Macro Links Mar 22 – “DO NOT CONGRATULATE”
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MACRO LINKS TABLE OF CONTENTS (Click or Scroll Down)
- FACEBOOK CRISIS, CAMBRIDGE ANALYTICA
- SPY POISONING, PUTIN ELECTION, CONGRATULATION CALL
- AUSTIN BOMBER KILLED
- BITCOIN, CRYPTOCURRENCY, INITIAL COIN OFFERINGS
- FOREX, CARRY TRADES, EXCHANGE RATES
- TRADE, PROTECTIONISM, REGULATION, OVERSIGHT
- GUN CONTROL, POT BOOM, OPIOIDS, PUBLIC POLICY
- TAXATION, WEALTH HAVENS, INEQUALITY
- RUSSIA MEDDLING, RUSSIA PROBE, TRUMP WORLD
- INFLATION, RATES, DEBT AND CREDIT, BALANCE SHEETS
- VOLATILITY, BLACK SWANS, LIQUIDITY, TAIL RISKS
- MACRO OP-EDS, INSIGHT, EVENTS AND TRENDS
- CENTRAL BANKS & MONETARY POLICY
- USA ECONOMY DATA, CITIES AND STATES
- 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
- COMMODITIES BASE METALS, MATERIALS
- POLLUTION, CLIMATE & ENVIRONMENT
- BREXIT, SCOXIT, LONDON, UK ECONOMY
- GEOPOLITICS, CRIME, TERRORISM
- ELECTORAL POLITICS
- SCANDALS, LAWSUITS, FINES, REGULATORY
- SILICON VALLEY, UNICORNS, STARTUPS, VC
- MEDIA, CABLE, SPORTS, ENTERTAINMENT
- AUTOS, ELECTRIC, SELF-DRIVING
- AEROSPACE, MILITARY & DEFENSE
- LUXURY, HIGH END, ASPIRATIONAL
- ARTIFICIAL INTELLIGENCE, DRONES, FUTURE TECH
FACEBOOK CRISIS, CAMBRIDGE ANALYTICA
In his first public statements concerning a data privacy scandal, Mr. Zuckerberg said “there’s more to do, and we need to step up and do it.” The statement fell short of a full-throated apology, but in his post, Mr. Zuckerberg said that Facebook would contact users whose data had been harvested through a personality quiz app and passed along to Cambridge Analytica.
Zuckerberg will sit down with CNN’s Laurie Segall for an interview that will air on “Anderson Cooper 360” at 9 p.m. ET on Wednesday. The interview comes amid an uproar over news reports that Cambridge Analytica, a data firm with ties to President Donald Trump’s campaign, accessed information from about 50 million Facebook users without their knowledge.
“Investors are reacting to fears of regulation and the consequences of regulation,” said Brian Wieser, a senior research analyst at Pivotal Research Group. “The scale of errors can only lead one to conclude these are systemic problems.” The company has faced internal dissent over its broader role in spreading disinformation during the presidential campaign and its response to it. The tensions have prompted the planned departure of Alex Stamos, Facebook’s chief security officer, who plans to leave in August.
Facebook Inc.’s failure to safeguard privacy was blamed in an investor lawsuit for a slump in its share price that followed the revelation user data was harvested without permission by a research firm connected to U.S. President Donald Trump. The world’s largest social media network was sued in San Francisco federal court on Tuesday by shareholders in a class action who said they suffered losses after the disclosure that Cambridge Analytica, a U.K.-based firm that aided Trump, improperly obtained profile information on 50 million users.
I think I understand why Facebook Chief Executive Officer Mark Zuckerberg hasn’t publicly responded to the Cambridge Analytica scandal. He’s stuck in a catch-22. Any fix for Facebook’s previous big problem — fake news — would make the current big problem with data harvesting worse.
More than three years before he served as Trump’s chief political strategist, Bannon helped launch Cambridge Analytica with the financial backing of the wealthy Mercer family as part of a broader effort to create a populist power base. Earlier this year, the Mercers cut ties with Bannon after he was quoted making incendiary comments about Trump and his family.
The University of Cambridge resorted to external arbitration in an attempt to resolve a bitter dispute between Aleksandr Kogan, the academic at the heart of the Facebook scandal, and colleagues concerned by how he was planning to use data in work with Cambridge Analytica four years ago.
Aleksandr Kogan, the Cambridge University researcher at the center of Facebook’s data breach allegations, said today he is being used as a “scapegoat” by the social network and Cambridge Analytica, the analytics firm that acquired the data. “The events of the past week have been a total shell shock, and my view is that I’m being basically used as a scapegoat by both Facebook and Cambridge Analytica when… we thought we were doing something that was really normal,” Kogan told BBC 4’s Today Program.
Moses Karanja, a researcher on a project at Strathmore Law School in Nairobi about social media and misinformation during the presidential election, said the recent reports about Cambridge Analytica’s role in Kenya, and its abuse of Facebook data globally, reinforced concerns raised in his own work about how Kenyans’ personal data was accessed by political parties and even by government institutions, like the elections commission. He said targeted text messages that he and others received during the campaign season suggested that individuals’ voter registration information, social media data and telephone numbers were being independently linked — although it’s still unclear how.
SCL Group reportedly entrapped the leader of the opposition party in St. Kitts and Nevis with a $1.4 million (£1 million) bribe, in order to secure an election win for the country’s Labour party, who was a client of SCL Group, The Times reported.
SPY POISONING, PUTIN ELECTION, CONGRATULATION CALL
Many of those caught on camera turned up to the polling stations in groups and in state-run minibuses. One woman caught voting at least THREE TIMES was identified as a hospital deputy director of health and safety. Voting twice is a misdemeanour under Russian law and those caught are heavily fined. But when shown these pictures, election commission member Leila Koichuyeva said: “They could be twins.”
Chancellor Angela Merkel pushed back against doubts that Russia probably is to blame for a nerve-agent attack in England, challenging the Kremlin before European Union leaders discuss their response to the poisoning of a former spy. “I would be happy if I didn’t have to name Russia here, but we can’t ignore evidence just because we don’t want to call out Russia,” Merkel said in a speech to parliament on Wednesday, the first major policy address of her fourth term. “That’s no way to operate.” The German leader renewed expressions of solidarity with the U.K. government and said “many indications” point to Russian involvement in the poisoning of Sergei Skripal, who sold Russian secrets to U.K. intelligence, and his daughter.
The EU failed to harden its position on whether Russia was responsible for the Salisbury nerve agent attack earlier this month, despite a major diplomatic push by the U.K. to rally allies behind its judgement that the Kremlin was behind it. A new text of draft conclusions that EU leaders will discuss at a summit in Brussels Thursday and Friday now condemns the attack on Russian former spy Sergei Skripal and his daughter — the first use of a chemical weapon on European soil since World War II — “in the strongest possible terms.”
Britain’s top diplomat, Boris Johnson, told Parliament on Wednesday that the Russian president, Vladimir V. Putin, would use the World Cup this summer as a propaganda tool much as Hitler used the 1936 Olympic Games to glorify Nazi Germany. The provocative comparison drew an enraged reaction from Moscow — which has often stoked nationalist pride around the Soviet Union’s triumph over Nazi Germany in World War II — and was a striking example of the diplomatic clash between the two countries following the poisoning of a Russian former spy, Sergei V. Skripal, and his daughter earlier this month.
