Macro Links Oct 18th – NAFTA in Jeopardy
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MACRO LINKS TABLE OF CONTENTS (Click or Scroll Down)
- NAFTA IN JEOPARDY
- TRUMP DEMEANS WAR DEATHS
- TRUMP VS MCCAIN, NFL
- CHINA’S 19TH CONGRESS
- NORTH KOREA
- RUSSIAN TROLL FARM, TALIBAN SUPPORT
- RUSSIA PROBE
- GOOGLE’S SMART CITY
- RAQQA, KURDISH OIL FIELDS
- BITCOIN, ICO FRENZY
- CATALAN INDEPENDENCE
- TAX REFORM, OPIOID UPROAR
- WEINSTEIN, SEXUAL HARRASSMENT
- SOROS FOUNDATIONS
- MARC FABER RACIST COMMENTARY
- RATES, LIQUIDITY, SYSTEMIC RISK, BALANCE SHEETS
- MACRO OP-EDS, INSIGHT, EVENTS AND TRENDS
- CENTRAL BANKS & MONETARY POLICY
- USA ECONOMY DATA, CITIES AND STATES
- POSITIONING, INFLECTION, MARKET CALLS
- COLOR, EARNINGS, SENTIMENT, VALUATIONS
- DEALS, MERGERS, IPOs, LBOs, RESTRUCTURINGS
- ENERGY COMPANIES, NOCs, INDUSTRY
- ENERGY RENEWABLES, NUCLEAR
- COMMODITIES AGRICULTURE & SOFTS
- POLLUTION, CLIMATE & ENVIRONMENT
- BREXIT, SCOXIT, LONDON, UK ECONOMY
- DACA, TRAVEL BAN, IMMIGRATION, WALL
- GEOPOLITICS, CRIME, TERRORISM
- PROPAGANDA, CORRUPTION, AUTHORITARIANISM
- TRUMP WORLD
- ELECTORAL POLITICS
- SCANDALS, LAWSUITS, FINES, REGULATORY
- SILICON VALLEY, UNICORNS, STARTUPS, VC
- CONSUMER TECH, SOCIAL MEDIA, E-COMMERCE, MOBILE
- RETAIL APPAREL, SPECIALTY, DINING, BIG BOX
- MEDIA, CABLE, SPORTS, ENTERTAINMENT
- AUTOS, ELECTRIC, SELF-DRIVING
- ARTIFICIAL INTELLIGENCE, DRONES, FUTURE TECH
NAFTA IN JEOPARDY
Bitter differences over how to update the North American Free Trade Agreement have broken into the open, as Donald Trump’s trade tsar accused Canada and Mexico of resisting the need for major change and warned US companies they would need to make sacrifices.
The acrimony began last week after the US put forward a series of proposals that the US business community has dubbed “poison pills”. They include a requirement that the three countries review the deal every five years and actively opt-in, as well as a 50 per cent US-content requirement for cars made in North America, which the auto industry is fighting.
The vast divide between Canada and the United States over the future of North American trade burst into public view on Tuesday as top officials for Prime Minister Justin Trudeau and President Donald Trump traded blame for their negotiating impasse.
President Donald Trump’s top trade negotiator exchanged public barbs with his Mexican and Canadian counterparts as well as U.S. businesses, magnifying gaps over the North American Free Trade Agreement and highlighting the obstacles to keeping the pact alive.
Until Tuesday, the North American Free Trade Agreement looked like it might be headed for a quick demise. Now, it could be headed for a slow, painful one. The United States, Canada and Mexico said on Tuesday that they would extend Nafta negotiations into next year, with the parties citing “significant conceptual gaps” in how to rewrite the 1994 trade pact.
TRUMP DEMEANS WAR DEATHS
On Tuesday morning, the White House, not just President Donald Trump, went out of its way to turn Chief of Staff John Kelly’s dead son into a political football for the purpose of attacking Barack Obama’s character.
“To the best of my knowledge, I think I’ve called every family of somebody that’s died,” Trump told Fox News radio host Brian Kilmeade on Tuesday morning. “As far as other representatives, I don’t know, I mean you could ask Gen. Kelly, did he get a call from Obama?”
White House visitor records from former President Barack Obama’s term show that he hosted current White House chief of staff John Kelly at a breakfast for Gold Star families after his son died in Afghanistan.
Former Attorney General Eric Holder told Trump to “stop the damn lying.” Ben Rhodes, Obama’s former deputy national security adviser, called Trump’s remarks “an outrageous and disrespectful lie even by Trump standards.” Alyssa Mastromonaco, a former top Obama administration official, tweeted that Trump’s accusation was “a fucking lie” and derided the president as “a deranged animal.”
The anger also extended deep inside the military, with retired Army Gen. Martin Dempsey, a former chairman of the Joint Chiefs of Staff, tweeting that both Presidents George W. Bush and Barack Obama had worked to comfort the families of dead troops.
A congresswoman is alleging that President Trump told the widow of a slain U.S. soldier, “he knew what he signed up for.” According to Rep. Frederica Wilson (D-FL), the president made the remark to the widow of Army Sgt. La David Johnson, who was killed earlier this month during an ambush in Niger. “Yes, he said it,” Wilson said. “It’s so insensitive. He should have not have said that. He shouldn’t have said it.” Wilson was with Myeshia Johnson, the soldier’s widow, in a limousine at the time of the call and overheard it over speaker phone, according to The Washington Post. Wilson said she wanted to “curse him out” for making Johnson break down and cry. “He was talking off the cuff, saying the same thing over and over again,” Wilson was quoted as saying.
TRUMP VS MCCAIN, NFL
President Donald Trump fired back at Sen. John McCain, one day after the Arizona senator took aim at the nationalist and isolationist rhetoric that has swept through the Republican party and is often championed by the White House.
“People have to be careful, because at some point I fight back,” Mr. Trump told The Chris Plante radio show when asked about a late Monday speech in which Mr. McCain condemned “half-baked, spurious nationalism cooked up by people who would rather find scapegoats” than solve problems.
“You know, I’m being very nice. I’m being very, very nice,” the president said. “But at some point I fight back and it won’t be pretty.”
“I’ve faced far greater challenges than this,” McCain said, according to a CNN reporter.
John McCain and Joe Biden have been on opposite sides of many crucial national security debates over the past 30 years. On Monday night, in the cradle of liberty, those disputes disappeared as Biden presented the Liberty Medal to McCain at the National Constitution Center, a nonprofit organization that touts bipartisanship and sits across the street from Independence Hall.
Another reality has also brought them together: President Trump, whose global outlook has helped crystallize just how closely aligned these two elder statesmen really are.
“We believed in our country, and in our country’s indispensability to international peace and stability and to the progress of humanity,” McCain said, growing unusually emotional at times during the address.
CHINA’S 19TH CONGRESS
On Wednesday, Mr. Xi opened another Communist Party congress, this time as the nation’s most powerful leader in decades, all but certain to receive a second five-year term. And after spending his first term tightening control on society, he is expected to enshrine his authoritarian vision for revitalizing the party — and perhaps position himself as indispensable to its survival.
