Macro Links Nov 16th – Tanks in Harare

Macro Links Nov 16th – Tanks in Harare

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ZIMBABWE ARMY REMOVES MUGABE

Zimbabwe’s Mugabe Out Of Power For First Time Since 1980s As Military Takes Control : The Two-Way : NPR

President Robert Mugabe and his family are “safe and sound,” according to Zimbabwe’s military — but his decades in power are seemingly at an end, after Mugabe, 93, was forcefully pushed aside. Both the ruling party and the military insist there was no coup.

Robert Mugabe Under House Arrest as Rule Over Zimbabwe Teeters – The New York Times

President Robert Mugabe, who has ruthlessly ruled Zimbabwe for nearly four decades as one of Africa’s last liberation leaders still in power, was under house arrest on Wednesday, hours after the military announced it had taken him into custody in what appeared to be a coup.

The fate of Mr. Mugabe, 93, who kept a tight grip on his southern African nation despite his increasing frailty and diplomatic isolation from the West, appeared to be in the hands of former allies and opposition officials negotiating his future.

In the capital, Harare, about half a dozen tanks were stationed around strategic government buildings and intersections. But shops and banks were open, and most people carried on business as usual, perhaps because the apparent coup had occurred without violence or resistance. Soldiers blocked the main road leading to the airport, which Mr. Mugabe, 93, had renamed after himself just last week.

17X16 - ZIMBABWE TANKS

Grace Mugabe, Shrewd if Ill-Tempered, Became a Target of Zimbabwe’s Anger – The New York Times

As Zimbabweans have been mired in poverty under President Robert Mugabe, Africa’s longest-serving leader, his wife, Grace, 52, became a target of anger over allegations that she siphoned profits from diamond mines and bought luxury palaces. She spent so much money on foreign trips that the European Union imposed sanctions on the Mugabes to stop them from sucking wealth out of the country.

The couple appear to have now fallen from power, as the military on Tuesday night took Mr. Mugabe, 93, the world’s oldest head of state, into custody. His wife’s whereabouts were not clear on Wednesday, but there were reports that she was in Namibia when the apparent coup unfolded.

Zimbabwe army seizes power and holds Mugabe

The army moved in the early morning hours, taking control of state broadcasting and the capital’s main thoroughfares, saying it had been forced into action to remove “criminals” around the president and insisting Mr Mugabe and his family were in a “safe and secure place”.

“We are targeting criminals around him who are committing crimes that are causing social and economic suffering in the country,” said Major General SB Moyo, the military spokesman. “As soon as we have accomplished our mission we expect that the situation will return to normalcy.”

Zimbabwe Doesn’t Have Its Own Currency and Bitcoin Is Surging – Bloomberg

Bitcoin climbed as much as 10 percent on Zimbabwe’s Golix exchange on Wednesday after the country’s armed forces seized power. The price of the cryptocurrency in the Southern African nation jumped as high as $13,499, almost double the rate at which it trades in international markets, according to prices cited on Golix’s website. It traded at $13,010 by 3:34 p.m. in Harare, the Zimbabwean capital.

Demand for bitcoin in Zimbabwe has surged amid a shortage of hard currency. Golix processed more than $1 million of transactions in the past 30 days, compared with turnover of $100,000 for the whole of 2016, according to data on the exchange’s website. Zimbabwe doesn’t have its own currency, with the government adopting the U.S. dollar and South African rand, among others, as legal tender in 2009 after hyperinflation rendered the local dollar worthless.

Sacking of Zimbabwe’s vice-president triggered military action

Two days after Emmerson Mnangagwa was sacked as Zimbabwe’s vice-president, he fled the country saying there were “incessant threats” to his life, his political career apparently in tatters.

But a week later, he appears to be in pole position to take over from Robert Mugabe, the veteran Zimbabwean leader who dismissed him. Mr Mnangagwa’s sacking last week was the catalyst for the dramatic decision by the army to seize control of the impoverished southern African nation on Wednesday and confine Mr Mugabe to his house.

Analysts say that one possible scenario is that Mr Mnangagwa, who is thought to be preparing to return to Zimbabwe from his brief spell in exile, will now be restored as vice-president. He could then be sworn in as acting president at a conference of the ruling Zanu-PF party that is scheduled for next month, the analysts say.

To understand the coup in Zimbabwe, you need to know more about Grace Mugabe – The Washington Post

Mugabe says things that the average politician would not dare to say, blending snark and sarcasm with Biblical references. In less than two years as an active politician, she has brought down more than a dozen big men and women who have been at the heart of ZANU-PF’s survival. Unlike some other politicians, Mugabe appears to openly enjoy the fight, even laughing at her own jokes, and the audience often joins in her glee. Much like Sarah Palin, she reminds voters that she, like millions of women, is an ordinary, hard-working woman, a mother of the nation, who sometimes goes hungry in solidarity with suffering Zimbabweans — even though she is anything but ordinary. Through her control of the ZANU-PF youth and women’s leagues, Mugabe now has a following of loyalists who find her straightforward “truth-telling” refreshing.

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ROY MOORE

Moore falls 12 points behind Jones in new poll – Axios

GOP Alabama Senate nominee Roy Moore now trails his Democratic opponent Doug Jones by 12 points (51 to 39 percent) in the latest National Republican Senatorial Committee (NRSC) poll, per Politico.