President Trump did not follow specific warnings from his national security advisers Tuesday when he congratulated Russian President Vladimir Putin on his reelection — including a section in his briefing materials in all-capital letters stating “DO NOT CONGRATULATE,” according to officials familiar with the call. Trump also chose not to heed talking points from aides instructing him to condemn the recent poisoning of a former Russian spy in Britain with a powerful nerve agent, a case that both the British and U.S. governments have blamed on Moscow.
Trump was fuming Tuesday night, asking his allies and outside advisers who they thought had leaked the information, noting that only a small group of staffers have access to those materials and would have known what guidance was included for the Putin call, the source said. According to the source, the incident resurfaces his long-held belief there are individuals inside his administration — especially in the national security realm — who are actively working to undermine him.
President Trump’s senior advisers were thrown when he told Russian President Vladimir Putin on Tuesday that he expected to meet with him soon, as briefings before the call to Moscow included no mention of a possible meeting, and aides have not been instructed to prepare for one, senior administration officials said. Although Trump told reporters that “probably we’ll be seeing President Putin in the not-too-distant future,” several officials said there are no plans for the two even to be in the same country until November, when both are expected to attend a Group of 20 summit in Argentina.
The White House on Wednesday defended a phone conversation between President Donald Trump and Russian counterpart Vladimir Putin, saying Mr. Trump made headway by striking a cordial tone rather than taking a more confrontational approach as suggested by his national security advisers.
Sen. John McCain (R-Ariz.) was irate. “An American president does not lead the Free World by congratulating dictators on winning sham elections,” he said in a written statement. “And by doing so with Vladimir Putin, President Trump insulted every Russian citizen who was denied the right to vote in a free and fair election to determine their country’s future, including the countless Russian patriots who have risked so much to protest and resist Putin’s regime.”
AUSTIN BOMBER KILLED
As multiple officers neared his car, banging on his car window, Conditt detonated a bomb inside, knocking back one of the approaching Austin SWAT officers, police said. Another SWAT officer fired his gun at Conditt, who suffered “significant injuries from [the] blast,” said Brian Manley, the interim Austin police chief. It was not immediately clear if Conditt was killed by the explosive or the gunfire.
In the hours after Mr. Conditt’s death, a portrait of the bomber, his bombs and his techniques emerged, along with the story of how he was finally stopped — the lucky breaks, investigative ingenuity and technology that helped catch one of the most elusive serial bombers in recent decades. By the end of the day Wednesday, police had another tool: A 25-minute confession, left on the suspect’s phone, in which he attempted to describe his odyssey. “It is the outcry of a very challenged young man talking about challenges in his personal life that led him to this point,” the Austin police chief, Brian Manley, said.
Mark Anthony Conditt, the man authorities say carried out a string of bombing attacks in Austin, was a home-schooled 23-year-old who had dropped out of college and lived in a fast-growing bedroom community north of Austin. Mr. Conditt, who blew himself up after a showdown with police Wednesday morning, stood out for his intelligence, people who knew him said. He had once parried with classmates in a college class through blog posts, voicing his opposition to same-sex marriage, among other issues. He liked tennis, cycling and music, he wrote. Stunned family members and friends said they saw no signs of the reign of violence he would unleash on the Austin area this month, mailing and setting off package bombs that killed two people and wounded several more.
BITCOIN, CRYPTOCURRENCY, INITIAL COIN OFFERINGS
Suggesting the shift could happen in 10 years or perhaps less, the entrepreneur said: “The world ultimately will have a single currency, the internet will have a single currency. I personally believe that it will be bitcoin.” While conceding that bitcoin is faced with scaling issues right now, making it “slow and costly,” Dorsey nonetheless argued that new solutions will ease that difficulty in the end.
Google is working on blockchain-related technology to support its cloud business and head off competition from emerging startups that use the heavily-hyped technology to operate online in new ways, according to people familiar with the situation. Companies use blockchain and other so-called digital ledgers to securely record transactions and process other data over the internet — a service Google could use, for example, to reassure customers that their information is protected when stored on the giant network of computer servers that power its cloud services.
Huawei Technologies Ltd., the world’s third-biggest handset maker, is considering developing a mobile phone that will be able to run blockchain-based applications, according to two people familiar with the plans. Shenzhen, China-based Huawei is in talks to license Sirin Labs’ operating system, called SIRIN OS, to run blockchain applications alongside Alphabet Inc.’s Android system, said the people, who asked not to be named because the talks are private.
“There is absolutely no way that an attacker could replace the firmware and make it pass attestation without knowing the Ledger private key,” officials said in 2015. Earlier this year, Ledger’s CTO said attestation was so foolproof that it was safe to buy his company’s devices on eBay. On Tuesday, a 15-year-old from the UK proved these claims wrong. In a post published to his personal blog, Saleem Rashid demonstrated proof-of-concept code that had allowed him to backdoor the Ledger Nano S, a $100 hardware wallet that company marketers have said has sold by the millions.
The Organization for Economic Co-operation and Development (OECD), a global intergovernmental body, has called for agreement on new frameworks for the taxation of emerging technologies such as cryptocurrency. In a report sent to financial ministers and central bank regulators of the G20 member countries on Tuesday, the OECD said it is looking to develop practical tools and build cooperation in “examining tax consequences of new technologies,” such as cryptocurrencies and distributed ledger technology.
With this year’s April 17 tax filing deadline fast approaching, many virtual currency traders are sweating over their tax returns. They’re confused by the complicated rules, many of them stemming from guidelines issued by the I.R.S. in 2014, governing the taxation of virtual currencies. They’re afraid that the windfall profits created by last year’s cryptocurrency boom, which sent currencies like Bitcoin and Ether skyrocketing and created a new class of crypto-millionaires, have left them with huge tax bills. And, of course, they’re worried about drawing the eye of the Internal Revenue Service.
As startups try to build applications on blockchains, they’re discovering the technologies all have pros and cons. None solve every problem. Ethereum, for instance, is good for issuing tokens. Stellar might be good for cross-border payments. Hundreds of different digital ledgers already exist, and new ones appear almost daily. “Different blockchains have different properties, and have different teams working on them and they have different road maps,” Jerry Brito, executive director of the Coin Center advocacy group, said in a phone interview. “It makes sense sometimes to move to another.”
The imposition of new sanctions against Venezuela at the G20 Summit and the US government’s strict prohibition of investment in the country’s state-issued cryptocurrency could be expected to disarrange most of the Venezuelan government’s existing plans to grow its cryptocurrency and raise even more capital through a second ICO.
There are some Chinese innovators that see a future in the country’s crypto and Blockchain markets, regardless or in spite of current limitations for operating there. These entrepreneurs are doing their best to develop their crypto and Blockchain projects specifically with a Chinese audience in mind.
It appears popular exchange desk Coinbase suffered from a flaw in its Ethereum smart contract setup, which made it possible to reward yourself with a virtually infinite sum of ETH, according to newly surfaced vulnerability report. The jarring vulnerability was discovered by Dutch fintech firm VI Company, which reported the issue to Coinbase back in late December last year. The exchange desk fixed the issue a month later in January and has since rewarded the Dutch company with a $10,000 bounty.
