Macro Links Jan 25th – Knifing The Dollar
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MACRO LINKS TABLE OF CONTENTS (Click or Scroll Down)
- BITCOIN, CRYPTOCURRENCY, INITIAL COIN OFFERINGS
- FINTECH, BLOCKCHAIN, DIGITAL PAYMENTS
- FOREX, CARRY TRADES, EXCHANGE RATES
- TRADE, PROTECTIONISM, REGULATION, OVERSIGHT
- 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
- USA ECONOMY DATA, CITIES AND STATES
- GLOBAL ECONOMY, INTERNATIONAL
- POSITIONING, INFLECTION, MARKET CALLS
- COLOR, EARNINGS, SENTIMENT, VALUATIONS
- DEALS, MERGERS, IPOs, LBOs, RESTRUCTURINGS
- HEDGE FUNDS, PRIVATE EQUITY, MONEY MGMT
- ENERGY COMPANIES, NOCs, INDUSTRY
- ENERGY CRUDE OIL, OIL SANDS, SHALE
- ENERGY RENEWABLES, NUCLEAR
- POLLUTION, CLIMATE & ENVIRONMENT
- BREXIT, SCOXIT, LONDON, UK ECONOMY
- DACA, TRAVEL BAN, IMMIGRATION, WALL
- GEOPOLITICS, CRIME, TERRORISM
- PRIVACY, HACKING, CYBERWAR, SURVEILLANCE STATE
- ELECTORAL POLITICS
- SCANDALS, LAWSUITS, FINES, REGULATORY
- SILICON VALLEY, UNICORNS, STARTUPS, VC
- RETAIL APPAREL, SPECIALTY, DINING, BIG BOX
- AIRLINES, SHIPPERS, RAIL, TRANSPORTS
- SCIENCE, NATURE, PSYCHOLOGY
BITCOIN, CRYPTOCURRENCY, INITIAL COIN OFFERINGS
One of the riskiest corners of the cryptocurrency market is shrugging off this year’s price slump. Startups have raised about $450 million in initial coin offerings so far this month, the most since October, according to Coinist, which compiles cryptocurrency market data. ICOs brought in $3.8 billion in 2017, beating venture capital funding.
Rapper 50 Cent reportedly found out he has millions of dollars worth of bitcoin from long-ago album sales. Nearly 700 bitcoin were paid in return for a 2014 release, and was promptly forgotten. Four years later, the world’s most popular cryptocurrency is hovering around 11,000 USD per coin, which would net the artist a cool 7.7 million USD.
Goodbye bonds, hello Bitcoin. That’s the career path taken by former BlackRock Inc. bond specialists Michael Wong and Adam Grimsley who together with a third founder have set up Prime Factor Capital, a London hedge fund that will trade cryptocurrencies from April. “In our day job, we were constantly asked about diversification, but credit markets have become very correlated and the dispersion between credit assets has declined,” Grimsley said. “Here we see truly uncorrelated returns.”
Nearly 60 percent of Americans have heard or read about the world’s largest cryptocurrency, according to a joint SurveyMonkey and Global Blockchain Business Council poll of more than 5,700 adults conducted in January. But only 5 percent of people actually own the digital coin. Those few Bitcoin investors are of a fairly consistent demographic. An overwhelming 71 percent of them are male. The majority — 58 percent — are young, between the ages of 18 and 34 years old. And unlike the broader U.S. population, nearly half of them are minorities.
Nasdaq is still estimating whether “it is the right thing to” launch its own Bitcoin futures to compete with the futures products of Chicago Board Options Exchange (CBOE) and Chicago Mercantile Exchange (CME). Nasdaq is currently looking for the ways to produce something “unique enough” to make it different from its competitors and attractive for users, said CEO Adena Friedman. The statement comes from an interview with Bloomberg TV at the World Economic Forum’s annual meeting in Davos.
The change of heart among investors like Mr. Robinson has coincided with other factors now buffeting bitcoin’s fortunes. Financial regulators have grown concerned about the bubbly prices of cryptocurrencies and their association with illegal activity, particularly in Asia, where much of the world’s trading in bitcoin and its peers takes place. The price of bitcoin fell to $10,525.27 on Tuesday according to news and research site Coindesk, down from a peak of $19,283 on Dec. 16. It started 2017 at just $892.
