Macro Links Jan 24th – Steep Tarriffs
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MACRO LINKS TABLE OF CONTENTS (Click or Scroll Down)
- TRUMP TARIFFS, TRANS-PACIFIC PARTNERSHIP
- SOLAR PANEL TARIFFS
- TESLA COMPENSATION PLAN
- BITCOIN, CRYPTOCURRENCY, INITIAL COIN OFFERINGS
- FOREX, CARRY TRADES, EXCHANGE RATES
- FINTECH, BLOCKCHAIN, DIGITAL PAYMENTS
- TAXATION, WEALTH HAVENS, INEQUALITY
- RUSSIA PROBE
- NORTH / SOUTH KOREA, IRAN, NUCLEAR WEAPONS
- RATES, LIQUIDITY, SYSTEMIC RISK, BALANCE SHEETS
- MACRO OP-EDS, INSIGHT, EVENTS AND TRENDS
- CENTRAL BANKS & MONETARY POLICY
- USA ECONOMY DATA, CITIES AND STATES
- GLOBAL ECONOMY DATA
- POSITIONING, INFLECTION, MARKET CALLS
- COLOR, EARNINGS, SENTIMENT, VALUATIONS
- CREDIT, YIELD, BUYBACKS, CORPORATES
- DEALS, MERGERS, IPOs, LBOs, RESTRUCTURINGS
- REAL ESTATE, HOUSING, REITS, COMMERCIAL
- HEDGE FUNDS, PRIVATE EQUITY, MONEY MGMT
- ENERGY COMPANIES, NOCs, INDUSTRY
- ENERGY CRUDE OIL, OIL SANDS, SHALE
- COMMODITIES AGRICULTURE & SOFTS
- POLLUTION, CLIMATE & ENVIRONMENT
- DACA, TRAVEL BAN, IMMIGRATION, WALL
- GEOPOLITICS, CRIME, TERRORISM
- TRUMP WORLD
- ELECTORAL POLITICS
- CONSUMER TECH, SOCIAL MEDIA, E-COMMERCE, MOBILE
- RETAIL APPAREL, SPECIALTY, DINING, BIG BOX
- MEDIA, CABLE, SPORTS, ENTERTAINMENT
- GAMING, LIFESTYLE, RECREATION & LEISURE
- AUTOS, ELECTRIC, SELF-DRIVING
- ARTIFICIAL INTELLIGENCE, DRONES, FUTURE TECH
- SCIENCE, NATURE, PSYCHOLOGY
TRUMP TARIFFS, TRANS-PACIFIC PARTNERSHIP
The twin announcements came after a year of tough rhetoric — but little action — on curbing imports of cheap products from countries like China and South Korea. White House advisers warned that additional trade measures related to steel, aluminum and other products from China could be coming, a signal that Mr. Trump is ratcheting up the protectionist policies he has long espoused as part of his “America First” approach.
Mr Trump made pulling out of the Trans-Pacific Partnership negotiated by the Obama administration one of his first official acts when he took office a year ago, a move that critics have called a strategic gift to China. But in a sign of how the rest of the world is ready to move on without the US, the 11 remaining countries announced on Tuesday that they would go ahead and sign the agreement in Chile on March 8 after overcoming last-minute objections from Canada.
Canada and the remaining members of the old Trans-Pacific Partnership have breathed new life into a trade deal that will forge ahead without the United States and open distant new markets at a time of uncertainty closer to home. The agreement was struck Tuesday after two days of high-level talks in Tokyo — exactly one year after U.S. President Donald Trump withdrew his country from the Pacific Rim treaty. The fresh commitment left Japan as the largest player in a new 11-nation pact that spans two hemispheres and includes both U.S. neighbours.
When the Trump administration unveiled tariffs on imports of solar panels and washing machines — industries dominated by Chinese and South Korean businesses — they deliberately applied them to products from around the world. The administration’s decision was followed on Tuesday by the announcement that a group of 11 countries would resurrect the Trans-Pacific Partnership, the pact that Mr. Trump pulled out of a year ago. The agreement, expected to be signed later this year, further complicates the president’s trade policies.
The European Union pushed back against U.S. President Donald Trump’s decision to impose tariffs on imported solar panels and washing machines, in yet one more sign of increasing strain in the political alliance. The U.S. said on Monday it will impose new duties of as much as 30 percent on foreign-made solar equipment, and tariffs starting as high as 50 percent on imported washing machines. The EU, which is the world’s largest trading bloc, joined Chinese and South Korean officials in condemning the move.
“This agreement meets our objectives of creating and sustaining growth, prosperity and well-paying middle-class jobs today and for generations to come,” Trudeau said. “If we’re going to push back against the anti-trade tendency in globalization that will leave us all worse off, we have to put the concerns and the well-being of our ordinary citizens at the center of what we are negotiating and that’s what all 11 of us have been able to do.”
As Mr. Trump touted from the Oval Office his commitment “to defending American companies…very badly hurt from harmful import surges,” U.S. allies grew more vocal in their concerns about what they view as the longtime leader of the world trading system turning inward. “Now in some parts of the world, there is a move toward protectionism,” Toshimitsu Motegi, the Japanese economy minister, said in Tokyo, announcing the agreement of the Trans-Pacific Partnership, redrafted after Mr. Trump pulled the U.S. out a year ago. “TPP-11 is a major engine to overcome such a phenomenon.”
China’s economic might gives President Xi Jinping’s government the leverage it needs to strike back decisively, including scaling back purchases of American products and subjecting well-known U.S. companies with large Chinese operations to tax or antitrust probes. “This is the beginning of a rough patch in U.S.-China relations,” said David Dollar, a former U.S. Treasury attache in Beijing and now a senior fellow at the Brookings Institution in Washington. “These initial measures are modest and are likely to be met by proportionate moves from the Chinese. The key question is whether U.S. protectionism will escalate, which would damage both economies.”
SOLAR PANEL TARIFFS
“You’re going to have people getting jobs again and we’re going to make our own product again. It’s been a long time,” Trump said as he signed the order. But the solar industry countered that the move will raise the cost of installing panels, quash billions of dollars of investment, and kill tens of thousands of jobs, raising questions about whether Trump’s move will backfire by triggering mass layoffs.
President Donald Trump’s tariffs on solar-panel imports to the U.S. will rattle an industry that drew in $161 billion of investment globally last year and is dominated by companies in China. The move may add 10 percent to the cost of a utility-scale solar farm in the U.S. and 3 percent to rooftop units bought for homes, according to Bloomberg New Energy Finance. GTM Research estimated it may cut U.S. installations by 11 percent over the next five years. But the decision is unlikely to reshape the economics of the photovoltaic business or threaten China’s leadership of the industry.
