive after partaking and think it’s safe to do so.

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POSITIONING, INFLECTION, MARKET CALLS

Tech ETF Hit by the Largest Outflows Since the Dot-Com Crash – Bloomberg

The rout in U.S. stocks last week spurred the heaviest withdrawals since the 2000 dot-com crash for the biggest exchange-traded fund tracking U.S. technology shares. Investors yanked almost $4 billion from the $56 billion PowerShares QQQ Trust Series 1 ETF in the five days ended Feb. 9, outpacing redemptions at the depths of the financial crisis. The SPDR S&P 500 ETF Trust, the world’s biggest fund, saw a record $23.6 billion of outflows.

Record $23 Billion Flees World’s Largest ETF – Bloomberg

Investors actively abandoned the world’s biggest passive fund during the onset of market mayhem. The SPDR S&P 500 exchange-traded fund (ticker SPY) suffered a record $23.6 billion in outflows last week amid the worst momentum swing in history for the underlying U.S. equity benchmark.

Retail Investors Piled In Just Before the Stock Rally Fizzled – Bloomberg

Retail investors jumped head first into last month’s market rally — just in time to get burned by a correction. E*Trade Financial Corp. added 64,581 gross new brokerage accounts in January, according to a company statement. That’s the most in a month since September 2016 and came as the S&P 500 Index capped a 19 percent annual gain.

Volatility Sellers Return to Market With a Vengeance – Bloomberg

Volatility sellers are likely emboldened by signs the market’s fever is breaking. The Cboe Volatility Index — often called the “fear gauge” — has roughly halved from last week’s peak, and U.S. stocks are up nearly 5 percent from their Feb. 9 lows.

S&P Pressure Gauge Swings Toward Selling, Suggests Pain to Come – Bloomberg

While U.S. stocks may have finished higher Monday, the pressure to sell still dominates the market, according to a key technical gauge. As the S&P 500 posted its worst weekly performance since 2016 last week, the index’s DVAN trend line — a “divergence analysis” which measures the current buying or selling pressure — has turned appreciably downward for the first time in two years.

Korea ETF Suffers Record $1 Billion Outflow Amid Market Turmoil – Bloomberg

South Korean equities were collateral damage in last week’s stock rout that saw exchange-traded fund investors run for the exits. The biggest Korean ETF, the Samsung Kodex 200 fund, which mainly tracks the nation’s benchmark Kospi 200 Index, shed $1 billion last week, its biggest ever weekly outflow, according to data compiled by Bloomberg.

Emerging-Market Investors Looking to Policy Makers for Answers – Bloomberg

Emerging-market investors took it on the chin last week, and will be hyper-vigilant about what comes next as volatility roars back to life. All eyes will be on any responses by policy makers to the rout in stocks, currencies and bonds that has gripped much of the world.

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COLOR, EARNINGS, SENTIMENT, VALUATIONS

Snap’s Head of Sales Leaving After Less Than Two Years – WSJ

Mr. Lucas was considered to be instrumental in Snap’s early advertising strategy of wooing brands to buy premium ads on Snapchat, similar to the way they buy ads from television networks. More recently, Snap has been focusing on selling its ads through an automated auction process, a method used by Facebook Inc. and Alphabet Inc.’s Google.

Snapchat’s New Update Triggers Revolt by Millions of Teens – DB

A new update by the tech company has pissed off teens and celebs alike, and may put the fragile company in more trouble. Snapchat’s massive teen userbase is outraged at the update, and already desperately trying to get the old version back. For teens and young twentysomethings, the Snapchat redesign is the first time a tech platform that they rely on daily has been radically altered overnight.

The Wayfair Riddle – WSJ

A recent study by marketing professors Daniel McCarthy of Emory University and Peter Fader of the University of Pennsylvania’s Wharton School found that Wayfair spends about $69 to acquire each new customer, but only earns $59 back from each acquisition. Using a method of valuing publicly traded retailers that focuses on customer retention, Professors McCarthy and Fader conclude that Wayfair is overvalued by 84%.

