Macro Links Jan 8th – Hot Enough To Melt Asphalt
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MACRO LINKS TABLE OF CONTENTS (Click or Scroll Down)
- BITCOIN, CRYPTOCURRENCY, INITIAL COIN OFFERINGS
- FINTECH, BLOCKCHAIN, DIGITAL PAYMENTS
- TAXATION, WEALTH HAVENS, INEQUALITY
- RUSSIA PROBE
- KOREAN PENINSULA, 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
- DEALS, MERGERS, IPOs, LBOs, RESTRUCTURINGS
- COMMODITIES BASE METALS, MATERIALS
- POLLUTION, CLIMATE & ENVIRONMENT
- BREXIT, SCOXIT, LONDON, UK ECONOMY
- DACA, TRAVEL BAN, IMMIGRATION, WALL
- GEOPOLITICS, CRIME, TERRORISM
- PRIVACY, HACKING, CYBERWAR, SURVEILLANCE STATE
- TRUMP WORLD
- TRADE, PROTECTIONISM, REGULATION, OVERSIGHT
- ELECTORAL POLITICS
- SILICON VALLEY, UNICORNS, STARTUPS, VC
- CONSUMER TECH, SOCIAL MEDIA, E-COMMERCE, MOBILE
- MEDIA, CABLE, SPORTS, ENTERTAINMENT
- AUTOS, ELECTRIC, SELF-DRIVING
- AIRLINES, SHIPPERS, RAIL, TRANSPORTS
- AEROSPACE, MILITARY & DEFENSE
- SCIENCE, NATURE, PSYCHOLOGY
BITCOIN, CRYPTOCURRENCY, INITIAL COIN OFFERINGS
Founder Jackson Palmer, who created the digital currency as a joke, said new found interest in Dogecoin is a concerning indicator of wide-spread frothiness in the cryptocurrency market.
“I have a lot of faith in the Dogecoin Core development team to keep the software stable and secure, but I think it says a lot about the state of the cryptocurrency space in general that a currency with a dog on it which hasn’t released a software update in over 2 years has a $1B+ market cap,” Palmer told cryptocurrency watcher CoinDesk.
The new idea is to build “leveraged” and “inverse” funds that would rise – or fall – twice as fast as the price of bitcoin on a given day. Direxion Asset Management LLC plans to list such products on Intercontinental Exchange Inc’s NYSE Arca exchange if U.S. securities regulators give the nod, according to a filing by the exchange this week.
The three ‘Bull Funds’ are categorized as 1.25X, 1.5X and 2X, offering 100 percent, 150 percent and 200 percent returns on the given contract. As stated in the document sent to the SEC, the funds are not intended to be traded any longer than a day – and offer percentage returns based on the given contract entered into.
South Korean financial authorities on Monday said they are inspecting six local banks that offer virtual currency accounts to institutions, amid concerns the increasing use of such assets could lead to a surge in crime.
The joint inspection by the Financial Services Commission (FSC) and Financial Supervisory Service (FSS) will check if banks are adhering to anti-money laundering rules and using real names for accounts, FSC Chairman Choi Jong-ku told a press conference.
“Virtual currency is currently unable to function as a means of payment and it is being used for illegal purposes like money laundering, scams and fraudulent investor operations,” said Choi.
Microsoft has stopped supporting Bitcoin as a payment method for Microsoft products, Bleeping Computer has learned.
A Microsoft support staffer has told us the move is temporary and cited the unstable state of the Bitcoin currency. Microsoft added support for Bitcoin in 2014, and has previously temporarily stopped supporting Bitcoin in the past.
For traders who hold fewer than 25 of Cboe’s bitcoin futures contracts—a category that likely encompasses many retail investors—bullish bets are 3.6 times more common than bearish ones, according to the latest Commodity Futures Trading Commission data that cover trading through Tuesday.
At Cboe, the big players in bitcoin futures tend to be short, betting the future price will be lower. For instance, among “other reportables”—large trading firms that don’t necessarily manage money for outside investors—short bets outweighed bullish “long” bets by a factor of 2.6 last week.
A motley crew of old-money investors, entrepreneurs, crypto-anarchists and anti-inflation hawks is rallying around bitcoin in a surprising place: cash-loving Germany. Driven by interest from these very different constituencies, Germany and especially its capital are turning into a development hub for virtual currencies and blockchains, the distributed ledger technology that underpins them.
“It’s a technology driven by anarchists who wanted to get rid of banks, and now the banks are promoting the technology,” said Shermin Voshmgir, founder of BlockchainHub, a Berlin-based think tank that advocates for blockchain and the decentralized web. “Many of the main actors are based in Berlin,” she said.
North Korean hackers are hijacking computers to mine cryptocurrencies as the regime in Pyongyang widens its hunt for cash under tougher international sanctions.
A hacking unit called Andariel seized a server at a South Korean company in the summer of 2017 and used it to mine about 70 Monero coins — worth about $25,000 as of Dec. 29 — according to Kwak Kyoung-ju, who leads a hacking analysis team at the South Korean government-backed Financial Security Institute.
The case underscores the increasing appetite from cyber-attackers for digital currencies that are becoming a source of income for the Kim Jong Un regime. North Korea is accelerating its pursuit of cash abroad as the world tightens its stranglehold on its conventional sources of money with sanctions cutting oil supplies and other trade bans.
Visa, the payments giant, terminated a card issuer’s membership on Friday, causing cryptocurrency debit card providers to suspend their services, according to three of the affected companies.
Bitcoin payments processor BitPay announced in a statement that its European card issuer, WaveCrest Holdings, Ltd., had been told by Visa to close its accounts. The company will refund any remaining balances, as well as card order fees for anyone who purchased a card after Dec. 1, 2017.