The 30 percent duties on imported panels are only apt to increase the total cost of a typical residential rooftop system by about 3 percent, Bloomberg New Energy Finance analyst Hugh Bromley said. That’s because panels account for only about a quarter of the price of rooftop system. Other major costs include labor and marketing. Nonetheless, the president’s announcement has sent some homeowners hunting for panels before duties kick in.
There was a mixed reaction in the stock market, with some companies saying the tariff was not as steep as they had feared. On Tuesday shares in SunPower, a US solar developer and manufacturer that said it expected to be hit by the tariffs, were down 6.4 per cent. However shares in Sunrun, the largest independent residential solar company in the US, were up 6.1 per cent. Shares in First Solar, another US integrated group that uses a technology not covered by the tariffs, were down 0.7 per cent.
The biggest winners of President Donald Trump’s decision to slap tariffs on imported solar equipment may not be American manufacturers but a group of investment houses around the globe. The firms — from Centerbridge Partners LP to JPMorgan Chase & Co. — all are creditors to the two struggling solar companies that brought the trade complaint. The value of their investments, mostly in the form of distressed bonds, is likely to get a boost as the new tariffs help American manufacturers.
President Donald Trump just decided to slap tariffs on solar equipment imported into America for four years. There are plenty of losers from the decision: Chinese manufacturers, U.S. rooftop panel installers and renewable energy developers including utilities that are planning large-scale solar farms. There are also a few in the industry that stand to gain — some more surprising than others.
TESLA COMPENSATION PLAN
Mr. Musk’s critics — and there are many — are likely to contend that the new compensation plan is just the company’s latest publicity stunt. He has been called a modern-day P.T. Barnum who has created the illusion of success while consistently missing production estimates. Even though Mr. Musk’s shares have vested, he has not sold them except to pay the taxes on the grants. His current stake is worth $13 billion.
Mr Musk can collect the first tranche of shares, worth a potential $1bn, as soon as Tesla’s market cap reaches $100bn, and as soon as it hits one of two financial targets, with either revenues rising to $20bn, or reporting adjusted earnings of $1.5bn. Each additional tranche can be collected once the company’s value rises by another $50bn, as well as one further financial milestone is hit.
Tesla, which reported revenue of $7 billion for 2016, had a market value of about $58.8 billion as of Monday’s close. Mr. Musk owns about 20% of the company, according to S&P Global Market Intelligence.
Having unlocked all eight revenue targets, he only has to get four of the profit targets (and the small matter of seeing the share price rise to value Tesla at $650bn) to receive the full amount. That would give Tesla revenues of $175bn and adjusted EBITDA of $6bn – so a margin of 3.4 per cent, or exactly what it is expected to report for 2017.
BITCOIN, CRYPTOCURRENCY, INITIAL COIN OFFERINGS
Some 19 Bitcoin forks came out last year — but up to 50 more could happen this year, according to Lex Sokolin, global director of fintech strategy at Autonomous Research. Ultimately, the number could run even higher now that Forkgen, a site enabling anyone with rudimentary programming skills to launch a clone, is in operation. In a Jan. 14 tweet, hedge fund manager Ari Paul predicted more than 10 percent of the current value of Bitcoin and Bitcoin Cash will reside in new offshoots.
A former Goldman Sachs banker plans to launch a digital currency platform that will make it easier for investors to short one cryptocurrency against another, potentially bringing the nascent market one step closer to the financial mainstream. The platform, called Oxygen, will let investors earn money by lending out their cryptocurrencies—assets which don’t offer any sort of income at present. It will charge a fee for transactions and will target Changelly’s existing 1.6 million clients and other cryptocurrency holders.
South Korea will ban the use of anonymous bank accounts in cryptocurrency trading from Jan. 30, regulators said on Tuesday in a widely telegraphed move designed to stop virtual coins from being used for money laundering and other crimes. The measure comes on top of stepped up efforts by Seoul to temper South Koreans’ obsession with cryptocurrencies. Everyone from housewives to college students and office workers have rushed to trade the market despite warnings from global policymakers about investing in an asset that lacks broad regulatory oversight.
A surge in bitcoin and other cryptocurrency trading is presenting challenges for financial regulators and central banks that manage their countries’ fiat currency. Regulators fear some people may use cryptocurrency trades to launder money. South Korea’s share of global bitcoin trading grew significantly last year, raising alarm bells among government officials.
“It’s a terrible idea because it’s great, so to speak, when it’s not needed and the times are good. But if there is a crisis,” that safety “is actually the prescription for bank runs,” said the 68-year economics professor from the Massachusetts Institute of Technology. In a crisis, the thinking goes, money would rush out of the banks and flood the central bank, which would suddenly find itself in the position of taking the role of market intermediary, though bereft of much of the information that banks possess. The central bank would then need to resolve the conundrum of how to inject the money back into the banking system.
Riot, which invests in cryptocurrency and blockchain startups, sought many more of the 3,813 Bitcoins in the auction Monday but was outbid, Chief Executive Officer John O’Rourke said in a phone interview. The company acquired the Bitcoins at about the market price at the time, he said. That works out to about $5.2 million, based on Monday’s closing price of $10,354.
FOREX, CARRY TRADES, EXCHANGE RATES
Economists at the Institute of International Finance estimated on Monday that the greenback remains about 10% overvalued despite a year-long slide that has driven the currency down 7% against a basket of 16 currencies tracked by the Wall Street Journal. In order to fully close the U.S. trade gap, the IIF estimates the dollar would need to fall another 10% from its current levels. IIF economists say the dollar has furthest to fall against the currencies of Asian nations, such as China’s yuan, with which the U.S. runs its largest trade deficits.
FINTECH, BLOCKCHAIN, DIGITAL PAYMENTS
Europe’s fintech industry, which includes challenger banks and online-only lenders, has rapidly expanded over the past 10 years. Traditional financial institutions have faced intense competition as a result, with former Barclays Plc CEO Antony Jenkins saying in July last year that banks could face obsolescence in five to 15 years. “We often say internally that it’s a war for talent,” says Christian Faes, co-founder and CEO of LendInvest, which employs about 130 people.
“Transaction confirmation times have risen substantially; this, in turn, has led to an increase in the failure rate of transactions denominated in fiat currencies. (By the time the transaction is confirmed, fluctuations in Bitcoin price mean that it’s for the “wrong” amount.) Furthermore, fees have risen a great deal. For a regular Bitcoin transaction, a fee of tens of U.S. dollars is common, making Bitcoin transactions about as expensive as bank wires. Because of this, we’ve seen the desire from our customers to accept Bitcoin decrease. And of the businesses that are accepting Bitcoin on Stripe, we’ve seen their revenues from Bitcoin decline substantially. Empirically, there are fewer and fewer use cases for which accepting or paying with Bitcoin makes sense.”
