Macro Links Oct 11th – IQ Test

Macro Links Oct 11th – IQ Test

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FORBES INTERVIEW, “IQ TEST”, CORKER FEUD

Inside Donald Trump’s Head – The Forbes Interview

“I think it’s fake news. But if he did that, I guess we’ll have to compare IQ tests. And I can tell you who is going to win.”

For Trump, the Reality Show Has Never Ended – The New York Times

Mr. Trump’s West Wing has always seemed to be the crossroads between cutthroat politics and television drama, presided over by a seasoned showman who has made a career of keeping the audience engaged and coming back for more. Obsessed by ratings and always on the hunt for new story lines, Mr. Trump leaves the characters on edge, none of them ever really certain whether they might soon be voted off the island.

“Absolutely, I see those techniques playing out,” said Laurie Ouellette, a communications professor at the University of Minnesota who has studied reality television extensively. “Reality TV is known for its humiliation tactics and its aggressive showmanship and also the idea that either you’re in or you’re out, with momentum building to the final decision on who stays and who goes.”

Trump proposes ‘IQ tests’ faceoff with Tillerson after secretary of state calls him a ‘moron’ – The Washington Post

Reporters asked Trump over the weekend about his relationship with Tillerson. “We have a very good relationship,” Trump said Saturday. “We disagree on a couple of things. Sometimes I’d like him to be a little bit tougher. But other than that, we have a very good relationship.”

Mensa offers to host IQ test for Trump and Tillerson | TheHill

“American Mensa would be happy to hold a testing session for President Trump and Secretary Tillerson,” said Charles Brown, the group’s communications director.

A brief history of Trump challenging people to IQ tests – The Washington Post

Trump both puts a lot of weight on IQ tests as an objective measure of intelligence (to which scientists probably would object) and believes that few, if any, people can match his own score. Trump uses his IQ like he uses his net worth: It’s always higher than you might assume and there’s no way to ever pin it down.

Trump Has the Highest IQ. He Says So Himself. – Bloomberg

Trump has also boasted that he has a higher IQ than George W. Bush, Barack Obama, George Will, Karl Rove and the entire staff of the Washington Post. Lest he missed anyone, Trump has also issued blanket warnings to those who might question his intellectual chops, as he did in this Twitter post from 2013:

17V11 - TRUMP IQ FEUD

New York Times debunks Trump’s claim that it ‘set up’ Bob Corker – Business Insider

President Donald Trump tweeted on Tuesday morning that The New York Times “set Liddle’ Bob Corker up by recording his conversation.”

But by Tuesday afternoon, The Times had released audio of the senator explicitly asking for his bombshell interview, published Sunday, to be recorded. “I know they’re recording it,” Corker said of his aides who were on the line with him along with a Times reporter. “And I hope you are, too.”

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PRESSURE COOKER, NUCLEAR FOOTBALL, POLLING

A ‘pressure cooker’: Trump’s frustration and fury rupture alliances, threaten agenda – The Washington Post

One Trump confidant likened the president to a whistling teapot, saying that when he does not blow off steam, he can turn into a pressure cooker and explode. “I think we are in pressure cooker territory,” said this person, who spoke on the condition of anonymity to talk candidly.

Kelly and Mattis discussed literally tackling Trump in the event he ‘lunges for the nuclear football’

“A conversation I had with a very prominent Republican today, who literally was saying that they imagine Gen. Kelly and Secretary Mattis have had conversations that if Trump lunged for the nuclear football, what would they do?” Sherman told NBC’s Chris Hayes. “Would they tackle him? I mean literally, physically restrain him from putting the country at perilous risk.”

White House Allies Worry Trump Has Become Unstable | Vanity Fair

Trump’s fraying relations with the establishment factions of the G.O.P. are not simply bluster: they are part of his political calculus. As he burns bridges in Washington and pushes senators to liken his administration to an unruly primary school, governed by social-media attacks and warring wives, he seems to be bolstering his appeal to his base. But catering to those core voters who revel in the chaos also risks blowing up a fragile political coalition. “We have been watching the slow-motion breakup of the Republican Party, and Trump is doing what he can to speed it up,” said veteran pollster Patrick Caddell to the Post. “Trump is firmly placing himself on the outside, trying to become an almost independent president . . . He knows that many people will be with him, that he helps himself when he’s not seen as the Republican president.” For many, the cost of containing Trump and maintaining the running of his “adult day care center” is becoming unaffordable.

Poll: Trump approval falls in every state | TheHill

A Morning Consult survey found that Trump’s national job performance numbers have also dropped since January. In September, 43 percent of respondents said they approved of Trump’s performance, and 52 percent disapproved. In January, 49 percent of voters approved of Trump’s performance, compared to 39 percent who disapproved.

Trump’s net approval rating dropping in every state – Business Insider

Trump’s net approval rating, which is his disapproval rating subtracted from his approval rating, went down by at least 11 points in every state between January and September. The smallest change was in Louisiana, where his net approval dipped by 11.4 points. The largest change took place in Illinois, where his net approval dropped by 30.6 points.

17V11 - CHANGE IN TRUMP NET APPROVAL

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JAPAN STEEL SCANDAL

Kobe Steel’s Falsified Data Is Another Blow to Japan’s Reputation – The New York Times

Big manufacturers of cars, aircraft and bullet trains have long relied on Kobe Steel to provide raw materials for their products, making the steel maker a crucial, if largely invisible, pillar of the Japanese economy.

Now, Kobe Steel has acknowledged falsifying data about the quality of aluminum and copper it sold, setting off a scandal that is reverberating through the global supply chain and casting a new shadow over the country’s reputation for precision manufacturing.

The fallout has the potential to spread to hundreds of companies. Big multinationals, including automakers like Toyota Motor, General Motors and Ford, as well as aircraft manufacturers like Boeing and Mitsubishi Heavy Industries, are investigating.

The companies are trying to determine if substandard materials were used in their products and, if so, whether they present safety hazards. It is a daunting task, since multinationals source from various suppliers and producers.

The scandal hits a tender spot for Japan. The country relies on its reputation for quality manufacturing as a selling point over China and other countries that offer cheaper alternatives. But its reputation has been marred by a series of problems at some of Japan’s biggest manufacturers.

Kobe Steel Faked Data for Metal Used in Planes and Cars – Bloomberg

The industrial scandal engulfing Kobe Steel Ltd. began to reverberate overseas as Japan’s third-biggest steelmaker said its staff falsified data about the strength and durability of some aluminum and copper products used in planes, trains and potentially a space rocket.

Kobe Steel’s admission raises fresh concern about the integrity of Japanese manufacturers. Nissan Motor Co. last week said it would recall more than 1 million cars after regulators discovered unauthorized inspectors approved vehicle quality, while Takata Corp. pleaded guilty this year of misleading automakers about the safety of its air bags. Kobe Steel said the products were delivered to more than 200 unidentified companies, with the falsification intended to make the metals look as if they met client quality standards.

Japan’s Steel Scandal Deepens as More Faked Data Emerges – Bloomberg

The scandal engulfing Kobe Steel Ltd. deepened Wednesday as the steelmaker said it may have falsified data about two more products, triggering a further collapse in its shares and intensifying concern that compromised material found its way into cars, trains and aircraft.

After admitting Sunday that it provided false information about the strength and durability of some aluminum and copper, Japan’s third-largest steel producer said data about iron ore powder and another product may also have been faked. Shares plunged 18 percent in Tokyo, with $1.6 billion wiped off the company’s market value since the revelations were made.

17V11 - KOBE STEEL SHARES

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CATALAN INDEPENDENCE

Catalan leader steps back from immediate independence declaration

Catalonia’s president told the regional parliament in Barcelona the region had won the right to become independent after the October 1 vote but was prepared to wait “a few weeks” as it holds talks.

“I assume the mandate that Catalonia becomes an independent state in the form of a republic,” he said, prompting a long bout of applause from the pro-independence camp in the regional parliament. But he added: “I propose suspending the effects of the declaration of independence to undertake talks in the coming weeks without which it is not possible to reach an agreed solution.”