Woman: When I Was 17, Moore Said, ‘I Go Out With Girls Your Age All The Time’ – Talking Points Memo

Two more women on Wednesday came forward with allegations about Alabama Republican Senate candidate Roy Moore’s past misconduct. One said Moore asked her out when she was 17 years old, and another said he groped her when she was 28 years old, bringing the total number of women with allegations of sexual misconduct against Moore to seven, according to AL.com.

Roy Moore Gets Desperate, Attorney Suggests ‘Roy Moore’ Yearbook Signature Is Fake

The embattled Republican Senate nominee’s counsel went after a rape accuser’s divorce and 1977 yearbook to try to discredit her—all without ever addressing her accusations.

Roy Moore’s Lawyer Just Said Some Batshit Crazy Things While Defending Him On MSNBC

In a giant what-the-actual-F moment, Roy Moore’s attorney suggested that MSNBC host Ali Velshi’s “diverse background” would help him understand why the Republican candidate for Senate from Alabama allegedly acted inappropriately with underage women.

If Roy Moore Wins, the Senate Is Stuck With Him – WSJ

Senate Republicans can send a strong message to Alabama voters that Mr. Moore is unwelcome in the Capitol. Perhaps this will lead Alabamans to send his opponent to Washington instead. But flouting the establishment is Roy Moore’s brand, and Mr. Moore’s base may call the Senate’s bluff. If they do, the Senate will have to live with the voters’ choice, or else open up a can of worms it has seen fit to keep closed for over 220 years.

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VENEZUELA, SAUDI ARABIA

Venezuelan Debt Now Has the Vultures Circling – The New York Times

With steel stomachs and having survived numerous byzantine debt dramas — from Argentina in 2000 to Greece in 2012 — they see Venezuela as the next great debt-restructuring payday.

“It is all about the price,” said Lee C. Buchheit, a debt specialist of 30 years’ standing at the law firm of Cleary Gottlieb Steen & Hamilton. “If you look at the behavior of distressed investors, they wait for the price to hit a certain threshold” — usually 20 cents on the dollar — “and we have now reached that.”

Russia Offers Venezuela Debt Relief – WSJ

Russia threw a lifeline to Venezuela on Wednesday, restructuring the more than $3 billion it is owed by its economically and politically troubled South American ally. The Russian Finance Ministry said the debt of $3.15 billion would now be repaid over 10 years, with minimal repayments during the first six years.

SoftBank Plans Up to $25 Billion in Saudi Investments – Bloomberg

SoftBank Group Corp. plans to invest as much as $25 billion in Saudi Arabia over the next three to four years as the Japanese company run by Masayoshi Son deepens investment ties with the kingdom, according to people familiar with the matter.

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ASSANGE, RUSSIA PROBE, URANIUM ONE

We Knew Julian Assange Hated Clinton. We Didn’t Know He Was Secretly Advising Trump.

For Brown, and others who have been critical of Assange for using the platform of WikiLeaks to fight his own political and personal battles, his secret communication with the Trump campaign was damning because it revealed that he had been functioning more like a freelance political operative, doling out strategy and advice, than a journalist interested in obtaining and publishing information, concerned only with its accuracy.

White House Aides To Meet With Mueller Team : NPR

Now that President Trump is back in the U.S., he confronts an unpleasant reality – the investigation of Russia’s participation in Trump’s election has now reached the West Wing of the White House.

Fox News’s Shepard Smith debunks his network’s favorite Hillary Clinton ‘scandal,’ infuriates viewers – The Washington Post

Trump’s “Uranium One” accusations “are inaccurate in a number of ways,” Smith said. “Get Shepard Smith off of Fox,” tweeted one angry critic.

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GOP TAX PLAN

Tax Bill Thrown Into Uncertainty as First G.O.P. Senator Comes Out Against It – The New York Times

Uncertainty gripped the Senate on Wednesday over efforts to pass a sweeping $1.5 trillion tax cut after a Wisconsin Republican became the first senator in his party to declare that he could not vote for the tax bill as written, and other senators expressed serious misgivings over the cost and effect on the middle class.

Senator Ron Johnson, Republican of Wisconsin, came out against both chambers’ tax plans on Wednesday, saying that the bills favored corporations over small businesses and other so-called pass-through entities, whose owners pay taxes on profits through the tax code for individuals.

“These businesses truly are the engines of innovation and job creation throughout our economy, and they should not be left behind,” he said in a statement. “Unfortunately, neither the House nor Senate bill provide fair treatment, so I do not support either in their current versions.”

Republican sceptics hold key to tax reform

Five senators whose reactions are being watched most closely did not respond to requests for comment on the bill on Wednesday morning. They include Bob Corker and Jeff Flake, deficit hawks who have insisted the tax bill should not significantly increase government debt. The Republican bill would raise the deficit by nearly $1.5tn over 10 years but needs to be deficit-neutral thereafter.