“Currently, conditions domestically and abroad are undergoing deep and complicated changes,” Mr. Xi told some 2,300 party delegates and other dignitaries assembled in the Great Hall. “Our country is in an important period of strategic opportunity in its development,” he said in a calm, steady voice. “The outlook is extremely bright; the challenges are also extremely grim.”
With his two most recent predecessors as Chinese leader, Mr. Hu and 91-year-old Jiang Zemin, in attendance, Mr. Xi told his audience that under him Chinese socialism was entering a “new era.”
In an address that ran for more than three hours and was attended by his predecessors Hu Jintao and Jiang Zemin, Mr Xi urged his party colleagues to “work tirelessly to realise the Chinese dream of national rejuvenation” and hailed the economic progress made during his administration’s first term.
“The Communist party is entering the Xi era,” said Sima Nan, a patriotic blogger. “Mao and Deng’s shadows still loom large, but Xi is his own man.”
The affirmation of Mr. Xi’s political supremacy suggests he will double down on a drive to reassert party control at home, and project power abroad, during a second term likely to be marked by a slowing economy and volatile foreign relations, especially over North Korea.
Beyond that looms the question: Will he step down come 2022? The twice-a-decade congress is expected to endorse Mr. Xi’s rise to a level of political control in modern China comparable only to Deng Xiaoping or Mao Zedong. Both remained dominant figures till death.
As well as packing top party posts with Mr. Xi’s lieutenants, the 2,280 delegates are expected to enshrine his political theory in the party’s constitution and grant him even tighter control over China’s armed forces, political insiders and analysts say.
“Houses are built to be inhabited, not for speculation,” Xi said in his address at the 19th Party Congress Wednesday in Beijing. “China will accelerate establishing a system with supply from multiple parties, affordability from different channels, and make rental housing as important as home purchasing.”
China’s leaders are determined to cool rising home prices, imposing buying restrictions to rein in demand. Curbs in bigger cities have spurred buying in smaller ones, forcing local authorities to reverse policies put in place last year to reduce a glut of unsold homes.
From December 2012 to October 2017, 18 sitting Central Committee members — almost 9 per cent of the total — were detained for alleged corruption. To date six have been formally tried, convicted and sentenced to jail terms ranging from 12 years to life.
They are among the highest profile victims of President Xi Jinping’s historic anti-corruption campaign, which has ended the careers of more than 150 government ministers, army generals and state-owned enterprise executives.
“The sanctions that the White House has imposed on North Korea are of a historic level,” said Ri Jong-ho, who ran the international network of North Korean businesses that funnels hard currency to Pyongyang before leaving North Korea for the US last year. “Never before has the country faced such tough sanctions. I don’t know if North Korea will survive a year with these sanctions. People will die.”
Ri also said North Korea’s relations with China had soured because of Kim Jong-un’s purge of his uncle Jang Song-thaek and other officials close to Beijing. Kim’s hatred of Beijing intensified after China’s President Xi Jinping visited Seoul before Pyongyang on his first trip to the Korean peninsula. Xi’s decision was prompted by the deaths of “thousands” allied with Jang and, by extension, China, Ri said.
North Korea warned that a nuclear war “may break out any moment” as the U.S. and South Korea began one of the largest joint naval drills off both the east and west coasts of the peninsula.
North Korea isn’t known for technological sophistication. The isolated country doesn’t have global giants like Apple Inc. or Samsung Electronics Co. and its citizens have limited access to basics like the internet and smartphone apps. Yet the regime of Kim Jong Un has grown increasingly adept at breaking into computer systems around the world for financial gain and strategic benefit.
In recent weeks, his cyber warriors have been linked to stolen U.S.-South Korean military plans and the alleged theft of $60 million from a Taiwan bank. Even as the U.S. takes aim at North Korea’s development of nuclear weapons, the hackers are becoming more aggressive and skillful in fighting for the nation’s Supreme Dignity.
RUSSIAN TROLL FARM, TALIBAN SUPPORT
One former troll, who was interviewed by the independent Russian news outlet Dozhd and went by “Maxim,” or Max, spoke of his experience working for the Internet Research Agency, a well-researched Russian “troll farm” located in St. Petersburg, whose function is to spread pro-Russian propaganda and sow political discord in nations perceived as hostile to Russia.
Up to a third of the IRA’s staff was tasked with interfering in US political conversation during the 2016 election, according to an investigation conducted by Russian news agency RBC and detailed by Meduza.
The IRA, Max told Dozhd, consisted of a “Russian desk” and a “foreign desk.” The Russian desk was primarily made up of bots and trolls, which used fake social-media accounts to flood the internet with pro-Trump agitprop and made-up news throughout the campaign, especially in the days leading up to the election.
The foreign desk had a more sophisticated purpose, according to Max, who worked in that department. “It’s not just writing ‘Obama is a monkey’ and ‘Putin is great.’ They’ll even fine you for that kind of [primitive] stuff,” he told Dozhd. In fact, those who worked for the foreign desk were restricted from spreading pro-Russia propaganda. Rather, Max said, their job was more qualitative and was geared towards understanding the “nuances” of American politics to “rock the boat” on divisive issues like gun control and LGBT rights.
“Our goal wasn’t to turn the Americans toward Russia,” he added. “Our task was to set Americans against their own government: to provoke unrest and discontent, and to lower Obama’s support ratings.”
“Heart of Texas” grew into the most popular Texas secession page on Facebook. It was run by the Russians.
There were other oddities about the site. Its organizers had a strangely one-dimensional idea of its subject. They seemed to think, for example, that Texans drank Dr. Pepper at all hours: while driving their giant trucks, while flying their Confederate battle flags, while griping about Yankees and liberals and vegetarians.
But Heart of Texas, sadly, was no joke. At one point the page’s organizers even managed to stir up its followers into staging an armed, anti-Islamic protest in Houston. As gradually became clear, this was part of a broader strategy. The sponsors of the page were keen to exacerbate America’s own internal divisions. At certain moments they lent support to Black Lives Matter, while in others they would play to the latent (or obvious) racism of Donald Trump’s base.
As many as 100 unwitting activists were recruited to help organize events in the United States both before and after the election by the same St. Petersburg-based Russian troll farm behind scores of fake social media accounts that purchased ads to sow discord during the 2016 campaign.
Russia’s most infamous troll farm recruited US activists to help stage protests and organize self-defense classes in black communities as part of an effort to sow divisions in US society ahead of the 2016 election and well into 2017.
Yevgeny Prigozhin is a Russian oligarch dubbed “chef” to President Vladimir Putin by the Russian press. In 2002, he served caviar and truffles to President George W. Bush during a summit in St. Petersburg. Before that, he renovated a boat that became the city’s most exclusive restaurant.
But his business empire has expanded far beyond the kitchen. US investigators believe it was Prigozhin’s company that financed a Russian “troll factory” that used social media to spread fake news during the 2016 US presidential campaign, according to multiple officials briefed on the investigation. One part of the factory had a particularly intriguing name and mission: a “Department of Provocations” dedicated to sowing fake news and social divisions in the West, according to internal company documents obtained by CNN.
Russia is supporting the Afghan Taliban against Nato forces through a covert programme of laundered fuel sales, a report has revealed. “Russian intelligence services are sending fleets of fuel tankers into Afghanistan through the Hairatan border crossing with Uzbekistan,” The Times quoted sources in the militant group and Afghan forces as saying.