Weinstein Company Sale Delayed by N.Y. Attorney General Lawsuit – The New York Times

The lawsuit, filed electronically in State Supreme Court in Manhattan, appeared timed to at least delay a sale, which had been expected to be finalized on Sunday. If financiers get spooked, Mr. Schneiderman’s move could ultimately kill the proposed deal, putting the Weinstein Company on an almost certain path to bankruptcy.

Steve Wynn’s Tarnished Name and Now a Tainted Brand – The New York Times

For decades, Steve Wynn used his persona and his name to promote his casino and hotel empire. To get past sexual misconduct allegations, it must act quickly, experts said.

Nevada Regulator, Inundated With Reports About Steve Wynn, Starts Website to Field Tips – WSJ

Nevada gambling regulators on Monday introduced a new online system for the public to send in confidential complaints and tips after receiving a number of reports about Steve Wynn in the days after The Wall Street Journal published an article detailing sexual-misconduct allegations against the casino mogul.

Kraft Heinz Made Its Factories Really Efficient. Now It Has to Sell Bologna – WSJ

3G Capital’s formula of squeezing costs to improve profit margins is running up against consumers whose tastes have shifted away from processed foods.

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DEALS, MERGERS, IPOs, LBOs, RESTRUCTURINGS

General Dynamics Buying CSRA for $6.8 Billion – WSJ

The maker of Abrams tanks and Gulfstream business jets will double its annual IT services sales to become one of the largest providers to the Pentagon and other agencies such as the Central Intelligence Agency and the Department of Health and Human Services.

Broadcom Secures as Much as $100 Billion of Debt Funding for Qualcomm Bid – WSJ

A dozen banks—including Bank of America Corp. , Citigroup Inc., Deutsche Bank AG, JPMorgan Chase & Co. and Morgan Stanley —have agreed to provide up to $100 billion of committed credit facilities, including a $5 billion revolver and bridge financing, Broadcom said Monday.

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REAL ESTATE, HOUSING, REITS, COMMERCIAL

New York’s Commercial Property Slump Shows Signs of Slowing – WSJ

Expectations of stabilizing sales in commercial real estate come after an accelerated slide. Sales fell 33% to a five-year low of $31.3 billion in 2017, according to Ariel Property Advisors, a brokerage that tracks sales in all boroughs except Staten Island.

British House Prices Post First Annual Decline in Six Years – Bloomberg

U.K. house prices recorded an annual drop for the first time in almost six years at the start of 2018, with London leading the slump. Values fell 0.4 percent in January compared with a year earlier, according to a report published by Acadata on Monday. Detailed data covering the fourth quarter of 2017 show London down 4.3 percent — the most since the depths of the recession in 2009.

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HEDGE FUNDS, PRIVATE EQUITY, MONEY MGMT

High-Speed Traders Profit From Return of Loophole at CME – WSJ

Five years ago, exchange operator CME vowed to fix a flaw in its systems that allowed high-speed traders to infer the direction of the futures market before others. Now, the defect is back, traders say. The problem arises from the two ways that CME distributes information about a trade.

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ENERGY CRUDE OIL, OIL SANDS, SHALE

India’s Oil Consumption Grows at Fastest Pace in 14 Months – Bloomberg

Oil demand in India rose 10.3 percent in the first month of 2018, the fourth straight monthly gain. The growth in demand came over a low base as in January last year the nation’s oil consumption fell the most in 13 years following the government’s crackdown on high-value currency notes.

Oil Market Sell-Off: Hedge Funds Stay Long – Bloomberg

Money managers’ net length in futures and options for the three main crude-oil contracts fell by all of 2.3 percent, and it remains above 1 billion notional barrels. Aggregate net length in New York gasoline and diesel dropped by 7.2 percent — the biggest decline in nine weeks — but those positions are a fraction of the crude market.