Cryptocurrencies are making inroads into food commodity trading. The first freight deal settled in Bitcoin was executed last month on a vessel carrying wheat from top shipper Russia to Turkey, according to Prime Shipping Foundation, the venture behind the transaction. The consignment was part of pilot testing of Prime Shipping Foundation’s blockchain payment system for bulk commodities, said Chief Executive Officer Ivan Vikulov.
Blockchain technology may help keep track of the roughly $200 billion of the precious metal dug from remote mines, traded by middlemen and melted down by recyclers that’s sold each year to buyers scattered around the world. The London Bullion Market Association, which oversees the world’s biggest spot gold market, will seek proposals including the use of blockchain for tracing the origins of metal, partly to help prevent money laundering, terrorism funding and conflict minerals, according to Sakhila Mirza, an executive board director.
TAXATION, WEALTH HAVENS, INEQUALITY
Many states typically follow the federal government’s rules for deductions, exemptions and other breaks. When federal rules change, as they did under the law passed late last year, state rules often do, too. State lawmakers must choose whether to conform their systems to the new federal rules, cut tax rates to prevent rising tax burdens or spend potential revenue windfalls.
Walt Disney Co. said it will give employees a one-time cash bonus of $1,000, joining a growing list of companies handing out awards in the wake of federal tax reform. About 125,000 U.S. employees will be eligible, the company said Tuesday in a statement, putting the cost at $125 million. Disney also plans to put $50 million into a fund to help hourly employees with tuition costs and plans to provide as much as $25 million annually for that purpose afterward.
Special counsel Robert S. Mueller III is seeking to question President Trump in the coming weeks about his decisions to oust national security adviser Michael Flynn and FBI Director James B. Comey, according to two people familiar with his plans. Mueller’s interest in the events that led Trump to push out Flynn and Comey indicates that his investigation is aggressively scrutinizing possible efforts by the president or others to hamper the special counsel’s probe.
Attorney General Jeff Sessions — at the public urging of President Donald Trump — has been pressuring FBI Director Christopher Wray to fire Deputy Director Andrew McCabe, but Wray threatened to resign if McCabe was removed, according to three sources with direct knowledge.
There are increasing signs that Sessions has done plenty of Trump’s bidding behind closed doors. And he’s done it on some dicey and very politically tinged issues — so much so that he made Trump’s second FBI director deeply uncomfortable with the whole thing.
FBI Director Christopher A. Wray has been resisting pressure from Attorney General Jeff Sessions to replace the bureau’s deputy director, Andrew McCabe, a frequent target of criticism from President Trump, according to people familiar with the matter. The tension over McCabe and other high-level FBI officials who served during James B. Comey’s tenure has reached the White House, where counsel Donald McGahn has sought to mediate the issue, these people said.
Attorney General Jeff Sessions was interviewed for several hours last week by the special counsel’s office investigating Russian meddling in the 2016 election, making him one of the highest-level officials to talk to Robert Mueller’s team. Special Counsel Robert Mueller has been examining, among other things, whether anyone tried to obstruct the investigation of Russian meddling, including through President Donald Trump’s firing of former FBI Director James Comey.
For Mr. Sessions, the interview was the latest in a balancing act that has lasted nearly a year. He has sought to get back in Mr. Trump’s good graces by pursuing investigations into issues like leaks to the news media and relaying Mr. Trump’s displeasure about senior F.B.I. leadership to the bureau’s current director, Christopher A. Wray.
When Attorney General Jeff Sessions was called in for an interview last week with the special counsel investigating Russian election interference, he turned to a friend and fellow Alabama lawyer to accompany him. The lawyer, Chuck Cooper, worked in the Reagan Justice Department and is well-known in conservative circles for his private-practice work on social causes, such as defending a California law that banned same-sex marriage. What Cooper isn’t known for is criminal work, a fact that surprised some white-collar criminal lawyers who questioned Sessions’ decision.
Joe Biden said Tuesday that Senate Majority Leader Mitch McConnell stopped the Obama administration from speaking out about Russian interference in the 2016 campaign by refusing to sign on to a bipartisan statement of condemnation. That moment, the former Democratic vice president said, made him think “the die had been cast … this was all about the political play.”
The overwrought rhetoric, and near-total lack of substance, suggests that the contents of the memo may not live up to expectations. Adam Schiff, the ranking Democrat on the House Intelligence Committee, said in statement that the memo, is “rife with factual inaccuracies” and “is meant only to give Republican House members a distorted view of the F.B.I.” But the panel has moved to prevent Democrats from releasing a minority report characterizing the intelligence upon which the memo is based. As a result, the only thing the public knows is what lawmakers are saying about a partisan document—again, written by Nunes and his staff—based on confidential information that cannot be disclosed.
“It’s highly distorted spin by Nunes,” Schiff told me. “The Nunes spin memo distorts the underlying materials and has presented Members with a very misleading impression of what those materials show.” Schiff also made a striking claim: He said that in allowing the memo to be accessed in a classified setting by House Republicans, Nunes has violated an agreement with the FBI and the Justice Department. Schiff added that its public release would also violate that agreement.
Almost 8 in 10 Americans say President Donald Trump should testify under oath if asked to do so for the investigation being run by special counsel Robert Mueller, including majorities across party lines, according to a new CNN poll conducted by SSRS.
Top congressional Democrats on Tuesday called on Facebook and Twitter to urgently examine the role of Russian bots and trolls in the growing online campaign to release a classified memo about allegations that the FBI mishandled a classified surveillance request as it probed Russia’s meddling in the 2016 campaign. Hashtags such as “#ReleaseTheMemo” have been trending on Twitter in recent days, and accounts affiliated with Russian influence efforts have been supporting this effort, according to the Alliance for Securing Democracy, a U.S.-based group that examines efforts by Russia and other nations to interfere in democratic institutions. The hashtag has also been shared by Donald Trump Jr. and Rep. Steve King.
NORTH / SOUTH KOREA, IRAN, NUCLEAR WEAPONS
Pompeo would not answer if options exist for Trump to attack North Korea short of a nuclear war. Analysts warn a limited strike would lead to such a war should North Korea retaliate and prompt escalation. He indicated instead the administration was developing a range of options spanning from diplomacy to war, so Trump will not face a binary choice between inaction and potential nuclear devastation.