“From there, they are delivered free of charge to front companies operating on behalf of the Taliban. The arrangement allows about $2.5 million raised in cash from the sale of the fuel each month to be delivered directly to insurgent paymasters,” the report claimed.
A prominent exiled Russian oligarch said in an exclusive interview with NBC News that he is nearly certain Russian President Vladimir Putin tried to collaborate with the Trump campaign, and that he believes a top Russian banker was not “acting on his own behalf” when he held a controversial meeting with Jared Kushner last December.
The pointed remarks come from a longtime Putin rival, Mikhail Khodorkovsky, an oil executive who was Russia’s richest man before he was imprisoned and exiled by the Kremlin.
On Friday, Reince Priebus testified for hours with lawyers on special counsel Robert Mueller’s team. While Priebus has been careful not to criticize the president openly, sources who have spoken to him say he’s not happy about the way he was treated by Trump—and his family. Is Kushner nervous? He has added Charles Harder to his legal team.
Robert Mueller, the FBI’s special counsel, interviewed Matt Tait, a former information-security specialist at Britain’s Government Communications Headquarters. The interview was part of a broader effort by Mueller to examine the relationship between the longtime GOP operative, Peter Smith, and the former national security adviser Michael Flynn and whether Flynn played any role in seeking out the stolen emails during the election. Smith killed himself in May after talking to The Wall Street Journal about his experience.
President Donald Trump’s former press secretary Sean Spicer met with special counsel Robert Mueller’s team on Monday for an interview that lasted much of the day, according to multiple people familiar with the meeting.
During his sitdown, Spicer was grilled about the firing of former FBI director James Comey and his statements regarding the firing, as well as about Trump’s meetings with Russians officials including one with Foreign Minister Sergei Lavrov in the Oval Office, one person familiar with the meeting said.
Some Democrats in Congress are growing impatient with how the GOP is handling probes into Russian meddling in the U.S. election. Democrats on the Senate Judiciary Committee say they want to see more urgency in that panel’s efforts, while a leading House Democrat says the Trump administration is trying to pressure Congress into ending its investigations prematurely.
GOOGLE’S SMART CITY
On Tuesday, Sidewalk Labs, a division of Alphabet Inc., and the government agency Waterfront Toronto announced a partnership in which Sidewalk initially will invest $50-million (U.S.) in a year-long planning process for Quayside, a 12-acre district on the waterfront, and the company has signalled its intentions to pursue a much larger area. This is the first such project for Alphabet, and for Sidewalk Labs.
If the initiative proceeds, it would include at least 3.3 million square feet of residential, office and commercial space, including a new headquarters for Google Canada, in a district that would be a test bed for the combination of technology and urbanism.
Self-driving shuttles, adaptive traffic lights that sense pedestrians, modular housing and freight-delivering robots that travel in underground tunnels might all be part of the new development, according to the winning bid submitted by Sidewalk Labs.
In its proposal, Sidewalk also said that Toronto would need to waive or exempt many existing regulations in areas like building codes, transportation, and energy in order to build the city it envisioned. The project may need “substantial forbearances from existing laws and regulations,” the group said.
Sidewalk Labs said it will work with companies such as Waymo to deploy a “baseline fleet of taxibots and multi-passenger vanbots.” Existing providers, such as Lyft, would be welcome to enter the market, it added. “A key goal of the taxibot system is to use competition to improve user experience, and individuals will be encouraged to include any privately-owned self-driving vehicles in the system as well,” according to Sidewalk’s plan.
In the near-term, Sidewalk plans to run a six-to-twelve person autonomous shuttle in the summer in a specific area of Toronto to get residents used to the technology. “Single-person selfdriving vehicles might eventually be integrated into an elevated transport system, such as a gondola,” Sidewalk added.
The Alphabet unit also plans to move goods, not just people, autonomously through its digital district. It envisions an “internal robot delivery system” for all businesses and residents in the Quayside area of Toronto, and will seek to expand it further. Finally, a four-part solid waste system Sidewalk imagines would include a waste hauling system the relies on autonomous vehicle technology, according to the plan submitted to Toronto.
RAQQA, KURDISH OIL FIELDS
American-backed forces said on Tuesday that they had seized the northern Syrian city of Raqqa from the Islamic State, a major blow to the militant group, which had long used the city as the de facto capital of its self-declared caliphate.
“The military operations within the city are completely over,” said Talal Silo, a spokesman for the SDF, which led the monthslong battle against Islamic State in Raqqa. “We are combing through the city to make sure there are no sleeper cells and to defuse the mines.”
Army Col. Ryan Dillon, a spokesman for the U.S.-led coalition fighting Islamic State, said the extremist group is “on the verge of a devastating defeat,” adding that 90% of Raqqa has been cleared.
The city gained symbolic value as the headquarters of the Islamic State’s supposed caliphate, but by this year it had lost all of its strategic significance. The Islamic State is greatly weakened and is making final stands in cities it once controlled across eastern Syria and northern Iraq.
Raqqa was a war zone for more than four and a half years. It was the first Syrian provincial capital to fall out of government control, when an al-Qaeda-linked group then known as Jabhat al-Nusra took the city in March 2013. Fighting over the years forced most of the city’s population into displacement camps around the country. The Islamic State often showcased its most brutal executions in Raqqa, and American journalist James Foley was beheaded in the mountains south of the city.
The city’s infrastructure is in tatters. The citizen journalist group Raqqa Is Being Slaughtered Silently told Al Jazeera in late August that the remaining citizens had no access to electricity, water and medical supplies. Food is scarce, and much of the region’s agricultural capacity has been decimated.
Kurdish separatists in northern Iraq surrendered all disputed oil fields to Iraq’s military on Tuesday, retreating in the face of overwhelming force that appeared to halt, at least for now, their independence hopes from a referendum held less than a month ago.
In a swift and largely nonviolent operation that came a day after Iraqi forces reclaimed the contested city of Kirkuk from the Kurdish separatists, Baghdad’s troops occupied all oil-producing facilities that the separatists had held for three years, and which had become critical to the Kurdish autonomous region’s economic vitality.
The loss of those resources will erase billions of dollars in export earnings that has flowed to the Kurdish region from the sale of oil. Kurds took over the disputed areas adjacent to their region after Iraqi troops fled an assault by the Islamic State extremist organization in 2014.
BITCOIN, ICO FRENZY
Didi Taihuttu, his wife, three kids and their cat bet all they have on bitcoin. The Dutch family of five is in the process of selling pretty much everything they own — from their 2,500-square-foot house, to their shoes – and trading it in for the popular cryptocurrency. They have moved to a campsite in the Netherlands, where they’re waiting for bitcoin to really take off.
Rules announced this year by the Financial Services Agency allow people to pay for goods and services with bitcoin and require cryptocurrency exchanges or remittance operators to be licensed and subject to annual audits. These have given bitcoin official approval.
“The Japanese have felt that cryptocurrencies are a scary thing but trading volumes have increased as many now see it as trustworthy thanks to government approval,” says Yusuke Otsuka, chief operating officer at Coincheck, a bitcoin exchange.
The new digital currency rules come as other governments clamp down on cryptocurrencies. China, for instance, has banned companies from issuing their own virtual currencies and is cracking down on cryptocurrency exchanges.