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ENERGY RENEWABLES, NUCLEAR

Big Batteries Are Taking a Bite Out of the Power Market – WSJ

Giant batteries charged by renewable energy are beginning to nibble away at a large market: The power plants that generate extra surges of electricity during peak hours. Numerous big batteries are under construction or consideration in the U.S., especially in the Southwest, where some companies see a shiny future for “solar plus storage” projects.

Biggest-Ever U.S. Wind Farm Suffers Blow From Oklahoma Judge – Bloomberg

American Electric Power Co.’s proposal for the largest-ever U.S. wind-power project received a setback Monday. The company failed to prove that customers should pay for the $4.5 billion Oklahoma project through power rates, Mary Candler, an administrative law judge in the state, said in a filing. Her non-binding recommendation will be considered by the Oklahoma Corporation Commission, which has final say on the project.

A Powerful Mix of Solar and Batteries Is Beating Natural Gas – Bloomberg

It’s a powerful combination for meeting peak demand because of when the sun shines. Here’s how it’ll work: The panels will generate solar power when the sun’s out to charge the batteries. The utility will draw on those batteries as the sun starts to set and demand starts to rise.

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POLLUTION, CLIMATE & ENVIRONMENT

The Queen declares war on plastic after David Attenborough documentarY – UKT

The Queen has declared war on plastic, banning straws and bottles from the Royal estates. Buckingham Palace outlined new waste plans and said there was a ‘strong desire to tackle the issue’ at the highest levels of the Royal household. It is thought that the Queen became personally interested in the problem of plastic after working with Sir David Attenborough on a conservation documentary dealing with wildlife in the Commonwealth.

A Nearly Invisible Oil Spill Threatens Some of Asia’s Richest Fisheries – The New York Times

It is the largest oil spill in decades, but the disaster has unfolded outside the glare of international attention that big spills have previously attracted. That is because of its remote location on the high seas and also the type of petroleum involved: condensate, a toxic, liquid byproduct of natural gas production.

18G13 - WHERE THE SANCHI SANK

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DACA, TRAVEL BAN, IMMIGRATION, WALL

Senate to Hold Immigration Debate — With the Outcome Unknown – The New York Times

The highly unusual debate, expected to unfold throughout the week, will test whether a series of legislative concepts and proposals championed by President Trump and a variety of Republicans and Democrats can garner 60 votes, the threshold for a measure to pass the Senate. No one has any idea how it will turn out.

Time Is Running Out for Puerto Ricans Sheltering in Hotels – The New York Times

Hotel rooms provided by FEMA have been a rare source of stability amid the turmoil brought by Hurricane Maria. But Puerto Rican families worry about what comes next. Nearly 4,000 families spread across 40 states and Puerto Rico remain in hotels under FEMA’s transitional sheltering assistance program, federal officials said. Most families — more than 1,500 — were in Florida, while hundreds of others were in Connecticut, Massachusetts and New York. More than 800 were in hotels in Puerto Rico.

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GEOPOLITICS, CRIME, TERRORISM

US fears closer EU defence ties could undermine Nato – FT

The US is concerned that EU plans for closer defence ties between the bloc’s members risk undermining Nato as the alliance confronts a resurgent Russia. “We don’t want to see EU efforts pulling requirements or forces away . . . from Nato and into the EU,” said Katie Wheelbarger, a senior Pentagon official who covers Nato.

Rodrigo Duterte tells soldiers to shoot female rebels in the vagina | The Independent

Philippines President Rodrigo Duterte last week told soldiers to shoot female rebels in their genitals, the latest in a series of violent, misogynistic remarks. Addressing a group of former communist rebels on 7 February, Duterte, who served as a city mayor before becoming President, appeared to encourage Armed Forces of the Philippines (AFP) to target women in conflict.