Tether, the altcoin backed by fiat currencies USD and EUR, has issued another 300 mln USDT tokens priced at $1 per token on Tuesday March 20, according to data from Omni Explorer. In mid-February, Tether had released 86 mln in euro-backed EURT and 61.1 mln in US dollar-based USDT on the Ethereum (ETH) Blockchain. Bitfinex’ed, an anonymous blogger and avid Tether critic, posted on Twitter today that the release of such a large amount of Tether at once caused BTC’s price to rise in proportion.
CryptoKitties, the blockchain-based virtual game that was a breakout success on the Ethereum network, is being spun off as a separate venture that has already raised $12 million from a star-studded roster of investors. While Andreessen Horowitz and Union Square Ventures led the funding round, other investors included Coinbase Inc. founder Fred Ehrsam, AngelList Chief Executive Naval Ravikant and Zynga founder Mark Pincus, the venture-studio Axiom Zen said in a statement.
Last week Thailand’s government issued drafts of two laws regarding cryptocurrency and ICO legislation. There is a certain cause for optimism as long as Thai lawmakers intend not to ban, but to regulate the technology. Nevertheless, any fears remain legitimate after Veerathai Santiprabhob, governor of the Central Bank of Thailand asked all banks in the country to stay away from cryptocurrency in February.
South Korea’s Financial Services Commission (FSC) has announced that they will use Blockchain technologies for future fintech innovation by focusing on supporting new technologies as opposed to regulating them, local news outlet Korea JoongAng Daily reports today, March 21. Choi Jong-ku, the chairman of the FSC, said in relation to the impetus for the FSC announcement that “the players in the financial service market are becoming more diverse, with new companies entering, and the competition in the financial market is becoming fiercer. As a result, existing financial companies are also making attempts with fintech to raise their services.”
Anyone swiping through the tech news on their tablet this week may have been startled by an unsavory story. Child pornography (CP) is permanently encoded in the bitcoin blockchain accoriding to mainstream media reports, making anyone who downloads the blockchain guilty of accessing CP. Not only is this old news, but it’s fake news. Understanding why calls for taking a quick dip into bitcoin’s code.
The U.S. Treasury Department may start publishing cryptocurrency wallet addresses along with the names of people and organizations with whom it forbids citizens from doing business. In a March 19 update to its FAQ on sanctions compliance, the department’s Office of Foreign Assets Control notes that cryptocurrencies are treated the same as fiat currencies when it comes to Specially Designated Nationals – a list of people affiliated with the governments of sanctioned nations, terrorist organizations or narcotics trafficking.
One of the founders of the firm, Ferhan Patel, has been arrested, while his brother, co-founder Firoz Patel, remains at large. On Tuesday, the Department of Justice unveiled the charges and accused the Patels and Pazya of facilitating as much as $250 million in money laundering on behalf of Ponzi schemes and child pornography sites, among other enterprises.
The public utility from a county in Washington state long known as a destination for power-hungry bitcoin miners has said it will stop reviewing applications for new operations. The current load from the operations already set up are beginning to impact the county’s overall electric grid capacity, said General Manager Steve Wright, according to the release. This is resulting in public health and safety concerns, as well as possible threats to the district’s planned growth. “Rogue cryptocurrency operations” are also taking power which the county could be using elsewhere, according to the release.
FOREX, CARRY TRADES, EXCHANGE RATES
The currencies of Mexico and Canada have gone their separate ways this year, an unexpected outcome for two countries whose economies may be hurt by trade tensions with the U.S. The Mexican peso is up 6.7% against the dollar this year, making it the best performing currency of the 16 tracked by the WSJ Dollar Index. The Canadian dollar, meanwhile, has fallen 2.6% against its U.S. counterpart, finishing below all currencies in the index save the Turkish lira.
TRADE, PROTECTIONISM, REGULATION, OVERSIGHT
China is preparing to hit back at trade offensives from Washington with tariffs aimed at President Donald Trump’s support base, including levies targeting U.S. agricultural exports from Farm Belt states, according to people familiar with the matter. The plans are part of a strategy that has taken shape in recent weeks as Beijing seeks to avert tariffs by warning of possible repercussions and offering incentives to the U.S., including better access to China’s markets, especially in the financial sector.
The Trump administration is looking at tariffs and investment restrictions as a way to pressure China to strengthen protection of American intellectual property, U.S. Trade Representative Robert Lighthizer told House lawmakers worried about a brewing trade war. A White House spokesman said the president would take actions Thursday regarding “China’s state-led, market-distorting efforts to force, pressure, and steal U.S. technologies and intellectual property.”
Republican lawmakers worried about a trade war are cautioning President Donald Trump in their strongest terms yet that broad trade barriers risk hurting the economy and that Congress could take steps to rein in his trade authority. Lawmakers have summoned the president’s top trade officials—U.S. trade representative Robert Lighthizer and Commerce Secretary Wilbur Ross —for hastily arranged hearings this week on the coming tariffs.
The Trump administration indicated it could delay imposing steel and aluminum tariffs on some nations while negotiations are taking place for a more permanent exemption, U.S. Trade Representative Robert Lighthizer said. The USTR office is actively discussing exemptions at the request of the European Union, Australia and Argentina, and similar talks are expected with a “great number” of other nations including Brazil, Lighthizer said during a briefing to the House Ways and Means Committee on Wednesday. The goal is to wrap up the talks over exemptions by the end of April, Lighthizer said.
While officials from the U.S., Canada and Mexico try to hammer out a new North American Free Trade Agreement, lobbyists in Washington are using the deal’s rewrite to advance a broad legislative agenda making it easier for U.S. companies to build factories, move cargo and export coal. The strategy exploits the fast-track authority that allows presidents to negotiate big trade deals without having to worry about Congress tinkering around the edges. Under that authority, legislation to implement a trade deal can pass the House and Senate on a simple majority vote, without amendments or filibusters. That means a Nafta bill could lead to the enactment of what is essentially a big business wishlist of regulatory reforms and other policies too ambitious or politically sensitive to clear Congress in a piecemeal fashion.
Just two days before tariffs on foreign-made steel and aluminum are scheduled to take effect, the Trump administration has yet to make public its plans for how the import levies will work in practice — creating confusion for its closest allies. In recent days, top steel suppliers such as Brazil, South Korea and Japan have complained that the office of the U.S. trade representative has yet to establish a process for countries to apply for tariff exemptions, leaving it unclear whether any will be granted in time to forestall billions of dollars in border charges.
GUN CONTROL, POT BOOM, OPIOIDS, PUBLIC POLICY
YouTube said it would ban videos relating to the sale or assembly of guns and certain gun accessories, as tech giants face growing pressure to limit the promotion of firearms. The world’s largest video site, a division of Alphabet Inc.’s Google, said this week it would prohibit all videos that link directly to sites that sell guns or accessories known as bump stocks, which allow certain firearms to fire as rapidly as machine guns. Bloomberg News and the website Tubefilter reported the policy shift, which YouTube posted on its website on Monday.
