Macro Links Mar 23rd – Let Slip the Dogs of War
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MACRO LINKS TABLE OF CONTENTS (Click or Scroll Down)
- TRADE WAR SELL-OFF
- FACEBOOK, REGULATORY RISK
- BITCOIN, CRYPTOCURRENCY, INITIAL COIN OFFERINGS
- BLOCKCHAIN, FINTECH, DIGITAL PAYMENTS
- FOREX, CARRY TRADES, EXCHANGE RATES
- TRADE, PROTECTIONISM, REGULATION, OVERSIGHT
- BUDGET, INFRASTRUCTURE, HEALTHCARE, IMMIGRATION
- GUN CONTROL, POT BOOM, OPIOIDS, PUBLIC POLICY
- RUSSIA MEDDLING, RUSSIA PROBE, TRUMP WORLD
- KOREAN PENINSULA, MIDDLE EAST, NUCLEAR WEAPONS
- 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
- GLOBAL ECONOMY, INTERNATIONAL
- COLOR, EARNINGS, SENTIMENT, VALUATIONS
- DEALS, MERGERS, IPOs, LBOs, RESTRUCTURINGS
- ENERGY RENEWABLES, NUCLEAR
- POLLUTION, CLIMATE & ENVIRONMENT
- BREXIT, SCOXIT, LONDON, UK ECONOMY
- GEOPOLITICS, CRIME, TERRORISM
- SCANDALS, LAWSUITS, FINES, REGULATORY
- RETAIL APPAREL, SPECIALTY, DINING, BIG BOX
- MEDIA, CABLE, SPORTS, ENTERTAINMENT
- AUTOS, ELECTRIC, SELF-DRIVING
- LUXURY, HIGH END, ASPIRATIONAL
- ARTIFICIAL INTELLIGENCE, DRONES, FUTURE TECH
- SCIENCE, NATURE, PSYCHOLOGY
TRADE WAR SELL-OFF
Thursday’s selling, which sent shares of manufacturers, aluminum producers and steelmakers sharply lower, culminates months of growing investor anxiety over U.S. trade policy. It came as many say the market was already under pressure, gripped by concern over rising interest rates and sliding technology shares. Trade tensions ratcheted higher as the Trump administration said it would impose tariffs on tens of billions of dollars of Chinese imports on top of duties on steel and aluminum imports, provoking the ire of officials from China to Germany to Mexico.
For the second time this month, U.S. equities sold off and investors sought havens after the Trump administration announced plans to impose sweeping levies that threaten to rewrite the rules of global trade. While the threat of rising interest rates and some company-specific angst added to market anxiety, selling was heaviest in sectors most likely hurt by the simmering trade war.
FedEx Corp. tumbled the most in five years as President Donald Trump’s order to impose tariffs on at least $50 billion in Chinese imports stoked fears of weaker trade flows. FedEx, which operates the world’s largest cargo airline, has a bigger presence in Asia and China than United Parcel Service Inc., having gained a major foothold through its 1989 acquisition of Tiger International Inc. FedEx also has a larger international air network than its rival.
Boeing Co. is heading for its biggest monthly decline in two years as U.S.-China tensions over tariffs threaten a wider trade war that would stifle demand for its airliners. President Donald Trump’s plan for sweeping duties against China heightens uncertainty for Boeing, which is poised to generate a torrent of cash from a record commercial backlog. The Chicago-based planemaker would suffer if a trade war spills over into the global economy and hurts air-travel growth.
US businesses responded with alarm to President Donald Trump’s announcement of wide-ranging tariffs on imports from China, warning that they would raise costs for American consumers and risked provoking a damaging trade war. As US shares dropped in response to the tariffs on Thursday, some of the worst-hit companies were US exporters, including Boeing and Caterpillar, because of fears that China would take retaliatory measures.
The Trump administration unveiled plans to slap 25 per cent tariffs on up to $60bn in annual imports from China, in response to a finding that Beijing had pursued a strategy of unfairly acquiring US intellectual property. Harm Bandholz, chief US economist at UniCredit, said the tariffs would mean “US consumers will face higher prices, while domestic businesses will feel negative consequences from the tariffs’ effects on value chains, a potentially stronger dollar, and likely retaliation by China”. Andrew Hunter, US economist at Capital Economics, argued that the tariffs outlined by President Trump would not have a huge impact on the US economy, even if implemented in full — adding that he suspected they would end up being watered down. “But as the market reaction highlights, there is a clear risk that sentiment continues to deteriorate. And the damage from a further escalation of the trade conflict with China could be much greater.”
China’s ambassador, Cui Tiankai, called the US’s accusations of IP theft “totally groundless” and also warned that Beijing would stand up for itself. “We don’t want a trade war,” he said. “But we are not afraid of it . . . We will certainly fight back and retaliate. If people want to play tough, we will play tough with them and see who will last longer.”
Export-related jobs are everywhere, which means many of America’s cities have a lot to gain — and a lot to lose. America’s largest cities have big and diverse economies, including sources of economic growth that can’t be traded with other countries, such as tourism or government. But small towns are much more likely to have specialized in one or two industries that are tied to trading abroad. The Brookings data ranks the cities that are most dependent on exports and with the most export-related jobs. Small Midwestern cities that export auto parts and other manufactured goods appear high on the list, as do coastal cities that export chemicals and petroleum byproducts.
“People want to believe tariffs are good for U.S. steelmakers, on the other side of the coin they see exemptions and potential for demand uncertainty due to supply disruptions,” Phil Gibbs, an analyst at Keybanc Capital Markets, said by telephone. “Now there’s exemptions unfolding and the gap is enormous. There’s only one place for prices to go and that’s down.”
The fortunes of the world’s 500 richest people tumbled $71 billion on Thursday as markets plunged on heightened prospects for a trade war. Berkshire Hathaway Inc. Chairman Warren Buffett led with a $3.02 billion decline, followed by $3.01 billion for Amazon.com Inc.’s Jeff Bezos. Tencent Holdings Ltd.’s Ma Huateng lost $2.16 billion, the most among Asia’s richest.
FACEBOOK, REGULATORY RISK
The resulting backlash is Facebook’s worst crisis since it was founded by Mr. Zuckerberg and others in 2004. The information, photos and other content that users post and their frequent engagement with the platform is crucial to the social network, and to the company’s profitability. Questions about user privacy and security threaten the company’s standing at a time when people are already uneasy about whether the use of technology can bring good or ill.