Republicans are risking the entire 2018 election on this tax bill – CNNPolitics

The move was done out of a combination of necessity and political calculation. Repealing the individual mandate creates more than $330 billion in deficit reduction — an irresistible sum for a party desperate not to blow a massive hole in the deficit with their tax plan — and it also offers the possibility of (sort of) making good on an eight-year long campaign pledge to their base to get rid of Obamacare.

There’s just too much potential there — in terms of the policy and the politics — for Republicans not to leap at it. But make no mistake: Like anything with a major upside, this gambit is also a massive risk for Republicans. By combining the tax cut bill and the repeal of the individual mandate, Republicans are going for broke — legislatively and politically.

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RATES, LIQUIDITY, SYSTEMIC RISK, BALANCE SHEETS

A Late Swoon Halts 50-Day Streak of Nothing Happening in S&P 500 – Bloomberg

A final-hour descent in the S&P 500 put to bed a streak that had been trotted out to show how bullet-proof the stock market is. It was consecutive days without a 0.5 percent decline, a streak that hit 50 yesterday, the longest since 1965, but couldn’t make it to 51. While the benchmark measure was down only 0.6 percent today, it was the worst decline in two months.

Contagion worries rise after junk bond sell-off

Junk-rated debt has already lost 1.1 per cent in value so far during November, on pace for its worst month since January 2016, according to ICE BofAML indices. The selling pressure, which is so far restricted to a few companies and sectors, is testing the resolve of investors who over the past 20 months have only experienced three down months, each with losses of less than 0.4 per cent.

This month’s drop has been propelled by shocks from a handful of companies, with news that Sprint and T-Mobile would abandon merger talks, and lacklustre earnings from CenturyLink, Community Health Systems and Frontier Communications weighing on the index. Prices of telecom junk bonds have fallen 3.3 per cent since the start of November, with losses in the healthcare and cable and satellite television industries pacing declines.

Fear of Glut Grips Commodities as Xi Shifts China Economic Focus – Bloomberg

A slowdown in the world’s biggest consumer of most commodities is reviving fears over a glut in raw materials. The Bloomberg Commodity Index extended declines after sliding the most in six months on Tuesday. Futures in China also plunged in overnight trading.

Concern is increasing that demand will weaken as the world’s second-biggest economy dials back amid a pledge by President Xi Jinping to focus on the quality of expansion rather than the pace of it. Nickel, iron ore and oil all dropped, and shares of resources companies slipped.

Stock Market Rings Alarm Bells on Rising Corporate Leverage – Bloomberg

Cracks in high-yield credit may have only started to emerge, but equity investors have been signaling growing preference for stronger balance sheets throughout the year, amid tightening monetary policies and booming debt issuance.

Global stocks with the lowest debt-to-equity ratios, a measure of balance-sheet strength, are outperforming those with the highest ratios, according to Bloomberg calculations. The data exclude financials, where gearing ratios tend to be higher than in other industries.

Why China’s Bond Selloff Isn’t Luring Back Their Biggest Holder – Bloomberg

Even with yields surging to a three-year high, banks are staying put. The percentage of sovereign bonds owned by lenders dropped to a five-year low of 66 percent in September, compared with a record-high 70 percent in 2014, and market participants say they’ve not seen much evidence of a pickup in demand.

Banks are facing a rapid slowdown in savings, thereby limiting the firepower they have to use, partly due to a crackdown on wealth management products. At the same time, they are being encouraged to shift more of their funds into loans in order to maintain a steady economic expansion. While yuan deposit growth hit a record low in August, the average amount of monthly new loans is poised to rise to a record this year.

Vanguard’s 2017 Prediction: A Record $350 Billion In New Cash – WSJ

Vanguard Group is on pace to collect a record one-year total of $350 billion in investor cash by the end of 2017, Chief Executive F. William McNabb III said after a shareholder meeting in Scottsdale, Ariz.

No end in sight for passive boom, says investing pioneer

“I don’t see why it won’t [continue],” the inventor of one of the first index funds said in an interview with the Financial Times. “First of all it just has better results. And it has better satisfaction exhibited by investors.”

China and Japan’s US Treasury holdings dip in September

The value of US Treasuries held by China and Japan, the US’s two largest creditor nations, dipped in September alongside a selloff in the country’s debt.

A Specter Is Haunting Europe’s Recovery: Zombie Companies – WSJ

Hundreds of staggering firms are kept alive by struggling banks, which in turn undercut healthy rivals by tying up capital that could be used more productively elsewhere. Economists and central bankers worry they are a drag on the continent just as growth is resuming.

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MACRO OP-EDS, INSIGHT, EVENTS AND TRENDS

Oil market’s new political reality after Saudi Arabia arrests

Where oil prices go from is suddenly a function of an inherently difficult call about politics in the kingdom, one of the world’s largest producers and by far the most influential member of Opec.

While the coming on stream of higher shale output will again be an important influence, the impact this time round is likely to pale in comparison to a new political uncertainty which, when put in a highly differentiated manner, boils down to whether recent Saudi Arabian political developments will turn out to be beneficial enablers of the larger reform drive outlined in the government’s 2030 Vision programme for economic diversification or a prelude to a higher risk of domestic political turmoil and greater regional instability.