The organization lost significant ground with married white women. For the first time since 2000, the NRA is seen more negatively than positively, according to an NBC/WSJ poll. Over the last year, the NRA has taken hits after tragic shootings like Vegas, Sutherland Springs and most recently, Parkland.
TAXATION, WEALTH HAVENS, INEQUALITY
Median pay for the chief executives of 133 of the largest U.S. companies reached an all-time high of $11.6 million in 2017, up from $11.2 million in 2016, a Wall Street Journal analysis of proxy statement data found. The highest paid so far? Hock Tan, the chief of Broadcom Ltd. , who has been at the center of the hostile bid for Qualcomm Inc. His compensation eclipsed $100 million. Others, like IBM’s Virginia Rometty, took a pay cut.
RUSSIA MEDDLING, RUSSIA PROBE, TRUMP WORLD
What exactly Kushner and the Saudi royal talked about in Riyadh may be known only to them, but after the meeting, Crown Prince Mohammed told confidants that Kushner had discussed the names of Saudis disloyal to the crown prince, according to three sources who have been in contact with members of the Saudi and Emirati royal families since the crackdown. If Kushner discussed names with MBS as an approved tactic of U.S. foreign policy, the move would be a striking intervention by the U.S. into an unfolding power struggle at the top levels of an allied nation. If Kushner discussed the names with the Saudi prince without presidential authorization, however, he may have violated federal laws around the sharing of classified intelligence.
To calm Mr. Trump, Donald F. McGahn II, the White House counsel, drew up a broad document barring White House officials from publicly disclosing what they heard and saw at work. But he privately told senior aides that it was mainly meant to placate an agitated president, who was convinced that the people around him had to be pressured into keeping his secrets. Mr. McGahn made it clear the agreement could not ultimately be enforced, according to several people who signed.
Danielle Romero-Apsilos, a Citigroup spokeswoman, said the Bay Street loan wasn’t discussed at a March 2017 White House meeting attended by CEO Mike Corbat and Jared Kushner that was highlighted in a New York Times story. Citigroup issued a $325 million loan for a separate Kushner development later that month. Corbat was unaware that the bank was in the process of closing a real estate loan to the Kushner Cos. venture when he met with Jared Kushner, the bank said in a Tuesday letter to Democratic senators.
John O. Brennan, the former director of the Central Intelligence Agency, said Wednesday that he thought Russia may have some kind of compromising information on President Trump, setting off furious speculation about whether the former spy chief was basing that assertion on inside information. “The Russians, I think, have had long experience with Mr. Trump, and may have things that they could expose.”
“I think Mueller should be fired,” Gohmert said during the monthly “Conversation with Conservatives” meeting on Wednesday. “He should never have been appointed and he should never have accepted. He should be fired.” Gohmert clarified that he thinks the president should not actually fire Mueller, because Republicans in Congress might impeach him if he did so.
One source told ABC News that Sessions was not aware of the investigation when he decided to fire McCabe last Friday less than 48 hours before McCabe, a former FBI deputy director, was due to retire from government and obtain a full pension, but an attorney representing Sessions declined to confirm that.
“In my view, Fox has degenerated from providing a legitimate and much-needed outlet for conservative voices to a mere propaganda machine for a destructive and ethically ruinous administration. When prime-time hosts–who have never served our country in any capacity–dismiss facts and empirical reality to launch profoundly dishonest assaults on the FBI, the Justice Department, the courts, the intelligence community (in which I served) and, not least, a model public servant and genuine war hero such as Robert Mueller–all the while scaremongering with lurid warnings of “deep-state” machinations– I cannot be part of the same organization, even at a remove. To me, Fox News is now wittingly harming our system of government for profit.”
INFLATION, RATES, DEBT AND CREDIT, BALANCE SHEETS
Companies that went on a borrowing binge may default on their debt as interest rates increase and the prospect of a recession grows, according to Scott Minerd, chief investment officer of Guggenheim Partners. After skirting defaults and bankruptcies during the last recession, corporations may not be as lucky this time around, Minerd said in an interview on Bloomberg TV on Wednesday. “There are a lot of companies that are zombie companies that survived the last cycle,” he said. “With rates going up, it will be harder and harder (for them) to stay alive.”
Shares of General Mills and other food makers were slammed after the company warned of higher costs. The company cited higher commodity prices—including grains, nuts and dairy—as well as rising logistics and freight costs. On a conference call, management was contrite for not catching the trend of accelerating inflation earlier, and it outlined plans to respond by cutting costs, reconfiguring logistics networks and raising some prices.
As interest rates rise, U.S. homeowners are losing their incentive to refinance. Applications to refinance a home loan fell 4.5 percent last week, according to data released Wednesday from the Mortgage Bankers Association. That sent the refinancing share of total mortgage activity to 38.5 percent, the lowest since September 2008.
VOLATILITY, BLACK SWANS, LIQUIDITY, TAIL RISKS
The surge in recent weeks in this key global short-term financing indicator may have a mostly technical explanation, meaning it’s probably not flashing warning signals like it was during the credit crunch or the European sovereign debt crisis. Nonetheless, it’s still making funding more costly for some borrowers outside the U.S. The three-month London interbank funding rate rose to 2.27 percent Wednesday, the highest since 2008. The concern is that the Libor blowout may have more room to run, a prospect that borrowers and policy makers in various markets are just beginning to grapple with.
Venezuela’s crude oil output is plunging as the country teeters on the verge of collapse. Additionally, the American Petroleum Institute reported a decent-size weekly decline in US crude inventories.
MACRO OP-EDS, INSIGHT, EVENTS AND TRENDS
The scandal, the latest in Facebook’s tortured history with privacy concerns, has eroded the potential for any of the company’s leaders to ever credibly run for public office. And it’s made Zuckerberg’s Chinese dreams a lot more fraught. One tech investor put it more succinctly: “They’re fucked.”
Your name. Your location. All your friends. Your family. Your work history. Your schooling. Your birthday. Your checkins. Your events. Your hometown. Your likes, photos. Your relationships. Your religion and politics. And not just for you, but for one a half billion other people. Target’s data breach isn’t even in the ballpark.
Not only is the product bad, but the company is in a deep state of denial about it. Mark Zuckerberg and other top leaders believe they are making the world a better place. The labor market for the kind of talented engineers that Facebook needs to hire is robust enough that you can’t compete on the basis of money alone — they need to believe that Facebook is a decent, honorable place to work. But in fact, Facebook is bad. And it probably can’t be fixed. Rumors, misinformation, and bad reporting can and do exist in any medium. But Facebook created a medium that is optimized for fakeness, not as an algorithmic quirk but due to the core conception of the platform. By turning news consumption and news discovery into a performative social process, Facebook turns itself into a confirmation bias machine — a machine that can best be fed through deliberate engineering.
What’s been unfolding for a while now is a rolling catastrophe so obvious we forget it’s happening. Private data are spilling out of banks, credit-rating providers, email providers, and social networks and ending up everywhere. So this is an era of breaches and violations and stolen identities. Big companies can react nimbly when they fear regulation is actually on the horizon—for example, Google, Facebook, and Twitter have agreed to share data with researchers who are tracking disinformation, the result of a European Union commission on fake news. But for the most part we’re dealing with global entities that own the means whereby politicians garner votes, have vast access to capital to fund lobbying efforts, and are constitutionally certain of their own moral cause. That their platforms are used for awful ends is just a side effect on the way to global transparency, and shame on us for not seeing that.