The approach taken by Mr Puigdemont, in a tense and long-awaited intervention before Catalan lawmakers, was aimed at staving off an immediate, heavy-handed riposte from the national government in Madrid, which has long threatened to intervene to withdraw Catalan autonomy if the region declares independence.

But it leaves the outcome of Spain’s most serious political and constitutional crisis since an attempted military coup in 1981 in the balance.

Catalan President Stops Short of Declaring Immediate Independence – WSJ

Catalonia’s separatist leader backed away from an immediate declaration of independence from Spain, slowing a headlong push for secession and potentially drawing out the tense political standoff with Madrid.

Catalonia independence declaration signed and suspended – BBC News

The referendum resulted in almost 90% of voters backing independence, Catalan officials say. But anti-independence voters largely boycotted the ballot – which had a reported turnout of 43% – and there were several reports of irregularities. National police were involved in violent scenes as they manhandled voters while implementing the legal ruling banning the referendum.

Euro Rises to Fresh High After Catalan Speech; Dollar Drops – Bloomberg

The euro rose to its highest in more than a week after Catalonia’s president struck a conciliatory tone in a speech about the region’s independence referendum.

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NFL PROTESTS

Goodell and N.F.L. Owners Break From Players on Anthem Kneeling Fight – The New York Times

As the president continues to harangue the league over the anthem, and a number of fans across the country express displeasure with the handful of players who continue to kneel during the anthem, a growing pool of owners is trying to defuse the politically charged issue, even if it means confronting the players the owners previously sympathized with.

One of the most powerful owners in the league is now speaking openly about benching players who do not stand for the anthem, and Goodell, who said previously that players had a right to voice their opinions, is siding with the owners opposed to letting the players demonstrate. The owners plan to meet next week to establish what to do about the anthem gestures.

“Like many of our fans, we believe that everyone should stand for the national anthem,” Goodell said in a letter sent to owners on Tuesday.

Joe Namath defends NFL protesters: ‘Look up the definition of oppression’ | TheHill

NFL Hall of Famer Joe Namath defended athletes who protest during the national anthem on Tuesday, saying on Fox News that the original intent of the protests was to highlight racial injustice and oppression.

NAACP: Cowboys owner violating players’ rights | TheHill

The NAACP on Tuesday condemned Dallas Cowboys owner Jerry Jones’s decision not to allow his team’s players from taking the field if they kneel in protest during the national anthem.

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VEGAS SHOOTING, CHARLOTTESVILLE, RUSSIA PROBE

Investigators Change Key Piece of Timeline in Las Vegas Shooting – WSJ

The gunman responsible for the deaths of 58 people here shot a hotel security guard minutes before he began firing into the crowd of concertgoers from his room, law-enforcement officials said Monday.

That revelation significantly changes the timeline of events and deepens the mystery around the Oct. 1 shooting. The change to the timeline leaves it unclear why Paddock stopped shooting, and investigators didn’t comment on the matter. They had earlier said he fired on the crowd for nine to 11 minutes.

Clark County Sheriff Joseph Lombardo said Monday that “some things are going to change” in the investigation as police learn more information. After the press conference, Las Vegas Metropolitan Police Department spokeswoman Laura Meltzer said police believe Mr. Campos was able to notify his security dispatcher after he was shot, allowing police to more quickly find Paddock’s room.

Mr. Lombardo during the news conference also said police are confident that Paddock carried out the massacre alone.

After Las Vegas Shooting, a Tight-Lipped Sheriff Faces a Maddening Case – The New York Times

In nearly 30 years with the Las Vegas police, Joseph Lombardo has helped defuse an armed standoff between federal agents and local ranchers, struggled to contain a spike in homicides and defended his officers against accusations of using excessive force against a professional football player.

But nothing could have fully prepared him for last week.

Since a gunman smashed out windows in a casino hotel suite on Oct. 1 and rained bullets on a country music festival, killing 58 people and wounding hundreds more, Sheriff Lombardo has found himself in charge of one of the most frustrating criminal investigations in memory: a mass shooting by a man who seems to have left no public accounting for his actions.

So far, Sheriff Lombardo, a plain-spoken man whose persona contrasts sharply with his city of flashing billboards and jangling slot machines, has not been able to uncover a motive for the shooting. And he has wondered aloud whether something — anything — might have prevented the bloodshed.

Black man attacked by white supremacists in Charlottesville faces felony charge – The Washington Post

The black man beaten in a Charlottesville parking garage by white supremacists after a “Unite the Right” rally has been charged with a crime in connection with the incident, even as police continue searching for some of the people who kicked him to the ground and pummeled him.

Harris’s attorney, S. Lee Merritt, denounced the charge and said it was orchestrated by the League of the South, an organization labeled by the Southern Poverty Law Center as a hate group. Crews, who runs the group’s North Carolina chapter, was not injured “in any way” by Harris, Merritt said.

“We find it highly offensive and upsetting,” Merritt said, “but what’s more jarring is that he’s been charged with the same crime as the men who attacked him.”

Carter Page says he won’t testify before Senate Intelligence panel in Russia probe – POLITICO

Carter Page, a former foreign policy adviser to the Trump campaign, informed the Senate Intelligence Committee on Tuesday that he will not be cooperating with any requests to appear before the panel for its investigation into Russian meddling in the 2016 election and would plead the Fifth, according to a source familiar with the matter.

Nunes Subpoenaed Firm Behind Trump Dossier Without Telling Democrats

Rep. Devin Nunes, the California Republican who chairs the House Intelligence Committee, issued subpoenas to a U.S. firm involved in the Donald Trump dossier without consulting the Democrats on the committee, three people familiar with the matter told NBC News.

A source close to Fusion GPS, a firm co-founded by former Wall Street Journal reporter Glenn Simpson, confirmed to NBC News that its partners had received subpoenas from the committee. And a Democratic congressional source told NBC News that the subpoenas were issued unilaterally by the Republicans “despite good faith engagement thus far by the witnesses on the potential terms for voluntary cooperation.”

“This is a blatant attempt to undermine the reporting of the so-called ‘dossier,’ even as its core conclusion of a broad campaign by the Russian government to influence the outcome of the 2016 presidential election has been confirmed by the U.S. intelligence community and is now widely accepted as fact,” Joshua Levy, a lawyer for Fusion GPS, told NBC News in a statement.

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NORTH KOREA, PUERTO RICO

North Korea hacked war blueprint, says Seoul lawmaker

Lee Cheol-hee, a member of the ruling Democratic party, on Tuesday said hackers had broken into a defence data centre in September last year. He said stolen documents included Operational Plan 5015, the most recent blueprint for war with North Korea.

The plans reportedly includes detailed procedures for a decapitation strike against the North Korean regime, a proposal that has infuriated Kim Jong Un, the country’s supreme leader.

The development comes amid growing anxiety in South Korea that US President Donald Trump intends to use military action to curb North Korea’s rapidly developing nuclear and ballistic missiles programmes.

North Korea Suspected of Hacking U.S.-South Korean War Plans – WSJ

North Korean hackers are believed to have stolen sensitive military secrets, including joint U.S.-South Korean plans detailing how to eliminate the Pyongyang leadership, during an attack last year on Seoul’s defense data system.

Japan’s New Satellite to Help Keep Self-Driving Cars—and North Korea—In Line – WSJ

With its latest satellite launch, Japan is taking a leap in technology to keep its self-driving cars in their highway lanes, land delivery drones on matchbox-sized targets in the country, and potentially help destroy North Korean missile sites.

Tuesday’s launch, Japan’s fourth of a geo-positioning satellite, will allow the country to start operating its own version of the U.S. military-controlled Global Positioning System in April, a network that will cover Japan and the surrounding region.

Officials at Japan’s space center in the south of the country applauded as the successful deployment of the satellite was announced about 30 minutes after the launch.

Puerto Rico’s Health Care Is in Dire Condition, Three Weeks After Maria – The New York Times

As the island struggles to recover from the devastation of Hurricane Maria, sick people remain in mortal peril. Hospitals are short of medicines, power supplies and staff.