FINTECH, BLOCKCHAIN, DIGITAL PAYMENTS
The IOTA Foundation, a non-profit Blockchain foundation for the Internet of Things (IoT) has announced that the Chief Digital Officer (CDO) of Volkswagen, Johann Jungwirth, will join the Supervisory Board, effective immediately. Jungwirth said: The IOTA platform allows connected devices to digitally send money to each other in form of micropayments, making it useful for the IoT.
FOREX, CARRY TRADES, EXCHANGE RATES
The Trump administration declared a surprising war on the U.S. dollar on Wednesday, breaking from a long tradition in which top American officials generally voice support for a strong American currency. “Obviously, a weaker dollar is good for us as it relates to trade and opportunities,” Mnuchin told reporters in Davos. Mnuchin said recent declines in the value of the dollar against other currencies were “not a concern of ours at all.”
The US dollar struck a three-year low and is eyeing its second-largest drop of 2018 following US Treasury secretary Steve Mnuchin’s comments a weaker dollar is good for American trade. Mr Mnuchin’s remarks, delivered at a news conference at the World Economic Forum in Davos, are a break from previous US administrations where Treasury secretaries have enthused about a strong dollar policy.
Whether or not the White House choreographed the dollar’s slide to its lowest level in three years, the U.S. administration is certainly providing ammunition for those betting that the greenback will continue to weaken. Mnuchin’s comments give “a green light to ongoing dollar weakness as far as the market is concerned,” said Shahab Jalinoos, global head of foreign-exchange trading strategy at Credit Suisse Group AG in New York. “As long as these kind of messages are presented it allows the market to imagine that’s what the administration wants to see. It validates the idea that further weakness is possible.”
The fallout from Mr Mnuchin’s remarks at the World Economic Forum in Davos on Wednesday erupted across traders’ screens. And the breakdown in the dollar has plenty of momentum, say traders. “It could go quite a bit further,” says Steven Englander of Rafiki Capital. “At this stage, there’s nothing to stop it.”
Marc Chandler of Brown Brothers Harriman said: “While Mnuchin was only stating the obvious, Treasury secretaries since Robert Rubin have never deviated from the strong dollar mantra. That mantra has never really meant much, but to deviate from it suggests that US policymakers desire a weaker dollar. “Rubin started this ‘policy’ after his predecessor Lloyd Bentsen used the exchange rate to pressure Japan into opening its markets. Mnuchin’s comments pack an even bigger punch coming after the US trade actions announced this week.”
Market-derived inflation expectations are climbing on both sides of the Atlantic — but the strong euro and the weak dollar underscore diverging economic paths that suggest the greenback’s losing streak may gather more pace. The shared currency climbed to a three-year high against its U.S. counterpart Wednesday, spurred by strong manufacturing data across the region, which affirmed hopes of a benign increase in price pressures consistent with consumer demand and wage increases. The greenback, for its part, fell to a three-year low against its major peers after Treasury Secretary Steven Mnuchin endorsed its decline as a fillip for U.S. trade.
TRADE, PROTECTIONISM, REGULATION, OVERSIGHT
Tough U.S. talk on trade, on the eve of Trump’s arrival at the Swiss ski resort on Thursday, contrasted sharply with a chorus of government leaders, from India and Brazil to Germany and Canada, who urged cooperation and criticized protectionism. Commerce Secretary Wilbur Ross later told CNBC that his colleague was “not advocating for a weaker dollar”, but he also struck a combative tone. Asked if he was concerned about sparking a trade war, Ross said: ”Trade war has been in place for quite a little while, the difference is the U.S. troops are now coming to the ramparts.”
While Mnuchin’s blast echoed Trump administration doubts over a strong currency, it marked a confrontation with the global elite in Davos over their “America First” agenda. Ross, speaking alongside Mnuchin, says more measures at defending U.S. commerce are in the offing.
Emmanuel Macron led an international riposte in Davos to some of the policies espoused by Donald Trump’s administration, issuing a “call to all and every one of us” to push back against protectionist and nationalist forces. The French president, who arguably takes second billing only to the US president at this year’s gathering of the World Economic Forum in the Swiss Alps, said globalisation was undergoing a “major crisis”.
While the tariffs may help domestic manufacturers, they are expected to ripple throughout the industry in ways that may ultimately hurt American companies and their workers. Energy experts say it is unlikely that the tariffs will create more than a small number of American solar manufacturing jobs, since low-wage countries will continue to have a competitive edge.