Facebook Inc.’s terrible week may be just the beginning of a backlash against tech companies that could wreak havoc across global markets. Nomura Inc. currency strategist Bilal Hafeez warned that a host of factors, from populism to tighter regulation, are converging to undercut tech stocks at a time when their valuations are near extreme levels. The fallout could sweep far beyond the confines of equity markets, weighing on currencies and benefiting haven assets like the yen, Hafeez wrote in a note published Tuesday.
Mr. Tenanes contemplates the audacity of building a city. “It’s a good thing, right?” he says. Depends how it goes. Facebook is testing the proposition: Do people love tech companies so much they will live inside of them? When the project was announced last summer, critics dubbed it Facebookville or, in tribute to company co-founder Mark Zuckerberg, Zucktown. The company has not warmed to these names. “I owe my soul to the company store,” Tennessee Ernie Ford sang. But Facebook’s ambitions are now confronting a more urgent problem: an escalating crisis over the company’s power to sway elections, its casual approach to data privacy and its susceptibility to Russian manipulation. If Facebook’s image is permanently sullied by the furor over Cambridge Analytica, the data firm hired by President Trump’s 2016 election campaign, Zucktown will falter before it is finished.
Could democracy die in the US? Is a new wave of authoritarianism sweeping the world? Is the west about to be engulfed by civil conflict? Questions such as these would have seemed hysterical as recently as 2015. But they are now the subject of mainstream political discussion. The three books under review here come from academics based at some of the most prestigious universities and think-tanks in the US. They all start from the belief that the democratic system in America is under threat — and that this is part of a broader global crisis.
Trump and Putin are cut from the same cloth. Their strategy is: keep pushing, keep grabbing, keep lying, keep denying, no matter how implausible the denials — and never apologize. Because when you lie on an industrial scale, it overwhelms everyone else. Normal people just don’t behave that way, and the sheer shamelessness eventually exhausts them. That steady erosion of norms is what Trump is doing to America and Putin is doing to the world. And if we let them get away with it, your kids won’t just grow up in a different America, they’ll grow up in a different world.
In the 1930s, fascists railed against “rootless cosmopolitans”. Today’s version of the latter are “globalists”. Anti-Semitism channels hatred of modernity. The biggest spur to this in the US is the Donald Trump effect. According to the Anti-Defamation League, anti-Semitic incidents in America rose by nearly 60 per cent in 2017 — by far the largest jump since it began monitoring. Whether Mr Trump stokes it unwittingly is an open question. That he has had a big impact is undeniable. How else to explain a near doubling of anti-Semitic incidents in US schools in his first year in office? Children mimic grown-ups. Society takes its cues from leaders.
Mr Netanyahu’s florid rhetoric belies his record of aversion to risk. Yet he is fighting for his political life. With US and Saudi hostility to Iran behind him, he may feel he could get away with dramatic air strikes — like those Israel carried out on the Osirak nuclear reactor in Iraq in 1981 and a suspected Syrian nuclear facility in 2007. Alternatively, he might recall the fate of his predecessors who launched wars against Lebanon — Menachem Begin in 1982, Shimon Peres in 1996 and Ehud Olmert in 2006. All of them tumbled from office after wars far less destructive than this catastrophe would be.
Sycamore Partners, owner of Anne Klein, Hot Topic and Nine West, has succeeded where many other investors have stumbled. It’s making money in brick-and-mortar retailing. With Sycamore’s strategy, it isn’t necessary to spruce up a purchased company. The firm often buys struggling retailers and sells off their most valuable pieces. It cuts costs at whatever remains, sometimes using the savings to extract dividends. The firm tells investors its returns “need not depend” on successfully identifying growth opportunities for its retail targets, according to documents for its new fund. Sycamore also extracts returns from clothing chains by acting as a middleman between them and suppliers, using a company it owns to sell inventory to the retailers, sometimes as they struggle to remain solvent, according to industry executives and court filings. As Sycamore and its investors profit, bondholders and retail employees sometimes suffer. Some investors who have lent Sycamore money to buy retailers have been left with less-valuable pieces of businesses as the firm has carved up companies and sold parts.
“The Mittelstand is going to be hit by a wave of succession that will change its face,” says KfW chief economist Jörg Zeuner. This will shake up Germany’s economic backbone: these largely family-owned companies generate more than a third of corporate revenues and provide more than two out of three jobs in Europe’s largest economy. Managing this generational shift will be anything but easy as Germany’s low birth rates since the 1970s have severely reduced the supply of potential successors. The country’s brimming labour market offers plenty of alternative job opportunities and the number of people starting a new company has fallen in recent years.
Even before Trump’s comments, the Defense Department was under orders to formulate a “concept of operations” document for space war fighting, due this June. That exercise will help to inform how the government develops and acquires new space capabilities, Air Force General John Hyten, commander of U.S. Strategic Command, said Tuesday. “We must normalize space and cyberspace as warfighting domains,” Hyten testified before the Senate Armed Services Committee. “There is no war in space, just as there is no war in cyberspace. There is only war, and war can extend into any domain.”
B.S. is a form of persuasion that aims to impress the listener while employing a blatant disregard for the truth, the researchers explained. It can involve language, statistics and charts and appears everywhere from politics to science. This definition closely adheres to the one presented by the philosopher and Princeton emeritus professor Harry Frankfurt in his now-classic 2005 book “On Bullshit.” Dr. Frankfurt explored how B.S. is different than lying because liars know the truth and push it aside while B.S.ers don’t necessarily care about the truth at all. Of course this isn’t new. But false information moves faster and farther these days, thanks to social media.
CENTRAL BANKS & MONETARY POLICY
The Federal Reserve on Wednesday lifted its key interest rate from 1.5 percent to 1.75 percent, the highest level since 2008. The move, the central bank’s first major decision under new Chairman Jerome H. Powell, was widely expected as the U.S. economy continues to strengthen and stock markets remain near record highs. The Fed also significantly boosted its forecast for U.S. growth this year and next. The U.S. economy is on track to expand 2.7 percent this year and 2.4 percent in 2019, Fed officials now say, a jump from their previous projection done before the Republican tax cuts were finalized.
The Fed anticipates hiking rates three times in total in 2018, part of an ongoing move away from the extraordinary measures it took to stimulate the economy during and after the Great Recession. But the central bank opened the door to potentially doing four hikes. Higher rates are likely to be welcomed by savers but not by borrowers, who will face more expensive loan terms.
In its first policy meeting under new Fed chief Jerome Powell, the U.S. central bank indicated that inflation should finally move higher after years below its 2 percent target and that the economy had recently gained momentum. The Fed also raised the estimated longer-term “neutral” rate, the level at which monetary policy neither boosts nor slows the economy, a touch, in a sign the current gradual rate hike cycle could go on longer than previously thought.
Jerome H. Powell, the new Fed chairman, expressed optimism about the current economic picture and said officials were trying to strike a balance between raising rates too slowly or too quickly. “We’re trying to take that middle ground,” he said in a news conference following his first policy meeting as head of the central bank. Mr. Powell, a former Fed governor, succeeded Janet L. Yellen last month.