However, for Japan, cryptocurrencies sit within the realm of fintech. The government and banking leaders hope that this sector’s businesses — ranging from artificial intelligence-led investment advisory groups to cloud data storage — will free up cash sitting in bank deposits and reignite the economy.
Lloyd Blankfein last week tweeted that he’s “still thinking about #Bitcoin,” but the bank he leads is doing more than just thinking about the technology that underpins the cryptocurrency.
Goldman Sachs Group Inc. is the fifth most active corporate blockchain investor, with involvement in four companies focused on the distributed-ledger technology since 2012, according to a report by tech researcher CB Insights. The bank’s investments include software developer Digital Asset Holdings, payments company Circle and Axoni, which provides blockchain infrastructure for capital markets.
“A year ago they didn’t know about it, six months ago they thought it was a scam and now they realise they simply just don’t understand it and are starting to get nervous and want to learn about it,” he says. “There is definitely an element of fomo. People have been told by their advisers, ‘Don’t touch it! It’s a bubble!’, and now they are upset they might have already missed it.”
One London-based private banker describes how they have been having a growing number of requests from ultra-high net worth clients who are curious about investing in cryptocurrencies who would never have considered it a year ago. “It is getting to a point where we can’t ignore the interest,” they say. “We don’t want our clients to go near this stuff, but we will have to find a way to make it available if they keep asking”.
In spite of growing acceptance that investors and bankers need at the very least to learn the basics of the wild world of cryptocurrencies and the block chain technology that underpins them, few are any closer to developing a plausible way in which to value these highly volatile coins.
The government of Catalonia accused the Spanish government in Madrid on Tuesday of destroying any chance of dialogue after a judge ordered the arrest of two of the main leaders of the separatist movement.
Jordi Turull, a spokesman for the Catalan government, told Catalunya Radio, a Barcelona-based station, that the Spanish state had “dynamited” the proposal for talks made by Carles Puigdemont, Catalonia’s separatist leader. Mr. Puigdemont wrote a letter on Monday to Prime Minister Mariano Rajoy asking for negotiations to find a solution to the territorial conflict, but without clarifying whether he had declared independence from Spain.
“Catalonia is now a storm that may turn into a typhoon unless tackled in time,” said Jose Maria Balaña, a corporate partner at law firm Hogan Lovells in Madrid. “The uncertainty around it is already having a negative impact on deals, in particular involving international investors, with some of them being put on hold or simply abandoned.”
The uncertainty in the northeastern region, which accounts for a fifth of Spain’s economy, is starting to hurt. Spanish business confidence dropped for the first quarter in seven, the National Statistics Institute said last week, while the European Commission’s gauge of consumer confidence has slipped for the past two months.
Some 700 companies have transferred their legal bases out of Catalonia to other parts of Spain since the Oct. 1 ballot, El Pais reported, citing data from Spain’s College of Registrars. On Monday, the government cut its economic forecast for 2018, projecting growth of 2.3 percent next year instead of the 2.6 percent.
TAX REFORM, OPIOID UPROAR
Senate Republicans scrambled on Tuesday to ensure support for a budget resolution vital to President Donald Trump’s drive to overhaul the U.S. tax code, as one Republican fiscal hawk announced he might vote against the measure.
As the Senate opened debate on a fiscal year 2018 budget, Senator Rand Paul objected to spending levels that he said would exceed agreed caps by $43 billion, and called for spending reforms for so-called entitlement programs such as the Medicare and Medicaid health insurance programs.
The White House inflated the potential benefits to workers from a proposed corporate tax cut, according to a Harvard University economist whose work informed the estimate, highlighting a challenge Republicans face as they push a tax rewrite that President Trump has promised will benefit the middle class.
The Post’s story — titled “The Drug Industry’s Triumph Over The DEA” — came out Sunday morning. The two-part “60 Minutes” segment aired Sunday night. Trump was questioned about it on Monday afternoon. And Trump announced Marino’s withdrawal on Tuesday morning.
Tom Marino, a Pennsylvania congressman tapped to head the Office of National Drug Control Policy, withdrew his nomination after reports about his role passing legislation that weakened the ability of the government to prevent drug companies from selling various opioids. Synthetic opioids are being blamed for sparking an epidemic, which has now morphed into a heroin crisis as people substitute the opiate for artificial drugs.
WEINSTEIN, SEXUAL HARRASSMENT
Bob Weinstein hasn’t been accused of the kind of sexual misconduct that led to the ouster of his brother from the production company they jointly ran. Instead, according to multiple former employees and business associates, he was a volatile and bullying executive.
Mr. Price, who had overseen Amazon.com Inc.’s film and television operations, was suspended late last week when Isa Dick Hackett, a producer on the Amazon program “The Man in the High Castle,” went public with her complaint that Mr. Price sexually harassed her in 2015. Ms. Hackett said Mr. Price had made inappropriate and crude remarks about his genitalia and then sexually propositioned her.
Money managers have until the end of the year to pay taxes on fees they earned from investors in offshore funds and had deferred payment on. Many are now turning to charitable donations — including to their own foundations — to help offset the levies coming due. Soros, founder of $26 billion Soros Fund Management, has transferred almost $18 billion to his Open Society Foundations over the past several years, according to a foundation official.
The 87-year-old pioneer of hedge-fund investing has transferred the bulk of his fortune to Open Society Foundations, which vaults it into the big leagues. Soros Fund Management is expected to show a tamer investing style now the firm has a philanthropy as its main client.
The gift, made quietly over the past several years but disclosed only on Tuesday, has transformed Open Society into the second-biggest philanthropic organization in the United States, behind the Bill and Melinda Gates Foundation. It will also place Mr. Soros, a lightning rod for conservative critics, squarely in the middle of the social and political debates convulsing the country.
Founded by Mr. Soros more than 30 years ago, Open Society promotes democracy and human rights in more than 120 countries. In recent years, the organization has increased its attention on the United States, investing in programs to protect gays and lesbians and reduce abuses by the police.
MARC FABER RACIST COMMENTARY
Marc Faber, the über-bearish author of an investing newsletter who frequently appears as a guest on financial TV, wrote in his latest “Gloom, Doom, and Boom” report that he was glad the US “enjoyed 200 years in the economic and political sun under a white majority.”
Veteran investor Marc Faber left the boards of money manager Sprott Inc. and mining companies Novagold Resources Inc. and Ivanhoe Mines Ltd. after he claimed in his newsletter this month that “the U.S. would look like Zimbabwe” if it had been settled by black people instead of whites.
“The recent comments by Dr. Faber are deeply disappointing and are completely contradictory with the views of Sprott and its employees,” Sprott Chief Executive Officer Peter Grosskopf said in announcing Faber’s departure from the board. “We pride ourselves on being a diverse organization and comments of this sort will not be tolerated.”
RATES, LIQUIDITY, SYSTEMIC RISK, BALANCE SHEETS
No two crises are exactly the same, and China is unlikely to allow its domestic stock market to become so stretched again. But if the Federal Reserve keeps raising interest rates, it could put renewed downward pressure on the yuan. The country’s new capital controls haven’t been tested by a big shock either. China’s shadow banking system has grown dramatically, so any attempt to rein it in, or any breakdown in the byzantine chain of wealth management products, could threaten Chinese growth and send cash flowing out of the country.