The Upstart Saudi Prince Who’s Throwing Caution to the Winds – The New York Times

Investors, nervous about his plans, have been moving money out of the kingdom. Prince Mohammed has sought to counter the capital flight by squeezing detainees and others to surrender assets. He has presented the arrests as a campaign against corruption, but his targets call it a shakedown, and he has turned for advice to a former Egyptian security chief who has been pilloried at home for brutality and graft.

Prince Mohammed’s supporters say he is simply taking the drastic measures needed to turn around the kingdom’s graft-ridden and oil-dependent economy while pushing back against Iranian aggression.

But analysts around the region debate whether the headlong rush might be driven more by a desire to consolidate power before a possible royal succession, desperation for cash to pay for his plans or simply unchecked ambition to put his stamp on the broader Middle East. And despite President Trump’s enthusiasm for the prince, some in the State Department, the Pentagon and the intelligence agencies say they fear that his impulsiveness could both set back his own goals and destabilize the region.

How Trump walked into Putin’s web | News | The Guardian

The long read: The inside story of how a former British spy was hired to investigate Russia’s influence on Trump – and uncovered explosive evidence that Moscow had been cultivating Trump for years.

Inside Artificial Intelligence’s First Church | WIRED

The new religion of artificial intelligence is called Way of the Future. It represents an unlikely next act for the Silicon Valley robotics wunderkind at the center of a high-stakes legal battle between Uber and Waymo, Alphabet’s autonomous-vehicle company. Papers filed with the Internal Revenue Service in May name Levandowski as the leader (or “Dean”) of the new religion, as well as CEO of the nonprofit corporation formed to run it.

The documents state that WOTF’s activities will focus on “the realization, acceptance, and worship of a Godhead based on Artificial Intelligence (AI) developed through computer hardware and software.” That includes funding research to help create the divine AI itself. The religion will seek to build working relationships with AI industry leaders and create a membership through community outreach, initially targeting AI professionals and “laypersons who are interested in the worship of a Godhead based on AI.” The filings also say that the church “plans to conduct workshops and educational programs throughout the San Francisco/Bay Area beginning this year.”

“What is going to be created will effectively be a god,” Levandowski tells me in his modest mid-century home on the outskirts of Berkeley, California. “It’s not a god in the sense that it makes lightning or causes hurricanes. But if there is something a billion times smarter than the smartest human, what else are you going to call it?”

Elon Musk: Inventor’s Plans for Outer Space, Cars, Finding Love – Rolling Stone

Most tellingly, there’s a framed poster of a shooting star with a caption underneath it that reads, “When you wish upon a falling star, your dreams can come true. Unless it’s really a meteor hurtling to the Earth which will destroy all life. Then you’re pretty much hosed, no matter what you wish for. Unless it’s death by meteorite.” To most people, this would be mere dark humor, but in this setting, it’s also a reminder of Musk’s master plan: to create habitats for humanity on other planets and moons. If we don’t send our civilization into another Dark Ages before Musk or one of his dream’s inheritors pull it off, then Musk will likely be remembered as one of the most seminal figures of this millennium. Kids on all the terraformed planets of the universe will look forward to Musk Day, when they get the day off to commemorate the birth of the Earthling who single-handedly ushered in the era of space colonization.

And that’s just one of Musk’s ambitions. Others include converting automobiles, households and as much industry as possible from fossil fuels to sustainable energy; implementing a new form of high-speed city-to-city transportation via vacuum tube; relieving traffic congestion with a honeycomb of underground tunnels fitted with electric skates for cars and commuters; creating a mind-computer interface to enhance human health and brainpower; and saving humanity from the future threat of an artificial intelligence that may one day run amok and decide, quite rationally, to eliminate the irrational human species.

So far, Musk, 46, has accomplished none of these goals.

But what he has done is something that very few living people can claim: Painstakingly bulldozed, with no experience whatsoever, into two fields with ridiculously high barriers to entry – car manufacturing (Tesla) and rocketry (SpaceX) – and created the best products in those industries, as measured by just about any meaningful metric you can think of. In the process, he’s managed to sell the world on his capability to achieve objectives so lofty that from the mouth of anyone else, they’d be called fantasies.

How EU (Withdrawal) Bill could change course of Brexit – POLITICO

The EU (Withdrawal) Bill could prove the trigger for the U.K. parliament to flex its muscles and change the course of Brexit.

How MPs vote on the legislation — which was supposed to be a simple copy-and-paste exercise to bring existing EU law onto the U.K. statute book — could yet limit Theresa May’s room for maneuver in negotiations with the remaining 27 EU countries as Britain prepares for its exit.

Three significant disputes — over the exit date, the process of agreeing a transition, and what would happen if no deal is agreed with the EU27 — could convince Tory rebels to vote with Labour and ultimately restrict the government’s ability to deliver Brexit on its own terms.

Catalans Fail to Live Up to Brexit Expectations – WSJ

Brexiters who hoped their own revolution in the U.K. would lead to the democratic liberation of the continent, appeared convinced that another European domino was finally about to fall after so many disappointments in European elections this year. One Brexit-supporting newspapers breathlessly declared that “Europe is on the brink,” while many commentators reached for parallels with the 1930s and the start of the Spanish civil war. Predictably, Russian Twitter bots and fake accounts have been in overdrive throughout the crisis, according to the Spanish government.