Brazil’s central bank cut interest rates to a new record low on Wednesday, saying the reduction was driven by the need to stimulate the economy and benign external conditions. Even as the US Federal Reserve raised rates and warned of more increases, Brazil’s central bank cut the benchmark Selic interest rate by 25 basis points to 6.50 per cent.
A decision is now looming for the Hong Kong Monetary Authority on whether to buy Hong Kong dollars before the currency nears the lower end of its trading band, but risk damage to a property market that has a large role in the local economy and has boomed thanks to years of easy money. “HKMA has been warning the local property market here for several years that it can’t expect things to go on forever and people have ignored them,” said Cliff Tan, east Asian head of global markets research at MUFG. “Once they intervene, it will have some knock-on effect on property, although it probably won’t be the death knell.”
Chairman Jerome Powell, picked by Trump to lead the U.S. central bank, said policy makers had not altered their economic outlook following the president’s announcement of trade tariffs on steel and aluminum and threats of measures against Chinese goods. But officials reported hearing worries from business leaders. “A number of participants in this FOMC did bring up the issue of tariffs,” Powell said on Wednesday after leading a Federal Open Market Committee meeting for the first time. A number of Fed officials have gathered from business leaders that “trade policy has become a concern going forward for that group,” he said.
Russia’s central bank has barely made a dent in the real cost of borrowing despite chopping nominal interest rates by 250 basis points over the last year because inflation has plunged just as fast. Another rate cut is on the cards again, especially with economic growth failing to gain traction. As inflation clings to the lowest level in Russia’s modern history, all but one of the economists polled by Bloomberg predict the fifth straight decrease on Friday. “Monetary conditions tightened despite the nominal cutting cycle as the Bank of Russia has fallen further behind the curve,” said Goldman Sachs Group Inc. economist Clemens Grafe. “However, this should now be in the past and real rates should fall.”
USA ECONOMY DATA, CITIES AND STATES
Here are some of the worrying statistics via Trulia: In the first quarter of 2018, the inventory of starter homes — the cheapest, smallest homes that first-time buyers can usually afford — was down 14.2% from a year ago. New residential construction in the US rose to a 10-year high last year, but that’s not been sufficient to meet the demand for starter homes. Meanwhile, mortgage rates are on the rise, although they’re still well below levels that prevailed in the 1980s and 1990s.
Homebuyers in the U.S. have plenty to grouse about these days. Prices have climbed steeply in many metro areas, mortgage rates are rising and inventory is thin. But for people looking to purchase their first home, it’s ugly out there. “Starter homes have become scarcer, pricier, smaller, older and more likely in need of some TLC” than they were six years ago, the real estate website Trulia reported Wednesday after analyzing housing stock across the country. Trulia began tracking prices and inventory in 2012.
Sales of previously owned U.S. homes rose strongly in February, overcoming stiff headwinds from a shortage of inventory and rising mortgage rates and home prices. Existing-home sales increased 3% in February from the previous month to a seasonally adjusted annual rate of 5.54 million, the National Association of Realtors said Wednesday. Compared with a year earlier, February sales were up 1.1%.
POSITIONING, INFLECTION, MARKET CALLS
We’ve been here before. In late 1999, just before the dot-com bubble bust, technology stocks accounted for just more than 29 percent of the S&P 500 Index. They are nearly back to that point, now accounting for just more than 25 percent of the S&P 500. But that doesn’t include Amazon.com Inc. or even Netflix Inc., which S&P Dow Jones Indices classify as consumer discretionary stocks. Include Amazon and Netflix, and tech’s share of the S&P 500 total market cap rises to 28.6 percent.
Emerging market equity funds have made a record-breaking start to the year, with net inflows of $44.5bn as of mid-March, according to figures from EPFR Global, a data provider, even as demand for EM bonds has hit a “near halt”. The dramatic rotation is a sign that investors remain upbeat about global and emerging market growth, bolstering equities, but fear bond prices may be undermined by the knock-on effect of tighter monetary policy in the US.
COLOR, EARNINGS, SENTIMENT, VALUATIONS
Less than a week after the bank sounded a bullish tone, a Deutsche Bank AG executive poured cold water on investors again.
Chief Financial Officer James von Moltke said at a Morgan Stanley conference Wednesday that the euro’s gain against the dollar will reduce revenue at the bank’s securities unit by about 300 million euros ($368 million) this quarter compared to a year ago, calling the effect a “headwind.”
French luxury group Hermès, best known for its silk scarves and Birkin and Kelly handbags, has reported record profitability in 2017 and proposed to pay an exceptional dividend in recognition of an “exceptional year.” On Wednesday Hermès announced that operating income grew 13 per cent in 2017 to €1.92bn, with an all-time high operating margin. Net profit increased 11 per cent to €1.22bn.
DEALS, MERGERS, IPOs, LBOs, RESTRUCTURINGS
Chinese companies are taking advantage of America’s financially strapped higher-education system to buy schools, and the latest deal for a classical music conservatory in Princeton, New Jersey, is striking chords of dissonance on campus. The pending purchase rankles some faculty and alumni, who question what a longtime maker of steel spans knows about running an elite school whose choirs sang with maestros Leonard Bernstein, Arturo Toscanini and Seiji Ozawa. Alumni are among those suing in New York federal court to block the sale.
In a securities filing Wednesday, Dropbox said it expects its shares to price between $18 and $20 each, compared with the $16 to $18 range the company expected earlier in the month. At the midpoint of the new range, based on a fully diluted share count, its valuation would be $8.32 billion, above the previous estimate of $7.44 billion but well below the $10 billion valuation reached when it raised private capital in 2014.
Salesforce Inc. agreed to buy MuleSoft Inc. for about $6.5 billion in its largest-ever acquisition, as the market leader in customer-relationship software makes an aggressive play for new products and corporate users. San Francisco-based Salesforce is paying $36 in cash and 0.0711 shares of its common stock for each MuleSoft share, according to a statement. That’s 36 percent more than MuleSoft’s closing share price on Monday. Salesforce said the $6.5 billion total price represents MuleSoft’s enterprise value.
Multiple sources tell us that Google is acquiring Lytro, the imaging startup that began as a ground-breaking camera company for consumers before pivoting to use its depth-data, light-field technology in VR. The sale would be far from a big win for Lytro and its backers. The startup has raised just over $200 million in funding and was valued at around $360 million after its last round in 2017, according to data from PitchBook.
HEDGE FUNDS, PRIVATE EQUITY, MONEY MGMT
Tilson’s introspection is uncommon for those in the hedge fund business, where self-confidence and salesmanship are as important to success as any investing prowess. As Tilson readily admits, managers cannot afford to be frank while they are going through turmoil, lest they further hurt their business — and their investors. But there’s another reason for Tilson’s uncommon openness: His experiences, both positive and negative, have led him to create a whole new business, turning Kase Capital into Kase Learning. From a small conference room at the New York Athletic Club, Tilson has started teaching the perils and profits of investing in general — and running a hedge fund specifically — to aspiring youngsters who don’t come out of big seeding platforms like Julian Robertson’s Tiger Management or a multibillion-dollar hedge fund.