FINTECH, BLOCKCHAIN, DIGITAL PAYMENTS
The company disclosed in a Securities and Exchange Commission (SEC) filing this week that the holder of a warrant had exercised its right to buy $100 million worth of shares. Although the filing did not identify this investor, Byrne told CoinDesk it was the Quantum Fund, managed by billionaire George Soros.
Of the $100 million Overstock received, Byrne said he anticipates $20 million will fund DeSoto Inc., the blockchain property rights joint venture he is working on in partnership with economist Hernando DeSoto.
As for the other $80 million, Byrne said he intends to invest the funds across Overstock’s flagship e-commerce platform (which accepts bitcoin for payments) and the other blockchain ventures that are part of its Medici Ventures subsidiary.
TAXATION, WEALTH HAVENS, INEQUALITY
Investors and analysts face a series of earnings reports muddied by charges and other special items related to US tax reform when the fourth quarter season gets under way this week.
President Donald Trump, Republicans and Wall Street have heralded the tax package, which was agreed late last year, as a boon for US earnings and its centrepiece — a cut in the domestic corporate rate from 35 per cent to 21 per cent — is expected to drive 2018 numbers up.
The Trump administration may try to block potential plans by high-tax states including New York and California to shield residents from state and local tax break changes, according to White House economic adviser Gary Cohn.
“I understand what they’re trying to do for their cities and their states and their taxpayers,” said Cohn, director of the National Economic Council, during a Bloomberg Television interview Friday. “We at the federal government still have to collect revenue.”
Bristol-Myers Squibb Co. said Friday it expects to pay an extra $3 billion in taxes on its overseas cash in the fourth quarter, a result of the tax overhaul.
New York-based Bristol is the latest company to outline the tax bill it faces under the new law, which levies a tax on profits made abroad ahead of eliminating U.S. taxes on future foreign earnings.
Morgan Stanley said on Friday it would take a $1.25 billion hit in its fourth-quarter earnings due to a cut in corporate tax rate as part of the U.S. tax code overhaul.
The net blow of the bill to the bank will include about a $1.4 billion net discrete tax provision, mainly due to the remeasurement of certain net deferred tax assets using the lowered corporate tax rate, the company said in a filing.
The decision by Mr. Grassley and Mr. Graham to single out the former intelligence officer behind the dossier infuriated Democrats and raised the stakes in the growing partisan battle over the investigations into Mr. Trump, his campaign team and Russia.
The Senate Judiciary Committee effort played into a far broader campaign waged by conservatives to cast doubt on the Trump-Russia investigations, and instead turn the veracity of the dossier and the credibility of its promulgators into the central issue. At the same time, President Trump and his allies have demanded that the Justice Department reopen its investigation of Hillary Clinton’s email server and the Clinton Foundation. F.B.I. agents have begun interviewing people connected to the foundation about whether any donations were made in exchange for political favors while Mrs. Clinton was secretary of state.
The deal, which was not made public, pumped significant new equity into 10 Maryland apartment complexes controlled by Mr. Kushner’s firm. While Mr. Kushner has sold parts of his business since taking a White House job last year, he still has stakes in most of the family empire — including the apartment buildings in and around Baltimore.
The Menora transaction is the latest financial arrangement that has surfaced between Mr. Kushner’s family business and Israeli partners, including one of the country’s wealthiest families and a large Israeli bank that is the subject of a United States criminal investigation.
During the presidential campaign, Mr. Trump branded his rival “Crooked Hillary” and promised to send her to jail if he won. He briefly struck a more magnanimous tone after the election and said he had no interest in pushing for a prosecution.
But as his legal problems have mounted, Mr. Trump has returned to his attacks on his favorite target. With four former aides facing federal charges and the special counsel, Robert S. Mueller III, investigating him and his campaign, Mr. Trump has openly called for Mrs. Clinton to be investigated and one of her top aides to be imprisoned.
KOREAN PENINSULA, IRAN, NUCLEAR WEAPONS
Russia is going “to pay a huge price” for supporting Iran’s regime and its vision for the Middle East, President Donald Trump’s top security adviser said.
The White House’s National Security Adviser H.R. McMaster spoke out, calling for the global community to jointly “confront Iran’s behavior that is causing so much suffering,” around a week after anti-government protests erupted across the Islamic republic.
North Korea has agreed to hold high-level talks with South Korea next week as an emerging detente between the two nations picks up pace, raising the prospect of a shift in policy towards the isolated nuclear regime.
The talks — the first inter-Korean dialogue in more than two years — will see officials from both sides meet on Tuesday, most likely in the border village of Panmunjom, and will focus on the North’s potential participation in next month’s Winter Olympics, which will be held in Pyeongchang, South Korea.
South Korea will seek to use inter-Korean talks on Tuesday to decrease tensions on the peninsula and reunite families separated by the Korean war, Seoul has said.
Comments from Cho Myung-gyon, South Korea’s unification minister, illustrate the broader possibilities of the negotiations with North Korea, which are set to focus on Pyongyang’s participation in next month’s Winter Olympic Games.
Iran has banned the teaching of English in primary schools, a senior education official said, after Islamic leaders warned that early learning of the language opened the way to a Western “cultural invasion.”
“Teaching English in government and nongovernment primary schools in the official curriculum is against laws and regulations,” Mehdi Navid-Adham, the head of the state-run High Education Council, told state television late on Saturday.
RATES, LIQUIDITY, SYSTEMIC RISK, BALANCE SHEETS
Global debt rose to a record $233 trillion in the third quarter of 2017, more than $16 trillion higher from end-2016, according to an analysis by the Institute of International Finance. Private non-financial sector debt hit all-time highs in Canada, France, Hong Kong, South Korea, Switzerland and Turkey.