The House Energy and Commerce Committee on Thursday said a briefing from Facebook officials had left many questions unanswered. “Mr Zuckerberg has stated that he would be willing to testify if he is the right person. We believe, as CEO of Facebook, he is the right witness to provide answers to the American people,” it said.
Facebook is contending with a groundswell of users—some of whom are tweeting under the hashtag #DeleteFacebook—who claim to be abandoning the social-media giant, prompting some analysts to warn that its growth juggernaut could sputter. “The biggest issue we see for Facebook is if the DeleteFacebook leads to user attrition and eventually ad dollars allocated elsewhere,” Barclays analysts said in a research note Tuesday. The public backlash also could impinge on Facebook’s ability to recruit talented engineers, they said.
The company has lost more than $50 billion in market value since allegations this week that Cambridge Analytica improperly accessed data to build profiles on American voters and influence the 2016 presidential election. On Thursday, Facebook executives were still saying sorry.
Republicans on the House Intelligence Committee voted down a Democratic proposal to hold a hearing with Facebook’s Mark Zuckerberg and other tech CEOs, according to the panel’s ranking member, Adam Schiff. The Democratic effort came amid a firestorm over revelations that Trump-linked Cambridge Analytica improperly obtained information on some 50 million Facebook users. Schiff, however, said House Intel Democrats are finalizing plans for an interview with Christopher Wylie, the whistleblower in the Cambridge Analytica case.
BITCOIN, CRYPTOCURRENCY, INITIAL COIN OFFERINGS
While agreeing that bitcoin will endure for a long period of time, Snowden argued that he does not believe “bitcoin will last forever.” “Everybody is focused on the transaction rate limitations of bitcoin being its central flaw, and that is a major one,” he said, adding that, actually, “the much larger structural flaw, the long-lasting flaw, is its public ledger.” The whistleblower further explained that the existing mechanism of the bitcoin blockchain has the problem of balancing recording every transaction history with attempting to scale its capacity in processing these transactions. “That is simply incompatible with having an enduring mechanism for trade, because you cannot have a lifelong history of everyone’s purchases, all of the interactions be available to everyone and have that work out well at scale,” he told the audience.
The brother of late Columbian drug lord Pablo Escobar, Roberto Escobar, has released his own alternative to Bitcoin (BTC), a BTC hard fork called dietbitcoin (DDX). Roberto De Jesús Escobar Gaviria’s website for dietbitcoin includes a 281 page book, available as a downloaded PDF, entitled “The True Story by Roberto Escobar: Pablo Escobar’s Dietbitcoin” and subtitled, “After making $100 bln dollars, Roberto Escobar launches the dietbitcoin ‘DDX’ cryptocurrency.”
The Saga token aims to avoid the wild price swings of many cryptocurrencies by tethering itself to reserves deposited in a basket of fiat currencies at commercial banks. Holders of Saga will be able to claim their money back by cashing in the cryptocurrency. The currency also aims to avoid the anonymity afforded by bitcoin, which has raised financial crime concerns with regulators and bankers. Saga will require owners to pass anti-money laundering checks and allow national authorities to check the identity of a holder when required.
As Bitcoin surges in popularity, global regulators have increasingly sounded alarms that crypto investments are susceptible to fraud, theft or even worse. U.S. lawmakers seem less concerned, as they are about to cut the funding of an agency that just took on the responsibility of policing Bitcoin futures.
Add a top U.S. financial regulator to the list of people concerned that lightly policed cryptocurrency markets make easy targets for manipulators. Warding off market cheaters in digital currencies is among the Securities and Exchange Commission’s major concerns as it monitors those assets, according to Brett Redfearn, head of the regulator’s Division of Trading and Markets. “We are concerned about a lot of the issues around manipulation, whether it’s spoofing, or any other forms of market manipulation that are out there,” he said Thursday at an event in New York. “Spoofing, front running, wash trading, pump-and-dump, insider trading — there’s a question of, how are they being watched out for?”
It is unclear whether the bitcoins were bought at market prices, but at press time the combined total value of the bitcoins was roughly $18.7 million. Forty-two bidders registered for the auction, and 39 bids were received, the spokesperson said.
Bitcoin mining firm Hut 8 is officially setting up shop in Alberta, Canada. The Bitfury-backed company announced Monday that it had secured a deal with the city of Medicine Hat to both lease land and receive 42 megawatts of electrical power for a new mining facility. In turn, Hut 8 will inject $100 million into the local community by way of a construction project.
A looming regulatory rebuke for one of the world’s largest cryptocurrency exchanges is giving Bitcoin investors the jitters. The digital currency sank 4.4 percent to $8,506 on Thursday after Japan’s Financial Services Agency was said to be planning to tell Binance, the trading venue founded by Zhao Changpeng, to stop operating in the country without a license. Binance has several staff in Japan and has been expanding without official permission, a person familiar with the FSA’s plans said.
BLOCKCHAIN, FINTECH, DIGITAL PAYMENTS
Blockchain Capital has raised $150 million in its fourth fundraising round, raising the total value of assets under the venture capital firm’s management to $250 million. San Francisco-based Blockchain Capital’s portfolio already includes fintech companies such as Coinbase, Ripple, Circle, and Kraken. It has long been one of the blockchain industry’s leading firms, investing in 72 companies, tokens and protocols since it was founded in 2013.
American multinational tech company IBM has announced the launch of their new IBM Blockchain Starter Plan (in Beta) as a way facilitate more Blockchain use in businesses of any scale, according to an IBM blog post from March 16 and the 72 hour live stream from conference Think 2018 today, March 21. The IBM Blockchain Starter Plan will be free for the duration of its Beta version, but then will have a 30 day free trial once the plan becomes fully implemented. As CNBC reported today, the starter plan is a “cheaper alternative to Big Blue’s current enterprise plan for firms looking to develop blockchain applications.”
China’s Shenzhen Exchange has announced its intention to crack down on businesses misleading investors by seeking to associate themselves with so called “distributed ledger technology”, or “blockchain”. The trend of making dubious claims of embracing blockchain innovation to boost stock prices appears to have begun to take off in mainland China. According to China Money Network, “More than 20 listed companies have been questioned by the Shenzhen and Shanghai exchanges about their suspicious speculation on blockchain.”
Chinese e-commerce giant JD.com has today unveiled a white paper detailing its next big step into the blockchain industry. Drawn up by JD’s blockchain technology and application center, the white paper outlines a variety of verticals that the firm will target with the launch a new blockchain-as-a-service (BaaS) platform.