With Gaza in Financial Crisis, Fears That ‘an Explosion’s Coming’ – The New York Times

A standoff between Hamas and the Palestinian Authority is ravaging Gaza’s economy, pushing it to the verge of collapse, and escalating the risk of a violent confrontation with Israel. At grocery stores, beggars jostle with middle-class shoppers, who sheepishly ask to put their purchases on credit. The newly destitute scrounge for spoiled produce they can get for little or nothing.

Xi takes aim at military in anti-graft drive – FT

What many now view as a political purge forms part of a massive anti-graft campaign spearheaded by Mr Xi, who began his second five-year term as party secretary-general in October. It has touched every corner of Chinese officialdom from senior Communist party members to local administrators and targeted wealthy business figures. But no institution has been turned upside down more than the PLA, and no Chinese leader since Mao Zedong has done more to reconfigure the relationship between the ruling Communist party — long obsessed by its own survival — and the one institution that can perhaps guarantee it.

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TRUMP WORLD

Member of Central Park Five Slams Trump Hypocrisy for ‘Due Process’ Defense – Newsweek

Salaam said that Trump had little concern for due process when, in 1989, he took out a full-page newspaper advertisement ahead of their trial, calling for Salaam and four other teenagers accused of the attack to be executed. “Here you had Donald Trump taking out a full-page ad, two weeks in, rushing to judgement. Finding out 13 years later after he did all that that we were not the real culprits,” he said.

Abuse Case Exposes Fissures in a White House in Turmoil – The New York Times

Aides to the president said they remained confused and upset over the handling of the accusations against Rob Porter, the staff secretary who stepped down. Days after his departure, the White House was still struggling on Sunday to provide a consistent explanation of who knew what and when, even as questions swirled about whether anyone might be felled as a result.

John Kelly faces biggest crisis as Trump’s chief of staff – FT

Chris Whipple, author of The Gatekeepers, a book about chiefs of staff, said Mr Kelly had been a “fiasco” in almost every way. “Failing to tell Trump hard truths, not knowing how to govern, acting like a political novice, doubling down on Trump’s worst, partisan instincts. And, now, demonstrating that he can’t run the West Wing.”

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ELECTORAL POLITICS

Big Republican Advantages Are Eroding in the Race for House Control – The New York Times

Slowly but surely, the considerable structural advantages — like incumbency, geography and gerrymandering — that give the Republicans a chance to survive a so-called wave election are fading, giving Democrats a clearer path to a House majority in November.

House Departures Give Democrats Hope of Winning GOP Strongholds – Bloomberg

Winning competitive open Republican districts, like Royce’s outside Los Angeles, is a crucial component of the Democratic strategy for taking control of the House in November, when all 435 seats will be up for election. A surge of GOP departures — 33 House Republicans have announced they won’t run for re-election — is helping increase the odds for Democrats, who need to win a net total of 24 seats to gain the majority in the House.

Hillary Clinton, a favorite GOP foil, plans discreet 2018 strategy – The Washington Post

Her emerging 2018 strategy, according to more than a dozen friends and advisers familiar with her plans, is to leverage the star power she retains in some Democratic circles on behalf of select candidates while remaining sufficiently below the radar to avoid becoming a useful target for Republicans seeking to rile up their base.

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SCANDALS, LAWSUITS, FINES, REGULATORY

U.S. investment adviser gets prison for insider trading on Pfizer-King deal

A Long Island, New York, investment adviser was sentenced to six months in prison on Monday after he pleaded guilty to insider trading in connection with Pfizer Inc’s $3.6 billion acquisition of King Pharmaceuticals Inc.

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SILICON VALLEY, UNICORNS, STARTUPS, VC

Unilever threatens to pull its ads fromFacebook and Google over toxic content – The Washington Post

“Fake news, racism, sexism, terrorists spreading messages of hate, toxic content directed at children — parts of the Internet we have ended up with is a million miles from where we thought it would take us,” Weed said in a speech at the Interactive Advertising Bureau’s Leadership Meeting in Palm Desert, Calif. “It is in the digital media industry’s interest to listen and act on this.”