At the same time, though, the ratio of debt-to-gross domestic product fell for the fourth consecutive quarter as economic growth accelerated. The ratio is now around 318 percent, 3 percentage points below a high set in the third quarter of 2016, according to the IIF.
The hunt for yield is clearly still going on, and in the eurozone, Greece is the final frontier. The enormous drop in Greek bond yields might be reason to be cautious; the move might be too much, too soon. But rather than exiting the euro, Greece may finally exit its bailout program in 2018. A convergence between Greek and eurozone yields is a necessary part of that process.
The bigger consideration is the extraordinary monetary-policy gap that has opened up between the U.S. and the eurozone. Although the debate around the ECB is about how and when it removes stimulus, it is still far from raising rates, and will be years behind the Fed when it starts doing so. That German two-year yields are negative and more than 2.5 percentage points below U.S. yields is the real oddity for markets.
US Treasury bond market volatility has declined to a remarkably subdued level, sinking to its lowest in more than half a century in spite of the Federal Reserve’s clear signal that it expects to raise interest rates further in 2018.
The decline mirrors similar developments in the US equity market where volatility has also sunk to its lowest level since the 1960s. It seems highly improbable, however, that such serene conditions will persist throughout this year.
The 10-year Treasury yield has trended down steadily since the early 1980s but the long bull run for US bonds is showing signs of nearing a turning point. Bond yields have moved up since President Donald Trump’s plan to reduce taxes was passed by Congress last month and are close to breaking what had been a steady downward trend. This would be a profoundly important moment for asset markets because the 10-year Treasury yield plays a critical role in setting the notional “risk-free rate” in financial transactions globally.
For a company regularly in the news, China’s HNA Group Co. remains shrouded in mystery. American government officials are seeking more information about the conglomerate’s ownership, the Chinese government has been asking questions and the European Central Bank is considering a review of its own.
Once a little-known airline operator, HNA took on billions of dollars in debt as it made more than $40 billion of acquisitions over six continents since the start of 2016. With interests in tourism, logistics and financial services, it’s now the biggest shareholder of such well-known names as Hilton Worldwide Holdings Inc. and Deutsche Bank AG. It’s also facing mounting costs to finance its spending habits.
China’s foreign-exchange reserves posted an 11th straight monthly increase, capping a year of recovery amid tighter capital controls, a stronger yuan and resilient economic growth.
The reserves climbed $20.7 billion to $3.14 trillion in December, according to a People’s Bank of China statement on Sunday, compared with a $3.13 trillion median estimate in a Bloomberg survey. That brought the full-year increase to $129 billion.
A measure of the bond market’s expectations for inflation crossed a key threshold in the past week, highlighting investors’ renewed economic enthusiasm.
The 10-year inflation break-even rate, which reflects the yield premium on the 10-year U.S. Treasury note over the comparable Treasury inflation-protected security, topped 2% on Tuesday for the first time in more than nine months, according to Thomson Reuters. It settled Friday at 2.027%, its highest level since March 16.
Here’s a scary statistic: Hong Kong home prices are more than double their 1997 levels, when the city’s biggest housing bubble burst. What’s more, affordability has deteriorated too, according to cautionary remarks made on Monday to legislators by Financial Secretary Paul Chan, who noted the ratio of mortgage payments to median household income hit 68 percent in the third quarter, compared with a 45 percent average between 1997 and 2016.
Investors are still flocking to initial public offerings in Hong Kong, with a Chinese eye-clinic chain drawing the heaviest demand in more than a decade even after some of last year’s hot deals fell below their offer prices.
MACRO OP-EDS, INSIGHT, EVENTS AND TRENDS
“We should have an Iranian republic not an Islamic republic,” says Mohsen, whose anger partly stems from an incident last summer when he and 20 friends were harassed by security forces over their clothing. “Anyone who comes is better than this regime. Even a bloodbath is worth it. Any big development needs deaths and blood . . . Islam cannot address our needs. It cannot bring a strong currency, social freedom and investments by Americans.”
The timing could not be worse for Mr Rouhani. He is under pressure both at home, where he is given little credit for curbing inflation and restoring growth, and abroad. His biggest achievement — the nuclear accord that he needs to deliver his economic reforms — is at risk of collapse as US president Donald Trump accuses Tehran of exploiting it to pursue its ambitions in the Middle East.
For now the protests, which left at least 20 people dead and banks, cars, police stations and mosques burnt out, have subsided, although sporadic unrest continues. But their impact has been enormous. Even in 2009, when the largest protests since the 1979 revolution followed allegations that the election had been rigged, millions of largely middle-class protesters called for reform of the Islamic system, not its scrapping.
You probably heard about the arctic blast that turned much of North America into a Popsicle last week, but in Australia, where Christmas is a summer holiday, it was so hot this weekend that the asphalt melted on a stretch of highway.
Beaches in Sydney were so crowded, there was barely room to maneuver. Bushfires raged out of control near Melbourne, and on the Hume Highway, which links Sydney and Melbourne, a stretch of asphalt oozed apart in the heat, causing a major traffic jam.
Mount Washington in New Hampshire vied for the title of world’s coldest place on Sunday as millions of Americans shivered in plummeting temperatures.
But in Australia, dangerous heat is roasting parts of the continent with summer temperatures not seen in decades. Thermometers in Sydney hit a near-80-year high on Sunday.
Taken together, that means the temperature gap between parts of the east coast of the continental US and the east coast of Australia is about 120°C — a range big enough to send water from solid ice to scalding steam.