According to a patent originally filed in September 2017, plans are underway to create a so-called “tamper-evident” ledger on the basis of Blockchain. At the same time, Google’s Alphabet Inc. conglomerate is looking to utilize the technology to create a transparent audit review platform, Bloomberg reported March 21 citing anonymous sources at the company.
The US bank developed Quorum as its own customised version of blockchain technology over two years ago, in an effort to make many of its operations — such as clearing and settlement of derivatives and cross-border payments — more efficient. The expected spin-off of Quorum underlines how banks have grappled with how to harness blockchain technology, which uses a distributed ledger system to share information across a network of computers protected by cryptography. The change in approach by JPMorgan is particularly sensitive because chief executive Jamie Dimon has been one of the most outspoken critics of bitcoin, the cryptocurrency that is based on blockchain technology.
FOREX, CARRY TRADES, EXCHANGE RATES
For Wells Fargo, the prospect of a trade war poses a risk for its broader 2018 outlook, which is for a weaker U.S. currency. What it boils down to is their view that a wave of protectionism could lead to narrower American trade deficits, feeding through into dollar strength. “We are of the view that any sort of trade war scenario would likely be dollar-positive,” said Erik Nelson, a currency strategist at the bank. “The U.S. economy is probably positioned to be hurt the least in such a scenario and the U.S. dollar has shown some risk-off behavior in recent months.”
TRADE, PROTECTIONISM, REGULATION, OVERSIGHT
“China would fight to the end to defend its own legitimate interests with all necessary measures,” China’s embassy in Washington said in a statement late Thursday. “China is not afraid of and will not recoil from a trade war… We urge the US to cease and desist, make cautious decisions, and avoid placing China-U.S. trade relations in danger with the purpose of hurting others that eventually end up hurting itself,” the statement said.
Chinese officials, facing punitive U.S. trade policies that are set to be announced Thursday, are preparing to respond with their own tariffs focused on U.S. exports of soybeans, sorghum and live hogs, according to the people with knowledge of the matter. The U.S. is among the top suppliers of these products to China.
China announced plans for reciprocal tariffs on $3 billion of imports from the U.S., including products from steel to pork, after President Donald Trump’s move to order levies on a range of Chinese goods sent markets plunging. China plans to take legal action against the U.S. under the World Trade Organization framework, the Commerce Ministry said in a statement Friday. It plans a 25 percent tariff on U.S. pork imports and 15 percent tariffs on American steel pipes, fruit and wine, the statement said.
President Trump put China squarely in his cross hairs on Thursday, imposing tariffs on as much as $60 billion worth of Chinese goods to combat the rising threat from a nation that the White House has called “an economic enemy.” The measures are Mr. Trump’s strongest trade action yet against a country that he says is responsible for thousands of lost American jobs and billions in lost revenues. Financial markets plunged on fears of a potential trade war between the world’s two largest economies, with the Standard & Poor’s 500-stock index dropping by 2.5 percent.
The Trump administration said Thursday that it would exempt some allies from stiff steel and aluminum tariffs that go into effect on Friday, but in a twist, the administration may impose import quotas to prevent too much foreign metal from flooding into the United States. The shift in strategy reflects a few chaotic weeks in which foreign governments lobbied, cajoled and threatened Washington to win exemptions from the 25 percent tariffs on steel and the 10 percent tariffs on aluminum.
Concerns that China could curtail its buying of U.S. agricultural goods have already weighed on crop and livestock markets in recent weeks. Lean hog futures fell almost 10% over the past week. Soybean futures have also fallen. “Bottom line, we’re terrified,” said Brian Grossman, a market strategist at Zaner Group in Chicago who used to farm in North Dakota. “It’s not going to be good for the American farmer.”
BUDGET, INFRASTRUCTURE, HEALTHCARE, IMMIGRATION
The House gave swift approval on Thursday to a $1.3 trillion spending bill that would fund the government through September, shaking off the objections of its most conservative members and voting less than 24 hours after the 2,232-page document was unveiled. With government funding set to expire at midnight Friday, the focus is now on the Senate, whose approval is needed to avert what would be the third government shutdown of the year.
In the Senate, attention was focused on Sen. Rand Paul (R., Ky.) who triggered a brief government shutdown last month when he objected to a budget deal that set the overall levels for the current fiscal year, which ends Sept. 30, and the next one. Mr. Paul declined to say whether he would block the Senate from speeding up its time-consuming procedures. Other senators said Mr. Paul could delay but not block the bill’s passage. “I know how the movie ends,” said Sen. Lindsey Graham (R., S.C.) “No matter what he does, we’re going to pass this bill and the military’s going to get a pay raise and more funding and that’s a good thing.”
GUN CONTROL, POT BOOM, OPIOIDS, PUBLIC POLICY
Lyft Inc. is offering free rides on Saturday in support of “March For Our Lives,” a gun control rally organized by survivors of the Parkland shooting. The San Francisco-based ride-hailing company partnered with event organizers and committed as much as $1.5 million in free rides to any of the 50 cities participating in the demonstration.
Citigroup is setting restrictions on the sale of firearms by its business customers, making it the first Wall Street bank to take a stance in the divisive nationwide gun control debate. The new policy, announced Thursday, prohibits the sale of firearms to customers who have not passed a background check or who are younger than 21. It also bars the sale of bump stocks and high-capacity magazines. It would apply to clients who offer credit cards backed by Citigroup or borrow money, use banking services or raise capital through the company.
RUSSIA MEDDLING, RUSSIA PROBE, TRUMP WORLD
President Trump named John R. Bolton, a hard-line former American ambassador to the United Nations, as his third national security adviser on Thursday, continuing a shake-up of his administration that creates one of the most hawkish national security teams of any White House in recent history.
Also in a statement from the White House, McMaster, a three-star Army general, announced that he would retire from the military in the coming months. “After thirty-four years of service to our nation, I am requesting retirement from the U.S. Army effective this summer after which I will leave public service,” he said.
Mr. Dowd viewed an interview as too risky; the president reiterated shortly after Mr. Dowd resigned that he wanted to clear his name. “I would like to,” the president told reporters at the White House when asked about meeting with investigators for the special counsel, Robert S. Mueller III. “I would like to.” Mr. Dowd’s departure cleared the way for the president to embrace a more aggressive posture toward the investigation and marked another reshuffling of personnel for Mr. Trump. In the most politically consequential investigation in decades, the president has refashioned his legal team several times, a revolving door that mirrors the high turnover among senior White House and campaign aides.