Yet, it looks increasingly likely that Catalonia will prove another false dawn for opponents of the EU. What has become clear over the past six weeks is that the secessionist leaders embarked on their independence drive without a proper plan, perhaps because they never expected to get so far.

How a Shirt Covered in Swastikas Ends Up in a Department Store – Bloomberg

Several layers of quality control are supposed to catch such items before they hit store racks. Many retailers hire auditors to visit factories and inspect the goods; their buyers often host apparel-makers, too, searching through designs to pick out what they want to stock in their stores. Off-price retailers such as Ross, however, often buy from brands and therefore aren’t involved in the production process, although they will also order some merchandise manufactured just for them.

The items they pick must then pass through random audits while being transported to warehouses or distribution centers. Final checks are performed in stores, when associates unbox clothes and hang them on racks.

Yet accidental Nazi imagery isn’t uncommon in retail, and the swastika—a sacred religious symbol in Hinduism, Buddhism and Jainism long before the Nazis hijacked it—pops up regularly. Hallmark Cards Inc. recalled Hanukkah gift wrap with swastikas threaded into a pattern. Mango sold a shirt with lightning bolts that evoked the SS insignia. Zara, owned by Inditex, the world’s largest retailer, has pulled handbags with green swastikas, a children’s T-shirt that resembled the clothes Nazis forced Jews to wear, and a skirt festooned with frogs resembling the ones recently co-opted as hate symbols.

Then there are those who sell the swastika on purpose, like the T-shirt seller that tried to rebrand it as a “symbol of peace” with $22 rainbow-swastika shirts this summer. Backlash was swift, and the company pulled the styles.

Technology invading nearly all U.S. jobs, even lower skilled: study

The use of digital tools has increased, often dramatically, in 517 of 545 occupations since 2002, with a striking uptick in many lower-skilled occupations, according to a study released Wednesday by the Brookings Institution, a Washington think tank.

The report underscores the growing need for workers of all types to gain digital skills and explains why many employers say they struggle to fill jobs, including many that in the past required few digital skills. There is anxiety about automation displacing workers and in many cases, new digital tools allow one worker to do work previously done by several.

Those 545 occupations reflect 90 percent of all jobs in the economy. The report found that jobs with greater digital content tend to pay more and are increasingly concentrated in traditional high-tech centers like Silicon Valley, Seattle and Austin, Texas.

Capitalism Has a Problem. Is Free Money the Answer? – The New York Times

In much of the world, angry workers denounce a shortage of jobs paying enough to support middle-class life. Economists puzzle over the fix for persistently weak wage growth, just as robots appear poised to replace millions of human workers. At the annual gathering of the global elite in the Swiss resort of Davos, billionaire finance chieftains debate how to make capitalism kinder to the masses to defuse populism.

Enter the universal basic income.

The idea is gaining traction in many countries as a proposal to soften the edges of capitalism. Though the details and philosophies vary from place to place, the general notion is that the government hands out regular checks to everyone, regardless of income or whether people are working. The money ensures food and shelter for all, while removing the stigma of public support.

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CENTRAL BANKS & MONETARY POLICY

Fed’s Evans Says His Anxiety Over Low Inflation Is Growing – WSJ

Federal Reserve Bank of Chicago leader Charles Evans expressed concern that persistently weak inflation in the U.S. may be a more enduring force than central bankers now recognize.

Fed’s Rosengren Says Data Favors a December Rate Increase – WSJ

Federal Reserve Bank of Boston President Eric Rosengren said the economy’s expected path means the U.S. central bank will need to keep raising rates and will likely need to act again next month.

Fed’s Rosengren sees need to continue raising interest rates – MarketWatch

Boston Fed President Eric Rosengren says he thinks the Fed should continue with rate hikes as the unemployment rate is likely to fall below 4%.

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USA ECONOMY DATA, CITIES AND STATES

Foreign students have begun to shun the United States – Axios

In a potential threat to future U.S. innovation, new international enrollment at U.S. colleges is down for the first time in more than a decade, according to a new report. It is the first hard sign that the Trump administration’s rhetoric may be frightening away some of the world’s best and brightest who traditionally have been drawn to settle and work in the U.S.

U.S. Core-Inflation Gauge Picks Up for First Time Since January – Bloomberg

U.S. inflation excluding food and fuel accelerated on an annual basis for the first time since January, a pickup that will be welcomed by Federal Reserve officials debating the pace of interest-rate increases, a Labor Department report showed Wednesday.

Connecticut Submarine Maker Struggles to Find Workers – WSJ

Higher defense spending is boosting military contractors in Connecticut, but General Dynamics is having trouble finding enough qualified employees for its Electric Boat submarine plant.

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GLOBAL ECONOMY DATA

Japan Extends Economic Growth Streak – The New York Times

The Japanese economy grew for a seventh consecutive quarter — the longest streak in nearly two decades — according to government data released Wednesday.

Japanese businesses have benefited from rising global demand because of an improving global economic outlook, as well as from sustained financial stimulus measures from the government and the central bank. Unemployment is at a multidecade low, the stock market is buoyant, and even the country’s longtime economic nemeses — persistent wage and price deflation — have eased.