When drivers entered California recently from the borders with Arizona and Nevada, they were greeted with signs welcoming them to an “official sanctuary state” that is home to “felons” and “illegals.” It was a prank, but the message was clear: By entering California, they might as well have been entering foreign territory.
And in many ways it feels like that these days, as the growing divide between California and the Trump administration erupted this past week over a dizzying range of flash points, from immigration to taxes to recreational marijuana use.
What had been a rhetorical battle between a liberal state and a conservative administration is now a full-fledged fight.
Two things stand out about the foreign policy messages Mr. Trump has posted on Twitter since taking office: How far they veer from the traditional ways American presidents express themselves, let alone handle diplomacy. And how rarely Mr. Trump has followed through on his words. Indeed, nearly a year after he entered the White House, the rest of the world is trying to figure out whether Mr. Trump is more mouth than fist, more paper tiger than the real thing.
Countries are unsure whether to take his words as policy pronouncements, or whether they can be safely ignored. If Mr. Trump’s threats are seen as hollow, what does that do to American credibility? In a series of Twitter posts on Saturday, Mr. Trump reacted to questions about his mental fitness by calling himself a “very stable genius.”
Even if there is a recognition that Mr. Trump’s tweets may be largely intended to let off steam or reassure his domestic base, there is an increasing sense that the credibility of the administration, and the presidency itself, is being eroded.
Wolff pulled it off because, at long last, there was a reporter out there willing to toss decorum aside and burn bridges the same way Trump does.
Everyone around Donald Trump is too polite to Donald Trump. Democrats, foreign dignitaries, underlings… all of them. And the White House press is perhaps the worst offender. From the media pool playing along with Sarah Sanders during press conferences—conferences where Sanders openly lies and pisses on democracy—to access merchants like Maggie Haberman doling out Trump gossip like so many bread crumbs, too many reporters have been far too deferential to an administration that is brazenly racist, dysfunctional, and corrupt.
And for what purpose? It’s clear to me that Haberman and the like aren’t saving up their chits for just the EXACT right time to bring this Administration down. No, the only end goal of their access is continued access, to preserve it indefinitely so that the copy spigot never gets shut off. They are abiding by traditional wink-wink understandings that have long existed between the government and the press covering it.
But Wolff didn’t do that. He did not engage in some endless bullshit access tango. No, Wolff actually USED his access, and extended zero courtesy to Trump on the process, and it’s going to pay off for him not just from a book sales standpoint, but from a real journalistic impact. I am utterly sick to death of hearing anonymous reports about people inside the White House “concerned” about the madman currently in charge of everything. These people don’t deserve the courtesy of discretion. They don’t deserve to dictate the terms of coverage to people. They deserve to be torched.
A greater share of Americans have more debt than money in the bank than at any point since 1962, according to Deutsche Bank economist Torsten Slok. And, in a note to clients yesterday, Slok said that, despite record stock market wealth and home price levels just shy of housing-bubble highs, Americans are poorer than at any point in nearly a quarter century.
Why it matters: The data suggest that the third-longest economic expansion in history, and the lowest jobless rate in 17 years, has benefitted an exceedingly thin slice of the American public.
With the exception of wartime, when instability rattles stock markets (or shuts them down completely) and bombs literally destroy housing wealth, the rate of return on wealth has been considerably higher than the growth rate of the major economies. Overall, if the average annual return on wealth since 1870 has been 6.28 percent, average annual economic growth works out to just 2.87 percent.
“The weighted rate of return on capital was twice as high as the growth rate in the past 150 years,” the authors conclude.
The scene in Mr. Singh’s shop underscores a persistent reality of India’s economy: People prefer cash for most routine transactions, despite intensive efforts by the government and global technology companies to lure them onto digital platforms.
India’s reluctance to give up paper money poses challenges for the firms that are vying to offer electronic payments, including local players like Paytm, which has received financing from the Chinese e-commerce giant Alibaba, and American tech companies, like Facebook, Google and PayPal.
Facebook is built on the idea of bringing the world closer together, as its mission statement so boldly pronounces. The irony that Mr. Zuckerberg must confront is that the very means of that connection—what the company euphemistically calls engagement, but which experts say is more accurately described as addiction—appears to be detrimental to the humans whose thriving he seems earnestly to want to promote. Unlike CEOs who in the past were confronted with the harms of their products, Mr. Zuckerberg seems more ready to acknowledge them.
Facebook might well live up to Mr. Zuckerberg’s stated goals. Or, it could bow to economic logic: In the first nine months of 2017 alone, the company’s “engaging” News Feed algorithm helped drive revenue up 47%.
You cannot fix Facebook without completely gutting its advertising-driven business model. And because he is required by Wall Street to put his shareholders above all else, there’s no way in hell Zuckerberg will do that.
Put another way, Facebook has gotten too big to pivot to a new, more “sustainable” business model. The company is on track to earn at least $16 billion in profits in 2017. Wherever the number lands (earnings for the year come out later this month), it’s at least 50 percent growth on the year before.
Rocinha, Rio’s largest favela — or hillside shantytown — was once ascendant, a symbol of rising fortunes in a nation that finally seemed on the fast track to greatness. But a little more than a year after Rio hosted the Olympic Games, that optimism is disappearing in a wave of urban violence.
Across Rio, at least 120 police officers were killed in 2017. Through December, 6,590 people were slain — the highest rate in nearly a decade. Crippled by corruption scandals and economic woes, the “Marvelous City” is floundering. Its police force is broken.
In Rocinha, residents are using cellphone apps to track shootouts. Schools have closed or shortened their hours because of the violence. In September, the army was called in to help pacify the streets. In November, students were trapped inside their homes by gunfire, unable to take their equivalent of the SATs.