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RUSSIA, FACEBOOK

Cold War in the Arctic: Russia, Norway Dig In – WSJ

Norway, a member of the North Atlantic Treaty Organization, and Russia subsidize these unprofitable mines to keep a strategic footprint on an icy group of islands where Oslo and Moscow have been the main players since a 1920 treaty among multiple nations recognized Norwegian sovereignty but allowed other nations to develop some commercial interests.

But on Thursday, Norway will decide whether it wants to continue plowing money into coal production here, a move that could weaken its hold on the islands just as Russia cements its Arctic presence with its largest military buildup there since the Cold War.

The mines highlight Russian President Vladimir Putin’s focus on projecting power despite the cost. Russia continues to use its military in eastern Ukraine, despite economic sanctions that have hobbled its economy, and is investing in the defense of other isolated parts of its territory, including the Kuril Islands, an archipelago also claimed by Japan.

How Russia Harvested American Rage to Reshape U.S. Politics – The New York Times

A New York Times examination of hundreds of those posts shows that one of the most powerful weapons that Russian agents used to reshape American politics was the anger, passion and misinformation that real Americans were broadcasting across social media platforms.

The Russian pages — with names like “Being Patriotic,” “Secured Borders” and “Blacktivist” — cribbed complaints about federal agents from one conservative website, and a gauzy article about a veteran who became an entrepreneur from People magazine. They took descriptions and videos of police beatings from genuine YouTube and Facebook accounts and reposted them, sometimes lightly edited for maximum effect.

Other posts on the Russian pages used stilted language or phrases rarely found in American English. Yet their use of borrowed ideas and arguments from Americans, which were already resonating among conservatives and liberals, demonstrated a deft understanding of the political terrain. The Russians also paid Facebook to promote their posts in the feeds of American Facebook users, helping them test what content would circulate most widely, and among which audiences.

Sandberg to Discuss Facebook Ads With Congressional Black Caucus – Bloomberg

Facebook Inc. Chief Operating Officer Sheryl Sandberg is meeting with the Congressional Black Caucus this week to discuss race-related ads on the social network, according to a schedule received by the members. “I think her meeting face-to-face with African Americans will help,” delegate Eleanor Holmes Norton, a nonvoting House Democrat representing the District of Columbia, said in an interview.

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TAX PLAN, TRADE FEARS

Trump Allies Fear His Corker Feud Is Putting the GOP Tax Plan at Risk – Bloomberg

Allies of President Donald Trump say they fear his feud with Republican Senator Bob Corker risks unraveling the White House tax overhaul effort and that another major legislative failure could hobble the administration for the rest of his term.

A setback for Trump’s promised plan to significantly change the tax code would only solidify perceptions that the president is an ineffective leader who is unable to convince his own party to back his priorities, according to one key ally who requested anonymity to discuss concerns about the White House agenda.

Republicans have only a narrow majority in the Senate, and Trump’s decision to go on the attack against Corker sparked immediate concern among supporters of the tax overhaul effort that the president’s insults also could alienate other key lawmakers. He’s previously lashed out publicly at Senate Majority Leader Mitch McConnell and Arizona Senator John McCain.

Trump repeats false claim that US is the highest taxed nation in the world | TheHill

White House press secretary Sarah Huckabee Sanders was asked last week why Trump continues to repeat this claim. “I believe there are specific sectors within the country that are among the highest taxed in the world, and we’ll be happy to provide that data to you,” Sanders said during a press briefing last week.

U.S. businesses fear NAFTA doomed; Mexico warns of consequences

The most powerful U.S. business lobby accused the Trump administration of making “poison pill proposals” to sabotage NAFTA on Tuesday, as Mexico’s foreign minister said the demise of the regional trade pact would hurt bilateral cooperation. The process of renegotiating the 23-year-old North American Free Trade Agreement has turned increasingly acrimonious. Mexico accuses U.S. President Donald Trump of spoiling for a “protectionist war” with proposals aimed at balancing trade.

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WAL-MART BOOSTS DOW

Wal-Mart Plans Further Cost Cuts as Competition With Amazon Intensifies – WSJ

Wal-Mart Stores Inc. plans to open fewer U.S. stores than it has in at least 25 years and deepen its cost-cutting efforts, attempting to free up cash for e-commerce and store improvements in an increasingly competitive retail environment.

The strategy is central to Wal-Mart’s plan to fend off Amazon.com Inc. and a sign that executives believe the profitable, cavernous stores Wal-Mart built rapidly for decades won’t grow through expansion.

At an investor meeting on Tuesday at the retailer’s Bentonville, Ark., headquarters, executives said they would open about two-dozen U.S. stores in the 2019 fiscal year. Instead, Wal-Mart will remodel existing buildings and spend on its e-commerce infrastructure and services like home grocery delivery.

Wal-Mart sees 40 percent online sales growth next year, shares rise

Wal-Mart Stores Inc on Tuesday forecast a 40 percent rise in U.S. online sales next year as it ramps up competition with Amazon.com Inc, boosting shares of world’s biggest brick-and-mortar retailer to the highest in more than two years.

Walmart announces $20 billion buyback to boost its stock price – Business Insider

The retailer on Tuesday morning announced that it had authorized up to $20 billion in stock buybacks over the next two years. That’s a massive amount of capital to be allocated for repurchases, which are frequently used by companies to boost shares during times devoid of other positive catalysts.

Not that Walmart will need to fall back on that tactic quite yet. In Tuesday’s release, the company also reaffirmed its earnings guidance for 2018, an encouraging sign given mounting pressures in an industry operating increasingly at the whim of Amazon.

Walmart surges on upbeat earnings guidance

In a trading update, Walmart reiterated its guidance for the current 2018 fiscal year. However, it said it expected earnings to climb 5 per cent in the next fiscal year as its investment in ecommerce continued to pay off. Net sales were expected to grow 3 per cent for the fiscal 2019 year, driven by same-store sales growth as well as what it predicted would be a 40 per cent jump in US online sales.

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HARVEY WEINSTEIN

From Aggressive Overtures to Sexual Assault: Harvey Weinstein’s Accusers Tell Their Stories | The New Yorker

In the course of a ten-month investigation, I was told by thirteen women that, between the nineteen-nineties and 2015, Weinstein sexually harassed or assaulted them, allegations that corroborate and overlap with the Times’ revelations, and also include far more serious claims.

Three women—among them Argento and a former aspiring actress named Lucia Evans—told me that Weinstein raped them, allegations that include Weinstein forcibly performing or receiving oral sex and forcing vaginal sex. Four women said that they experienced unwanted touching that could be classified as an assault. In an audio recording captured during a New York Police Department sting operation in 2015 and made public here for the first time, Weinstein admits to groping a Filipina-Italian model named Ambra Battilana Gutierrez, describing it as behavior he is “used to.” Four of the women I interviewed cited encounters in which Weinstein exposed himself or masturbated in front of them.

Gwyneth Paltrow, Angelina Jolie and Others Say Weinstein Harassed Them – The New York Times

“This way of treating women ends now,” Ms. Paltrow said as she and other actresses accused the producer of casting-couch abuses.

The Latest: Obamas say they are ‘disgusted’ by Weinstein

Former President Barack Obama and his wife, Michelle, say they are “disgusted” by revelations of sexual abuse and harassment being leveled at Harvey Weinstein. The couple said in a joint statement Tuesday evening, “Any man who demeans and degrades women in such fashion needs to be condemned and held accountable, regardless of wealth or status.”

Weinstein Resigns From Board of New York’s Robin Hood Foundation – Bloomberg

Harvey Weinstein, the movie mogul accused of sexual harassment and assault in recent days, quit the board of the Robin Hood Foundation, the New York-based anti-poverty charity where he rubbed shoulders with Wall Street and media elite.

Paltrow and Jolie join growing list of Weinstein accusers

Walt Disney, which owned Miramax, the studio Mr Weinstein founded with his brother, from 1993 to 2010 — a period that included some of the harassment allegations — said in a statement that it was “unaware of any complaints, lawsuits or settlements” involving Mr Weinstein’s behaviour. Michael Eisner, Disney’s chief executive at the time, wrote on Twitter: “Fired Weinsteins because they were irresponsible, and Harvey was an incorrigible bully. Had no idea he was capable of these horrible actions”.