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POSITIONING, INFLECTION, MARKET CALLS

The Hedge Fund Love Affair With Tech Is Souring – Bloomberg

Hedge funds are increasing short bets on tech stocks, especially in the U.S., where combined positioning shows managers the least reliant on American technology firms in nine months, according to data from Credit Suisse Group AG’s prime services. The worldwide view also reveals newly added bearish wagers while long positions have remained steady.

An increase in short bets is especially pronounced in U.S. stocks, where combined positioning shows managers the least reliant on American technology firms in nine months. The broader global view also reveals newly added bearish wagers while long positions have remained steady.

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COLOR, EARNINGS, SENTIMENT, VALUATIONS

Foxconn’s Profit Down 39% Amid iPhone Production Woes – WSJ

Foxconn Technology Group, the world’s largest contract manufacturer of electronics, posted a 39% drop in quarterly net profit amid production challenges dogging the flagship product of its biggest customer, Apple Inc.

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DEALS, MERGERS, IPOs, LBOs, RESTRUCTURINGS

Airbus clinches $49.5bn single aisle aircraft deal

Airbus clinched what is thought to be the biggest deal in its history on Wednesday with an agreement to sell 430 single aisle aircraft to four low-cost airlines linked to US investment group Indigo Partners for a headline price of $49.5bn.

The deal, which packages together aircraft for ultra low-cost operators Wizz Air of Hungary, JetSmart of Chile, Volaris of Mexico and Frontier of the US, is believed to be the largest order for aircraft by volume in the history of aviation.

Activist Peltz Narrowly Wins P&G Board Seat, New Count Shows – WSJ

Activist investor Nelson Peltz won a proxy fight for a board seat at Procter & Gamble by a slim 43,000 vote margin, a preliminary report says, weeks after the company had declared victory in fending off his bid.

After the most expensive proxy fight in history, an independent firm’s count of the roughly 2 billion votes that were cast found Mr. Peltz had 42,780 more votes than a P&G PG director he ran against, the company said. That is a margin of 0.0016% of the shares outstanding.

Mr. Peltz quickly claimed a victory Wednesday and called on P&G to concede the contest and let him into its boardroom. But the Cincinnati giant didn’t admit defeat, saying Mr. Peltz “is leading” but that the tally was still preliminary and subject to a challenge period. P&G is still deciding whether to contest the results, a person familiar with the matter said.

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FOREX, CRYPTOCURRENCY, EXCHANGE IMPACTS

The Bitcoin Exchange That CME Plans to Use for Futures Is Down – Bloomberg

Problems in the fifth-biggest exchange by bitcoin trading volume come just three days after Seoul-based Bithumb’s servers crashed as a sudden surge in usage caused a connection failure. The issues raise concerns about whether largely unregulated exchanges, without the safeguards of securities bourses, will be able to reliably provide prices for indexes tied to futures and exchange traded funds, and cope with higher trading volume that could come if institutional investors start buying cryptos.

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FINTECH, BLOCKCHAIN, DIGITAL PAYMENTS

MasterCard has filed a patent on its own blockchain-based money transfer solution | TechCrunch

While the abstract itself doesn’t mention blockchain, MasterCard intends to use the technology in the process, describing a step in which “the payment guarantee data stored in the third data element included in the received transaction message includes at least a blockchain network identifier and (i) a public key or (ii) a destination address, the record of payment guarantee is a blockchain transaction for payment of the transaction amount stored in the second data element included in the received transaction message to (i) the destination address or (ii) a destination address associated with the public key, and the computing system is a node in a blockchain network corresponding to the blockchain network identifier.” That’s definitely a mouthful, but it basically means they’ll store a record of the transaction in some immutable form.

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POLLUTION, CLIMATE & ENVIRONMENT

These are the melting glaciers that might someday drown your city, according to NASA – The Washington Post

Thanks to NASA — and the laws of physics — 293 coastal cities can now know which specific glaciers pose the most dangers to them if they melt.

Chemical Plant Owners Urged to Prepare for Worst-Case Flooding – WSJ

The U.S. Chemical Safety Board is warning that many industrial sites where hazardous materials are stored may not be adequately prepared for extreme weather events.

France will replace US funding for UN climate science, says Macron

In an address to a conference charged with writing the rules of the deal struck in Paris in 2015, Macron promised to replace every cent of $2m of funding withdrawn by the US from the UN’s Intergovernmental Panel on Climate Change (IPCC).

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CANADA, AUSTRALIA, NEW ZEALAND

Australia’s Jobless Rate Falls to Lowest in More Than Four Years – Bloomberg

Australia’s unemployment rate unexpectedly fell in October as fewer people sought work, while full-time jobs continued to surge.

Australia’s same-sex marriage postal survey: 61.6% yes, 38.4% no – as it happened | Australia news | The Guardian

61.6% of people who took part in the non-binding postal survey said Yes. The No campaign got 38.4% – lower than the 40% that former prime, Tony Abbott said would deliver a “moral victory”.

Vancouver Limits Airbnb, in an Effort to Combat Its Housing Crisis – The New York Times

The city is struggling with both exceptionally high housing prices and unusually low vacancy rates for apartments and houses. Officials hope the restrictions will free up more housing for long-term rentals.