A Chinese financial crisis likely wouldn’t play out like the U.S. housing bust, which caused the worst global recession in decades. But China’s stumble in early 2016 didn’t require the collapse of a complex financial product or the failure of a major bank to hit markets around the world. The combination of plain old commodities and leverage were enough to spread the damage.
Anyone searching for ground zero of the next crisis should look closely at how a crack in China’s growth story could be transmitted globally.
Signs of global dollar-funding pressures are bubbling up in currency derivatives, making it costlier for international investors to protect against swings in the greenback when they buy U.S. debt.
Cross-currency basis swaps, which money managers and corporate treasurers outside the U.S. can use to borrow in dollars, remain close to the widest levels since January even after quarter-end, when such financing strains typically dissipate. The market was a key indicator of stress during the financial crisis, and while it’s nowhere near the alarming levels of that era, it’s still garnering the attention of analysts.
There are several forces at work that are raising the expense of financing in dollars. Strategists cite the political tension in Spain related to Catalonia’s independence push and the slow pace of Brexit talks, which may be heightening the perception of credit risk for the region’s banks. That combines with the prospect that a U.S. tax overhaul could trigger dollar repatriation. And there’s also the outlook for monetary-policy divergence, with the Federal Reserve starting to unwind its balance sheet, and analysts see the trend only worsening.
The decision by the European Central Bank to phase out, and eventually exit, the asset purchase programme — its version of quantitative easing — which should be taken in the coming weeks, is creating increasing concern in financial markets. Unlike the other central banks, the scope for further extending the ECB’s balance sheet may be near the end, unless the rules are changed — but that would risk triggering legal challenges.
The European Central Bank looks set to remain active in the eurozone bond markets for most of 2018, confounding expectations that policymakers would end their landmark €60bn month quantitative easing programme as early as June next year.
ECB watchers now expect Mario Draghi to say at the next governing council meeting on October 26 that the central bank will continue its asset purchases until next September — or possibly even December 2018.
“It’s the first time since QE began that the communication from the eurozone’s monetary policymakers is clear: both the hawks and the doves seem in agreement that it will be a slow taper,” said Frederik Ducrozet, economist at Pictet Wealth Management.
For decades, it’s been a rite of autumn: Finance ministers and central bankers from economically struggling countries arrive here for the International Monetary Fund’s meetings, seeking cash infusions or bailouts from the world’s richest nations.
Now that tradition is being upended. Countries like Ukraine, Nigeria, Sri Lanka and Tajikistan still need the money. They’ve just found a much more relaxed lender: investors who, in an era of rock-bottom interest rates, are searching far and wide for risky assets that will churn out decent returns.
Last year, developing nations issued a record $133 billion in debt, according to Bond Radar, a data gathering outfit. Bankers have forecast another stellar year in 2017, approaching $150 billion — an amount that is nearly twice what was raised in 2015. The I.M.F. warned last week that this rush to snap up the debt of financially fragile countries could end badly. Many of these countries are already burdened with high levels of debt, and analysts fear that as they issue more they will be unable to meet financing requirements if interest rates rise sharply.
“These easy financial conditions might last for a while, but the longer they last the more the vulnerabilities build up,” said Tobias Adrian, who heads the I.M.F.’s monetary and capital markets division. “The impulse is to lever up when times are good, and we want to lean against that.”
China remains the biggest foreign holder of U.S. Treasuries, ahead of Japan, which owned $1.1 trillion, down by $11.4 billion from July. The two countries account for more than a third of all foreign ownership of Treasuries, which gained by $19.4 billion to $6.27 trillion in August, the figures showed.
MACRO OP-EDS, INSIGHT, EVENTS AND TRENDS
Of all the leaders on the international stage, Mr. Xi will be the most consequential. This is not simply because he rules a nation of 1.4 billion people and an economy that overtook the U.S. in 2014 to become the largest in the world (measured by purchasing power parity, which both the International Monetary Fund and CIA regard as the single best yardstick). By the end of his second term, China’s economy is on pace to be 40% larger than America’s.
At that point he will have firmly established Beijing as the capital―and Xi Jinping as the man―to which a world looking for growth and stability turns first. China will have been restored to its position as the “sun” around which the nations of Asia orbit—as they did in earlier millennia. And Mr. Xi will have become the modern emperor of China.
Far from the booming metropolis of Beijing, China is building a sprawling system that combines dystopian technology and human policing. “It’s a kind of frontline laboratory for surveillance.”
China, which has already deployed the world’s most sophisticated internet censorship system, is building a surveillance state in Xinjiang, a four-hour flight from Beijing, that uses both the newest technology and human policing to keep tabs on every aspect of citizens’ daily lives. The region is home to a Muslim ethnic minority called the Uighurs, who China has blamed for forming separatist groups and fueling terrorism. Since this spring, thousands of Uighurs and other ethnic minorities have disappeared into so-called political education centers, apparently for offenses from using western social media apps to studying abroad in Muslim countries, according to relatives of those detained.
“It’s an open prison,” said Omer Kanat, director of the Washington-based Uyghur Human Rights Project, an advocacy group that conducts research on life for Uighurs in Xinjiang. “The Cultural Revolution has returned [to the region], and the government doesn’t try to hide anything. It’s all in the open.”
For all his talk about giving markets a “decisive” role, Xi Jinping ultimately believes the state should lead. On the cusp of his elevation to Mao-like status, he aspires to use big data and artificial intelligence to correct the planning errors of the past and micromanage the Chinese economy while keeping tabs on its citizens.
Information technology, far from undermining China’s authoritarian model as many thought it would, is reinforcing it. The German political scientist Sebastian Heilmann coined the term “digital Leninism” to describe the program Mr. Xi has engineered to try to ensure the Communist Party’s survival.
The party calls the mission “top-level design,” and it is intended to guide the next stage of growth led by advanced technologies such as robotics, 3-D printing and driverless vehicles.
Technicians are working on a plan to monitor the performance of these machines using sensors and cameras and measure it against industrial goals. Corporate data feeds will give regulators the ability to spot credit and investment flows in real time, along with fraud. Algorithms will supposedly use this granular information to optimize macroeconomic decision-making, keep markets on an even keel and avoid speculative bubbles.
Western free-market theory says digital or not, state planning can never replace what Adam Smith called the “invisible hand” of the market. In their book “Why Nations Fail,” the economists Daron Acemoglu and James Robinson assert that centralized economies like China’s are ultimately doomed because the elites who run them feel threatened by the political disruption of innovation.
Others argue the contrary, that in a digital era authoritarian regimes less bound by concerns over data privacy and protection may actually have an edge on innovation. A number of young Stanford and MIT-educated software engineers and M.B.A.s are joining Chinese startups in areas like health care and computer vision, where easy access to vast reservoirs of data can propel scientific breakthroughs and reduce time to market for their inventions.
We Americans tend to think of Kim as an irritant to our plans, but his natural enemy in the long run is China. It is easier for North Korea to threaten Chinese cities with weapons, and its nuclear status stands in China’s way of becoming the dominant regional power in East Asia. Chinese public opinion has already turned against North Korea, and leaders wonder whether a more reliable, pro-Chinese option to Kim might be installed. Since assuming power, Kim has gone after the generals and family members with the strongest ties to China.