U.S. solar panel maker SunPower Corp. is planning to ask for an exemption to the 30 percent tariff on imported solar panels that President Donald Trump approved Monday. The company that manufactures most of its panels at factories in Asia and Mexico could hire more workers at its headquarters in San Jose, California, and invest in a “pilot” factory in San Jose if it’s excluded from import duties, SunPower Chief Executive Officer Tom Werner said in an interview Wednesday.
While President Donald Trump this week imposed tariffs on solar panels and washing machines, underscoring his America first outlook, China is hoping for a “bumper year” for new trade deals, according to the Commerce Ministry.
A federal jury found a Chinese wind-turbine maker guilty of stealing technology from a former U.S. supplier, a potential test case for looming intellectual property battles between the two countries. The verdict comes amid trade tension between the U.S. and China, and just months after the Trump administration moved to take a harder line on intellectual property theft by China.
TAXATION, WEALTH HAVENS, INEQUALITY
A provision in the newly revised tax code slashes the income tax that companies pay on royalties from the overseas use of intellectual property, making it more attractive to house these rights on American soil. The deduction is meant to induce companies with large U.S. operations and significant foreign income from patent royalties to base more of those assets in the U.S. Such companies, especially in technology and pharmaceutical sectors, often hold foreign rights for their IP in a company based in a low-tax country.
The US tax overhaul will not prompt the country’s big tech companies to drop their reliance on overseas tax avoidance strategies or create more jobs at home, according to tax experts who say some parts of the legislation could end up having the opposite effect, leading companies to shift more of their assets and jobs offshore. “The bill is biased in favour of offshore real investment, which is a completely perverse result when the intention was to bring jobs back to the US,” says Ed Kleinbard, a law professor at the University of Southern California.
New York state lawmakers could punch a $50.6 billion hole in the federal government’s budget by revamping their state income tax. If California followed the same approach, its legislature could keep $66.8 billion out of the U.S. Treasury. And in New Jersey, state lawmakers could hold back $12.5 billion more. Their plans face obstacles, and not every state is pursuing the same strategy. But five Democratic-leaning states that are exploring ways to change their tax laws could remove roughly $154 billion from federal coffers over the next eight years, adding to anticipated deficits, according to an analysis compiled by Bloomberg in conjunction with Daniel Hemel, a professor at the University of Chicago Law School.
Shortly after President Trump fired his FBI director in May, he summoned to the Oval Office the bureau’s acting director for a get-to-know-you meeting. The two men exchanged pleasantries, but before long, Trump, according to several current and former U.S. officials, asked Andrew McCabe a pointed question: Whom did he vote for in the 2016 election? McCabe said he didn’t vote, according to the officials, who, like others interviewed for this article, spoke on the condition of anonymity to talk candidly about a sensitive matter.
A year ago today, President Donald Trump’s newly sworn–in national security adviser, Michael Flynn, met privately in his West Wing office with FBI investigators interested in his communications with Russia’s ambassador, without a lawyer or the knowledge of the president and other top White House officials, according to people familiar with the matter.
In addition to the Comey and Flynn firings, key issues from Bannon’s time in the White House are likely to include Trump’s decision to fire then-acting Attorney General Sally Yates and any pressure the President may have exerted on Sessions about the FBI investigation into Russia’s interference with the election.
NORTH / SOUTH KOREA, IRAN, NUCLEAR WEAPONS
The US has imposed more sanctions on Chinese and North Korean companies, in an effort to pressurise Pyongyang into halting its nuclear weapons programmes. The move marks the latest salvo in a global campaign led by Washington to impose maximum economic pressure on Pyongyang in the hope that Kim Jong Un, the North Korean dictator, will agree to negotiations about dismantling his nuclear programme.
The U.S. Treasury Department sanctioned 16 North Korean agents it said are operating in China and Russia, aiding the country’s banned weapons program and financial system. Treasury also sanctioned two Chinese companies it says have been exporting goods to North Korea, including transactions with a subsidiary of a North Korean firm involved with Pyongyang’s missile program.
The Air Force has deployed an upgraded version of the U.S.’s largest non-nuclear bomb — a 30,000-pound “bunker-buster” that can only be carried by the B-2 stealth bomber and could be used against adversaries such as North Korea. Bombs known as bunker-busters have been in the Air Force’s arsenal for years for potential attacks against buried targets.