RATES, LIQUIDITY, SYSTEMIC RISK, BALANCE SHEETS
Asian investors have long been buyers of US government bonds, but in the era of low interest rates they have ratcheted up their purchases of corporate and municipal bonds, and headed into the more exotic — and riskier — parts of the market including structured products like collateralised loan obligations. “Asian buyers have always been here but not in this size and depth in our books,” Mr Burger says, whose colleagues in Hong Kong typically lead the deals overnight. “They used to always look at the higher quality deals — single A and better — but that has changed. It’s all the way down to low triple-B.”
Fewer fund managers have been buying downside protection for their portfolios. Being long vol has been painful. Speculative accounts, such as hedge funds, have accelerated their buildup of net-long S&P 500 futures positions. Part of this is hedge funds unwinding their portfolio hedges.
Barely a decade after the financial crisis, these are also alarming signs that the boom in the private equity sector could turn to bust — including aggressive and rapid dealmaking that leads to soaring prices for companies. The size of recent deals has surpassed those pre-crisis peaks and dependence on debt financing is nearing record levels. A decade ago, a string of buyout firms went out of business after a period of similarly frenzied activity.
merging markets are racking up bond sales at a record pace this year as issuers scramble to lock in low yields before the Federal Reserve’s next interest-rate increase. The yield premium paid by emerging issuers on dollar debt has dropped to the lowest in more than three years as investors wager on resilient global growth and as the ongoing global stock rally encourages them to dive into riskier assets.
The ongoing bull market in US stocks has created the first $300bn exchange-traded fund. Assets at State Street Global Advisors’ SPDR S&P 500 fund passed the landmark on Monday, almost exactly 25 years after it started trading. Almost universally known by its ticker symbol of SPY, the fund was the first ETF to be launched, and owes the landmark to the enduring popularity of the S&P 500 as a benchmark, as well as to the current strong performance of the US market and the ongoing shift to passive investing.
The world’s biggest bond market is about to get a taste of the future, with the U.S. Treasury expected to unveil bigger note sales for the first time since 2009 to fund budget deficits that are likely to deteriorate for years to come. The catch is that buyers may struggle to keep up: Central banks are showing signs of stepping back, and other investors may want to see higher yields before pouncing. That backdrop also contributes to forecasts for a flatter yield curve in 2018, given expectations that the Federal Reserve will hike rates further as inflation picks up.
MACRO OP-EDS, INSIGHT, EVENTS AND TRENDS
The global liberal order is holding up better than many feared a year ago. But globalists should not breathe easy. The nationalist insurgency is both growing and metamorphosing. It is not just eating away at relations between countries on issues such as free trade; it is also eroding the institutions and norms that prevail within countries. This is not a problem for the global economy yet, as a synchronized upswing drives growth and stock prices higher. But it’s a shadow over the future. Populists sustained by legitimate grievances at the cultural and economic upheaval caused by globalization often govern by authoritarian or divisive means, undermining the stable, rules-based environment that businesses crave.
The drop was swift: Prices for bitcoin and dozens of other digital currencies on Jan. 8 fell sharply, lopping more than $100 billion off their collective market value. The globe-rattling move can be traced to one address: An apartment in a new residential building across the street from a local union headquarters in a gentrifying section of Long Island City, Queens. It is the workplace of Brandon Chez, the 31-year-old computer programmer behind coinmarketcap.com, a website that is a top source for data on bitcoin and hundreds of other cryptocurrencies. Mr. Chez’s site, which went live in 2013, has become one of the most heavily trafficked websites in the world.
To be clear, I happen to think that blockchain is a fascinating and potentially revolutionary technology, and that marijuana legalisation is a cause whose time has come, and which could ease the pain of many invalids, allow state authorities to gain needed tax revenues, and allow for the healthy regulation of what is already a sizeable market. I have nothing against any of this. But I still find it amazing to see marijuana and the blockchain juxtaposed anywhere other than in a headline in The Onion.
Betting on blockchain is betting on small communities flourishing in an ecosystem that will grow increasingly punitive towards large established groups. Despite all the hype about the rising, then crashing, then rising price of bitcoin, blockchain technology will advance the ability of small people and groups to transact with each other without needing to rely on the iconic central intermediaries of today. And a parabolic rise in cryptocurrency prices almost guarantees that at least a small percentage of existing blockchain companies will have sufficient funding to actually build the technology and community engagement that will accelerate public separation from iconic institutions and central authorities. This will inherently mean mega corporations, and maybe even tech behemoths, will hold a continually declining share of GDP. Their revenues may still rise, but they will not at the same rate loyal employees would hope. If this occurs, you will see delayed retirement from existing workers and fewer open leadership positions available to younger employees.
Building on our January 2017 report on automation, McKinsey Global Institute’s latest report assesses the number and types of jobs that might be created under different scenarios through 2030 and compares that to the jobs that could be lost to automation. The results reveal a rich mosaic of potential shifts in occupations in the years ahead, with important implications for workforce skills and wages. Our key finding is that while there may be enough work to maintain full employment to 2030 under most scenarios, the transitions will be very challenging—matching or even exceeding the scale of shifts out of agriculture and manufacturing we have seen in the past.
So here America is. Still trying to use what it imagines are Holy Grails, markets, to solve everything — which means that public investment can never happen, because it is the opposite of markets. But markets are not Holy Grails. They are just another kind of tool, and one that is not suited to all a society’s tasks. And so people’s lives are simply falling apart — and as they do, so is their democracy, as people turn to strongmen to fix their problems and soothe their wounds. Soon, they will live a decade shorter than Europeans — and those short lives will be full of endless work, misinformation, junk food and media and education, no savings, no retirement, little happiness: Americans will never realize themselves to nearly the same degree that Europeans do. What did Europe do differently? Well, the striking thing is this. Though European countries are very different culturally and even socially, they converged on something like very much the same social contract.
Like most people who make their living in private aviation, Steve Varsano — owner of the Jet Business, whose extravagant retail space in London is the world’s only walk-in storefront jet dealership — sees Trump’s election as a harbinger of great things for his industry. The early 2000s were boom times for aviation, and the crash of 2008, after years of ramped-up production, hit the industry hard, not just economically but politically. Barack Obama, Varsano believed, created an environment hostile to private aviation: The president humiliated the near-bankrupt auto manufacturers after they arrived in Washington hat in hand on their corporate jets, and in a 2011 news conference about the economy, Obama mentioned corporate jets six times. After Trump’s inauguration, when Varsano and I first spoke, he was once again sanguine about the sector’s prospects. He got so many phone calls after Nov. 8, 2016, he said, that he started looking for a new retail space twice the size. “The guy is changing the optics of private aviation,” he told me in March. “He’s the mascot of private jets.”