Dowd, who had been Trump’s lead lawyer against Special Counsel Robert Mueller’s Russia probe for the past nine months, had been pushing Trump to cooperate with the investigation. That stance appears to put him at odds with diGenova, who has said he believes Trump was framed by Justice Department officials on a political vendetta and is expected to advocate a more confrontational approach.
President Trump said Thursday he still wants to testify before special counsel Robert Mueller in the ongoing probe into Russia’s interference in the 2016 presidential election.
“This can be a very mean-spirited town,” he said, drawing knowing laughs and a round of applause, “but you don’t have to choose to participate in that. Each of us get to choose the person we want to be, and the way we want to be treated, and the way we will treat others.” It’s virtually impossible not to connect these comments to Tillerson’s ouster. He was fired via tweet, and the No. 4 official at the State Department said Tillerson wasn’t given any advance notice. Then, in a closed-door meeting last week, White House Chief of Staff John F. Kelly reportedly told staffers that Tillerson received the news of his impending exit while using the toilet. Kelly has drawn plenty of criticism for disclosing that, even privately.
US president Donald Trump has claimed that Joe Biden, the former vice-president, would “go down fast and hard, crying all the way” if the duo got into a fight. The comments from the president, who has previously described himself as a “very stable genius” come after Mr Biden, who served under Barack Obama, told an audience at the University of Miami that if he and Mr Trump were in high school, he would “take him behind the gym and beat the hell out of him”, according to a video posted on the school’s Facebook page.
The Republican report concluded that Russia orchestrated a campaign “to sow social discord and to undermine the U.S. electoral process.” But it said the panel found no evidence that Russia was trying to boost Donald Trump’s chances of winning the election, nor could it find anything compromising in the president’s business background.
Guccifer 2.0, the “lone hacker” who took credit for providing WikiLeaks with stolen emails from the Democratic National Committee, was in fact an officer of Russia’s military intelligence directorate (GRU), The Daily Beast has learned. It’s an attribution that resulted from a fleeting but critical slip-up in GRU tradecraft. That forensic determination has substantial implications for the criminal probe into potential collusion between President Donald Trump and Russia.
KOREAN PENINSULA, MIDDLE EAST, NUCLEAR WEAPONS
This is how we should think today about the threat of nuclear warheads delivered by ballistic missiles. In 1837 Britain unleashed pre-emptive “fire and fury” against a wooden steamboat. It is perfectly legitimate for the United States to respond to the current “necessity” posed by North Korea’s nuclear weapons by striking first.
Saudi Arabia’s crown prince will rub shoulders in New York next week with top figures from Wall Street and Corporate America, part of a whistle-stop first visit to the United States since becoming King Salman’s heir apparent last year. On a public relations blitz, Crown Prince Mohammed bin Salman has lined up stops in Boston, Houston, Los Angeles, San Francisco and Seattle to cultivate investments. On Tuesday, he met with President Donald Trump in the Oval Office.
Fund managers from Barings to Shinyoung Asset Management say if the geopolitical risks are resolved, South Korean equities could start closing their valuation gap with regional peers. The benchmark Kospi has risen about 3 percent since March 8, when President Donald Trump first agreed to talks with Kim Jong-un, compared with a 1 percent rise in the MSCI Asia Pacific Index.
INFLATION, RATES, DEBT AND CREDIT, BALANCE SHEETS
Investors’ expectations for three or four rate hikes by the Federal Reserve in 2018 are likely overblown while a bear market in bonds will be gradual and “non-threatening,” influential bond investor Bill Gross said on Thursday. In his latest Investment Outlook piece, Gross, who runs the $2.2 billion Janus Henderson Global Unconstrained Bond Fund, said the U.S. and global economies are too highly leveraged to stand more than a 2 percent fed funds rate in a 2 percent inflationary world.
“There’s been an overall credit-quality degradation taking place within the investment grade market,” said Jon Duensing, a senior portfolio manager with Amundi Pioneer Asset Management. “And we have seen more willingness from investment-grade companies — particularly non-financials — to take more leverage on to their balance sheet.”
It’s no secret Canadian consumers are mired in a mountain of debt but it’s the less-talked-about corporate debt load that may help explain the stock market’s perennial underperformance. Canadian companies have a record 60 cents of debt for every dollar of sales that they generate, compared with about 35 cents of debt per dollar for U.S. companies, according to Martin Roberge, portfolio strategist at Canaccord Genuity Group Inc.
Americans are parking more money with the biggest banks than ever before, cementing the firms’ dominance of the financial industry less than a decade after the 2008 crisis. The three largest U.S. banks by assets have added more than $2.4 trillion in domestic deposits over the past 10 years, a 180% increase, according to a Wall Street Journal analysis of regulatory data. That amount exceeds what the top eight banks had in such deposits combined in 2007.
The good news is that what look like flashing red alerts about imminent trouble for the banks are nothing of the sort. The bad news is that blockages in the plumbing of the financial system could lead to unpredictable ruptures as the markets adapt to a new monetary regime. The danger signals at the moment are coming from the money markets, where banks are having to pay a bigger premium to borrow than during the 2012 euro crisis. Savers are directing their money to the U.S. Treasury rather than the banks, just as they did in the past two major crises.
Some of the biggest brick-and-mortar banks in the US are pouring resources into developing new online banking arms, as rising interest rates intensify an “arms race” for consumer deposits. Since the Federal Reserve embarked on its rate-hiking cycle in December 2015 the big US banks have passed on just a fraction of the increases to depositors, pumping up their profits by widening the gap between the yield on their assets and the cost of their funds. But the steady hikes from the Fed — Wednesday’s was the sixth increase at 0.25 per cent to a target rate of between 1.5 per cent and 1.75 per cent — have sparked concerns among the banks about how much longer they will be able to offer rock-bottom rates to retail depositors.
It has been more than a decade since private-equity firms went on a buyout binge on the eve of the financial crisis, but as the recent bankruptcies of Toys “R” Us and iHeartMedia show, many of the deals continue to haunt their owners and are forcing them to find new ways to spend an epic pile of cash.
VOLATILITY, BLACK SWANS, LIQUIDITY, TAIL RISKS
The Cboe Volatility Index, a measure that investors use to track the speed and severity of market moves, rose as much as 27% Thursday as U.S. stocks fell for a second consecutive day. Stock-market reversals have made 2018 one of the most tumultuous on record for the volatility index, better known as the VIX. The gauge has surged by more than 20% five times already this year, sending the Cboe VIX of VIX index, which measures the gyrations of the VIX itself, to a record high during the quarter.