ENERGY COMPANIES, NOCs, INDUSTRY
“The results look especially poor largely because of the exaggerated rhetoric — the ‘energy dominance’ rhetoric — that is the calling card of this administration’s energy policy,” said Michael Bromwich, a lawyer who was the first director of the Bureau of Ocean Energy Management under the Obama administration. “If they hadn’t unrealistically hyped expectations, the results would be less disappointing.”
ENERGY CRUDE OIL, OIL SANDS, SHALE
Weekly crude imports from seven OPEC members fell 14 percent to 1.86 million barrels a day last week, the lowest level since the Energy Information Administration began collecting weekly data in 2010. Compared with monthly data, it’s the lowest level since 1987. The decline comes as the Organization of Petroleum Exporting Countries and its allies make significant strides in trimming a global supply glut. The group saw record compliance with production-cut targets in February.
ENERGY RENEWABLES, NUCLEAR
After decades of prompting coal as the guarantor of national energy security, Poland, Europe’s fourth-biggest greenhouse-gas polluter, is shifting to embrace wind power. The moves reflect a plunge in the cost of wind turbines and rising costs for emissions permits. With the European Union determined to clamp down on climate-damaging fossil fuels, even the most polluting utilities are starting to look at how to clean up their industries. “Cheaper renewables are a positive development, while rising CO2 prices are negative because they take away the funds that we could otherwise invest in green sources,” Morawiecka said in an interview. “The investment choice is simple for us: we’re heading toward the cheaper scenario.”
COMMODITIES BASE METALS, MATERIALS
One by one, the biggest names in African mining are getting squeezed. The tactics might be blunt, but the message is clear: the countries where they operate want a bigger share of the proceeds. The collapse in commodities through 2015 hobbled some of Africa’s biggest resource economies, stunting growth and leaving budgets short. Since then a recovery in prices has sent the continent’s biggest miners soaring, boosted profits and rewarded shareholders with bumper payouts. But a lack of returns to governments is drawing a backlash from Mali in the Sahara to Tanzania on the Indian Ocean.
POLLUTION, CLIMATE & ENVIRONMENT
Bird populations across the French countryside have fallen by a third over the last decade and a half, researchers have said. Dozens of species have seen their numbers decline, in some cases by two-thirds, the scientists said in a pair of studies – one national in scope and the other covering a large agricultural region in central France. “The situation is catastrophic,” said Benoit Fontaine, a conservation biologist at France’s National Museum of Natural History and co-author of one of the studies.
Tuberculosis, a disease that until recently seemed to be under control in Venezuela, is making an aggressive comeback, overwhelming a broken health care system ill equipped for its return, doctors and infectious disease specialists say. The illness — like malaria, diphtheria and measles — has surged in Venezuela during a profound economic crisis that has battered almost every aspect of life and driven an exodus of Venezuelans, including many experienced doctors.
Hoping to stave off another deadly outbreak of yellow fever, Brazil’s government announced on Tuesday that it planned to vaccinate the entire country against the mosquito-borne virus by April 2019. The country of 208 million is grappling with the worst outbreak of yellow fever in decades. So far this year, 300 people, including several tourists, have died from the virus, which has hit the outlying areas of the country’s largest cities, Rio de Janeiro and São Paulo, particularly hard, threatening to become this country’s first-blown urban epidemic since 1942.
BREXIT, SCOXIT, LONDON, UK ECONOMY
The eurozone’s top financial supervisors have told banks to keep planning for Brexit without any transition arrangements, despite this week’s deal to delay the UK’s exit from the EU’s single market. The region’s banking authorities are maintaining a deadline of the end of June for groups with operations in the UK to apply for eurozone banking licences as part of possible relocation plans to deal with Brexit.
Large digital companies operating in the European Union, such as Alphabet Inc. and Twitter Inc., could face a 3 percent tax on their gross revenue based on users’ locations, according to a plan by the European Commission. The proposal by the EU’s executive arm outlines how a targeted levy on sales would increase the tax bill technology companies face, as the bloc seeks to raise money from an industry it says provides less than it should to public coffers. It follows calls by several countries led by France and Germany to look into methods to tax the firms, including Amazon.com Inc. and Facebook Inc., in a way that better captures the true value created in the region.
European policymakers are suggesting a new tax on tech giants such as Facebook Inc. and Alphabet Inc.’s Google in a measure that could raise $6.2 billion through what advocates say would be a fairer way of taxing how the companies make their money. The proposal, unveiled Wednesday, would tap into digital titans’ revenues in countries where they have the bulk of their users and customers, imposing a 3% tax on income from online advertising, the sale of user data and the connecting of users to one another.
China will permit foreign companies to access its $27 trillion payments market, further opening up the world’s second-largest economy. Foreign players can start applying for payment licenses and will be treated the same as local firms, the People’s Bank of China said in a statement on Wednesday. Applicants must set up local units, establish payment infrastructure — including disaster recovery systems — and store client information domestically, the central bank said.
Chinese President Xi Jinping moved to further entrench the Communist Party’s dominance with an order to eliminate some government bodies and strengthen the party’s control over decision-making in areas including foreign affairs and religious policy. A lengthy directive released on Wednesday follows up on a government restructuring announced last week and takes aim at a system of parallel and often duplicate party and state bureaucracies that has been in place for decades.
Chinese films, television shows and newspapers are already heavily controlled and censored by the Communist Party, but control of entertainment and news is likely to deepen. Under the new plan, the party’s Department of Propaganda will take direct control of film, the news media and publications from the State Administration of Press, Publication, Radio, Film and Television, a government agency. In effect, the thin partition that had separated the Communist Party from direct oversight of film production and imports of foreign films has been stripped away.
Television broadcaster CCTV and two state radio platforms, China Radio International (CRI) and China National Radio, will merge to become one platform charged with spreading China’s message beyond its borders, according to Chinese state media. The new entity will be called “Voice of China”, after the US government-funded “Voice of America”, according to a person familiar with the matter.
GEOPOLITICS, CRIME, TERRORISM
A suicide bomber detonated explosives in a crowd celebrating the Persian New Year in Kabul, Afghanistan, on Wednesday, killing 31 and leaving desperate family members searching among bodies and body parts for their loved ones’ remains. The victims were strewn around the courtyard in front of the Ali Abad Hospital in Kabul, where relatives preparing for burials tried grimly to match trunks with limbs or heads with trunks, and doctors searched for anyone with a pulse. While it was hard to know for sure, there were at least 10 dead just in that area, plus limbs, hands, and other pieces of flesh that were impossible to identify.
The acknowledgment of the destruction of the Syrian reactor “sends a clear message: Israel will never allow nuclear weapons to countries like Iran who threaten its existence,” Israel Katz, the country’s intelligence minister, wrote on Twitter. His comments came after the Israeli military disclosed for the first time details about the 2007 operation, releasing previously classified information, pictures and video of the airstrikes.
The destruction of the nuclear plant in 2007 was well known in the rest of the world, but the Israeli news media was banned from reporting on it until now. International tension has been mounting over Iran’s nuclear ambitions, which were supposed to have been contained by a 2015 agreement with the United States and its European allies. Mr. Netanyahu has criticized that deal as a historic mistake and Israel has set off alarms about Iran’s growing influence in Syria, where it is a key ally of Syrian President Bashar al-Assad in the country’s seven-year civil war.