But an analysis of the regulations city officials prepared for the City Council offers no hard evidence that more apartments will become available but it characterized the measures as a way to protect further losses of rental units. And Airbnb said Wednesday that the company might challenge the new rules.

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BREXIT, SCOXIT, LONDON, UK ECONOMY

Manfred Weber: May knows Brexit will cause damage – POLITICO

Theresa May is willing to make an extra effort to get Brexit talks to the next phase but is also aware that leaving the European Union “is difficult and will cause damage,” a senior member of the European Parliament said Wednesday.

Shortly after a meeting with the British prime minister in No. 10 Downing Street, Manfred Weber, head of the European People’s Party group in the European Parliament, said he could see that “May is willing to make a step forward towards Europe so that progress can be made by December.”

Hundreds reject tech jobs after Brexit vote

Hundreds of people have rejected technology jobs in Britain since the UK voted to leave the EU, according to a survey of entrepreneurs who say an intensifying skills shortage has already damaged the country’s reputation as a centre for innovation.

More than a third of entrepreneurs have lost a prospective hire because of uncertainty about immigration following the EU referendum, according to a survey of 5,400 founders carried out by Tech London Advocates, an industry body.

UK jobs boom losing momentum, new data suggests

Economists were divided over whether the official data were merely a blip, or a sign the labour market was beginning to turn. The level of employment fell briefly last year too, only to recover strongly in subsequent months.

“Given the jobs-rich, productivity-light composition of the UK’s economic expansion in recent years, news of stagnation in the employment level is potentially serious,” said Sam Hill, economist at RBC Capital Markets. “However, as ever, there is a case for cautioning against reading too much into one data point.”

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GEOPOLITICS, CRIME, TERRORISM

Africa’s richest woman removed as head of Angola state oil group

Angola’s president João Lourenço has dismissed Africa’s richest woman, Isabel dos Santos, as head of the country’s state oil company, in a bold move to wrest power from the family of the country’s former leader.

The daughter of former president José Eduardo dos Santos, who stepped down ahead of elections in August after 38 years in power, had run Sonangol for just under 18 months, having been appointed by presidential decree in June 2016.

The move to replace her with the secretary of state for oil, former Sonangol executive Carlos Saturnino, underscores Mr Lourenço’s apparent determination to move swiftly against the old regime and to establish his own power base.

Macron invitation sets up Hariri move to Paris

The French government has said Saad al-Hariri, the former Lebanese prime minister, will fly to Paris “in the coming days” amid allegations that he is being held against his will in Riyadh by Saudi authorities.

President Emmanuel Macron extended an invitation to Mr Hariri and his family to come to France after speaking to Mohammed bin Salman, Saudi Arabia’s crown prince, the Elysée Palace said in a statement on Wednesday. An Elysée official declined to elaborate on how long Mr Hariri would stay in Paris.

Spectre of immigration sparks rightward turn in Italy

Rightwing parties, including the anti-immigrant Northern League, the more moderate Forza Italia led by former premier Silvio Berlusconi, and the far right Brothers of Italy, are heading into the poll with the winds at their backs, partly due to their anti-immigration stance. This month, a Berlusconi-led coalition snatched control of Sicily from the centre-left in a regional election that was widely seen as a barometer of the national mood. Next year they have a realistic chance of trumping a deflated ruling centre-left Democratic party, led by former prime minister Matteo Renzi, as well as the anti-establishment Five Star Movement, headed by comedian Beppe Grillo, to win control of the Italian government.

Duterte tells Canada’s Trudeau to ‘lay off’ the ‘bullsh*t’ | Daily Mail Online

President Duterte said he was angered and insulted after Canada PM Trudeau spoke of his government’s war on drugs, which has been widely condemned for leaving thousands of suspects dead.

US unfreezes Yemeni assets in boost to Saudi-backed government

The Trump administration has unfrozen Yemeni central bank funds in a boost to the country’s Saudi-backed government in its war against Iranian-allied rebels, according to three officials familiar with the matter.

UCLA basketball players suspended from team after China shoplifting incident – The Washington Post

LiAngelo Ball, Jalen Hill and Cody Riley will not participate in workouts or practices, will not travel with the team and will not dress for home games, their coach announced.

Security clampdown bites in China’s Xinjiang region

Since taking office last August, Xinjiang’s new party secretary, Chen Quanguo, has overseen an expansive overhaul of the already notorious surveillance apparatus in an area almost seven times that of the UK.

“Measures of control have resulted in a feeling that southern Xinjiang has become an open-air prison,” says Darren Byler, an anthropologist at the University of Washington who has done extensive fieldwork in the region.

17X16 - XINJIANG REGION

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RESISTANCE, PROTEST, COUNTER-EFFORTS

3,000 form chain of light against far right in Austrian government

At least 3,000 people formed a chain of light in Vienna on Wednesday to protest against the formation of a government that includes the far-right Freedom Party.

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TRUMP WORLD

Trump deletes tweet appearing to reference wrong mass shooting

Hours after a shooting spree in Northern California left five people dead, President Trump tweeted his condolences — about the church shooting in Sutherland Springs, Texas, that occurred nine days earlier.