“The sovereigns look risky,” Blankfein said at a luncheon hosted by the Boston College Chief Executives Club. He said much of the banking industry’s problems have been solved since the financial crisis. But those problems have migrated to the balance sheets of sovereign countries, he said.
Senator Tammy Baldwin plans to introduce a bill on Thursday that would prohibit companies from repurchasing their shares on the open market, Baldwin told CNNMoney. While the legislation faces an uphill battle getting through Republican-controlled Congress, it demonstrates a growing backlash against companies using extra cash to reward shareholders instead of sharing it with workers. Buybacks, which boost stock prices by making shares scarcer, have exploded in 2018 thanks to the huge windfall created by President Trump’s new tax law. American companies like Pepsi (PEP) and Cisco (CSCO) have announced a total of $229 billion of buybacks so far this year, according to research firm TrimTabs. Companies are on track to buy back the largest number of shares in at least a decade.
MACRO OP-EDS, INSIGHT, EVENTS AND TRENDS
For the better part of the last month, Donald Trump has been winging it. His standoff with his chief of staff, John Kelly, appears to be resolved for the time being, with Trump having decided to return to the seat-of-the-pants decision-making that he believes won him the presidency. That doesn’t mean he has fully given up the idea of firing Kelly, though. One outside adviser to the White House said Trump has recently mulled the concept of creating a new West Wing structure without a chief of staff, one that would instead have four co-equal principals reporting directly to him. Trump seems to be loving his new freedom. “He was fucking excited and jubilant,” said one Trump friend who spoke to him in recent days. “He was like, everything’s great and these fuckers in the media are beside themselves.”
The punitive actions unveiled by President Trump on Thursday — about $60 billion in tariffs a year and other penalties targeting Chinese goods, as well as new restrictions on Chinese investment in the United States — will put Mr. Xi on the spot, forcing him to consider retaliatory action that could send a shudder through the global economy and complicate his efforts to sustain China’s rapid growth in the face of rising debt and an aging population. Chinese leaders are judged in part on how they manage relations with the United States, and a damaging trade war, if handled poorly, might diminish Mr. Xi’s political standing and test the wisdom of the highly centralized power structure that he has erected around himself. If he retreats and offers significant concessions, however, Mr. Xi risks looking weak and inviting criticism in a political system that has fanned nationalist and anti-American sentiment.
If these demonstrations of muscle are intended to strengthen the American position in grappling with China, trade experts increasingly fret that Mr. Trump’s policies are doing the opposite: They potentially diminish the place of the United States in the world by alienating allies, undermining the potential for collective action among countries nursing shared grievances with China. “It’s going to be far more effective if they go together,” said Meredith Crowley, an expert on international trade at the University of Cambridge in England. “The fact that the United States is doing all of this alone, it does seem to be weakening the U.S. position.”
America’s newfound energy leadership could become an effective counterweight to China’s financial muscle in the developing world. But if Mr. Trump insists on starting a trade war that makes American manufacturers less competitive and pushes the U.S. to the margins of the international trading system, expect the world’s aspirational economies increasingly to turn to Beijing. Everyone would lose, but the biggest hit would be to America itself. Let’s hope there’s time for second thoughts.
Amid all the chaos in the White House — including West Wing personnel drama, the Stormy Daniels scandal and Mueller’s Russia investigation — some wayward spellings and inaccurate honorifics might seem minor. But the constant small mistakes — which have dogged the Trump White House since the president’s official Inauguration Day poster boasted that “no challenge is to great” — have become, critics say, symbolic of the larger problems with Trump’s management style, in particular his lack of attention to detail and the carelessness with which he makes policy decisions.
U.S. politicians may not be able to pronounce “Huawei,” but they’re convinced it’s a threat to national security. Huawei dismisses American fears about its intentions as nationalistic fearmongering. It says it has no more connection to the Chinese government than Apple or Google and that installing backdoors for spies in its network hardware or software would be tantamount to market suicide. “We’re 30 years in this business, and there hasn’t been a single security issue,” says Joe Kelly, the company’s vice president for international media affairs. “Should America have anything to fear from us from a cybersecurity perspective? The answer is no.”
Austerity is an integral part of the image that Germans have of themselves — and a characteristic they feel sets them apart from other nations. There is also a deeply ingrained conviction that saving money and avoiding debt is not just a prudent approach to managing your income but a sign of something deeper: “Saving is seen as the morally right thing to do. It is more than a simple financial strategy,” says Kai Uwe Peter, the managing director of the Berliner Sparkasse, a savings bank that boasts some 2m clients in the capital.
A cooperating witness in the special counsel investigation worked for more than a year to turn a top Trump fund-raiser into an instrument of influence at the White House for the rulers of Saudi Arabia and the United Arab Emirates, according to interviews and previously undisclosed documents. Hundreds of pages of correspondence between the two men reveal an active effort to cultivate President Trump on behalf of the two oil-rich Arab monarchies, both close American allies.
A huge challenge for the agriculture industry is tracking and paying for delivery of produce. Usually, this takes the form of a big multinational corporation placing or receiving an order for thousands of tons of a given produce. In most cases today, this process relies on a locally-based third party that coordinates the delivery of goods. The seller would have an agent that makes sure the goods are delivered, and the buyer would have an agent to inspect the delivery and recommend payment. Using the blockchain, this system of regional sales agents can be simplified to a single distributed ledger. Commodity buyers can deal directly with the supplier and transmit funds immediately. This speeds up what was once a paper-based process that could take weeks to settle a payment. In addition, the companies save on agent fees and the farmer who grew the crops can receive a larger share of the proceeds from the sale.
In a 2008 paper , we had shown for a sample of 190 countries that financial and political crises have permanent long-run economic costs in terms of output forgone. On average, the magnitude of the persistent loss in output is about 5 percent for balance of payments crises, 10 percent for banking crises, and 15 percent for twin crises. Using updated data from 1974 to 2012, we confirm our earlier findings that the irreparable damage to output is not limited to financial and political crises. All types of recessions, on average, lead to permanent output losses. Contrary to conventional wisdom, we also show that countries do not typically have growth booms before crises and recessions.
Here are some of the things about inflation the Fed and other central banks are uncertain of: what causes it; what effects it has; what to count in measuring it (stock prices?); how low, or high, it should be; and how to move it up and down. The Fed, in other words, is driving blind. Daniel Tarullo, in a tell-all address at the Brookings Institution in October after his resignation from the Fed’s Board of Governors, said, “We do not, at present, have a theory of inflation dynamics that works sufficiently well to be of use for the business of real-time monetary policymaking.”