RATES, LIQUIDITY, SYSTEMIC RISK, BALANCE SHEETS
Billionaire hedge-fund manager Ray Dalio said that the bond market has slipped into a bear phase and warned that a rise in yields could spark the biggest crisis for fixed-income investors in almost 40 years. “A 1 percent rise in bond yields will produce the largest bear market in bonds that we have seen since 1980 to 1981,” Bridgewater Associates founder Dalio said in a Bloomberg TV interview in Davos on Wednesday. We’re in a bear market, he said.
A few hours in Davos just complicated things for bond traders betting central-bank policy shifts will drive Treasury yields higher.First, Treasury Secretary Steven Mnuchin endorsed a weaker dollar on Wednesday, driving the euro to the strongest level versus the greenback since 2014. Then, hedge-fund manager Ray Dalio raised the specter of the most punishing bond bear market since the early 1980s, helping push U.S. yields back near three-year highs set this month.
The sell-off in sovereign bond markets at the start of the year has pushed yields on hundreds of billions of dollars worth of debt back into positive territory. Some $9.56tn of corporate and government debt trades with a yield below zero, down $808bn from the end of 2017, according to data from Bloomberg Barclays Indices.
While most of last year’s new money stayed outside of China, there are rising prospects in 2018 of a virtuous cycle for the yuan if more offshore financing is brought home. A deleveraging campaign is pushing up domestic borrowing costs, encouraging companies to raise money overseas and repatriate it. And with the yuan strengthening through one milestone after another, the risk of owing dollar debt during a sharp depreciation has dropped off the radar.
The upward march of short-dated interest rates is closing in on a new record. The start of 2018 marks the second-longest period that the two-year Treasury yield has traded above its one-month moving average since 1990. The policy-sensitive two-year note has been charging higher since the summer, up 81 basis points to 2.07 per cent since September. It comes alongside anticipation for further interest-rate increases by the Federal Reserve, as well as rising inflation expectations.
Speaking to attendees at the World Economic Forum, the adviser, Liu He, said that the Chinese government planned to bring its debt under control within three years. Mr. Liu said Beijing intended to focus on reining in the growth of debt among local governments and companies. “We have full confidence and a clear plan to get the job done,” he said. Mr. Liu did not offer details of the government’s plans, or a specific standard by which China could be judged on whether it had achieved its goal.
Six months after Illinois resolved a budget stalemate that pushed its bonds close to a junk rating, investors are concerned that another political fight may be on the horizon. In a sign that bondholders are bracing for election-year dysfunction from the worst-rated U.S. state, the extra yield that investors demand to hold Illinois’s 10-year general-obligation bonds instead of benchmark debt rose to about 1.9 percentage points, according to data compiled by Bloomberg. That’s the most since July 20.
MACRO OP-EDS, INSIGHT, EVENTS AND TRENDS
“We are sitting down around this table trying to decide whose lunch we are going to eat,” says Richard Crook, head of emerging technology at Royal Bank of Scotland. “Because blockchain’s benefits come from decentralisation there is little point replacing one technology with another without changing the business model.”
By justifying tariffs solely on the failure to compete, Mr. Trump is inviting other countries to do the same for their struggling companies. Their case at the World Trade Organization will also be a layup, allowing legal retaliation against U.S. exports. And by the way, if Mr. Trump thinks these new border taxes will hurt China, he’s mistaken again. Mr. Trump’s tariffs are an economic blunderbuss that will hit America’s friends abroad and Mr. Trump’s forgotten men and women at home.
For decades, the U.S. stood out as the one nation that traditionally preferred its money superpower-strong. Investors flocked to it, enabling the U.S. to borrow lots of money at low interest rates. American consumers feasted on it, buying imported goodies for less. U.S. politicians touted it as evidence of the economy’s eternal dynamism. But under President Donald Trump’s “America First” manifesto, the so-called strong-dollar policy is undergoing a rethink. With so many negative consequences, the question now is whether the strong-dollar dogma is becoming a relic, or is just in hiatus?
The case against Trump on obstruction grounds is very strong — stronger even than the evidence that the Trump campaign broke the law by colluding with Russian’s campaign to influence the election. “If Trump exercises his power — even his lawful power — with a corrupt motive of interfering with an investigation, that’s obstruction,” says Lisa Kern Griffin, an expert on criminal law at Duke University. “The attempt is sufficient, and it seems to be a matter of public record already.”