The mayhem in the favela of nearly 200,000 people reflects a national plague. Brazil suffered a record 61,000 violent deaths in 2016, a figure greater than the estimated loss of life that year in Syria’s civil war. While the numbers are not directly comparable — Brazil has 10 times more people than Syria — the carnage is still extraordinary.
CENTRAL BANKS & MONETARY POLICY
“The Fed may not have the luxury of a simple monotonic glide path back to equilibrium,” said Lou Crandall, chief economist at Wrightson ICAP LLC in Jersey City, New Jersey. “They’re going to have to objectively tighten monetary policy in order to increase unemployment and stabilize inflation at their target.”
That’s important because the central bank is more likely to make a policy mistake and inadvertently push the economy into a recession if it is actively seeking to curb credit and boost joblessness, rather than just removing monetary accommodation from the financial system, as it is now.
USA ECONOMY DATA, CITIES AND STATES
The pace of hiring slowed a bit in the final month of 2017, but remained robust for the year as a whole and the jobless rate held at a 17-year low, signs the broader labor market maintained plenty of momentum going into the new year.
Nonfarm payrolls rose a seasonally adjusted 148,000 in December, the Labor Department said Friday. That brought employment gains for the year to 2.1 million, the seventh straight year of increases exceeding two million. It is only the second time on record—the other being in the 1990s—when the economy has produced jobs at that pace for that long.
Over all, average hourly earnings were 2.5 percent higher in December compared with the year before, scarcely keeping up with inflation. But other data shows that wages have increased most for the least-educated workers and for people in many industries that are generally low-paying.
“Growth is strong, and the benefits of this growth have been widely shared,” Jed Kolko, the chief economist for Indeed.com, a job-search site. “This has been a year in which some of the gaps in the economy that had been growing narrowed a bit.”
According to the report, published on December 21st, life expectancy in America fell in 2016, for the second year in a row. An American baby born in 2016 can expect to live on average 78.6 years, down from 78.9 in 2014. The last time life expectancy was lower than in the preceding year was in 1993. The last time it fell for two consecutive years was in 1962-63.
One answer trumps all others: home prices. Hawaii has the most expensive housing in the nation, according to the home value index from housing website Zillow. Rent costs trail only D.C. and (in some months) California.
Overall, Hawaii had the highest cost of living of any state in 2017 (D.C. was higher), the Center for Regional Economic Competitiveness found, and housing was the main driver.
GLOBAL ECONOMY DATA
The economy showed unexpected resiliency as the year came to an end, with the figures indicating rapidly diminishing slack in the labor market that may quicken the expected pace of interest-rate increases by the Bank of Canada. Since September, Canada added 193,400 jobs — the biggest three-month gain since at least 1976.
“The latest data in hand support a rate hike” in January, said Bill Adams, senior international economist at PNC Financial Services Group in Pittsburgh. “Broad-based growth is still the dominant theme.”
The latest signs are in that British households are coming under increasing pressure from surging inflation. Consumers curbed their spending for the first time in five years in 2017. The reports highlight how consumers are being hurt by the fallout from the U.K.’s vote to leave the European Union, as uncertainty increases and the pound’s decline feeds through into the economy.
Germany is in the midst of an economic boom, with exporters benefiting from improving global trade and record-low unemployment buttressing domestic spending. Manufacturing has been leading the expansion in output, with private-sector activity last month hitting the highest level in two decades.
Yet at the same time, and in common with the euro area as a whole, price pressures have failed to build at a similar pace and wages have been slow to rise.
Switzerland ended the year with its highest rate of inflation in almost seven years, underscoring the central bank’s tentative confidence that prices are finally on a steadier footing after years of deflation.
“In France right now there’s a strong combination of CEO optimism, the economy doing well, and a lot of large listed companies in good health,” says Gilberto Pozzi, co-head of global mergers and acquisitions at Goldman Sachs. “It should be a pretty good run for French M&A for the next few years and I would expect French companies to be more buyers than sellers.”
Greater optimism about France has been part of a revival in eurozone economic confidence over the past 12 months. Since Mr Macron was elected in May, he has pushed through reforms to make the labour market more flexible, cut public spending and slashed taxes for the rich with a view to attracting investors and revitalising the eurozone’s second-largest economy.
POSITIONING, INFLECTION, MARKET CALLS
A well-worn financial cliché is that the time to worry in a bull market is when the last bears start to turn. Following the Trump’s administration’s tax reforms and a barnstorming performance for US stocks over 2017, it is becoming increasingly hard to find investors who are vocally doubting shares will perform well over this year. Where once the post-crisis rally was “the most hated bull market of all time” its continuation appears to have ground down many naysayers into grudging submission.
Jeremy Grantham, a closely followed and frequently sceptical US investor, last week repeated his opinion that US valuations were high but conceded that “a melt-up or end-phase of a bubble within the next six months to two years is likely”. In short, where bearish views were commonplace two years ago few right now seem willing to step back from the market today, let alone be short. History tells us it is at these points of uninterrupted tranquility where surprises often spring from.
DEALS, MERGERS, IPOs, LBOs, RESTRUCTURINGS
Celgene Corp. agreed to buy blood-disease biotechnology company Impact Biomedicines for as much as $7 billion.
Celgene, based in Summit, N.J., is one of the biggest U.S. biotech companies. It is known for its cancer-drug portfolio but has been trying to diversify beyond its top-selling product, multiple myeloma drug Revlimid, and move into immune disorders such as the skin condition psoriasis.
COMMODITIES BASE METALS, MATERIALS
The Australian government’s statistics office has forecast the price of iron ore to drop 20 per cent in 2018, reflecting lower expectations than some private estimates.