Warehouse clubs such as Costco, Sam’s Club and BJ’s Wholesale Club have for decades been an American staple: a place where families can stock up on bulk items, try free samples and spend the better part of a weekend morning meandering through aisles filled with 26-packs of canned salmon and king-size mattresses. But as more of Americans’ buying shifts online, some retail analysts say warehouse clubs may largely be left behind.
While President Donald Trump relentlessly claims credit for the strengthening economy, the nation’s economic growth is being driven overwhelmingly by the places that are most resistant to him. Counties that voted for Hillary Clinton against Trump in 2016 accounted for nearly three-fourths of the nation’s increased economic output and almost two-thirds of its new jobs in the years leading up to his election, according to previously unpublished findings provided to CNN by the Metropolitan Policy Program at the Brookings Institution. That imbalance looks even starker when considering that Clinton won less than one-sixth of the nation’s counties. Trump carried more counties than any candidate in either party since Ronald Reagan in 1984.
A new report by three housing and consumer rights groups claims that Wall Street’s new rental empire is characterized by aggressive rent hikes, fee gouging, and high rates of eviction. These practices, according to the report, are propping up a new asset class known as “single-family rental securities,” akin to mortgage securities but backed instead by the rent checks of tenants. “This important report highlights the way Wall Street landlords have driven up rental prices and provided terrible living conditions—particularly in low-income and minority communities,” Sen. Elizabeth Warren, D-Mass., told The Intercept.
A harbinger of the techies who would storm Wall Street in a decade, this new generation of hedge-fund introverts would replace the profanity-laced trading rooms of the 1980s with quiet libraries of algorithmic research in every corner of the markets. They would also launch an early email system and look into the prospect of online retailing, leading one of Shaw’s most ambitious employees to take the idea and run with it. Yes, the seeds of Jeff Bezos’s Amazon were planted at a New York City hedge fund. Thirty years ago, all of that was yet to come. All Shaw told Sussman at the time was, “I think I can use technology to trade securities.”
The value of oil comes from scarcity and the difficulty of extracting oil from new untapped locations. However, it is increasingly easy to produce massive amounts of data. For example, data is both created and used by autonomous vehicles interacting with a smart city’s connected infrastructure. In San Francisco alone there are 470,000 registered cars (not including buses, motorcycles, or other commercial vehicles). If even only 25% of these cars were autonomous, it would result in the same data produced yearly as about 300,000,000 Internet users or roughly all of Twitter. Imagine that scaled for an entire country and it is easy to understand that data is not in short supply. Unlike oil, the value of data doesn’t grow merely by accumulating more. It is the insights generated through analytics and combinations of different data sets that generate the real value.
More than three decades after Honda Motor Co. first built an Accord sedan at its Marysville, Ohio, factory in 1982, humans are still an integral part of the assembly process — and that’s unlikely to change anytime soon. Even as doom-and-gloom reports suggest robots are poised to replace human labor and automotive upstarts like Tesla Inc. aim to largely remove people from the production line, workers keep toiling side-by-side with machines in Marysville. And Honda’s approach is working: The Accord won the prestigious North American Car of Year award at last week’s Detroit auto show. “We can’t find anything to take the place of the human touch and of human senses like sight, hearing and smell,” Tom Shoupe, the chief operating officer of Honda’s Ohio manufacturing unit, said in an interview.
Some current and former executives say Facebook has not fully owned up to the negative consequences of its tremendous power. At the heart of the predicament is the very technology that makes the social network work, they said. “The problem with Facebook’s whole position is that the algorithm exists to maximize attention, and the best way to do that is to make people angry and afraid,” said Roger McNamee, a Facebook investor and mentor to Zuckerberg in the company’s early days. He and others — including the company’s first president, its former head of growth and Zuckerberg’s former speechwriter — have criticized the company in increasingly harsh terms.
CENTRAL BANKS & MONETARY POLICY
Powell — known more casually as “Jay” — assumes the top Fed position following his nomination by President Donald Trump in November. He comes to the position amid a critical time for the Fed, which is normalizing policy after years of extraordinary accommodation triggered by the financial crisis.
If money still matters, the Canadian economy could be in trouble. Measures of Canada’s money supply have seen a sharp deceleration since the middle part of 2017. Year-over-year growth in one narrow metric of money, M1, slowed to 7.4 percent in November, the lowest since 2015. Growth in the broader M2++ monetary aggregate slipped to a more than five-year low of 6.1 percent in November, while the even broader M3 aggregate slowed to its lowest since 2010.
USA ECONOMY DATA, CITIES AND STATES
The U.S. dropped out of the top 10 in the 2018 Bloomberg Innovation Index for the first time in the six years the gauge has been compiled. South Korea and Sweden retained their No. 1 and No. 2 rankings. The index scores countries using seven criteria, including research and development spending and concentration of high-tech public companies.
Southern states, where economic growth is outpacing Northern counterparts, are predicting that a new $10,000 cap on the federal deductions taxpayers can take for state and local taxes will make low-tax states more attractive for workers and businesses. The South’s optimism contrasts with worries in many Northern states that the changes will hurt their economies, where higher state and local taxes were offset, in part, by federal deductions for decades.
GLOBAL ECONOMY DATA
Chief executives are descending on Davos with their confidence suddenly in high gear, despite a rising tide of threats menacing their bottom lines. With economic growth strengthening around the globe, business leaders are finding it easier to stiff-arm worries over geopolitical conflagrations, cyberattacks, climate change-related events and the rest of the lineup of potentially destabilizing calamities that form part of the Trump era.
The world economy is accelerating and the financial markets are going gangbusters. But there is an undertone of anxiety among delegates at the annual meeting of the World Economic Forum held at this Swiss mountain resort. In a reminder of the risks of a trade war, the Trump administration this week levied steep tariffs on imports of solar panels, aimed mainly at China, and washing machines, hitting mainly South Korea. Geopolitics aren’t the only factor driving caution. Even as the International Monetary Fund stepped up its growth projections for this year and next, Maurice Obstfeld, its chief economist, warned here Monday that “the next recession may be closer than we think,” describing policy-maker complacency as the “overarching risk.”
The world’s political and corporate elite gathered in the Swiss ski resort of Davos delivered a robust defense of globalization as U.S. President Donald Trump slapped tariffs on imported solar panels and washing machines in his first major trade action. “If we are going to push back against the anti-trade tendency in globalization, that will leave us all worse off,” Trudeau said. “We have to put the concerns and the well-being of our ordinary citizens at the center of what we are negotiating.”
As the World Economic Forum’s annual meeting got underway in Davos, Switzerland, the leaders of Barclays Plc, Citigroup Inc. and the Carlyle Group all fretted that the strongest global economy since 2011 was leaving financial markets complacent. “There is a numbness out there, there is an ambivalence out there that’s concerning,” Citigroup Chief Executive Officer Michael Corbat said on a Davos panel hosted by Bloomberg’s Tom Keene. “When the next turn comes — and it will come — it’s likely to be more violent than it would otherwise be if we let some pressure off along the way.”