South African media company Naspers Ltd. is cashing in a sliver of one of the greatest venture-capital investments ever. The Cape Town-based company is selling $10.6 billion of shares in Tencent Holdings Ltd., equal to 2 percent of the stock in the Chinese operator of the WeChat messaging service, it said in a statement Thursday. The stake Naspers bought for just $32 million in 2001 — when Tencent was an obscure Web firm in a nation where few people used the Internet — is now worth $175 billion.
We don’t know China because, in ways that have generally not been acknowledged, virtually every piece of information issued from or about the country is unreliable, partial, or distorted. The sheer scale of the country, mixed with a regime of ever-growing censorship and a pervasive paranoia about sharing information, has crippled our ability to know China. Official data is repeatedly smoothed for both propaganda purposes and individual career ambitions. That goes as much for Chinese as it does for foreigners; access may sometimes be easier for Chinese citizens, but the costs of going after information can be even higher. And we don’t know what we don’t know. Beyond the known unknowns, the unknown unknowns are equally worrying. We may be missing the biggest future stories, the ones that will shake or transform China and the world, right now. The situation for Chinese journalists is far worse; a limited ability to conduct investigative journalism in the 2000s has been almost obliterated by authorities determined that there will be no oversight beyond the party. Fear grips throats; those who would once give names now talk anonymously, where many others do not talk at all.
The former Soviet secret policeman Vladimir Putin is recreating the world that shaped him: cold-war spying. Putin can manipulate us because he has learnt that in espionage, it’s not generally the secrets that matter. It’s the reaction of the public, media and politicians whenever spies are exposed to the light. The attack on the superannuated minor double agent Skripal is chiefly a public statement. Russia is telling Britons: we can kill with impunity in your country, and it’s telling powerful Russians in Britain, we can kill you. Because spies fascinate the public, the message is heard. (Previous mysterious deaths of Russian non-spies in Britain passed almost unnoticed.) Russia’s paranoia-creation has become more deliberate. Russian espionage — like so much else in Russian behaviour abroad – is morphing into a branch of public relations. Nowadays, Russian spies are meant to be seen.
Insider trading is rife in the $400 billion Mexican stock market — and almost everyone knows it. As in the U.S., trading on non-public information is illegal. Mexico’s financial regulator has been making penalties public only since 2008, and just 28 people have been punished since then. It takes an average of more than five years for the agency to issue penalties for insider dealing. No one has been criminally charged or gone to prison, and while U.S. punishment can run into the tens of millions of dollars, fines in Mexico have added up to a mere $60,000 per perpetrator. The Mexican regulator said it only acts based on its constitutional authority and declined to comment on whether it does enough to stem insider trading.
As it scrambled to compete in the internet world, the once-dominant tech company cut tens of thousands of U.S. workers, hitting its most senior employees hardest and flouting rules against age bias. ProPublica estimates that in the past five years alone, IBM has eliminated more than 20,000 American employees ages 40 and over, about 60 percent of its estimated total U.S. job cuts during those years. In making these cuts, IBM has flouted or outflanked U.S. laws and regulations intended to protect later-career workers from age discrimination, according to a ProPublica review of internal company documents, legal filings and public records, as well as information provided via interviews and questionnaires filled out by more than 1,000 former IBM employees.
With “jewel-tone eyes,” blond hair and a “smattering of light freckles,” Othello looks nothing like most Brazilians, the majority of whom are black or mixed-race. Yet the “Caucasian” American cashier, described in those terms by the Seattle Sperm Bank and known as Donor 9601, is one of the sperm providers most often requested by wealthy Brazilian women importing the DNA of young U.S. men at unprecedented rates. Over the past seven years, human semen imports from the U.S. to Brazil have surged as more rich single women and lesbian couples select donors whose online profiles suggest they will yield light-complexioned and preferably blue-eyed children.
CENTRAL BANKS & MONETARY POLICY
Federal Reserve Chairman Jerome Powell showed he will be guided by the U.S. economy’s performance rather than the theories and models relied upon by his predecessors to set monetary policy for the past three decades. Fresh from overseeing his first policy-setting meeting and its first interest rate hike of 2018, Powell signaled he won’t try to guess the limits of the labor market or the growth-boosting effects of Republican tax cuts. His message: He’ll know the economy is changing when he sees it. For now, his Fed is on track to raise rates at least twice more this year and possibly three times. “There is no sense in the data that we are on the cusp of an acceleration of inflation,” Powell told reporters on Wednesday in Washington. “We have seen moderate increases in wages and price inflation, and we seem to be seeing more of that.”
European Central Bank President Mario Draghi briefed German Chancellor Angela Merkel and other heads of government gathered in Brussels on the main risks to the favorable economic outlook and put a trade spat at the top of the list of worries, according to a person familiar with the discussion.
The Bank of England has set the stage for an interest rate rise at its meeting in May, saying that pay growth was picking up and inflation was expected to remain above its 2 per cent target. The MPC maintained its pledge that any future rate rises “were likely to be at a gradual pace and to a limited extent”, a commitment that has persuaded financial markets not to expect more than two rate rises this year.
USA ECONOMY DATA, CITIES AND STATES
The population of federally designated retirement destination counties rose 2% last year, almost three times the rate of national population growth, according to census county population estimates for the year that ended July 1. Almost three-quarters of a million Americans during that period moved into one of the 442 counties that the Agriculture Department tags as retiree spots. The figures are a fresh sign that the nation’s 74 million baby boomers—those born between 1946 to 1964—have dug out from the 2007-09 recession that locked many of them in place when home and stock values plummeted.
The U.S. government is scaling back the number of contractors working on Puerto Rico’s storm-damaged electrical grid at a time when nearly 100,000 island residents still lack power, drawing fresh scrutiny from lawmakers over the federal response to Hurricane Maria.
GLOBAL ECONOMY, INTERNATIONAL
“The European economy wouldn’t be directly affected by Trump’s tariffs, but the blowback would affect everyone,” said Will Hobbs, head of investment strategy at Barclays Plc in London. “With the global economy now so tightly intertwined and supply chains so complex, a trade war would be painful for all.”
There are a growing number of indicators that suggest the economy is losing some of its dynamism. Official data for January recorded sharp declines in industrial output and construction, and less precipitous drops in retail sales and exports. More recent surveys of business activity appear to be pointing in the same direction.