Australia’s Office of the Chief Economist forecast in the December edition of its Resources and Energy Quarterly, published on Monday, that the price of iron ore would fall 20 per cent in real terms during 2018 to $51.50 per metric tonne, down from an estimated $64.30 at the end of 2017.
Iron ore is in for a bumpy ride in 2018, according to the world’s largest exporter, which warns that the commodity may be whipsawed as investors and users navigate the cross-currents thrown up by China’s efforts to manage steel production and rising
global mine production.
“The iron ore price is expected to experience some ongoing volatility in early 2018, as the market responds to uncertainty regarding the impact of winter production restrictions on iron ore demand,” the government forecaster said. Beyond the first six months, the price is set to drop on growing supply from low-cost producers and weaker steel output in China, it added.
POLLUTION, CLIMATE & ENVIRONMENT
The moment you step out into the frozen air on the way up Mount Washington — one of the most frigid spots in the lower 48 — the icy wind steals your breath and freezes your eyelashes. You can’t blink. The cold stabs your face and numbs your earlobes to rubber.
“It’s an icy hell,” said Amy Loughlin, 50, who was visiting from Austin, Tex., and scaling the mountain, the highest in the Northeast, in the back of a SnowCoach — a van retrofitted with tanklike treads to handle the blowing snow and treacherous roads.
Rescue workers are battling a toxic oil blaze at sea as 32 sailors remain missing after an Iranian-managed oil tanker collided with a Chinese bulk carrier off the coast of China on Saturday night. The Sanchi tanker, which was carrying condensate, a type of light oil, from Iran to South Korea, collided with the CF Crystal 160 nautical miles east of the mouth of the Yangtze river, according to China’s ministry of transport.
The response has been hampered by the fierce fire and toxic gases from the wreck, Chinese state media said. China, South Korea and the US have all dispatched ships and aircraft to assist with the incident. The environmental damage from the collision is still unknown, but could be limited because condensate burns and evaporates more easily than the heavier crude oil involved in some of the world’s best-known spills.
The 30 Iranians and two Bangladeshis who were aboard the 899-feet tanker late Saturday, when the accident occurred, still haven’t been found. Twenty-one Chinese crew members on the Hong Kong-registered cargo ship also involved in the crash were rescued, Chinese authorities said.
According to China’s state broadcaster CCTV, the tanker—operated by state-controlled shipping firm National Iranian Tanker Co.—was carrying 136,000 tons of highly-flammable condensate, which is especially prone to explosion. Shanghai maritime authorities have set up a 10-nautical-mile cordon around the affected area, some 184 miles off China’s eastern coast.
Sanofi SA’s recent disclosure of safety problems with the world’s only approved vaccine against the viral infection dengue has complicated efforts to contain a growing global epidemic and could delay potential new vaccines, public-health experts said.
Late last year, the French pharmaceutical company said its Dengvaxia product, first approved for sale in 2015, could in some cases worsen rather than prevent symptoms of the debilitating tropical disease. It was a frightening finding and a setback for scientists who have spent decades and hundreds of millions of dollars trying to develop an immunization against dengue, a mosquito-borne virus that each year infects an estimated 390 million people in tropical regions world-wide.
Temperature extremes across the globe spanned more than 85 degrees Celsius at the weekend as Sydney sizzled and parts of the U.S. froze. Roads melted and Sydney residents fled to air-conditioned shopping malls as temperatures surged to 47.3 degrees Celsius (117 degrees Fahrenheit) in one western suburb on Sunday afternoon, the hottest day there since 1939. By contrast, weekend temperatures at Mount Washington Observatory in New Hampshire plummeted to minus 36 degrees Fahrenheit (minus 38 degrees Celsius).
BREXIT, SCOXIT, LONDON, UK ECONOMY
Mothercare Plc reported a sharp drop in U.K. sales over the holiday season in the latest sign that the country’s retailers suffered a miserable Christmas.
Mothercare is far from alone in its woes. The Brexit-induced weakness of the pound and increases in the minimum wage have inflated U.K. retailers’ costs, and poor Christmas sales are bringing these issues to a head. Debenhams Plc warned last week that its full-year profit would miss estimates due to weak holiday business, while its department-store rival House of Fraser Ltd. is seeking rent reductions from landlords.
A “Cabinet minister for no deal” is to be appointed by Theresa May as part of the reshuffle of her top team which begins on Monday, the Telegraph can reveal.
The new minister is likely to be based in the Department for Exiting the European Union alongside David Davis, the Brexit Secretary, to provide regular updates on preparations for leaving the EU without a trade deal. They would attend Cabinet and control a significant budget, but would not be a Secretary of State.
DACA, TRAVEL BAN, IMMIGRATION, WALL
The White House on Friday presented Congress with an expansive list of hard-line immigration measures, including an $18 billion request to build a wall at the Mexican border, that President Trump is demanding in exchange for protecting young undocumented immigrants.
The request, which totals $33 billion over a period of 10 years for border security measures including the wall, could jeopardize bipartisan talks aimed at getting an immigration deal. Among the items on Mr. Trump’s immigration wish-list: money to hire 10,000 additional immigration officers, tougher laws for those seeking asylum, and denial of federal grants to so-called “sanctuary cities.”
With a potential government shutdown less than two weeks away, congressional leaders and the White House will meet this week to discuss ways to end an impasse over the legal status of young immigrants, which has become a primary obstacle to a spending deal.
Over the weekend, President Trump reiterated his campaign pledge to build a wall along the U.S.-Mexico border, warning that any plan to address the fate of immigrant “dreamers” won’t happen without it. Democrats once again balked at such demands, but the party is split over whether to force a government shutdown to get its way.