Japan’s exports grew less than anticipated in December, but shipments to the rest of Asia and China both notched their highest on record. The value of exports rose 9.3 per cent year on year in December, according to the Ministry of Finance, coming in below a median forecast of 10.1 per cent from economists surveyed by Reuters. That was down from 16.2 per cent growth in November but still marked 13 straight months of expansion.
Germany’s economy has been enjoying a strong run, supported by domestic spending and solid global trade, and saw the strongest expansion since 2011 last year. The Bundesbank says the momentum is likely to continue, and the country’s benchmark stock index has rallied in recent weeks to reach an all-time high. Companies in the manufacturing sector are seeing particular strength, as activity rose to a record level last month.
POSITIONING, INFLECTION, MARKET CALLS
Risk appetite hasn’t looked this euphoric since the tech-bubble heyday. Goldman Sachs Group Inc.’s U.S. Financial Conditions Index, a cross-asset gauge of market health, signals the most accommodative investing environment since April 2000, spurred by the tumbling dollar and the relentless bull run in stocks and corporate bonds. Federal Reserve officials are mulling the impact of inflated asset valuations on consumer prices, while the International Monetary Fund warned policy makers in Davos to be vigilant about financial risks.
Global stocks and U.S. Treasuries are in the throes of their most “extreme” start to the year ever as bullish sentiment engulfs markets, according to Goldman Sachs Group Inc. The bank’s cross-asset measure of risk appetite around the world is the highest since it started the gauge in 1991. Euphoria is turbo-charging global equities while 10-year U.S. government bonds are suffering their worst performance in risk-adjusted terms, according to Goldman.
“We are in this Goldilocks period right now. Inflation isn’t a problem. Growth is good, everything is pretty good with a big jolt of stimulation coming from changes in tax laws,” Ray Dalio told CNBC on Tuesday from the World Economic Forum in Davos, Switzerland. The investor said we’re in the late part of the cycle and predicts we will see “a market blowoff” rally, fueled by cash from banks, corporations and investors.
The equity rally that saw the S&P 500 Index cap its third straight weekly advance — the best start since 1987 — is being driven by two things: Upward earnings revisions and the crush of money flowing into stocks. Optimism that the advance fueled by Donald Trump’s presidency will keep going is high among institutions and mom-and-pop investors alike. A survey by the University of Michigan shows that a record 66 percent of Americans believe the stock market will climb in the next year.
The investor love affair with tech megacaps is showing signs of heating up to dangerous levels just ahead of a busy slate of earnings. A net 39 of the Nasdaq 100 Index’s constituents are trading at a relative strength above 70 — the most since June 2. The last time the group was flashing an overbought signal that strong, the tech-heavy gauge took a 5 percent tumble over the next month.
Asset allocators hoping to turn a profit this month only needed one simple rule: Don’t fight the trend. Everywhere you look — stocks, bonds, commodities, currencies — past winners keep thriving. Despite concern over shifting central bank policies or a sudden flare-up of inflation, January has been more of the same. In fact, cross-asset market momentum has only been this bullish three other times in the past decade.
COLOR, EARNINGS, SENTIMENT, VALUATIONS
Confidence is growing in Caterpillar Inc.’s ability to tap recoveries in global commodity industries and economies. Analysts tracking the world’s biggest maker of construction and mining equipment have lifted their quarterly earnings estimates by 41 percent on average in the past three months, according to data compiled by Bloomberg.
“We certainly wish we were participating” in the rally, said Brad Case, a senior vice president with the National Association of Real Estate Investment Trusts, or Nareit, the trade association whose members own nearly $3 trillion in property assets. The poor share performance has triggered a debate in the REIT world about whether the market’s shabby treatment is justified. Some analysts point to such explanations as rising interest rates and a swelling development pipeline of new office buildings, apartment complexes and self-storage facilities.
CREDIT, YIELD, BUYBACKS, CORPORATES
Spain drew record orders for its biggest syndicated offering since 2014, with bids reaching more than four times the amount offered. Orders for the 10-year notes totaled more than 43 billion euros ($52.7 billion), compared with the 10 billion euros on offer, reflecting investor confidence in the once-beleaguered economy and strong demand this year for sovereign debt in the single currency.
Netflix Inc. is using its newly minted $100 billion market capitalization to tout a return to the junk-bond market, but debt investors may cast a skeptical eye on the online TV network. “When will the company ever produce positive free cash flow?” Bloomberg Intelligence analyst Stephen Flynn said in an interview. “The challenge for a bondholder is your upside is not the same as it is for an equity holder.”
DEALS, MERGERS, IPOs, LBOs, RESTRUCTURINGS
From pharma to finance, dealmaking in 2018 is on fire around the globe. Just three weeks into the year, the value of mergers announced totals $152.5 billion. That’s the highest since the $374 billion racked up in the same period during the technology deal frenzy in 2000, according to data compiled by Bloomberg. While clouds loom, bankers say the U.S. corporate tax cut, robust economies and rising stock markets are giving executives confidence to sign off on billion-dollar transactions — and in some cases, to pay rich prices.
REAL ESTATE, HOUSING, REITS, COMMERCIAL
Co-working is coming of age. Some of the world’s largest landlords, facing weak growth in traditional office rents and occupancies, are investing heavily in what until recently was viewed as a niche office business that catered primarily to technology startups and millennials. Co-working at its core is a new name for a business that has been around for decades. Firms simply lease big blocks of space from landlords and subdivide it for smaller tenants and provide a range of office services.
HEDGE FUNDS, PRIVATE EQUITY, MONEY MGMT
Och-Ziff Capital Management faces turmoil as founder Daniel Och upends plan for James Levin to succeed him as head of the U.S.’s largest publicly traded hedge fund. Behind the rift: money and control. The sudden reversal comes at a time of transition for the industry. Founders of many hedge funds and private-equity firms are nearing retirement age, after pocketing fortunes over their careers, and are focusing on succession. Hedge funds, which manage $3 trillion, are also under pressure to justify their existence, with clients griping about the high fees and relatively poor returns.
William Ackman is cutting almost a fifth of staff and looking to lower his public profile as he seeks to turn around Pershing Square Capital Management after three straight years of losses, people familiar with the move told Reuters on Monday. The billionaire hedge fund manager, who recently suffered big losses on Valeant Pharmaceuticals International Inc and Herbalife Ltd and lost a proxy fight with Automatic Data Processing Inc, will spend more time investing and stop being the firm’s No. 1 marketer, the people said.