Universities Rush to Roll Out Computer Science Ethics Courses – The New York Times

Schools that helped produce some of Silicon Valley’s most prominent leaders are hustling to bring a more medicine-like morality to computer science. The idea is to train the next generation of technologists and policymakers to consider the ramifications of innovations — like autonomous weapons or self-driving cars — before those products go on sale.

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CONSUMER TECH, SOCIAL MEDIA, E-COMMERCE, MOBILE

German court rules Facebook use of personal data illegal – Reuters

A German consumer rights group said on Monday that a court had found Facebook’s use of personal data to be illegal because the U.S. social media platform did not adequately secure the informed consent of its users. The verdict, from a Berlin regional court, comes as Big Tech faces increasing scrutiny in Germany over its handling of sensitive personal data that enables it to micro-target online advertising.

Amazon cutting hundreds of Seattle jobs in its consumer business: source – Reuters

Amazon.com Inc is cutting hundreds of jobs in its consumer business in Seattle, a person familiar with the matter said on Monday, as the company shifts resources into fast-growing areas like its work on voice assistant Alexa.

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CLOUD, IOT, SEMICONDUCTORS, ENTERPRISE / SAAS

Oracle Leaps Into the Costly Cloud Arms Race – WSJ

The expansion thrusts Oracle into an expensive arms race against the market’s biggest spenders, Amazon, Microsoft Corp. and Alphabet Inc.’s Google. Those giants are working to wrest away traditional Oracle database customers shifting from their own data centers to web-based computing services.

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RETAIL APPAREL, SPECIALTY, DINING, BIG BOX

Instacart Adds $200 Million to Defend Against Amazon Delivery – Bloomberg

The San Francisco startup raised $200 million in a round led by investment firms Coatue Management and Glade Brook Capital Partners, the company told Bloomberg on Monday. The money will help Instacart defend against programs like the one Amazon made public on Thursday: It’s testing free two-hour delivery of Whole Foods groceries to Prime customers in four U.S. cities.

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AUTOS, ELECTRIC, SELF-DRIVING

Electric cars pave way to end of filling stations – FT

The rise of electric cars will lead to a “deforestation” of inner-city filling stations as drivers charge at home or work. This is the prediction of Pat Romano, chief executive of the world’s largest charging company, Chargepoint. “We’re not going to need as many of them because the ‘around town’ need to fill up will be much lower. We’re going to see a sort of deforestation of the current ‘around town’ gas stations.”

Self-Driving Car Safety Legislation Stalls in the Senate – WSJ

Legislation to remove regulatory obstacles to the development of self-driving vehicles is running into problems in the Senate, dimming prospects for the quick passage that many had expected. The political problems are surprising, given the bill’s easy approval, on a voice vote, in the Senate Commerce Committee in October. The full House overwhelmingly passed a similar measure in September.

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ARTIFICIAL INTELLIGENCE, DRONES, FUTURE TECH

Google Makes Its Special A.I. Chips Available to Others – The New York Times

Google’s move highlights several sweeping changes in the way modern technology is built and operated. Google is in the vanguard of a movement to design chips specifically for artificial intelligence, a worldwide push that includes dozens of start-ups as well as familiar names like Intel, Qualcomm and Nvidia.

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MISCELLANEOUS

Suspected Poacher Mauled to Death by a Pack of Lions – The Daily Beast

A suspected poacher has been mauled to death by lions in South Africa. Local police said little was left of the man’s body—except his head—after the attack close to the Kruger National Park, in a private game park. “It seems the victim was poaching in the game park when he was attacked and killed by lions. They ate his body, nearly all of it, and just left his head and some remains,” a Limpopo police spokesman told AFP. The police added that a loaded hunting rifle was found near the body when it was discovered on Saturday morning. Police are still trying to identify the victim.

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