GEOPOLITICS, CRIME, TERRORISM
As momentum ebbs for a two-state solution to the Israeli-Palestinian conflict, both sides are taking another look at the one-state idea. But that solution has long been problematic for both sides.
For the Israelis, absorbing three million West Bank Palestinians means either giving up on democracy or accepting the end of the Jewish state. The Palestinians, unwilling to live under apartheid-like conditions or military occupation, have also seen two states as their best hope.
Now, for the first time since it declared its support for a Palestinian state side-by-side with Israel in 1988, the P.L.O. is seriously debating whether to embrace fallback options, including the pursuit of a single state.
Saudi authorities have arrested 11 princes for protesting against the suspension of state subsidies to pay the electricity and water bills of members of the royal family, a rare example of open dissent over recent austerity measures.
The attorney-general said in a statement that the group of princes had staged a sit-in at a palace in the capital last week, refusing to leave the area after being told that their demands were not lawful.
PRIVACY, HACKING, CYBERWAR, SURVEILLANCE STATE
In 1994, Intel faced a public relations crisis over an elusive mathematics glitch that affected the accuracy of calculations made by its popular Pentium computer chips. After insisting that the problem would not affect many people, the company succumbed to public pressure and recalled the chips, costing it $475 million.
Now Intel faces an even bigger test: two serious security issues with its chips that could have implications for nearly everyone touched by computing. And so far — in something of a repeat of the 1994 incident — Intel has failed to quiet critics, putting it in an awkward position this week as its chief executive prepares to take the stage at one of the world’s biggest tech trade shows.
Businesses and institutions raced to patch computer systems and braced for slowdowns in system performance, as they—and much of Silicon Valley—reacted to the disclosure this week of two long-hidden vulnerabilities in chips running most of the world’s computers.
The two flaws, dubbed Meltdown and Spectre by researchers that discovered them, provide opportunities for hackers to exploit tricks many modern chips use to speed performance, and steal information in the chips’ memory, like passwords.
The process of evaluating Kaspersky’s role, and taking action against the company, is complicated by the realities of global commerce and the nature of how modern online software works. A top Department of Homeland Security official said in November congressional testimony the U.S. lacks “conclusive evidence” Kaspersky facilitated national-security breaches.
DHS, convinced Kaspersky is a threat, has banned its software from government computers. The company sued the U.S. government on Dec. 18 in U.S. District Court in Washington, D.C., saying the ban was arbitrary and capricious, and demanding the prohibition be overturned. DHS referred inquiries to the Justice Department, which declined to comment.
The president of the world’s largest economy has defended his mental state, declaring himself to be a “very stable genius” amid questions raised by an explosive new book that quotes senior aides in the White House questioning his fitness for office.
Twitter said on Friday that prohibiting a world leader from posting on the platform “would hide important information people should be able to see and debate.”
In an interview on NBC’s “Meet the Press,” Wolff recounted how he got access to the West Wing, saying Trump personally, if reluctantly, allowed him to roam. According to Wolff, the president went so far as to praise his work in front of others. Wolff said the president’s blessing was a critical tool that provided him access to White House staff.
“Trump’s foreign policy doctrine is simple: you Brits suck up to him and enlist in whatever geopolitical fantasy he has going, he’ll give you what you want — though only if it doesn’t hurt him. It is not so much vengeance, rather ‘you flatter me and I’ll flatter you.'”
Wolff said Trump will “value the Brits” if they give him what he wants. “He sees the queen in reality TV show terms. That’s the Trump modus operandi,” he said. “He will try to Trumpalize the queen and Buckingham Palace.”
President Trump is starting his official day much later than he did in the early days of his presidency, often around 11am, and holding far fewer meetings, according to copies of his private schedule shown to Axios. This is largely to meet Trump’s demands for more “Executive Time,” which almost always means TV and Twitter time alone in the residence, officials tell us. The schedules shown to me are different than the sanitized ones released to the media and public.
The publisher of Michael Wolff’s new book “Fire and Fury: Inside the Trump White House” can’t print copies fast enough.
Henry Holt is facing a backlog of orders from Amazon, Barnes & Noble and other booksellers. The publishing house is rushing to print more books, a person with direct knowledge of the matter told CNNMoney.
A Henry Holt spokeswoman said sales figures are not yet available for “Fire and Fury.” But it has been No. 1 on Amazon’s best sellers list since Wednesday, when the first excerpts from the book were published online.
White House adviser Stephen Miller was escorted off the set of CNN’s “State of the Union” on Sunday after a contentious interview with host Jake Tapper.
Two sources close to the situation told Business Insider that after the taping was done Miller was asked to leave several times. He ignored those requests and ultimately security was called and he was escorted out, the sources said.
Steve Bannon, the former White House strategist at the heart of a political firestorm over a tell-all book on Donald Trump, has expressed regret for comments he made to the author about the president and his family.
TRADE, PROTECTIONISM, REGULATION, OVERSIGHT
When President Trump addresses the U.S. agricultural community Monday, farmers will be looking for signs that a recent push to lobby him in support of the North American Free Trade Agreement has been successful.
Oprah Winfrey galvanised a politically charged Golden Globes ceremony with a speech that called on Hollywood to ensure the wave of actresses who have gone public with tales of sexual harassment are the last to face such mistreatment.
The appeal by the businesswoman, actress and TV host capped a night where show business leading lights wore black gowns to demonstrate against sexual harassment, turning the annual film and television awards ceremony into a star-studded protest on gender inequality and racism.
SILICON VALLEY, UNICORNS, STARTUPS, VC
Software on Apple Inc.’s iPhones and Google’s Android smartphones help mobile apps like Uber and Facebook to pinpoint a user’s location, making it possible to order a car, check in at a local restaurant or receive targeted advertising.