As Its Namesake Founder Becomes a Liability, Weinstein Co. Weighs Name Change – WSJ

A Weinstein-free name is in the works as the studio has enlisted two ad agencies to develop a new brand identity, a person close to the company said. In addition, Harvey Weinstein’s name is being scrubbed from the credits of coming film and television projects, people familiar with the matter said, as the company tries to contain the fallout from allegations that Mr. Weinstein had for decades sexually harassed actresses, female subordinates and other women.

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CALIFORNIA WILDFIRES

Deadly California Wildfires Rip Through Once-Safe Areas – WSJ

Fire officials issued grim tallies as more than a dozen wildfires tore through Northern California: at least 15 people dead, more than 100 missing, 20,000 evacuated, 115,000 acres charred, and at least 2,000 homes and businesses destroyed.

17V11 - CALIFORNIA FIRES

Napa, Sonoma, Santa Rosa wine country fires: 15 dead, more than 180 missing – The Washington Post

Officials expect the death toll to rise and high winds in coming days could complicate efforts to contain fires that have already torched 115,000 acres of land, mostly in Northern California’s wine country. Seventeen wildfires, some fanned by up to 50 mph wind gusts whipping across parched terrain loaded with tinder, have forced about 25,000 residents to evacuate and destroyed at least 2,000 homes and commercial buildings.

“These folks have lost everything. When you look at the destruction, it’s literally like it exploded,” Cal Fire Director Ken Pimlott said at a news conference Tuesday. He added: “Some of these folks were literally just sleeping at home in bed and had no idea.”

Wildfires Burn Out of Control Across Northern California; 15 Are Dead – The New York Times

With roads still blocked by the police and fires still raging across broad swaths of Northern California, Matt Lenzi hiked through smoke-choked vineyards and waded the Napa River to reach the home his father lived in for 53 years. In its place, he found only blackened debris, blackened earth, and ash.

“Every piece of vegetation was gone,” said Mr. Lenzi on Tuesday, after going back in the vain hope of finding the pet cat that his father, Carl Lenzi, who is in his 80s, left behind when he fled for his life. “Even the barbecue melted, and that’s built to take heat.”

The fires ravaging California’s wine country since Sunday night — part of an outbreak of blazes stretching almost the entire length of the state — continued to burn out of control Tuesday, as the toll rose to at least 17 people confirmed dead, hundreds hospitalized, and an estimated 2,000 buildings destroyed or damaged. But state and local officials warned that with many people still missing and unaccounted for, and some areas still out of reach of emergency crews, those figures are almost certain to rise.

Wildfires Put $65 Billion of California Homes at Risk – WSJ

More than 172,000 homes in the Napa and Santa Rosa metropolitan areas are at risk from the wildfires raging in northern California, with an estimated cost to rebuild of $65 billion, according to a report released Tuesday.

In Wine Country, Wildfires Take a Toll on Vintages and Tourism – The New York Times

Fatal fires that have devastated parts of Northern California this week engulfed several wineries and destroyed several hotels and restaurants.

17V11 - SIGNORELLO ESTATE

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RATES, LIQUIDITY, SYSTEMIC RISK, BALANCE SHEETS

‘Passive’ Investing Frenzy Pushes Vanguard to $4.7 Trillion in Assets – WSJ

Vanguard’s assets topped $4 trillion for the first time at the end of January and have continued their upward climb since, now reaching $4.7 trillion. The firm’s rise and the growth of passive investing broadly are prompting changes spanning the financial world, from corporate governance to market structure.

At the same time, many investors fret that the so-called passive revolution that has fed the growth of Vanguard and rivals such as BlackRock Inc. is itself creating a series of structures that haven’t been tested and could be vulnerable to unpredictable behavior in a downturn.

17V11 - VANGUARD FLOWS

Rich Europeans Have $14.7 Trillion and Are Ready to Pile Into Credit Markets – Bloomberg

Thought that inflows into European corporate bonds had peaked? Think again. Analysts at Bank of America Merrill Lynch have just identified a whole new potential buyer base.

European high-net worth individuals with a total wealth of more than $14.7 trillion are holding close to 24 percent of their portfolios in cash, the most since 2013, according to analysts at the bank. Frustration over negative interest rates in the euro zone is likely to drive much of that money into credit, they said.

17V11 - EUROPEAN ASSETS

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MACRO OP-EDS, INSIGHT, EVENTS AND TRENDS

President Trump’s temper tantrums are coming at an accelerating pace – The Washington Post

What’s next? Ordinary toddlers eventually tire out after throwing a tantrum. But this is when the analogy breaks down. Full disclosure: Trump is not really a toddler, but an overindulged plutocrat who has never had to cope with political failure. With each negative shock or story he faces, his behavior worsens, and that just leads to a new cycle of negative press and disaffected GOP officials. The political effects of this is to weaken his historically weak presidency, making it harder for him to do anything that would counteract this trend. This doom loop means that his behavior is only going to get worse.

As Trump implodes, he threatens to hurt millions — out of pure rage and spite – The Washington Post

As the implosion of President Trump continues amid the increasingly bitter intraparty war engulfing the GOP, let’s not lose sight of the very real impact this spectacular meltdown could have: It could end up harming millions and millions of people.

Trump unleashed two tweets that telegraph the massive damage that may yet ensue. The first bashed Democrats for allegedly not wanting to secure our border and claimed this imperils a deal to protect the “dreamers.” The second signaled that Trump is set to broaden his efforts to sabotage the Affordable Care Act.

It is not easy to grapple with the staggering levels of bad faith and sheer unbridled malevolence that characterize Trump and his administration. It sometimes seems as if we haven’t hit on the language we need to do justice to it all. But there is a thread running directly from Corker’s suggestion that Trump is unfit for the presidency to these latest moves on immigration and health care, and to the harm they may end up doing to millions.

The bizarre situation where only retiring Republicans will talk about Trump’s fitness for office – Vox

Sen. Bob Corker’s warning that President Donald Trump’s recklessness could set the country “on the path to World War III,” issued in a New York Times interview on Sunday, is notable for a few reasons.

For one, this is a critique that many Democrats and even some Republicans have made for some time — and that even more Republicans are said to make regularly in private.

For another, this is coming publicly from a Republican senator in a conservative state who chairs a major committee, has worked closely with the administration, and has had strong relationships with several of its officials. So when he says he knows “for a fact” that there’s no “good cop, bad cop” act underway, we should take him seriously.

But perhaps most noteworthy of all is that Corker only felt empowered to make such a bold critique after he had decided to retire rather than run for reelection in 2018 (as he announced at the end of last month). Only Corker’s liberation from the concerns of electoral politics, it seems, has motivated him to say what he truly thinks.

Ending the Iran Deal Is An Invitation to War – The Atlantic

If President Trump chooses not to certify Iranian compliance with the nuclear agreement and in the weeks ahead takes risky steps that may eventually unravel it, we will not immediately face a crisis. But over time Iran is likely to restart its deliberate march to a nuclear bomb. This will not inevitably lead to war. But it will mean a significant increase in the risk that, whether it be tomorrow or 10 years down the road, a U.S. president will face the same difficult question we wrestled with years ago: risk a major war with Iran, or acquiesce to an Iranian nuclear weapon.

Growth Without Industrialization? by Dani Rodrik – Project Syndicate

Low-income African countries can sustain moderate rates of productivity growth into the future, on the back of steady improvements in human capital and governance. But the evidence suggests that, without manufacturing gains, the growth rates brought about recently by rapid structural change are exceptional and may not last.

Global childhood obesity rises 10-fold in 40 years

The number of obese children and teenagers across the world has increased 10-fold over the past four decades and is about to overtake the number who are underweight, according to the most extensive analysis of body weight ever undertaken.

The world’s highest childhood obesity levels are in the Pacific islands of Polynesia and Micronesia. Nauru has the highest prevalence for girls and the Cook Islands for boys: both above 33 per cent. Among wealthy countries, the US has the highest obesity rates for girls and boys of about 20 per cent. Levels in most of western Europe are in the 7 per cent to 10 per cent range.