One way to interpret Kim’s spat with U.S. President Donald Trump is that he is signaling to the Chinese that they shouldn’t try to take him down because he is willing to countenance “crazy” retaliation. In this view, Beijing is a more likely target for one of his nukes than is Seattle.
More radically, think of Kim as auditioning to the U.S., Japan, South Korea and India as a potential buffer against Chinese expansion. If he played his hand more passively and calmly, hardly anyone would think that such a small country had this capacity. By picking a fight with the U.S., he is showing the ability to deter just about anyone.
Another possible scenario from Kim’s perspective is that external pressures and sanctions rise, and North Korea can’t survive as a regional nuclear pariah. If this doesn’t seem likely today, remember we are talking about the next 50 years. So if Kim’s belligerence induces Japan or maybe South Korea to develop nuclear deterrents, that would take some of the pressure off him, as nuclear proliferation would become the regional default. Kim is probably more concerned with sheer survival than with managing other shifts in the balance of power.
Space, once seen as the benign final frontier, has evolved into a crowded potential battleground that the U.S. must defend as conflicts extend beyond Earth, according to the Air Force’s top military space official.
While officials once aspired to treat space as a peaceful refuge from the strife on Earth, it’s now “congested, contested and competitive”– and “all three of those trends are trending upward,” General John W. “Jay” Raymond, the head of the Air Force Space Command, said in an interview Monday at Bloomberg headquarters in New York.
There’s a growing feeling of political limbo for Prime Minister Theresa May, undermined both at home and in Europe while the economy deteriorates. Six months into the most challenging government operation since World War II, the dominant electoral machine of modern British history is riven by internecine warfare.
May is unable to get her cabinet to agree on a negotiating stance as the clock ticks down to Brexit day in March 2019. Businesses are delaying investment and considering moving operations because ministers are unable to tell them what Britain’s trading and legal status will look like.
“The Conservatives are trapped between a rock and a hard place,” said Anand Menon, professor of European Politics at King’s College London. “Either disappointing a part of the party that has proved only too willing to rebel, or implementing a policy that risks real damage to their reputation for economic competence.”
Both at home and abroad, Britain’s prime minister is hamstrung by her political fragility. She is constantly forced to mediate between warring factions in her cabinet, some of whom want a quick, clean break with the bloc, while others fret about protecting the economy. She must also fend off doubts on the Continent about her ability to deliver a deal, even if one is agreed to.
“Britain is not seen as a credible negotiating partner,” said Charles Grant, director of the Center for European Reform, a London-based research institute. “Continental Europeans read Britain’s newspapers and watch its TV news, and it seems very confused. They don’t know who is in charge, and who speaks for the government.”
Economic experts have made an explosive suggestion of a further referendum to reverse Brexit, to avoid the crippling of the British economy.
The influential Organisation for Economic Co-operation and Development (OECD) said the deadlock in the exit talks now threatened a “disorderly Brexit”, with severe consequences. Its report controversially puts the case for a dramatic rethink on the agenda – suggesting halting EU withdrawal is a route to avoiding that fate.
Wes Streeting, a Labour MP and supporter of the Open Britain group, said: “Today’s OECD analysis should be the final nail in the coffin for the already long-buried notion that Brexit will benefit our economy.”
Mired in malaise for more than three decades, the Japanese economy is showing signs that stimulus and reform policies under Prime Minister Shinzo Abe — known as Abenomics — are kicking in. Gross domestic product expanded for six straight quarters through June, momentum nont seen in more than a decade, and private consumption, which accounts for two thirds of GDP, rose nearly 1 percent in the second quarter.
“Japan’s era of struggling with deflation has come to an end,” says Shuhei Abe, founder and chief executive office of Sparx Group Co., Japan’s largest hedge fund firm. “Since Abenomics began, land prices in Tokyo have been rising.”
The cost of renewables is plunging faster than forecasters anticipated just a few years ago as as technologies like gigantic wind turbines arrive on the market.
That’s the conclusion of Bloomberg New Energy Finance, whose founder Michael Liebreich estimated that clean energy will reap 86 percent of the $10.2 trillion likely to be invested in power generation by 2040.
In a presentation to the research group’s conference in London on Tuesday, Liebreich said technology that’s slashing the costs of wind and solar farms makes it inevitable that clean energy will become more economical than fossil fuels for utilities in many places. The most visible advance is in the scale of wind turbines, highlighted by the chart below.
Demand for cobalt in electric vehicle batteries is expected to grow fourfold by 2020, and eleven-fold by 2025, according to Wood Mackenzie. If supply cannot be nailed down, that could threaten carmakers’ aggressive plans for launches of new EV models. At the Frankfurt auto show this year VW pledged to spend €70bn to electrify 300 car models by 2030.
“The question some are now asking is: could a lack of cobalt impact the EV revolution? Be it through surging prices slowing the battery cost reduction trend, or a physical shortage of metal impacting automotive output,” says Gavin Montgomery, director of metals market at Wood Mackenzie. “While it may sound alarmist, it is by no means impossible.”
Cobalt is critical for the current generation of electric vehicle batteries, used by Tesla, Nissan and Chevrolet. But over the past year it has jumped more than 80 per cent in price, more than any other battery metal, just as carmakers look to reduce costs to make electric vehicles competitive with the internal combustion engine.
The humbling truth for Goldman is that US retail banking has become not only more reliable than investment banking, but more profitable. JPMorgan’s balance sheet is three times the size of Goldman’s and its retail banking arm made a 19 per cent return on equity in the third quarter, compared with Goldman’s 11 per cent.
It is no simpler for Goldman to break into Main Street than it was for the old JPMorgan to break back into Wall Street: $12bn on a balance sheet of $930bn is an interesting financial experiment, not a revolution. It would need to inflict on consumer banking with technology what Amazon did to the retail industry to rival fully JPMorgan and Bank of America.
CENTRAL BANKS & MONETARY POLICY
Mark Carney reaffirmed that the Bank of England is close to its first interest-rate increase in over a decade, as inflation hit 3 percent and one of his colleagues said the economy is approaching a “tipping point.”
In a series of testimonies to lawmakers, the BOE governor and the two newest members of the rate-setting Monetary Policy Committee signaled that the erosion of economic slack is dominating their thinking as they prepare for a Nov. 2 decision. The appearances coincided with a report showing consumer prices rising at the fastest pace since April 2012.
USA ECONOMY DATA, CITIES AND STATES
56 percent of Americans believe that automation destroys more jobs than it creates, according to a new study by Ipsos Public Affairs and the Center for Business Analytics at the University of Virginia. About one-third of respondents believe they are at risk of losing their job to automation. Most respondents—63 percent—agree that automation has made life easier. But only 43 percent believe that automation has more benefits than drawbacks.
POSITIONING, INFLECTION, MARKET CALLS
Unless the rising stock market suddenly slams into reverse, a pattern for U.S. blue-chips that has held for 130 years is about to end. For the past 13 times that a year has ended in seven, going back to 1887, the Dow Jones Industrial Average or its predecessor has suffered a sharp downturn between August and November. The average drawdown has been a little over 13% according to the research firm Leuthold Group.