But 911, with a far more pressing purpose, is stuck in the past.
U.S. regulators estimate as many as 10,000 lives could be saved each year if the 911 emergency dispatching system were able to get to callers one minute faster. Better technology would be especially helpful, regulators say, when a caller can’t speak or identify his or her location.
CONSUMER TECH, SOCIAL MEDIA, E-COMMERCE, MOBILE
A leading activist investor and a pension fund are saying the smartphone maker needs to respond to what some see as a growing public-health crisis of youth phone addiction.
Jana Partners LLC and the California State Teachers’ Retirement System, or Calstrs, which control about $2 billion of Apple shares, sent a letter to Apple on Saturday urging it to develop new software tools that would help parents control and limit phone use more easily and to study the impact of overuse on mental health.
The Apple push is a preamble to a new several-billion-dollar fund Jana is seeking to raise this year to target companies it believes can be better corporate citizens. It is the first instance of a big Wall Street activist seeking to profit from the kind of social-responsibility campaign typically associated with a small fringe of investors.
Of the three major new products since Mr. Cook became chief executive in 2011, both AirPods earbuds in 2016 and last year’s HomePod speaker missed Apple’s publicly projected shipping dates. The Apple Watch, promised for early 2015, arrived late that April with lengthy wait times for delivery. Apple also was delayed in supplying the Apple Pencil and Smart Keyboard, two critical accessories for its iPad Pro.
The delays have contributed to much longer waits between Apple announcing a product and shipping it: an average of 23 days for new and updated products over the past six years, compared with the 11-day average over the six years prior, according to a Wall Street Journal analysis of Apple public statements.
Longer lead times between announcement and product release have the potential to hurt Apple on multiple fronts. Delays give rivals time to react, something the company tried to prevent in the past by keeping lead times short, analysts and former Apple employees said. They can stoke customer disappointment and have cost Apple sales.
MEDIA, CABLE, SPORTS, ENTERTAINMENT
Verizon said it took down the news network last month because it did not want to pay for it when viewers can access it for free online. It remained unclear whether the companies could come to an agreement allowing the network to return to Verizon’s customers.
“Bloomberg is proposing that we pay for content that they make available to all consumers for free on their website and mobile app,” the company said in its alert to Verizon’s FIOS TV customers about the removal of Bloomberg TV.
AUTOS, ELECTRIC, SELF-DRIVING
A China-based startup established by former BMW AG executives is among the latest to take a swing at the growing market for electric and autonomous vehicles, competing against giants such as Nissan Motor Co. and General Motors Co.
Ford Motor Co plans this spring to offer a diesel engine version of its best-selling F-150 pickup truck, looking to gain a marketing edge as its main rivals ramp up more efficient pickups of their own.
Tesla clearly wants to emphasize that, despite 2017 production of Model 3s coming in at all of 1-to-2 percent of original guidance, it is accelerating now. But when you start getting into extrapolated run rates — and pushing back that totemic 5,000-per-week figure by yet another quarter — it tends to undercut the message.
AIRLINES, SHIPPERS, RAIL, TRANSPORTS
Two days after the last flake fell, JFK was reeling from the first snowstorm of 2018 with equipment malfunctions, dozens of delayed flights and scores of unhappy customers.
“We’ve been here since 8 a.m., and our flight keeps getting pushed back,” Leah Golubchick told the Daily News Saturday. “At first they said the baggage machine was frozen, so they were unable to take the bags off the plane. Now they said that the plane is snowed in at the hangar!”
Passenger Lily Crawford told Pix 11: ‘People are sleeping on the ground, people are sitting on the ground. People have taken over wheelchairs. There are no outlets, people are running out of power on their phone.’
AEROSPACE, MILITARY & DEFENSE
SpaceX will launch its biggest rocket yet, called the Falcon Heavy, at the end of the month, Chief Executive Elon Musk announced on social media late Thursday.
The billionaire’s space exploration company claims the Falcon Heavy is the “most powerful rocket in the world by a factor of two.” Musk said in an Instagram post Thursday that, at 2,500 tons of thrust, the rocket is equivalent to 18 Boeing 747 aircraft at full throttle.
SCIENCE, NATURE, PSYCHOLOGY
Sometime in the coming weeks or months, a brain-dead person, probably a man, will be wheeled into the plastic surgery department at NYU Langone Medical Center in Manhattan. A technician will slowly run a scanner over his face, recording the tiniest contour and detail.
Then surgeons will cut off the dying person’s face and attach it to a disfigured man who has been waiting for a face transplant since last summer.
And downtown from the hospital, in a basement below what could easily be confused with a Kinko’s, a team of New York University 3-D printing experts will work their own magic. They aim to generate a replica of the donor’s scanned face so lifelike — or perhaps more accurately, deathlike — that his family members will feel comfortable using it for their loved one’s burial, even in an open coffin.
The girl was just six weeks old when she died. Her body was buried on a bed of antler points and red ocher, and she lay undisturbed for 11,500 years.
Archaeologists discovered her in an ancient burial pit in Alaska in 2010, and on Wednesday an international team of scientists reported they had retrieved the child’s genome from her remains. The second-oldest human genome ever found in North America, it sheds new light on how people — among them the ancestors of living Native Americans — first arrived in the Western Hemisphere.
The analysis, published in the journal Nature, shows that the child belonged to a hitherto unknown human lineage, a group that split off from other Native Americans just after — or perhaps just before — they arrived in North America.
“It’s the earliest branch in the Americas that we know of so far,” said Eske Willerslev of the University of Copenhagen, a co-author of the new study. As far as he and other scientists can tell, these early settlers endured for thousands of years before disappearing.
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