In all, some 1.4 million Americans will lose their jobs to technological change in the next eight years, including 70 percent whose job type will just disappear. Without new skills, according to the report, 575,000 of them — 41% — will have either minuscule or no chance of finding other work. Women may be disproportionately affected. Even if they do find work using their current skills, many will on average earn $8,600 less per year.
As a businessman, Donald J. Trump never felt respected by the elites who shunned him. Now as president, he commands attention, if not admiration. “Part of him will feel the resentment that has long smoldered within and part will revel in the fact that he’s the president and no one else is,” said Michael D’Antonio, a Trump biographer. “Considering his tendency to say or tweet whatever comes to mind, we might expect both Trumps — the testy one and the triumphant one — to appear. We may even see and hear him toggle between the two, uncertain if he’s superior or inferior.”
From a business standpoint, Facebook’s barbarism seemed to work out well for the company. The social network is worth over half-a-trillion dollars, and Zuckerberg himself is worth some $76 billion. Facebook has some of the smartest engineers and executives in the entire industry. But the fallout from that success has also become increasingly obvious, especially since the 2016 election, which prompted a year of public relations battles over the company’s most fundamental problems. And now, as we enter 2018, Zuckerberg is finally owning up to it: Facebook is in real trouble.
One group of 300 women has petitioned the Indian government for the right to kill themselves over the film. Protests are already erupting in many places and rowdy mobs have vandalized movie theaters, tollbooths, road dividers, buses and cars. An Indian television station reported Wednesday night that a mob had attacked a school bus, pelting it with stones as children and teachers took cover in the aisle. Indian intellectuals watching the hysteria have been perplexed by two issues. First, few people have actually seen the film. The most strident protesters admit that they have not watched “Padmaavat” and that their objections rely on hearsay. Second, Queen Padmavati might never have existed.
Without politicians as adept as Yellen to defend it, the Fed may be forced to abandon the conceit there is always some “natural rate” of unemployment that prevents inflation from slowing down or speeding up. That would be welcome; in addition to being morally odious, the theory is empirically unsupportable and is increasingly questioned by a younger generation of central bankers.
A new paper by two former Hillary Clinton aides, criticizing digital advertising as a tool for disinformation campaigns, captures a party’s increasing mistrust. Mr. Ghosh and Mr. Scott played a leading role in helping to create the tech-friendly policies that helped companies like Facebook and Google flourish during the Obama administration. But as more information trickled out about the role played by technology firms in Russia’s attempts to influence the presidential election, they, like many Democrats, became disillusioned.
The whole world’s attention is focused on Southeast Asia. Banks, investment firms, mega-corporations, government regulators, mafias (!), everyone is charging in, metaphorical guns blazing. This is not hyperbole. This morning I saw a spy photo of an Indonesian mafia-run operation: a big seedy-looking room full of guys with stacks of phones doing fake ride bookings. Amazon just launched same-day Prime delivery in Singapore. Didi and Softbank and countless others are funneling money into the key players. I’m not exaggerating in the slightest when I say the world’s attention is focused right here on Grab’s territory, on that network of green motorcycle helmets. Oil companies, power companies, car companies, battery companies, credit card companies, banks, international restaurateurs, tourism companies, taxi companies, airlines, retailers — dozens of major industries are going to be impacted by this land war for better or worse, and they’re all fighting to make damn sure it’s “for better” for themselves.
USA ECONOMY DATA, CITIES AND STATES
Sales of previously owned U.S. homes slowed in December, but 2017 was still the best year for the hot housing market since the mid-2000s boom. “The promising news is that existing home sales are up over the last year despite chronically low inventory,” said Cheryl Young, senior economist at Trulia.
Millennials are pushing back against the stereotype that their money management skills are lacking, as 16% now have savings of $100,000 or more, double the amount of young people who had socked away that much in 2015, according to a new Bank of America survey.
Travel to the U.S. has been on the decline ever since President Donald Trump took office, and new data shows the slump translates to a cost of $4.6 billion in lost spending and 40,000 jobs. The latest data from the National Travel and Tourism Office shows a 3.3 percent drop in travel spending and a 4 percent decline in inbound travel.
GLOBAL ECONOMY, INTERNATIONAL
Inflationary pressures are rising in France and businesses are increasingly willing to pass higher costs on to their customers, according to a closely watched survey that will make welcome reading for policymakers at the European Central Bank ahead of Thursday’s monetary policy meeting.