COLOR, EARNINGS, SENTIMENT, VALUATIONS
Steve Wynn sold just over a third of his shares in Wynn Resorts Ltd., making his ex-wife, co-founder Elaine Wynn, the company’s new largest shareholder, securities filings show. The move marks another step in Mr. Wynn’s dramatic exit from the company he co-founded even as his signature remains splashed atop its casino resorts.
Shares of the Dow component rose about 3 percent in extended trading. They had closed down 3 percent at $64.42 in regular trading on reports that William Ackman’s Pershing Square had exited the company with a profit of about $100 million.
DEALS, MERGERS, IPOs, LBOs, RESTRUCTURINGS
The government’s attempt to block AT&T’s takeover of Time Warner is being closely watched by antitrust experts as the first challenge to a vertical merger to go to trial since the 1970s. Its outcome will set the tone for antitrust enforcement under the Trump administration. The justice department argues that Time Warner’s content is a “must have” for AT&T’s competitors and that allowing the two to combine would give the merged company unfair leverage over rival businesses, including new online live television services.
Dropbox Inc. raised $756 million in its U.S. initial public offering, according to a person familiar with the matter, pricing its shares above an already increased range. The file-sharing company sold 36 million shares for $21 apiece, said the person, who asked not to be identified because the details are private.
Dozens of early-stage drug makers and other biotech firms are planning to list in Hong Kong over the next two years, say executives, bankers and investors, as the exchange pushes through its biggest regulatory overhaul in decades.
ENERGY RENEWABLES, NUCLEAR
The power and gas giant that supplied coal that fueled the French Industrial Revolution and excavated the Suez Canal now sees its greatest potential for growth in helping large energy users like hospitals, schools and airports reduce their bills and carbon emissions, Isabelle Kocher, Engie’s chief executive officer, said in an interview in Singapore.
POLLUTION, CLIMATE & ENVIRONMENT
The Garbage Patch has been described before. But this new survey estimates that the mass of plastic contained there is four to 16 times larger than previously supposed, and it is continuing to accumulate because of ocean currents and careless humans both onshore and offshore. The “patch” is not an island or a single mass, leading some scientists to object to the name (which the current study uses). Instead, it’s a large area with high volumes of plastics, one in which concentrations increase markedly as you move toward its center. The debris ranges from tiny flecks to enormous discarded fishing nets, which make up 46 percent of the material, the study found.
BREXIT, SCOXIT, LONDON, UK ECONOMY
Labour said it was “farcical” that the government had given the contract to Gemalto “at the expense of the British economy”. “The irony is unreal,” said Eloise Todd, chief executive of Best for Britain, the anti-Brexit campaign group.
Thousands of French workers came out on strike on Thursday in the largest union protest against President Emmanuel Macron’s sweeping labour reforms, testing public support for his intent to shake up the French economy. Rail workers joined forces with civil servants protesting against changes to their employment and retirement status, shutting schools and curtailing public transport. The strike was expected to lead to the cancellation of up to three-quarters of inter-city trains and about 30 per cent of flights from French airports.
German businesses are becoming increasingly anxious over the threat of trade protectionism, according to a survey by a highly regarded research institution that underscores the rising risks faced by the eurozone’s powerhouse economy. Germany, the eurozone’s biggest ecomony, is coming off of a strong 2017, in which growth clocked in at the highst rate since 2011. The strength came on the back of an acceleration across the bloc and at many major trading partners.
GEOPOLITICS, CRIME, TERRORISM
China has sold Pakistan a powerful tracking system in an unprecedented deal that could speed up the Pakistani military’s development of multi-warhead missiles. News of the sale – and evidence that China is supporting Pakistan’s rapidly developing missile programme – comes two months after India tested its most advanced nuclear-ready intercontinental ballistic missile (ICBM) with a range long enough to hit Beijing or Shanghai.
After two months of uncertain fighting, Turkey appears suddenly to be riding high in its military campaign to take control of a larger piece of northern Syria. Along the border, studded with spring flowers and pistachio and olive groves, the artillery guns and fighter jets that until recently pounded the low mountains have fallen silent since Turkish forces captured the enclave of Afrin last weekend.
A group of EU states is discussing a co-ordinated expulsion of Russian diplomats in response to the UK nerve agent attack on a double agent and his daughter. As many as 10 countries — including France, Poland and the three Baltic nations — were considering the move as a European summit in Brussels decided to temporarily recall the EU ambassador from Moscow in a show of solidarity with the UK, two diplomats said.
The first commercial flight to Israel through Saudi Arabian airspace landed in Tel Aviv on Thursday night, the latest sign of the warming relations between Israel and the Gulf state. Air India flight 139 from New Delhi touched down at Ben Gurion International Airport after passing over Oman and Saudi Arabia, which have no formal relations with Israel, according to Flightradar24, an online site that tracks flights worldwide.
U.S. prosecutors have opened a criminal investigation into a Florida factory that makes shotguns modeled after the iconic AK-47 assault rifle and is run by executives with ties to top allies of Russian President Vladimir Putin.
A court in the northern Indian state of Jharkhand has sentenced 11 men to life in prison for lynching a Muslim meat trader last year. Alimuddin Ansari, 55, was beaten to death by the men for transporting beef. This is the first time India has convicted anyone for “cow vigilantism”, despite a spate of attacks on Muslim meat traders in the last few years. Hindus consider cows sacred and killing them is illegal in several states, including Jharkhand. Incidents of cow vigilantism have become increasingly common in India, but police investigations have often led to acquittals of those accused.
SCANDALS, LAWSUITS, FINES, REGULATORY
The scandal’s political bang, say some analysts, could prove loud and destructive; the much deeper resonance is the public debate it has unleashed over the anatomy of decisions and instructions. The analogies are not exact, but white-collar workers in corporate Japan know from their own experience inside hierarchies how orders are transmitted, when assumptions have to be made, how far initiative-taking is tolerated and when segments of the hierarchy tacitly demand indulgence or protection. They can see how this might have transpired, but they can also smell a rat.
Chipotle Mexican Grill Inc on Thursday won the dismissal of an investor lawsuit claiming it concealed food safety risks, causing its stock to drop after widely publicized outbreaks of foodborne illnesses in 2014 and 2015.
Mr. Shkreli, who was convicted of fraud for actions around hedge funds he ran, is going to prison. So far, Ms. Holmes, who peddled falsehoods about her blood-testing business, is not.
His arrest came a year after his successor, former President Park Geun-hye, was arrested following her parliamentary impeachment on bribery and other criminal charges. The two former leaders are being held in separate prisons. “I consider all this my own fault and feel remorse,” Mr. Lee, 76, said in a handwritten statement posted on Facebook shortly before his arrest.