Under Xi Jinping, China is turning back to dictatorship

Observers in China and beyond will be watching closely for signs Mr Xi intends to break recent precedent and stay in power past 2022, when he would normally be expected to step aside.

But the reality is we know almost as little about the inner workings of China’s top leadership as we do about North Korea’s. What we do know is what Mr Xi tells us, in his speeches and in the political slogans he coins. His own words reveal that the biggest and most important change under his watch has been the complete rejection of democracy and other “western values” such as free speech, constitutionalism, judicial independence and human rights.

In numerous private conversations over the years senior (sometimes very senior) party cadres would tell me that western-style democracy was the goal for China, but the transition must be gradual and carefully sequenced so as not to unleash chaos. Nobody is saying that now.

For the first time in nearly four decades there is not even a suggestion that China is moving towards building civil society or letting its people have more say in how they are governed. Instead, Mr Xi offers them a vague notion of “great rejuvenation” that borrows heavily from the premodern era of godlike emperors who ruled “all under heaven”.

The rejection of “western” political systems has been made easier recently by what the Chinese see as the ludicrous buffoonery of Donald Trump and, to a lesser extent, the self-inflicted damage of Brexit and EU infighting.

As a top foreign policy adviser recently told one of my colleagues: “Trump never talks about democracy or American leadership or liberty — we should not be so stupid to worship things that in the western world are now in doubt.”

The Smartest Americans Are Heading West – Bloomberg

Three cities in Colorado — a state whose fortunes have been tied to the boom and bust of oil, gas and other commodities — are among the top 10 leading destinations for the nation’s best and brightest as old cow and mining towns morph into technology hubs, according to data compiled by Bloomberg. Another Colorado city is plotting a 21st century revival.

Boulder, the small college town located just north of Colorado’s capital, is ranked No. 1 nationally in the Bloomberg Brain Concentration Index, which tracks business formation as well as employment and education in the sciences, technology, engineering and mathematics. Fort Collins and Denver follow at No. 4 and No. 10, respectively.

17V11 - BRAIN CONCENTRATION INDEX

Why Big Cities Thrive, and Smaller Ones Are Being Left Behind – The New York Times

Private employment grew almost twice as fast in large metropolitan areas as it did in small ones from the trough of the recession, in 2009, to 2015. Income grew 50 percent faster. And the labor participation rate — the share of the working-age population in the labor force — shrank only half as much.

“Economic transitions work against smaller America,” Mr. Muro told me. “This is a period demanding excruciating transitions.”

By now, most Americans live in big metropolitan clusters. Still, the stagnation of small cities is hardly inconsequential. In the presidential election last year, frustrated voters in metropolitan areas with fewer than 250,000 people chose Donald J. Trump over Hillary Clinton by a margin of 57 percent to 38 percent, by one reckoning. Mr. Trump took 61 percent of rural voters and 52 percent of voters in midsize cities. This offset Mrs. Clinton’s advantage in America’s prosperous big cities in critical states.

The frustration that helped deliver the presidency to Mr. Trump is a bad guide for policy. Mr. Trump’s promise to relieve the pain by reviving the coal and steel industries, by keeping immigrants out of the country and by raising barriers against manufactured imports is only a rhetorical balm to satisfy an angry base seeking to reclaim a prosperous past that is no longer available.

Yet it is unclear what should be done to slow the decline of small-city America. For what is driving the decline is the flip side of the forces powering the success of large metropolises: the accumulation of human talent that is spurring investment and driving innovations that are fueling the prosperity of the nation as a whole.

Facebook’s Zuckerberg needs to come clean if he wants our trust back

Facebook did not set out to increase political polarization and empower bad actors to undermine democracy, but this outcome was inevitable. It was the result of countless Facebook decisions, all made in pursuit of greater profits. In order to maximize its share of human attention, Facebook employed techniques designed to create an addiction to its platform. It deploys digital trackers to monitor and monetize the digital lives of its users. As a result, Facebook has emerged as one of the most profitable companies in our economy.

Facebook has created bubbles around users that contrary ideas — and even facts — cannot penetrate, empowering groups of like-minded people to share emotionally charged ideas on a platform that is vulnerable to exploitation by bad actors.

The harm goes way beyond the Russians and the election, and it is ongoing. Significantly, Facebook takes the position that its only policing obligation is to support community standards on issues such as displays of nudity. As a result, it was not even looking for, much less working to prevent, interference in our elections. In retrospect, Facebook’s architecture and the lack of surveillance invited malicious interference in the 2016 election. For a trivial sum, the Russians were able to wreak havoc. A congressional committee is investigating to what extent they exploited other platforms — 4chan, Reddit, Twitter and Google — but so far it appears Facebook was the one that did the most damage.

Kansas Tried a Tax Plan Similar to Trump’s. It Failed. – The New York Times

The Republican tax rewrite unveiled this month aims to jump-start economic growth in part by establishing a 25 percent tax rate on small businesses and other firms that operate as pass-through entities, a cut from the top rate of 39.6 percent that such business owners pay now.

But the abandoned experiment in Kansas points to how a carve-out intended to help raise growth and create jobs instead created an incentive for residents, particularly high earners, to avoid paying state income taxes by changing how they got paid.

First Evidence That Online Dating Is Changing the Nature of Society – MIT Technology Review

Dating websites have changed the way couples meet. Now evidence is emerging that this change is influencing levels of interracial marriage and even the stability of marriage itself.

Research into the strength of marriage has found some evidence that married couples who meet online have lower rates of marital breakup than those who meet traditionally. That has the potential to significantly benefit society. And it’s exactly what Ortega and Hergovich’s model predicts.

Also: “The change in the population composition in the U.S. cannot explain the huge increase in intermarriage that we observe,” say Ortega and Hergovich. That leaves online dating as the main driver of this change. And if that’s the case, the model implies that this change is ongoing. That’s a profound revelation. These changes are set to continue, and to benefit society as result.

Is the American Idea Doomed? – The Atlantic

America no longer serves as a model for the world as it once did; its influence is receding. At home, critics on the left reject the notion that the U.S. has a special role to play; on the right, nationalists push to define American identity around culture, not principles. Is the American idea obsolete?

The American story isn’t simply an arc of history bending toward justice; it’s far messier. Americans have never agreed on when to prioritize the needs of individuals and when their collective project should come first. If this tension wasn’t itself unifying, it nonetheless helped stake out the terrain over which productive national debate could be waged.

The greatest danger facing American democracy is complacence. The democratic experiment is fragile, and its continued survival improbable. Salvaging it will require enlarging opportunity, restoring rights, and pursuing equality, and thereby renewing faith in the system that delivers them. This, really, is the American idea: that prosperity and justice do not exist in tension, but flow from each other. Achieving that ideal will require fighting as if the fate of democracy itself rests upon the struggle—because it does.

Inside X, Google’s Moonshot Factory – The Atlantic

X is perhaps the only enterprise on the planet where regular investigation into the absurd is not just permitted but encouraged, and even required. X has quietly looked into space elevators and cold fusion. It has tried, and abandoned, projects to design hoverboards with magnetic levitation and to make affordable fuel from seawater. It has tried—and succeeded, in varying measures—to build self-driving cars, make drones that deliver aerodynamic packages, and design contact lenses that measure glucose levels in a diabetic person’s tears.

These ideas might sound too random to contain a unifying principle. But they do. Each X idea adheres to a simple three-part formula. First, it must address a huge problem; second, it must propose a radical solution; third, it must employ a relatively feasible technology. In other words, any idea can be a moonshot—unless it’s frivolous, small-bore, or impossible.

The purpose of X is not to solve Google’s problems; thousands of people are already doing that. Nor is its mission philanthropic. Instead X exists, ultimately, to create world-changing companies that could eventually become the next Google. The enterprise considers more than 100 ideas each year, in areas ranging from clean energy to artificial intelligence. But only a tiny percentage become “projects,” with full-time staff working on them. It’s too soon to know whether many (or any) of these shots will reach the moon: X was formed in 2010, and its projects take years; critics note a shortage of revenue to date. But several projects—most notably Waymo, its self-driving-car company, recently valued at $70 billion by one Wall Street firm—look like they may.