The most memorable of those drops was 30 years ago this Thursday. The 1987 stock-market crash sent the Dow tumbling 22.6%, its worst single-day percentage loss ever. Including a previous selloff, the decline wiped out 36% of the Dow’s value. The worst drop for a year ending in seven was a 40% tumble in 1937, during the Great Depression.
Now this streak looks to be in jeopardy. August this year was a fairly calm month, and September and the first half of October have broken multidecade records for their lack of volatility. The Dow hasn’t fallen by more than 1% in a single session for 42 days. The average daily change in the index this year has been 0.3%, or just half of its average in the preceding five years.
It has been about 325 trading days since the last “drawdown”, which the New York investment bank defines as a drop of at least 5 per cent from recent highs over a rolling half-year period. That means the S&P 500 could break the record early next year, FT calculations show.
Investors have once again pointed to bullish bets on the Nasdaq Composite as the most crowded trade on Wall Street, according to a new survey that underscores the rapid gains posted this year by US technology stocks.
Almost 30 per cent of asset managers in a monthly Bank of America Merrill Lynch poll said “long” trades on the Nasdaq were the most saturated, the fifth time this year the tech index has topped the list.
COLOR, EARNINGS, SENTIMENT, VALUATIONS
The biggest driver of the beat was a surge in investing and lending revenue. “I&L was far and away the biggest driver of the quarter’s revenue upside,” Credit Suisse analysts said in a note after the results.
International Business Machines Corp. had gains in its hardware and artificial-intelligence divisions in the third quarter but over all profit and sales declined, a sign the company’s drawn-out transformation still has a way to go.
The results provided some evidence of what management has been promising for nearly nine years: the decision to buy Smith Barney at the height of the 2007-2009 financial crisis has given the smallest of the Wall Street banks a cushion to weather downturns the way some larger rivals do.
“Our third quarter results reflected the stability our wealth management, investment banking and investment management businesses bring when our Sales and Trading business faces a subdued environment,” Gorman said in a statement.
DEALS, MERGERS, IPOs, LBOs, RESTRUCTURINGS
J.P. Morgan Chase said that it agreed to buy payments company WePay in the bank’s first sizable acquisition of a financial-technology startup.
Magic Leap, the secretive developer of “mixed reality” glasses, has raised another $502m in equity funding. The deal takes its total equity investments to $1.9bn, even before the company has unveiled its first product.
ENERGY COMPANIES, NOCs, INDUSTRY
“The market is frightened by the shale oil band,” says Olivier Jakob at PetroMatrix, one of the first analysts to popularise the concept in the industry. “But it’s not just traders — we’ve seen indications from Opec and Russian oil companies that even they think going above $60 a barrel right now would be too much and would bring on more oil from shale. They don’t want it.”
ENERGY RENEWABLES, NUCLEAR
COMMODITIES AGRICULTURE & SOFTS
The Trump administration Tuesday reversed efforts to make it easier for livestock farmers to challenge meatpackers over pricing and allegations of uncompetitive practices.
Some farmers complained for years that big meat companies enjoyed excessive control over farmers’ livelihoods by leveraging their broad influence over pricing and supplies needed to raise poultry and livestock. The U.S. Department of Agriculture in December outlined the new rules that would have made it easier for farmers to contest their big customers.
POLLUTION, CLIMATE & ENVIRONMENT
Alberta’s oil and gas industry – Canada’s largest producer of fossil fuel resources – could be emitting 25 to 50% more methane than previously believed, new research has suggested.
The pioneering peer reviewed study, published in Environmental Science & Technology on Tuesday, used airplane surveys to measure methane emissions from oil and gas infrastructure in two regions in Alberta. The results were then compared with industry-reported emissions and estimates of unreported sources of the powerful greenhouse gas, which warm the planet more than 20 times as much as similar volumes of carbon dioxide.
“Our first reaction was ‘Oh my goodness, this is a really big deal,” said Matthew Johnson, a professor at Carleton University in Ottawa and one of the study’s authors. “If we thought it was bad, it’s worse.”
Ireland dived into a cleanup effort on Tuesday after one of the most powerful storms ever recorded in the northeastern Atlantic tore across the island, killing at least three people and leaving a trail of destruction.
Officials said hundreds of thousands of people in the country remained without power on Tuesday, after the remnants of Hurricane Ophelia tore roofs off buildings in Ireland’s largest cities, Dublin and Cork, and pushed ocean water over sea walls on its west coast.
The national utility the Electricity Supply Board warned that it could take up to 10 days to restore power to all 245,000 homes and businesses that were without electricity, which represented 12 percent of the network.
BREXIT, SCOXIT, LONDON, UK ECONOMY
Consumer prices in the U.K. rose in September at the fastest annual rate for more than five years, a pickup that will reinforce expectations the Bank of England could nudge up interest rates as soon as November.
The referendum on British membership in the European Union and several terrorist attacks, including a suicide bombing after a concert in Manchester, England, have helped drive hate crimes in Britain to record levels, official figures showed on Tuesday.
The man poised to lead the Czech Republic following elections this week is a polarizing billionaire who vows to drain the swamp of this capital city’s politics, run his country like a business and keep out Muslim immigrants.
He casts himself as the straight-talking voice of the common man and derives support from the country’s forgotten communities. He makes a sport of attacking the European Union and says NATO’s mission is outdated. He pledges to put his own nation’s interests above all else but is dogged by investigations into alleged shady dealings that threaten to cripple his political career.
Andrej Babis is so similar to the U.S. president in profile and outlook that he feels compelled to offer at least one key distinction. “I was never bankrupt,” the 63-year-old says mischievously in an interview at his featureless office park on the outskirts of this gloriously gargoyle-and-spire-pierced city.
There are other differences, too. But the overall picture is clear: Europe, a land where President Trump is widely reviled, could soon have a man who bears an uncanny resemblance leading a nation at the continent’s heart. “People here may not like Trump,” said Jiri Pehe, the director of New York University’s Prague campus. “But they like Trumpian politics as performed by Mr. Babis.”
Emmanuel Macron will demand that the EU harden its approach to free trade talks when he meets his counterparts in Brussels this week, as the French president seeks to show critics at home that the bloc can be more protective of French farmers and workers.
Mr Macron wants EU leaders at their summit on Thursday and Friday to instruct the European Commission to put a brake on trade talks with South America’s Mercosur and revisit its strategy before pursuing negotiations with Australia and New Zealand, according to French diplomats.
As Prime Minister Shinzo Abe’s ruling party heads for what polls suggest will be its best national election result in more than three decades, Japan’s stock market has surged to heights not seen since before the financial crisis. Some investors and analysts are asking whether the optimism is overdone.
Retained earnings — profits kept by companies after dividend payments — at Japanese businesses totaled 406 trillion yen ($3.61 trillion) at the end of fiscal 2016, Finance Ministry data shows.
DACA, TRAVEL BAN, IMMIGRATION, WALL
The revised measure blocking entry from eight countries was set to go into effect early Wednesday.
President Donald Trump’s new effort to impose a travel ban drew fire Tuesday from a federal judge who blocked implementation of restrictions on people from six Muslim-majority countries, on the eve of the policy taking full effect.