Romer relinquished oversight of the Development Economics Group at the Washington-based bank after less than a year in May when researchers complained about his abrasive style as he tried to make them communicate more clearly. This month, Romer went on to accuse a fellow economist at the bank of potentially manipulating a global ranking on business conditions to the detriment of Chile. A week later, he backtracked, compounding the embarrassment for the World Bank.
Qatar’s economy performed better than expected last year and required “minimal” government support to blunt the effects of a trade and diplomatic embargo by Saudi Arabia and three other Arab countries, a minister said. “We opened new routes, we opened new markets, and we are trading with the whole world. The world is not only these four countries,” Sheikh Ahmed said. “From an economic point of view we can live forever without those countries.”
POSITIONING, INFLECTION, MARKET CALLS
Optimism has peaked, according to two widely followed measures of U.S. economic sentiment. If history is any guide, bouts of equity volatility and plunging Treasury yields will soon follow. The U.S. Citi Economic Surprise index — the rate at which data exceeds analyst expectations — has started to fall after reaching a five-year high in December. Meanwhile, the Federal Reserve’s index of the public’s uncertainty about the outlook for monetary policy is climbing after reaching a three-year low in November.
Yandex, soon to be the undisputed leader in Russia’s ride-hailing market, is unique because its shares are publicly traded. It is also Russia’s largest tech company, thanks to a search engine that competes fiercely with Google. Yandex’s financial results bear witness to the money being poured into ride-hailing. Third-quarter revenue in the taxi business, at around $20 million, was dwarfed by a roughly $56 million loss before interest, taxes, depreciation and amortization. The company has been essentially paying customers to keep ahead of an expanding Uber.
COLOR, EARNINGS, SENTIMENT, VALUATIONS
Las Vegas Sands on Wednesday reported a “robust recovery” in Macau, the former Portuguese colony and the world’s largest gambling hub, as it posted fourth-quarter results exceeded estimates. Adjusting for the one-time tax boost, the company reported earnings of 88 cents a share, handily topping estimates of 77 cents, according to a Thomson Reuters survey.
Ford on Wednesday reported disappointing fourth-quarter results and reiterated a bleak outlook for 2018. As Mr. Hackett scrambles to catch up to General Motors Co. and other rivals on electric and driverless cars, the pressure on the company’s current finances is evidence the new CEO is facing a multifaceted challenge.
General Electric’s quarterly results showed how far the company has fallen, with big charges and sliding sales in its power generation business. G.E. also said the S.E.C. was examining its accounting.
U.S. securities regulators are probing a massive insurance charge recently announced by General Electric Co (GE.N), the latest blow to the nation’s largest industrial conglomerate as it struggles to reverse steep declines in some of its units and is looking to sell off $20 billion of assets.
Whirlpool Corp posted a steep slowdown in sales for the fourth quarter and its full-year profit forecast fell short of market expectations as the home appliances maker struggles with higher costs of raw material such as steel. Whirlpool, which also makes products such as refrigerators and cooking appliances, has also hiked prices for some of its products to counter the impact of higher costs. Such price hikes will continue this quarter.
DEALS, MERGERS, IPOs, LBOs, RESTRUCTURINGS
Global dealmakers set a blistering pace for larger transactions during the first three weeks of 2018, free of the uncertainty surrounding U.S. tax policy that plagued deal talks last year. There have been 11 deals above the $5 billion threshold announced as of Jan. 23, ahead of the previous record-setting pace of seven such transactions disclosed during the same period of 2017, Dealogic said. The value of all announced deals during the period totaled $207 billion, the highest amount since the same period of Jan. 2000, according to Dealogic data.
HEDGE FUNDS, PRIVATE EQUITY, MONEY MGMT
Billionaire hedge fund manager Steven Cohen, who after years of toiling with the government during its crackdown on insider trading, is on the verge of making a big splash and return to public fund business, while shoveling wads of cash into PACs controlled by the Republican Party, according to campaign finance records reviewed by FOX Business.
Anthony Scaramucci said he’d like to have a role again in the future of SkyBridge Capital, the fund-of-hedge-funds firm he founded, and scrapped plans to hold his flagship SALT conference in Las Vegas this year.