Japan’s ruling party called for the nation to develop its own aircraft carrier and buy American F-35B fighter jets in response to what it described as aggressive Chinese actions. Tuesday’s proposal from the Liberal Democratic Party’s defense panel, if adopted, would be the latest step by the government of Prime Minister Shinzo Abe to beef up defense of outlying islands, including those also claimed by Beijing. In the eyes of China and Mr. Abe’s opponents at home, it would also be a worrying further step away from the country’s postwar pacifism.
A State Department official on Wednesday reasserted America’s commitment to Taiwan’s defense at a dinner attended by its president, a day after China’s leader issued a stern warning against any challenges to China’s claim to the island. “The aim of U.S. policy is to ensure that Taiwan’s people can continue along their chosen path, free from coercion,” the official, Deputy Assistant Secretary of State Alex Wong, said at the banquet in Taipei, Taiwan’s capital, as President Tsai Ing-wen looked on.
“Five Star and the League are the new top players in Italian politics, and these negotiations on the speakers demonstrate that,” said Giovanni Orsina, professor of government at Luiss University in Rome. “They fought in the campaign and now they’re talking directly, the give-and-take is starting. But it’s by no means automatic that either will get into government, the stakes are different.”
The former head of the American Nazi Party ran for the Republican nomination of Congress in Illinois’ 3rd Congressional District. No Republican stepped up to oppose him. On Tuesday, despite his vocal Holocaust denial, his anti-Semitic rhetoric, and his white supremacist views, 20,339 Illinois Republicans, according to preliminary totals, cast their ballots for Arthur Jones.
The Federal Election Commission on Wednesday sent a letter to Nunes’ campaign committee, raising red flags about some particular contributions received in 2017. The letter, sent to Nunes’ campaign treasurer and mother Toni Dian Nunes, requested “information essential to full public disclosure” about three potentially illegal contributions.
Less than three weeks before Hungary’s general election, an NGO that works with migrants accused the ruling Fidesz party on Wednesday of working with foreign spies to discredit civil society groups. Prime Minister Viktor Orbán’s government branded the allegation by the Migration Aid nonprofit “pathetic.”
After less than two years in office, Peru’s embattled president, Pedro Pablo Kuczynski, offered his resignation on Wednesday, a day after the release of videos that showed key allies trying to buy the support of opposition lawmakers. Mr. Kuczynski had spent months fighting off attempts to oust him, and he had vowed not to resign. But he faced an impeachment trial set for Thursday, which he appeared likely to lose, and the release of the videos made his decision inevitable.
SCANDALS, LAWSUITS, FINES, REGULATORY
Nicolas Sarkozy was on Wednesday evening charged with corruption, illegal campaign financing and receiving Libyan public funds, according to local media. The former French president was taken into police custody on Tuesday to be questioned about allegations that part of his victorious 2007 campaign was illegally financed by Libya’s then-government. The allegations have plagued Sarkozy ever since 2012, when the news website Mediapart published a document alleged to emanate from the former head of the Libyan secret services, promising Sarkozy some €50 million for his campaign.
SILICON VALLEY, UNICORNS, STARTUPS, VC
When he was chief executive of ride-hailing company Uber Technologies Inc., Travis Kalanick worked to reduce the need for parking lots. Now he’s making a business out of them. Mr. Kalanick, who stepped down as Uber CEO last June under pressure from investors, said Tuesday he is investing $150 million into distressed real-estate outfit City Storage Systems LLC where he will take the top job. CSS redevelops parking lots as well as real estate for retail and industrial uses like those for food services, he said on Twitter.
MEDIA, CABLE, SPORTS, ENTERTAINMENT
The price of the Carolina Panthers has reached $2.5 billion, according to people familiar with bids for the NFL team, which would set a record for a U.S. professional sports franchise. The rapid escalation in bidding has prompted Michael Rubin, the billionaire executive chairman of sports-apparel company Fanatics, to drop out of the process, said the people, who requested anonymity because the matter is private.
The board of MGM Holdings Inc. abruptly fired Chief Executive Gary Barber amid disagreement over whether the Hollywood studio was well-positioned for growth, according to people close to the company. Mr. Barber’s termination Monday came five months after the board renewed his contract, and without a designated successor. The longtime studio chief was blindsided by the news, one of the people said.
Bloomberg is among potential acquirers who have circled Fortune magazine, The Post has learned. A deal to sell the storied financial title — founded by Henry Luce in 1929 — could come in the next few weeks, according to one source. Others, however, cautioned that a quick sale was not guaranteed, saying the negotiations were fluid.
“As a talk radio host, I haven’t used a Breitbart story in at least six months,” said conservative commentator Erick Erickson in an email. “They have a lot of readers and lot of people reading by habit, even if not as many. But they seem less able to stimulate a conversation or move an agenda now.”
AUTOS, ELECTRIC, SELF-DRIVING
BMW AG’s profit growth is at risk of stagnating for the first time in a decade this year as the luxury carmaker ramps up already high investments in new models and electric vehicles.
Musk needs to hit 12 market capitalization milestones and 16 revenue or earnings before interest, taxes, depreciation and amortization targets in order to vest the entire award. Tesla has to reach a market cap of $100 billion for the first tranche to vest, and then each of the remaining 11 tranches require an additional $50 billion in market value
Experts say that the sophisticated sensors on the autonomous vehicle almost certainly detected the woman pushing her bicycle laden with bags along the median, close to the road. But it’s possible the car’s lidar and radar sensors, which scan the surroundings for objects, may not have realized it was detecting a person. (Uber declined to comment.)
AEROSPACE, MILITARY & DEFENSE
India, which sent an orbiter to Mars at about 1/10th the cost of NASA’s Maven probe, is examining how to build habitations on the moon. India’s declaration — just ahead of a planned lunar mission — comes at a time when governments are looking at the moon for the first time in years. In the U.S., President Donald Trump requested almost $900 million in new funding for NASA moon missions, which include building a space station in lunar orbit by the mid-2020s. China this year plans to land a probe on the unexplored dark side of the moon, where radio signals from Earth can’t be received.
LUXURY, HIGH END, ASPIRATIONAL
Christie’s, which is holding auctions of watches and post-war and contemporary art this week in Dubai, expects to build on a “strong art market” this year, with the Middle East playing a “very important” role, Chief Executive Officer Guillaume Cerutti said. “Let’s say the basics are very positive and we are on very strong and safe grounds this year,” Cerutti said Wednesday in an interview.
ARTIFICIAL INTELLIGENCE, DRONES, FUTURE TECH
On Wednesday, the Association for Computing Machinery, the venerable computing society that represents industry professionals across the world, announced that Mr. Patterson and Mr. Hennessy had won this year’s Turing Award, often called the Nobel Prize of computing. They will share a $1 million cash prize. “This is the one fundamental idea that has been sustained over the last several decades of chip design,” said Dave Ditzel, a chip industry veteran who studied with Mr. Patterson at Berkeley. Mr. Ditzel helped popularize many of the same ideas and is now building a new RISC chip at a start-up called Esperanto.
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