Martin Wolf: The Federal Reserve treads a fine line on monetary tightening

If a big jump in inflation would be destructive, so would premature, or excessive, tightening. That could further lower inflation, destabilising expectations further. It might weaken the economy so much that, given still limited room to cut interest rates, without going into negative territory, it would be difficult to restore demand, without going into negative territory. Above all, after the huge and politically destabilising shock of the Great Recession, a lengthy period of strong labour markets would be hugely desirable, even healing.

The Fed has to balance between tightening too fast and too slowly. Nobody can be sure it is now wrong. My best guess is that an explosive rise in inflation is highly unlikely. The Fed can afford to take its time, while testing the capacity of the US economy to expand supply. But risks are real on both sides. The Fed has probably been right to tighten a little. But it must be careful not to go too far. It has earned much credibility over inflation. Sometimes what one has earned should be spent. This is just such a time.

TOP

USA ECONOMY DATA, CITIES AND STATES

Working-Class Americans Face Growing Debt Burdens, Moody’s Says – Bloomberg

Working-class Americans devoted a growing percentage of their income toward paying their debts last year, the first increase since 2010 and a shift that is likely contributing to rising default rates, Moody’s Investors Service said.

“We are seeing signs of the credit cycle turning,” Shenn said in an interview. It’s important to look out for signs of stress “and think about the implications when the economy does hit a rough patch.”

Fentanyl Is Now The Leading Cause Of US Overdose Deaths

Fentanyl and other synthetic opioid painkillers are now the leading cause of overdose deaths nationwide, killing more than 21,000 people last year, according to provisional CDC data.

“Shocking numbers,” epidemiologist Daniel Ciccarone of the University of California, San Francisco School of Medicine told BuzzFeed News. “I see only growing problems in my field work,” he added, with fentanyl becoming the new normal for heroin buyers in places like Chicago and Charleston, West Virginia.

In the Heart of Milwaukee, a Gleaming Tower Leads an Urban Renewal – The New York Times

Northwestern Mutual’s striking $450 million, 32-story glass-and-steel office tower, which opened in August, is helping to reshape the city. It will be followed by the Milwaukee Bucks’ $524 million arena, financed with $250 million in taxpayer funds, which is set to open next year.

The two buildings will serve as bookends for more than 100 big real estate projects just opened or under construction in Milwaukee’s surging city center.

TOP

POSITIONING, INFLECTION, MARKET CALLS

Is Gold Really a Good Hedge? – Bloomberg

It turns out that a portfolio including gold outperforms the 60/40 portfolio by about 55 basis points per year, albeit at the cost of higher volatility. (The risk-adjusted return was virtually identical for both portfolios.) Over a 30-year time frame, though, that half a percent per year accumulates into quite a tidy sum.

When I set out to do the analysis, my bias and expectation were to find that the putative relationship between gold and risk aversion was simply a myth. Yet the statistics appear to show a relationship, and anecdotal evidence supports the notion. Given the solid performance of a portfolio including gold and the chance that the comfort of owning some might prevent investors from panicking at the height of a crisis, I have to conclude that the notion of gold as a hedge against serious risk aversion is true.

Dollar revival interrupts carefree year for EM investors

The chief cause of EM’s difficult September has been a recovery in the dollar, which has drawn strength from signs that the Federal Reserve is intent on raising rates further, even as inflation remains subdued. It is prompting analysts to re-examine the calibre of this year’s EM currencies performance.

Stocks are trading in a way not seen since the tech bubble – Business Insider

Stocks are operating with a mind of their own to an extent not seen since the dotcom bubble. Normally tossed and turned by geopolitical events and macroeconomic developments, stocks are exhibiting a historically high degree of independence at a time when price swings remain locked near all-time lows.

As of earlier this month, 65% of the risk associated with the average S&P 500 stock was inexplainable by a set of six macro risk factors maintained by Morgan Stanley over the past 63 days. That’s the highest since the financial crisis, the firm wrote in a client note.

And if you extend the period of comparison to 252 days, the measure of stock-specific risk is the highest since 2001, the age of the dotcom bubble, Morgan Stanley data show.

TOP

COLOR, EARNINGS, SENTIMENT, VALUATIONS

P&G says Nelson Peltz has lost battle for board seat

Procter & Gamble claimed victory in its battle with Nelson Peltz, saying the activist investor had been denied a seat on the consumer group’s board after the largest proxy battle corporate America has seen to date. Shares in P&G lurched 2 per cent lower on the news, although investment firm Trian Partners, where Mr Peltz is chief executive, disputed the result, saying Tuesday’s vote was “too close to call”.

Sears Canada to Shut Down, Leaving 12,000 Out of Work – The New York Times

After a failed effort to find a solution to save the company, Sears Canada said on Tuesday that it would shut down operations, leaving about 12,000 employees out of work.

The company, which operates separately from Sears Holdings of Hoffman Estates, Ill., has been in a downward spiral for at least three years and has been operating under creditor protection since June 22. The company has been losing about 1 million Canadian dollars a day.

As customers increasingly shift their retail shopping to e-commerce, traditional retailers are under pressure to keep up, closing stores and revamping debt to cut costs. Although high shipping costs have limited the growth of online shopping in Canada relative to the United States, Sears has nonetheless struggled to turn its fortunes around.

TOP

FOREX, CRYPTOCURRENCY, EXCHANGE IMPACTS

Bitcoin hits a record high above $4,900 – Business Insider

The price of the red-hot cryptocurrency soared passed $4,900 Tuesday afternoon to $4,926, an all-time high for the cryptocurrency, according to data from Bloomberg. Other estimates put bitcoin’s all-time high over $5,000, such as CoinDesk’s index.

Kenneth Rogoff, the former chief economist of the International Monetary Fund, weighed in on bitcoin Monday, saying that “in the long run, the technology will thrive, but that the price of bitcoin will collapse.”

Bitcoin suffers mystery flash crash on popular cryptocurrency index

Bitcoin appeared to have a flash crash on Tuesday morning after falling over $600 in a few minutes, but only one index logged the price move. The digital currency had hit a high of $4,867 early on Monday, according to industry website CoinDesk, its highest since September 2. But the same index showed that it dropped by over $600 to a low of $4,200 at roughly 9:00 a.m. London time.

CNBC checked the four exchanges that make up the CoinDesk bitcoin price index, but none showed any sign of a flash crash. CNBC has reached out to CoinDesk to see whether it may have been a problem with its own index.

Blockchain company Ripple says it has $15bn war chest

The head of Ripple, one of the biggest blockchain companies, has said its $15bn of cryptocurrency reserves could be used to acquire or partner with rivals, as it seeks to dominate its fast-moving sector within financial technology.

Brad Garlinghouse, chief executive of Ripple, said the California-based company had “moved out of the sandbox” after signing up more than 100 customers, many of which were now using its blockchain technology to move large sums of money across borders.

Russia turns cold on crypto-currencies

President Vladimir Putin said on Tuesday crypto-currencies were risky and used for crime, as Russia’s central bank said it would block websites selling bitcoin and its rivals – a change of tone from a month-old promise to legalize the market.

TOP

HEDGE FUNDS, PRIVATE EQUITY, MONEY MGMT

Deposed Hedge Fund Kingpin Steven Cohen Loses His Top Trader – The New York Times

The longtime top trader for Steven A. Cohen, the deposed hedge fund kingpin, is leaving — just months before Mr. Cohen is expected to re-enter the hedge fund game.

Phil Villhauer, 52, started working for Mr. Cohen’s SAC Capital Advisors hedge fund in 2002. When Mr. Cohen was forced to stop accepting outside investors’ money as part of a settlement with federal authorities, Mr. Villhauer became the global head of trading at Mr. Cohen’s family office, Point72 Asset Management, helping invest $11 billion of Mr. Cohen’s personal money.

“For 15 years, Phil Villhauer has been an integral member of the firm’s family,” Mr. Cohen and Point72’s president wrote Tuesday in an internal email that was reviewed by The New York Times. “We are sad to let you know that he is retiring from Point72.”