“Temporary pause,” Scaramucci told Reuters in an email on Wednesday about his SkyBridge Alternatives Conference, a swaggering financial industry event known as SALT that has taken place every year since 2009. But he added that it “will be back.” A question mark has hung over the conference’s future since Scaramucci’s brief stint as U.S. President Donald Trump’s communications director last year and his efforts to sell his investment business, which specializes in bringing a taste of hedge funds to less affluent investors.
ENERGY COMPANIES, NOCs, INDUSTRY
Saudi oil giant Aramco is looking to expand in the United States where President Donald Trump’s tax cuts and support for the oil industry are making business increasingly attractive, its chief executive told Reuters. Aramco already controls a large refinery in Texas. It is also preparing to launch what could be the world’s largest initial public offer (IPO) and is considering listing its shares in New York among several possible exchanges.
ENERGY CRUDE OIL, OIL SANDS, SHALE
US crude oil futures topped $65 a barrel for the first time since 2014 on Wednesday, with the gap between the North American benchmark and international rival Brent also narrowing sharply. The move in West Texas Intermediate (WTI) followed a sharp drop in stocks at the contract’s delivery point in Cushing, Oklahoma, with inventories drawing sharply at the storage hub following the ramp up of a new pipeline taking crude from there to Tennessee.
ENERGY NATURAL GAS, COAL
China is replacing coal with gas, sucking up global supplies of the fuel and pushing up the price of liquefied natural gas to a three-year high. The world’s No. 2 economy is cutting back on coal after President Xi Jinping made a cleaner environment a key priority at last Fall’s Communist Party Congress. That has left swaths of industry in China struggling with limited gas, including giants like German chemical company BASF SE and local producer Yunnan Yuntianhua Co., as supplies are diverted to households that had previously relied on coal for heating.
ENERGY RENEWABLES, NUCLEAR
Even before Trump’s tariffs, the U.S. panel maker underpriced Chinese rivals with a spray-on, energy-absorbing metal and largely automated factories. CEO Widmar has committed an additional $1.4 billion over the next two years to expand production at two new factories in Vietnam and to retrofit four others the company runs in Malaysia. Those factories are exempt from Trump’s tariffs, giving the company a further advantage.
POLLUTION, CLIMATE & ENVIRONMENT
A Swedish investor is pressing the world’s biggest drug companies to be transparent about their supply chains, after it alleged that some suppliers to those firms were dumping toxic waste into the environment. Nordea Asset Management, the investment arm of the Nordic region’s largest bank, manages roughly $300 billion in investments, of which $6 billion is spread across Big Pharma companies. Last week it wrote to the 27 drug makers in which it is an investor demanding they publicly report who their suppliers are and how they monitor them.
BREXIT, SCOXIT, LONDON, UK ECONOMY
The progress of Brexit talks is making it abundantly clear just how weak the U.K.’s negotiating hand is, according to Alexander Stubb, the former prime minister of Finland. “Your negotiating cards are actually very weak when you’re trying to leave the EU and that’s what we’re seeing in the process of negotiations right now,” Stubb, who’s now vice president at the European Investment Bank, said in an interview with Francine Lacqua on Bloomberg TV in Davos.
Qualcomm was slapped with a $1.23 billion antitrust fine by the European Union for illegal payments it made to Apple for exclusively using its chips in smartphones and other products. EU antitrust chief Margrethe Vestager said Qualcomm had abused its dominant position by paying billions of dollars to Apple from 2011 to 2016 on the condition it wouldn’t buy from rivals, hindering competition in the market for so-called baseband chips, which connect smartphones and tablets to cellular networks.
DACA, TRAVEL BAN, IMMIGRATION, WALL
In sidestepping Senate leaders of both parties, members of the group have taken it upon themselves to not only quickly resolve an immigration dispute that has long defied answers, but also prove that the Senate’s frozen legislative gears can still turn. “Part of our biggest challenge is letting the Senate be the Senate,” said Senator Chris Coons, Democrat of Delaware and one of about two dozen lawmakers who came together to pressure Republican and Democratic leaders to abandon the shutdown.
GEOPOLITICS, CRIME, TERRORISM
On 5,753 occasions from 2010 to 2016, the United States military reported accusations of “gross human rights abuses” by the Afghan military, including many examples of child sexual abuse. If true, American law required military aid to be cut off to the offending unit. Not once did that happen. That was among the findings in an investigation into child sexual abuse by the Afghan security forces and the supposed indifference of the American military to the problem, according to a report released on Monday by the Special Inspector General for Afghan Reconstruction, known as Sigar.