ENERGY COMPANIES, NOCs, INDUSTRY
Five workers were killed in a well explosion in Oklahoma, officials said Tuesday, in the deadliest shale-drilling accident since the boom in U.S. oil and gas production began a decade ago. All five were in an office off the elevated drilling floor when the blast occurred on Monday morning about 150 miles east of Oklahoma City, said Chris Moore, sheriff of Pittsburg County, Okla.
For so-called blank-check companies focused on energy, the party’s over. In 2017, investors plowed $2.5 billion into energy-centric special purpose acquisition companies, or SPACs, the vehicles typically led by rock-star management teams. But with more than 40 percent of last year’s cash still prowling for deals, the appetite for new SPACs to tackle the sector is fading.
ENERGY CRUDE OIL, OIL SANDS, SHALE
Crude’s rally faltered after an industry report showed U.S. crude stockpiles unexpectedly rose last week. Futures in New York, which were rising closer to $65 a barrel in after-hours trading, plunged back to the level where they settled on Tuesday, at $64.47. The American Petroleum Institute was said to have reported domestic oil inventories increased 4.76 million barrels last week. That would be the first build in stockpiles since November if data from the Energy Information Administration confirms it on Wednesday.
BBL Commodities LP, one of the world’s largest oil-focused hedge funds, believes Brent crude will climb to $80 a barrel this year as stockpiles drop rapidly on the back of production cuts made by OPEC and its allies. “We think the market is vastly overestimating the near term inventory buffer,” Jonathan Goldberg, the founder of BBL Commodities, said in an interview last week. “Given the rise in demand over the past five years, inventories are especially low as a measure of forward cover.”
COMMODITIES AGRICULTURE & SOFTS
Russian wheat exports are expanding further across the globe as the world’s biggest shipper edges out competitors. In the latest example, its shipments to Sudan have jumped 87 percent so far this season, turning the African country into the seventh-largest customer for Russian wheat, Institute for Agricultural Market Studies figures show. Sudan imported no Russian wheat until 2014, when millers decided the grain met their quality requirements, according to the country’s embassy in Moscow.
POLLUTION, CLIMATE & ENVIRONMENT
Within three months, Cape Town is at risk of going from a tourist haven and hub for the wine industry to becoming the world’s first big metropolis to run out of water after a years-long drought. “We have reached the point of no return,” Patricia de Lille, Cape Town’s mayor, warned this month. With anger in her voice she added: “It is quite unbelievable that a majority of people do not seem to care.”
Vintners know all too well that famously finicky, temperature-sensitive pinot grapes can changes with the subtlest shifts in soil, weather, and climate. Too hot, and you get wines with higher alcohol, jammy flavors, and too little acidity. Too cold, and grapes don’t get ripe. Pinot needs average growing-season temperatures ranging from 57F to 61F, a very narrow niche. If, as predicted, global temperatures shoot up two degrees in a couple of decades, some regions, including Oregon, may get too hot for cool-weather-loving pinot.
DACA, TRAVEL BAN, IMMIGRATION, WALL
Over the weekend it became clear that using the shutdown to insist on protections for hundreds of thousands of undocumented immigrants was a serious miscalculation. By abandoning the strategy on its third day, Democrats believe they limited whatever damage there may be and gave the public time to forget about the disruption before the crucial November election. They also won a commitment from Senator Mitch McConnell, the Kentucky Republican and majority leader, to allow debate on a wide-ranging, bipartisan measure that could achieve their goal of protecting hundreds of thousands of undocumented immigrants.
Seven in 10 Republicans, versus half of Democrats, now say they are “somewhat dissatisfied” or “very dissatisfied” with current U.S. immigration levels. Republicans’ dissatisfaction is down from a peak of 86% in 2016, while Democrats’ has rebounded after dropping to a low point of 34% in 2017.
Senate Minority Leader Chuck Schumer said Tuesday he withdrew the offer he made last week to give President Donald Trump more than the initial $1.6 billion he requested for a U.S.-Mexico border wall. “It was part of a package” on immigration that didn’t come together, Schumer of New York told reporters. “We’re going to have to start on a new basis and the wall offer is off the table.”
A leading bipartisan Senate immigration proposal is “totally unacceptable” to President Donald Trump and “should be declared dead on arrival,” the White House said Tuesday, reaffirming a hard line on a contentious issue that has become entangled with U.S. government funding in recent weeks.
GEOPOLITICS, CRIME, TERRORISM
Gunfire ringing out in American schools used to be rare, and shocking. Now it seems to happen all the time. The scene in Benton, Ky., on Tuesday was the worst so far in 2018: Two 15-year-old students were killed and 18 more people were injured. But it was one of at least 11 shootings on school property recorded since Jan. 1, and roughly the 50th of the academic year.
Today, as four decades ago, the Kurds in both Syria and Iraq are realizing just how disposable they are to the regional—and global—powers. That’s especially so now that Kurdish help is no longer needed in the campaign to topple Islamic State, and as geopolitical alliances shift in the contest over the future of Syria and the entire region.
Secretary of State Rex Tillerson said he is holding Russia accountable for a new chemical weapon attack believed to have been conducted by Syrian government forces near Damascus on Monday. Moscow’s failure to halt chemical strikes calls into question Russia’s ability to participate in efforts to resolve the Syrian crisis, Mr. Tillerson said Tuesday at the end of a meeting of more than 20 countries on preventing chemical weapon use.
A man with a gun and ammunition was arrested outside the White House early on Tuesday, the Secret Service said. The man, whom officials identified as Bryan McHugh, 43, of Alexandria, Va., was found in a vehicle near the White House around 2:30 a.m. as Secret Service agents responded to reports of a suspicious vehicle. He was transferred to the custody of the District of Columbia police and was expected to be charged with several firearms and weapons-related violations.
“Fake news. I’m coming to gun you all down,” the man told a CNN operator, according to court documents obtained by WGCL-TV. He allegedly later called CNN again, saying, “I’m smarter than you. More powerful than you. I have more guns than you. More manpower. Your cast is about to get gunned down in a matter of hours… I am coming to Georgia right now to go to the CNN headquarters to f—ing gun every single last one of you,” he said. The FBI were able to trace the call and arrested the man over the threats.
Fortress, a New York-based company that made its name in distressed debt, made a $57 million loan to a troubled Jersey City, N.J., real estate project owned by Kushner Cos. in October, mortgage records show. The funding, which has not been previously reported, came just after the Jersey City planning board approved a new, $800 million plan for the One Journal Square towers on Sept. 26, 2017.