MIT Study: Private Equity Managers Exaggerate Performance | Institutional Investor

Research from MIT finds that buyout firms retroactively push up portfolio company valuations for a quarter when public equity markets subsequently rise.

TOP

ENERGY CRUDE OIL, OIL SANDS, SHALE

How Deep Will Saudi Cut Its Oil Output? To the Lowest Since 2015 – Bloomberg

Saudi Arabia has promised to do “whatever it takes” to end the global oil gut. If it cuts supplies in November by as much as it pledges, the kingdom will reduce production and exports alike by more or less a million barrels a day compared with last year.

OPEC Secretary General urges U.S. shale oil producers to help cap global supply

OPEC’s Secretary General Mohammed Barkindo on Tuesday called on U.S. shale oil producers to help curtail global oil supply, warning extraordinary measures might be needed next year to sustain the rebalanced market in the medium to long term.

TOP

POLLUTION, CLIMATE & ENVIRONMENT

A Giant, Mysterious Hole Has Opened Up in Antarctica – Motherboard

A hole as large as Lake Superior or the state of Maine has opened up in Antarctica, and scientists aren’t sure why it’s there.

The gigantic, mysterious hole “is quite remarkable,” atmospheric physicist Kent Moore, a professor at the University of Toronto’s Mississauga campus, told me over the phone. “It looks like you just punched a hole in the ice.”

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FRONTIER MARKETS

Family Ties, Leaks and a Wedding: Inside the Political Scandal Rocking South Africa – WSJ

Connections between the Gupta business empire and South African President Jacob Zuma have roiled the African National Congress and ensnared international companies KPMG, McKinsey and SAP. South Africa is in its gravest political crisis since the overthrow of white-minority rule.

In the past five months, a flood of emails and other documents that appear to have been obtained from Gupta-controlled companies has buttressed longstanding suspicions among many South Africans that the family has used its connections to Mr. Zuma to help it amass gigantic financial gains.

Thailand announces 2018 general election – BBC News

The country’s military government has repeatedly delayed elections since taking power in 2014.

TOP

BREXIT, SCOXIT, LONDON, UK ECONOMY

Carney Rate Hike Signals Something Ailing in the U.K. Economy – Bloomberg

Bank of England Governor Mark Carney is ready to raise interest rates from a position of economic weakness rather than strength.

The fastest inflation in four years has left the U.K. central bank preparing to hike next month for the first time in more than a decade, yet it’s not an accelerating economy fanning those price pressures. Instead, policy makers are being pushed to temper less benign inflationary forces generated by weak productivity and Brexit.

The U.K. has fallen to the bottom of the Group of Seven growth rankings, but also of concern is the fact that it’s far less productive than international peers. For Carney, who’s warned that leaving the European Union could worsen the situation, that means a lower rate of growth is already enough to put a strain on resources, generating unwelcome domestic pressures.

Theresa May silent on how she would vote in second Brexit poll

Theresa May risked upsetting both sides of the Brexit debate when she refused to say how she would vote in another Brexit referendum and appeared to suggest EU citizens’ future rights in the UK were in doubt.

The question highlighted Mrs May’s unusual position during the Brexit referendum, when she sounded unenthusiastic about her Remain vote. Her equivocal stance helped Leavers to reconcile themselves to her becoming prime minister after David Cameron’s resignation.

Her continuing doubts prompted Nigel Farage, the former UK Independence party leader, to express doubts about her commitment to Brexit. “The PM clearly does not believe in Brexit, which explains dither, delay and such a lack of leadership,” Mr Farage wrote on Twitter.

TOP

EUROPE

French Public Sector Adds to Anti-Macron Protests – WSJ

French leader Emmanuel Macron’s truce with his country’s unions is showing signs of unraveling less than six months into his presidency, as public-sector workers took to the streets Tuesday to protest his attempts to overhaul the sluggish economy.

TOP

CHINA

Chinese tech groups display closer ties with Communist party

China’s tech sector, once reluctant to display any political affiliations, is becoming more open about ties with the ruling Communist party, on the eve of a landmark meeting where the country’s next leaders will be chosen.

More than 35 tech companies, including large groups such as Sina and Baidu, have quietly instituted party committees in recent years. These assess a company’s daily operations to ensure they do not stray from party objectives, but had typically been given little fanfare because of concerns around alienating foreign partners and investors.

To remain in favour with the government, three of China’s biggest tech groups — Baidu, Alibaba and Tencent — have been careful to demonstrate loyalty to the party, said Shaun Rein, managing director of China Market Research Group.

“[The groups] almost have more power than the SOEs [state-owned enterprises] right now, but the government trusts them to heed their call to do whatever the regulatory bodies want,” he said.

TOP

GEOPOLITICS, CRIME, TERRORISM

Russian military jet crashes on takeoff in Syria, crew killed: agencies

A Russian military jet crashed while taking off from Russia’s Hmeymim air base in Syria on Tuesday in an incident that killed its two-man crew, Russia’s Defense Ministry said, Russian news agencies reported.

Urban Warfare Escalates in Turkey’s Kurdish-Majority Southeast – WSJ

Surging violence between Turkish security forces and Kurdish separatists in the southeast threatens to kindle a level of urban warfare not seen for two decades.

Masked militants linked to the outlawed Kurdistan Workers’ Party, or PKK, have dug explosive-laden trenches and raised barricades in Silopi, which sits on a border where Turkey, Syria and Iraq meet.

Each day, Turkish special forces play a deadly game of cat-and-mouse with armed Kurdish youths, firing tear gas and live rounds in a bid to reassert control of several neighborhoods. Before nightfall, groups of Silopi residents flee the most violent central neighborhoods, taking refuge in relatives’ homes to avoid the crossfire, according to the mayor and residents.

TOP

PRIVACY, HACKING, CYBERWAR, SURVEILLANCE STATE

Def Con hackers expose holes in US electoral system

The US electoral system is vulnerable to cyber attack from the voting machines to the electronic pollbooks, cyber security researchers have found, as they team up with state and local politicians to improve the security of upcoming elections.

All of the 25 pieces of election equipment examined by researchers at Def Con, the hacker conference, were breached — many in a matter of minutes — according to a new report that details the holes in election security.

The so-called ‘white hat hackers’, who investigate vulnerabilities in order to fix them, exposed the personal data of more than 600,000 voters in a machine used in Tennessee and discovered a vulnerability from 2003 that would have allowed it to be controlled remotely for over 10 years.

Justice Department to Be More Aggressive in Seeking Encrypted Data – WSJ

The Justice Department signaled on Tuesday that it intends to take a more aggressive posture in seeking access to encrypted information from technology companies, setting the stage for another round of clashes in the tug of war between privacy and public safety.

TOP

PROPAGANDA, CORRUPTION, AUTHORITARIANISM

Wall Street Journal Reporter Sentenced to Prison by Turkish Court – WSJ

A Turkish court sentenced Wall Street Journal reporter Ayla Albayrak to two years and one month in prison Tuesday, declaring her guilty of engaging in terrorist propaganda in support of a banned Kurdish separatist organization through one of her Journal articles.

The conviction of Ms. Albayrak, who is currently in New York, highlights the increasing targeting of journalists in Turkey, where President Recep Tayyip Erdogan’s government has gained attention for deteriorating media freedoms.

“This was an unfounded criminal charge and wildly inappropriate conviction that wrongly singled out a balanced Wall Street Journal report,” said Wall Street Journal Editor in Chief Gerard Baker. “The sole purpose of the article was to provide objective and independent reporting on events in Turkey, and it succeeded.”

Ms. Albayrak plans to appeal the decision. “Given the current climate in Turkey, this appalling decision shouldn’t have come as a surprise to me, but it did,” she said.

TOP

RESISTANCE, PROTEST, COUNTER-EFFORTS

Joe Arpaio’s Tent City ‘Concentration Camp’ Prisoners Have Been Relocated

The last physical reminder of disgraced Sheriff Joe Arpaio’s legacy has been removed from his Arizona county as his successor shuttered the Tent City “concentration camp” where Arpaio humiliated hundreds of prisoners with pink underwear under their black-and-white striped uniforms.