The White House sent out a message aimed at mollifying Turkey’s president on Tuesday, suggesting that the United States was easing off its support for the Syrian Kurds. That message was quickly contradicted by the Pentagon, which said it would continue to stand by the Kurds, even as Turkey invaded their stronghold in northwestern Syria.
PRIVACY, HACKING, CYBERWAR, SURVEILLANCE STATE
Alphabet, Google’s parent company, is launching a cyber security company using technology created in its research and development arm called X. Chronicle will try to give organisations a much clearer view of their security situation by combining Google’s strengths in machine learning with large amounts of computing power and storage. The new company will be one of the subsidiaries called “Other Bets” alongside businesses including its self-driving cars unit Waymo and life sciences division Verily.
An appeals court panel on Wednesday unanimously upheld a corruption conviction against former Brazilian president Luiz Inácio Lula da Silva, a ruling that upends this nation’s presidential race and complicates the political comeback of one of Latin America’s best-known figures. The justices indicated they would stop short of the politically charged step of jailing the leftist icon as he continues his legal fight. But for the 72-year-old known simply as “Lula,” the 3-0 ruling poses potentially career-ending obstacles.
Venezuela’s all-powerful Constituent Assembly called Tuesday for a presidential election before the end of April, an accelerated schedule that seems to benefit President Nicolás Maduro’s United Socialist Party of Venezuela and put the deeply fractured and embattled opposition at a severe disadvantage.
SCANDALS, LAWSUITS, FINES, REGULATORY
An internet entrepreneur accused of masterminding one of the largest copyright infringements in history is suing the New Zealand government for $6.8bn in damages — equivalent to 3.5 per cent of the Pacific nation’s GDP — over the destruction of his business.
After seven days of listening to more than 160 girls, women and parents describe the impact of his sexual abuse, disgraced gymnastics physician Larry Nassar turned to the courtroom Wednesday and quietly attempted an apology, saying “There are no words that can describe the depth and breadth for how sorry I am for what has occurred.”
SILICON VALLEY, UNICORNS, STARTUPS, VC
Vision Fund is leading a group of investors with an $865 million bet on Katerra, a three-year-old Silicon Valley startup that aims to change how housing and commercial buildings are constructed by using an assembly-line-like system to control every aspect of design and production. Katerra, with more than $1 billion in funding raised since its founding in 2015, is among the fastest startups to ever command a multibillion-dollar valuation.
RETAIL APPAREL, SPECIALTY, DINING, BIG BOX
The planned closings represent about 20 percent of Toys “R” Us stores in the United States, which span from California to New York. As many as 4,500 workers could be affected. A spokeswoman said the company would try to find positions in other stores for as many of the displaced workers as it could. It’s unclear how many workers would be able to relocate and commute to another store farther from their homes.
AIRLINES, SHIPPERS, RAIL, TRANSPORTS
United’s stock nose-dived over 10% by Wednesday afternoon. Shares of other airlines also fell sharply on worries that United’s growth plan would prompt them to respond in kind in an effort to protect their market share. The challenge for the industry right now is figuring how long the good times are going to last.
United’s combatant attitude towards low-cost rivals and its plans to add more seats revived memories of the intense competition that ravaged airline stock prices in the past — and which investors, including Warren Buffett, had come to hope would not be repeated.
A nationwide truck shortage is forcing thousands of shippers into a tough choice: postpone all but the most important deliveries, or pay dearly to jump to the front of the line. Several factors have converged to overwhelm the trucking market. What’s more, bad weather and a new federal safety rule that took effect in December have crimped the supply of available trucks. Diesel prices are near a three-year high, adding to transportation costs.
SCIENCE, NATURE, PSYCHOLOGY
Scientists in China have successfully cloned two monkeys, the latest step in the country’s ambition of becoming a global scientific leader. Although the cloning method, known as somatic cell nuclear transfer (SCNT), is almost routine in mammals such as sheep, cattle and mice, it has been extremely difficult to replicate in primates. Previous efforts with monkeys often resulted in clones that did not develop properly as embryos or died shortly after birth.
“They use Botox for the lips, the nose, the upper lips, the lower lips and even the jaw,” Ali al-Mazrouei, the son of a leading Emirati camel breeder, said in an interview with the United Arab Emirates newspaper The National. “It makes the head more inflated so when the camel comes, it’s like, ‘Oh, look at how big that head is.’”
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