Democratic leaders have pressed one of their most prolific donors privately, urging him to tone down his campaign calling for President Trump’s impeachment. They have prodded him in public, declaring on television that they consider impeachment an impractical idea. And party strategists have pleaded with Democratic candidates for Congress not to join in. But that donor, Tom Steyer, a California billionaire, has only intensified his attacks in recent weeks. Buoyed by tens of millions of dollars in television commercials — financed out of his own pocket and starring him — Mr. Steyer has become one of Mr. Trump’s most visible antagonists, firing up angry Democrats and unnerving his own party with the ferocity of his efforts.
The state currently bars nearly 1.7 million people with felony records from casting votes unless they successfully petition the state to regain their rights, according to the Sentencing Project, which advocates for criminal justice policy changes. The ballot measure, pushed by civil-rights advocates, would automatically restore voting rights to former felons once they complete their sentences, including parole and probation, except those convicted of murder or sexual offenses.
A new poll places Martin Schulz’s Social Democrats (SPD) only four points ahead of the far-right Alternative for Germany (AfD). If there were an election today, the SPD would receive 18 percent of the vote while the AfD would receive 14, according to an INSA poll published Tuesday.
CONSUMER TECH, SOCIAL MEDIA, E-COMMERCE, MOBILE
Facebook Inc is buying a software firm that specializes in authenticating government-issued identification cards, the two companies said on Tuesday, a step that may help the social media company learn more about the people who buy ads on its network.
In Mr. Noto, SoFi has chosen a fast-rising executive in the tech industry. Mr. Noto, 49, was one of the most respected bankers at Goldman Sachs before becoming the chief financial officer of the National Football League and then Twitter. Since arriving at Twitter, Mr. Noto has been perhaps the most trusted deputy to the company’s chief executive, Jack Dorsey, and has taken on several additional roles. He has recently been leading the company’s interactions with investors and its marketing as well as its revenue-generating efforts, especially with its moves into live video.
Snapchat users will soon be able to share Stories outside the app to Facebook and Twitter in an effort to spark growth on the social media app. Users will be able to share Stories to their linked social media accounts or through text or email with a link to a webpage where people who don’t have the app can view the message.
RETAIL APPAREL, SPECIALTY, DINING, BIG BOX
The move — which is the first public case of Amazon handing over seller data to state tax officials — will help the state of Massachusetts identify which Amazon sellers may owe them unpaid sales taxes. It could also mean incredible headaches for the majority of third-party sellers who never comply with various state laws on sales tax collection — if more states follow Massachusetts and demand unpaid taxes from those sellers.
Procter & Gamble, the consumer products giant targeted by activist investors, has raised alarm bells about its long-term profitability, reporting that its discounting strategy had squeezed margins during the most recent quarter. After spending much of last year under siege by billionaire activist Nelson Peltz, P&G has been trying to reignite sales and fend off smaller competitors like Dollar Shave Club. P&G’s superbrands have been losing market share for a decade, while sales have dropped for the past three years — a key critique by Mr Peltz.
A healthy U.S. economy and the lower corporate tax rate have done little to alleviate the challenges these companies face. Retailers such as Wal-Mart Stores Inc. are pushing for steeper discounts as they struggle to compete with Amazon.com Inc. Meantime, costs of pulp, oil and other raw materials used in the products have risen more than expected. The dynamics are setting up a tug of war this year between consumer-products companies that are pouring money into new products and marketing in hopes of commanding higher prices, and retailers and shoppers increasingly accustomed to discounts.
Procter & Gamble has a message for teenagers seeking online fame: Please stop eating Tide detergent pods.The US consumer goods’ finance chief said during a media call on Tuesday that the company is working to stop the so-called Tide Pod challenge that has seen teenagers consume or bite into laundry detergent pods and that has sparked memes around the idea of eating them.
MEDIA, CABLE, SPORTS, ENTERTAINMENT
Every crop of Oscar nominees tells a story. This year, the films selected by the Academy of Motion Picture Arts and Sciences to celebrate at its 90th Academy Awards ceremony on March 4 reflected an industry and art form in the midst of profound, sometimes confounding change, even while clinging to their most hidebound habits and tastes.
Rupert Murdoch’s yearslong effort to secure an even larger presence in the international media market suffered a new setback on Tuesday, when a British regulator provisionally rejected 21st Century Fox’s bid to acquire full control of Sky, the British satellite broadcaster. Mr. Murdoch has made multiple attempts to acquire the part of Sky not already under his control, only to find himself thwarted by a phone-hacking scandal and the British authorities.
GAMING, LIFESTYLE, RECREATION & LEISURE
Wynn Resorts Ltd. plans to expand its newest property on Macau’s Cotai Strip after the project helped the company report better-than-expected earnings last quarter. The next phase of the $4.2 billion Wynn Palace, which opened in August 2016, will be developed on 11 acres (4.45 hectares), Chairman Steve Wynn said on a conference call. He didn’t provide details of the plans. “The depth and the foundational strength of that market is real,” Wynn said Monday. “We have been encouraged by the government in conversations with them to file our plans for Phase 2, which we’re working on now.”
AUTOS, ELECTRIC, SELF-DRIVING
The agency will send two investigators to conduct a field probe of the crash that occurred near Culver City, California, NTSB spokesman Chris O’Neil said in an email. The investigators will focus on the driver’s actions and how the vehicle performed, O’Neil said. They will likely arrive Wednesday. The inquiry is the second by the safety agency into a crash involving Tesla’s Autopilot feature. The system combines advanced cruise control and automatic steering systems but Tesla says the human driver should pay attention to the road at all times.
ARTIFICIAL INTELLIGENCE, DRONES, FUTURE TECH
Artificial intelligence is the lifeblood of Facebook and its future. The technology drives the ultra-precise ad targeting that gives the company an edge over traditional advertising platforms, as well as features for users like automated photo tagging, News Feed ranking, and translation. Increased automation due to AI, whose operation might not be transparent to its creators, could be complicit in a majority of Facebook’s woes, including the spread of fake news on the platform and the ability to target specific racial groups with advertisements.
SCIENCE, NATURE, PSYCHOLOGY
A national report on the state of US science has concluded the United States is still the world leader in science and technology – except by one vital, historic measure. For the first time, China has overtaken the US in terms of the volume of total scientific papers published – a telling statistic that underscores the rapid strides in scientific achievement China has made on the world stage in recent decades.
Over the years, a welter of American women have been identified as the model for Rosie, the war worker of 1940s popular culture who became a feminist touchstone in the late 20th century. Mrs. Fraley, who died on Saturday, at 96, in Longview, Wash., staked the most legitimate claim of all. But because her claim was eclipsed by another woman’s, she went unrecognized for more than 70 years.
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