More than two decades after Arpaio created the blazing hot open-air holding pen, new Maricopa County Sheriff Paul Penzone relocated Tent City’s final 17 prisoners on Monday. The move had been the final step in making good on a campaign promise to shut down the facility, which once housed roughly 350 prisoners who lived there during the 24-year reign of the self-styled tough-on-crime sheriff.

TOP

TRUMP WORLD

Donald Trump’s Obamacare Sabotage Is Starting to Piss Off Republicans

The last physical reminder of disgraced Sheriff Joe Arpaio’s legacy has been removed from his Arizona county as his successor shuttered the Tent City “concentration camp” where Arpaio humiliated hundreds of prisoners with pink underwear under their black-and-white striped uniforms.

More than two decades after Arpaio created the blazing hot open-air holding pen, new Maricopa County Sheriff Paul Penzone relocated Tent City’s final 17 prisoners on Monday. The move had been the final step in making good on a campaign promise to shut down the facility, which once housed roughly 350 prisoners who lived there during the 24-year reign of the self-styled tough-on-crime sheriff.

Steve Bannon Privately Slammed Pence VP Pick

Steve Bannon privately slammed the selection of Mike Pence as Donald Trump’s running mate a month before taking over the Trump campaign, according to emails obtained by BuzzFeed News.

The email exchange during Bannon’s first stint as executive chairman of Breitbart is of new relevance as Bannon — two months removed from his role as President Trump’s chief strategist — rolls out his plan for a wide-ranging attack against establishment Republicans in 2018. And it reveals that Bannon regarded the Pence pick as something of a deal with the devil necessary to bolster Trump’s standing in the GOP.

TOP

RETAIL APPAREL, SPECIALTY, DINING, BIG BOX

Amazon is in talks with Phrame and is working on a smart doorbell

Amazon has almost perfected speedy delivery to your home. Now the company is working to make sure your packages get inside the front door, or even into your car.

The company is in advanced talks to forge a partnership with Phrame, a maker of smart license plates that allow items to be delivered to a car’s trunk, according to a person with knowledge of the potential deal. Phrame’s product fits around a license plate and contains a secure box that holds the keys to the car. Users unlock the box with their smartphone, and can grant access to others — such as delivery drivers — remotely.

At the same time, Amazon is developing a smart doorbell device that would give delivery drivers one-time access to a person’s home to drop off items, said two people familiar with the matter. The sources asked not to be named because the discussions are confidential.

Amazon sales tax subsidy is doomed – Business Insider

In this battle, sellers want Amazon to collect sales taxes, while Amazon wants sellers to collect sales taxes. However this will ultimately be settled, they both appear to have lost the two-decade battle to dodge sales tax collections.

Other retailers have never been able to benefit from this vast taxpayer subsidy. They have to compete on price without it. Some of them have been driven out of business. Sales taxes are no fun for consumers, but a level playing field will give other retailers belatedly a better chance to fight off Amazon, but only after Amazon has already gotten so big, in part due to this subsidy, that practically no one can fight it off.

Amazon’s Private-Label Brands Could Deliver a $1 Billion Profit Boost – MoneyBeat – WSJ

Amazon.com Inc.’s business selling phone chargers, batteries and diaper wipes under its own brand names could become a $1 billion boon to its bottom line by 2019.

Morgan Stanley equity analyst Brian Nowak wrote in a research note Tuesday that Amazon is increasingly focusing on expanding its private-label business. The retail giant has been selling its own brands for years, debuting the AmazonBasics private-label line back in 2009 to sell mostly electronics.

Today, Amazon has 34 different private-label brands, Morgan Stanley estimates, selling everything from sheets to luggage. Amazon’s recent purchase of Whole Foods added the grocery chain’s 365 brand to its lineup.

TOP

MEDIA, CABLE, SPORTS, ENTERTAINMENT

Apple set to produce big-budget Spielberg TV show

Apple is on the verge of landing a big-budget TV show produced by Steven Spielberg’s Amblin Entertainment, in its first deal since the iPhone maker rebooted its entertainment push earlier this year.

Big Grosses for Bruce Springsteen as Broadway Run Begins – The New York Times

The Springsteen prices on Broadway — many seats were sold for $850 each — are significantly higher than for many seats at his concerts, but offer a rare chance to see him in a relatively intimate setting: the Walter Kerr Theater, configured with 939 seats. And the run is limited: Performances began Oct. 3 and are scheduled to end Feb. 3.

TOP

AUTOS, ELECTRIC, SELF-DRIVING

China Charges Toward Electric-Car Supremacy – WSJ

Ahead of Donald Trump’s trip to China in November, the White House is focused on holding back Chinese exports in traditional industries like steel and aluminum. But that’s a sideshow. A titanic struggle is under way to control the industries of the future from robotics to medical equipment and artificial intelligence. In new-energy vehicles, China is firmly in the driving seat.

Its industrial goal is to leapfrog over foreign car makers in the domestic market, by far the world’s largest—and the most important for General Motors —and become an export powerhouse. Having tried and failed to catch up with Western and Asian makers of traditional vehicles, the country is throwing everything it has at electric cars.

The critical point, notes Gary Rieschel, the founder of Qiming Venture Partners, one of China’s leading private-equity firms, is that they are dramatically simpler than regular cars mechanically. Chinese-built models already have a high quality “fit and finish.” The country is the world’s largest battery maker.

“This is not a hard play,” says Mr. Rieschel, who sees a future for China of driverless electric cars operating in vast fleets—essentially, living rooms on wheels for shopping and entertainment—controlled by urban governments.

10,000 Electric Cars Highlight Steep Path to India’s Ambitions – Bloomberg

Prime Minister Narendra Modi has kicked off India’s race to turn all new passenger car sales electric by 2030. The largest order has gone to a company that hasn’t commercially started producing the vehicles.

Ramping up production of electric vehicles in a country where carmakers sell 2.5 million fossil fuel powered units annually is just one part of the problem, finding uninterrupted power supply is another. In addition, non-existent charging infrastructure further widens the gap between India and China, the current global leader. It had 336,000 new registrations in 2016, more than double of 160,000 in the U.S., while India had just 450 cars hitting the roads, according to the International Energy Agency.

“The government needs to set up charging infrastructure to make this electric business model sustainable,” said Ram Kidambi, partner at consultancy firm A.T. Kearney. “Indian automotive companies may be able to supply electric vehicles meeting the deadline. But the problem is what do the car owners do without the charging infrastructure?”

17V11 - FALLING BATTERY PRICES

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LUXURY, HIGH END, ASPIRATIONAL

Last Da Vinci painting in private hands to go under hammer

The last Leonardo da Vinci painting in private hands has come up for sale at Christie’s with an estimated price tag of $100m. The auction house unveiled ‘Salvator Mundi’, a work that was once thought to have been lost, in New York on Tuesday, saying it would go under the hammer on November 15.

‘Salvator Mundi’ — ‘Saviour of the world’ in Latin — is a portrait of Jesus Christ dating from 1500. It is one of only around 15 Da Vinci paintings known to survive. It was the first to be rediscovered since the ‘Benois Madonna’ in 1909 when it re-emerged in the mid-2000s. Its provenance forgotten, it had sold for a mere £45 in 1958. It is currently owned by an unidentified private European collector.

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SCIENCE, NATURE, PSYCHOLOGY

Decoding cancer: hopes rise for a new age of precision medicine

Ever since scientists began decoding the human genome in 1990, doctors have predicted an age of “precision medicine” where patients are matched with drugs that target the specific genetic drivers of their disease. Nowhere would such a revolution be more keenly welcomed than in the treatment of cancer, a single word that describes a multitude of diseases caused by a vast array of mutations.

Now, 14 years after the genome project was declared complete, some scientists say the era of precision medicine is here. A new generation of targeted drugs is emerging and could, they say, usurp chemotherapy as the mainstay of cancer treatment, sparing millions of people from a brutal approach that attacks healthy cells as well as tumorous ones.

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