Inside the Breitbart Embassy, Where Bannon Parties and Plots

Since leaving the White House, he’s moved his operation to a D.C. townhouse where he runs Breitbart News, hosts glitzy parties, and possibly resides.

“Total Bullshit”: Ex-Staffers Say Tillerson’s “Disdain” Is Killing the State Department | Vanity Fair

The former C.E.O. believes that the private sector does everything better—but diplomacy might not run on business principles. There is a “danger of us losing the art of diplomacy,” one former foreign-service officer said. “Tillerson continues to apply black-and-white logic to a profession that operates very much in the gray.”

Wilbur Ross Sued by Firm’s Ex-Managing Directors Over Fees – Bloomberg

U.S. Commerce Secretary Wilbur Ross and the company he founded, WL Ross & Co., were sued by three former managing directors who claim the corporate entities created to handle equity funds were improperly charged millions of dollars in fees.

We’re Cutting Our Calculation of Wilbur Ross’s Net Worth to $860 Million – Bloomberg

The Bloomberg Billionaires Index lowered its net worth calculation for U.S. Commerce Secretary Wilbur Ross to $860 million after determining that figures he provided couldn’t be independently verified.

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TRADE, PROTECTIONISM, REGULATION, OVERSIGHT

Under Trump, Banking Watchdog Trades Its Bite for a Tamer Stance – The New York Times

A change in course has made the Office of the Comptroller of the Currency, which oversees the nation’s biggest banks, part of a campaign to roll back regulations.

Goldman Sachs’s China Deal Prompts Questions About Country’s U.S. Investment – The New York Times

The bank’s $5 billion pact with an arm of the Chinese government to make deals in the United States highlights political divisions over trade and investment.

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ELECTORAL POLITICS

Northam is first Dem to win key Virginia county in 56 years | TheHill

Virginia Gov.-elect Ralph Northam is the first Democrat to win a key county in the state since 1961,

Fight over 55 uncounted ballots could swing Virginia state House | TheHill

Democrats believe 55 unopened and uncounted absentee ballots in Stafford County could be the key to their party taking control of the Virginia House of Delegates.

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AUTOS, ELECTRIC, SELF-DRIVING

Elon Musk Plugs New Truck Even as Model 3 Faces Delays – WSJ

Billionaire entrepreneur Elon Musk will find himself in a familiar place on Thursday night, pitching an unconventional idea to capture the imagination of investors—while his company Tesla Inc. is grinding through “production hell” with the Model 3 sedan.

This time, Mr. Musk will be promoting an electric semitrailer truck, which he has been trumpeting on Twitter for months. “This will blow your mind clear out of your skull and into an alternate dimension,” Mr. Musk, Tesla’s chief executive, promised in a tweet Sunday ahead of this week’s demo event in Hawthorne, Calif.

Tesla shares the next day soared 4%—the kind of pop that continues to fuel Tesla’s stock run this year as expectations build for Mr. Musk to fulfill his vision of a world complete with electric self-driving vehicles.

What Tesla’s Semi Truck Must Do to Seduce Truckers – Bloomberg

Unlike the U.S. market for luxury sedans and SUVs, where Tesla has been able to succeed against stylish, high-priced rivals with stylish, high-priced electric vehicles, truck drivers and delivery fleets need to make money with their big rigs. It’s an unglamorous and ultralow-margin business in which one factor matters above all else: cost. And the truck market is huge. In North America alone, the largest heavy duty freight trucks—Class 8 semis—account for about $30 billion in sales each year, or more than 250,000 new trucks, according to industry data tracked by Bloomberg.

Tesla’s foray into commercial trucking is coming at an impossibly tough time for the company. Its first mass-market car, the Model 3, is already months behind schedule, and Tesla is spending a billion dollars a quarter to get things up to speed. Skeptics will see the truck unveiling as a distraction from the company’s biggest existential test yet.

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MEDICAL, PHARMA, BIOTECH

Drugmaker Acorda Plunges After Deaths in Parkinson’s Trial – Bloomberg

Acorda Therapeutics Inc. plunged by a record 40 percent after patients died in final-stage studies of a treatment for Parkinson’s disease, in a fresh blow to a drugmaker that had started to rebound from earlier setbacks.

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LUXURY, HIGH END, ASPIRATIONAL

Leonardo da Vinci Painting Sells for $450.3 Million, Shattering Auction Records – The New York Times

It was an astounding price, even as some experts criticized a Christie’s marketing campaign that glossed over the painting’s flaws.

Sotheby’s Fails to Sell 37-Carat Diamond Amid Auction Jitters – Bloomberg

The largest known fancy intense pink diamond went unsold at Sotheby’s in Geneva on Wednesday amid jitters in the market for precious stones.

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MISCELLANEOUS

The 9 Best Photos From Mnuchin’s Trip to See His Name on the Dollar Bill – Bloomberg

U.S. Treasury Secretary Steven Mnuchin on Wednesday took a tour of the Bureau of Engraving and Printing to see production of the new $1 bills with his signature, Bloomberg’s Saleha Mohsin reports. Mnuchin’s wife, Louise Linton, joined the visit, along with Jared Kushner, President Donald Trump’s son-in-law and adviser, and several Treasury officials. The new bills are scheduled to go into circulation next month.

17X16 - THE MNUCHINS

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