The Trump administration is planning an increase in federal immigration jails across the country for the thousands of additional undocumented immigrants its agents are arresting.
In recent weeks, the Immigration and Customs Enforcement (ICE) agency has put out requests to identify privately-run jail sites in Chicago, Detroit, St. Paul, Salt Lake City and southern Texas, according to notices published on a federal contracting website. It did not publicly announce its plans to house 4,000 more detainees at the facilities.
GEOPOLITICS, CRIME, TERRORISM
Several US veterans and relatives of American soldiers killed or wounded in Iraq on Tuesday sued five pharmaceutical and medical equipment makers, saying the companies in effect funded an Iraqi terrorist militia that killed hundreds of American soldiers in the years following the 2003 US-led invasion.
The civil lawsuit, filed in federal court in Washington, accuses the five multinationals of routinely bribing Iraqi Ministry of Health officials to win drug contracts when the office was controlled by the virulently anti-American Jaysh al-Mahdi or Mahdi Army.
The head of Britain’s domestic intelligence agency said Tuesday that there has been a dramatic uptick in the threat of Islamist extremism to the U.K., with plots occurring at a faster tempo than at any point in his career.
PROPAGANDA, CORRUPTION, AUTHORITARIANISM
Venezuela’s President Nicolás Maduro on Tuesday defended the results of regional elections, accusing the United States of fanning domestic opposition and dismissing claims of dirty campaign tactics.
“Our people have sent a message to [President] Trump, his allies, and the local right wing,” Maduro said in a lengthy official news conference, his first since Sunday’s elections — when his socialists won the governor posts in at least 17 of Venezuela’s 23 states. He said the U.S. criticism is strengthening his base.
Venezuela’s opposition is deeply divided over the outcome of the vote after opinion polls had suggested a massive government defeat. Some opposition leaders have suggested fraud, refusing to recognize the results and calling for an independent audit. Others have recognized the defeat, attributing it to the abstention of disappointed and disillusioned opposition supporters.
The document, whose authenticity was confirmed to The Washington Post, was prepared by Peter Navarro, the influential director of the White House Office of Trade and Manufacturing Policy. The claims alarmed some Trump administration officials.
A spokesman for the Heat declined to give a reason for the change.
Former Rep. David Jolly (R-Fla.) said he thinks the United States might be better off if Democrats take the House in 2018.
SCANDALS, LAWSUITS, FINES, REGULATORY
Rio Tinto and two former senior executives were hit with US fraud charges, and the miner with a UK penalty, on Tuesday for allegedly trying to hide a multibillion-dollar business failure by inflating the value of coal assets in Mozambique.
SILICON VALLEY, UNICORNS, STARTUPS, VC
Regina Dugan, the head of Facebook’s secretive hardware lab called Building 8, is leaving the company after just 18 months.
Dugan’s departure was announced internally on Tuesday, and in a post she wrote that she’s leaving to “lead a new endeavor,” though she didn’t specify what. Dugan will stay at Facebook into early 2018, to ensure “a smooth transition,” she added.
Dugan made a big splash when she arrived at Facebook in early 2016. Not only did she join to run Facebook’s hardware efforts, which were totally new and garnered a commitment of hundreds of millions of dollars from the company, but Dugan has an impressive background.
Before joining Facebook, she led Google’s Advanced Technology and Products team, which built things like modular smartphones and clothes outfitted with micro-sensors. Before Google, Dugan was the director of DARPA, the special research lab that builds new technology for the U.S. military.
The rising ranks of Asian millionaires has pushed assets managed by wealthy clans in the region to more than $17 trillion, according to the consultancy Capgemini. A chunk of that cash is flowing into technology startups in the region and overseas as more digitally-savvy heirs take control of family fortunes. Their hope is that these new investments will generate higher returns and modernize empires that are decades old.
The fresh flood of Asian money promises to inflate already lofty valuations for the most promising firms in the red-hot tech sector. The $93 billion SoftBank Vision Fund and state-owned Chinese entities are also on the prowl for new businesses, as are investors from around the world. Amid the formidable competition, many Asian families are investing in startups at the earliest stages, a contrast with the more conventional approach of older generations, who focused on areas like real estate and manufacturing.
CONSUMER TECH, SOCIAL MEDIA, E-COMMERCE, MOBILE
Amazon has signed contracts with apartment owners and managers representing more than 850,000 units across the U.S. to begin installing Amazon locker systems in their buildings, according to the landlords. Amazon has commitments to install the lockers in thousands of properties, many before the peak holiday shopping season, according to a person familiar with the matter.
Called “Hub By Amazon,” the locker can accommodate packages from any major carrier, including United Parcel Service Inc., FedEx Corp. and the U.S. Postal Service. A modular unit measures about 7 feet by 7 feet and has 42 lockers in various sizes, accessible 24 hours a day.
The lockers are designed to prevent lobbies and mail rooms in multifamily housing units from getting overrun with packages. The units also secure packages so residents can get their items after hours when an apartment’s management office may be closed. Such lockers are becoming must-have amenities in apartment complexes as tenants shift more spending online and lack a convenient way to receive their purchases.
Even as the Seattle-based company takes a step forward in Brazil, it’s keeping a low profile. The company’s offices in a posh building near a key Sao Paulo financial district are indistinct and almost bland. There are no signs in the lobby. The company shrugged off any discussion about its next steps in Brazil, though Alex Szapiro, the country manager, said in an interview that Amazon is hiring for 81 positions there.
Twitter Inc. is introducing new policies to combat harassment and unwanted sexual advances on the social media site after a recent decision to disable the account of a famous actress sparked an uproar.
RETAIL APPAREL, SPECIALTY, DINING, BIG BOX
Wal-Mart’s U.S. e-commerce chief Marc Lore said the online retail division is still in growth mode, the fruits of which will start paying off over the next two years and help it better compete with Amazon.
MEDIA, CABLE, SPORTS, ENTERTAINMENT
AUTOS, ELECTRIC, SELF-DRIVING
Chinese search giant Baidu Inc. is pushing aggressively ahead with autonomous vehicles, its chief executive said, including plans to release a fully self-driving bus in China next year.
In a direct challenge to Tesla, Volvo Cars unveiled its first high-performance electric-car model in Shanghai on Tuesday, doubling down on its commitment to make only electric or hybrid vehicles starting in 2019.
ARTIFICIAL INTELLIGENCE, DRONES, FUTURE TECH
“This should not have happened,” Canada’s minister of transport, Marc Garneau, said at a news conference on Sunday. “That drone should not have been there.” Nobody was hurt, but the incident could have caused “catastrophic” damage had it hit an engine or incapacitated the pilot, Mr. Garneau said.
Researchers documented evidence that the alligators had consumed three new species of sharks and one new species of stingray, Nifong said. He estimated that the largest sharks eaten were three to four feet long, while the largest stingrays consumed were probably two to three feet long.
Nothing on the level of “Jaws,” sure — but Nifong noted it was possible that there were larger, untrapped gators out there that had taken down bigger sharks as prey.
“There’s not a ton of people out there stomach-pumping very large alligators,” he said. “They’re actually very difficult to stomach-pump and retrieve prey items. It’s very tough to be certain that you got everything out of there.”
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