RETAIL APPAREL, SPECIALTY, DINING, BIG BOX
An executive exodus is under way at Whole Foods, as Amazon.com Inc. integrates the pioneering natural grocer into its retail empire. More than a dozen executives and senior managers have left since Amazon acquired Whole Foods last year, according to former employees and recruiters steering them to new jobs. People who have left include leaders of the bakery, produce, sustainability and local-foods divisions. Some veterans have left even though higher-ups asked them to stay. Others say they were pushed out after the deal was announced but before it closed, as Whole Foods sought to tighten command.
The world’s largest online retailer is searching for bigger Whole Foods locations in cities that can serve as both grocery stores and urban distribution centers for delivering goods to online shoppers more quickly, said a person briefed on the plans. Amazon is seeking more retail space that can accommodate grocery aisles and storage for the most popular items purchased from Amazon’s website, like consumer electronics, bestselling books and yoga pants.
MEDIA, CABLE, SPORTS, ENTERTAINMENT
Alphabet Inc.’s Google will ask web publishers to obtain consent on its behalf to gather personal information on European users and target ads at them using Google’s systems, according to people familiar with the matter, part of a plan to keep up with data-privacy rules in Europe.
AUTOS, ELECTRIC, SELF-DRIVING
Electric cars may be cheaper than their petroleum counterparts by 2025 if the cost of lithium-ion batteries continues to fall. Some models will cost the same as combustion engines as soon as 2024 and become cheaper the following year, according to a report by Bloomberg New Energy Finance. For that to happen, battery pack prices need to fall even as demand for the metals that go into the units continues to rise, the London-based researcher said on Thursday.
The pedestrian killed Sunday by a self-driving Uber Technologies Inc. SUV had crossed at least one open lane of road before being hit, according to a video of the crash that raises new questions about autonomous-vehicle technology. Forensic crash analysts who reviewed the video said a human driver could have responded more quickly to the situation, potentially saving the life of the victim, 49-year-old Elaine Herzberg. Other experts said Uber’s self-driving sensors should have detected the pedestrian as she walked a bicycle across the open road at 10 p.m., despite the dark conditions.
The test operator in the Uber Technologies Inc. self-driving car that killed an Arizona woman was a felon with a history of traffic citations who wasn’t watching the road before the accident happened, facts that raise new questions about the company’s testing process for autonomous technology.
LUXURY, HIGH END, ASPIRATIONAL
There currently are about 150 private railcars (also called “varnish”) in good enough shape to be certified to run attached to Amtrak trains in the U.S., according to the American Association of Private Railroad Car Owners. Cost of the cars ranges from $25,000 to more than $800,000, depending on the condition. Renovating and restoring cars at the highest end can cost more than $1 million. To travel, owners pay Amtrak $2.90 per mile, plus additional fees for services. Add the expenses of crew and connection transportation, and a cross-country trip can cost tens of thousands of dollars. Storing the cars costs about $600 to $1,000 a month.
ARTIFICIAL INTELLIGENCE, DRONES, FUTURE TECH
The company is launching a small army of autonomous scanning robots. The robots are 6 feet tall, equipped with an array of lights, cameras, and radar sensors. It then goes up and down each aisle on its own, at 2 to 3 mph, scanning the shelves for empty spots and also checking the price tags. Because the robot uses LIDAR and other video cameras, what the robot actually sees is very similar to what a self-driving car sees. The three dimensional world it sees is detailed enough for the algorithm to figure out what’s missing and needs restocking.
She’s not quite fish flesh, but she’s not a typical marine robot either. Although critical for studying the ocean, remote operated vehicles and submersibles can be expensive to build and operate. They also can startle the sea creatures they’re supposed to study. But without a line giving her away by connecting her to a boat, a noisy propeller or the big, rigid, awkward or angular body of a metallic land-alien, she doesn’t seem to bother or scare off real fish. Some even swim along with her. Sleek, untethered, relatively inexpensive and well-tolerated, SoFi may provide biologists a fish’s-eye view of animal interactions in changing marine ecosystems.
SCIENCE, NATURE, HISTORY, PSYCHOLOGY
“There’s geniuses everywhere,” he said, motioning to the pair talking next to him, the theoretical physicist Lisa Randall and the computer scientist Stephen Wolfram. “I don’t even register on this scale.” We’re at Mars, an exclusive three-day conference at a midcentury-modern hotel here in the California desert run by Amazon and its founder, Jeff Bezos, for some of the world’s most successful geeks. For its first two years, Mars was largely secret; the most prominent image that leaked was a photo of Mr. Bezos piloting a 13-foot robot last year. This year, Amazon lifted the veil and invited a handful of reporters into Mr. Bezos’s brainiac pow-wow.
Among the resulting trove of scientific discoveries, perhaps the most striking was that these collisions between neutron stars are in fact the cosmic forge in which gold and other precious metals are made, before being flung out into the universe. They explain, in essence, the source of gold on Earth.
Her features attracted UFO hunters and extraterrestrial investigators, who suspected her bones might represent something remarkable. Ata is indeed remarkable. And she is human, according to the story told by her genes, which was published Thursday in the journal Genome Research. “We were able to look at all the mutations that were in this individual,” said Stanford University geneticist Garry Nolan, an author of the new report. “And everybody is born with mutations. This person just happened to roll snake eyes.”
Mr. Lazarus’s death comes one week after Toys “R” Us announced that it would start liquidating its stores in the United States. Loaded down by debt and unable to attract new investment, the chain could no longer compete with more nimble toy sellers like Amazon and Walmart, and last September it filed for bankruptcy. It was a painful denouement for a company that Mr. Lazarus founded 70 years ago in Washington, D.C., and that grew into a global toy seller with thousands of stores in locations stretching from the United Kingdom to Asia.
Ocean kayaking is catastrophically monotonous. The primary challenge is not physical. Doba describes the tedium as a form of dementia: “Hundreds, thousands, maybe millions of repetitions. The brain is removed from the process.” Alone at sea without his hearing aids, Doba joked, he grew so disoriented that he started shouting at himself “so that I could hear.” (Doba is fairly deaf but didn’t bring the aids along because they’re expensive and not waterproof, and there was no one to talk to anyway.) He intended to keep muscle tone in his legs by swimming, but he had to abort that plan because his body in the water attracted sharks. He was assaulted by hailstorms of flying fish. “Do you know how fast they go?” he said. “This does not feel good.”
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