Macro Links Oct 9th – Adult Daycare Center
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MACRO LINKS TABLE OF CONTENTS (Click or Scroll Down)
- TRUMP VS REPUBLICAN SENATOR
- NUTSO INTERVIEW
- PENCE NFL STUNT
- NORTH KOREA
- IRAN, RUSSIA
- FACEBOOK POLITICAL FALLOUT
- CATALAN SECESSION CRISIS
- PUERTO RICO, HURRICANE NATE
- LAS VEGAS AFTERMATH, SHOOTER PROFILE, NRA, SCALISE
- HARVEY WEINSTEIN
- RATES, LIQUIDITY, SYSTEMIC RISK, BALANCE SHEETS
- MACRO OP-EDS, INSIGHT, EVENTS AND TRENDS
- CENTRAL BANKS & MONETARY POLICY
- USA ECONOMY DATA, CITIES AND STATES
- GLOBAL ECONOMY DATA
- POSITIONING, INFLECTION, MARKET CALLS
- COLOR, EARNINGS, SENTIMENT, VALUATIONS
- DEALS, MERGERS, IPOs, LBOs, RESTRUCTURINGS
- FOREX, CRYPTOCURRENCY, EXCHANGE IMPACTS
- HEDGE FUNDS, PRIVATE EQUITY, MONEY MGMT
- ENERGY COMPANIES, NOCs, INDUSTRY
- ENERGY CRUDE OIL, OIL SANDS, SHALE
- COMMODITIES AGRICULTURE & SOFTS
- POLLUTION, CLIMATE & ENVIRONMENT
- FRONTIER MARKETS
- BREXIT, SCOXIT, LONDON, UK ECONOMY
- GEOPOLITICS, CRIME, TERRORISM
- PRIVACY, HACKING, CYBERWAR, SURVEILLANCE STATE
- PROPAGANDA, CORRUPTION, AUTHORITARIANISM
- TRUMP WORLD
- ELECTORAL POLITICS
- RETAIL APPAREL, SPECIALTY, DINING, BIG BOX
- AUTOS, ELECTRIC, SELF-DRIVING
- AEROSPACE, MILITARY & DEFENSE
TRUMP VS REPUBLICAN SENATOR
Senator Corker, who decided not to run for re-election, tweeted that the White House had become “an adult day care center,” and said, “Someone obviously missed their shift this morning.”
By alienating Corker, Trump risks further endangering his legislative agenda. As chairman of the Foreign Relations Committee, Corker would be a leading voice on Capitol Hill determining the future of the Iran nuclear deal, should Trump “decertify” the agreement and punt to Congress a decision about whether to restore sanctions against Iran.
While Corker didn’t address Trump’s claims, a source familiar with the matter said that when Trump and Corker met in September, the president said he would endorse and campaign for Corker if he ran again. Corker’s office also explicitly rebutted the president’s remarks later on Sunday by highlighting a newly disclosed conversation in which Trump tried to get Corker to reconsider his decision to leave the Senate after 2019.
Corker, as an influential senator on foreign policy and tax reform, is critical to getting many parts of Trump’s agenda through Congress.
“When Corker later called Trump to tell him that he had decided to retire — a decision Corker made on his 65th birthday — the president was disappointed,” said the Post, citing an unnamed Republican Congressional official.
“When Corker later called Trump to tell him that he had decided to retire — a decision Corker made on his 65th birthday — the president was disappointed,” said the Post, citing an unnamed Republican Congressional official.
“I think one of the greatest of all terms I’ve come up with is ‘fake,’” he told Huckabee. “I guess other people have used it, perhaps, over the years, but I’ve never noticed it.”
In a conversation that aired on Christian television station Trinity Broadcasting, Trump said a number of bizarre statements including a defense of the “beautiful, soft towels” he threw in Puerto Rico. “The cheering was incredible,” he said.
Donald Trump has apparently taken credit for creating the word “fake”, during a television interview. The President of the United States suggested he had coined the term as he lashed out at the media for its coverage of his response to the Puerto Rican hurricane victims.
PENCE NFL STUNT
Vice President Mike Pence left the Indianapolis Colts NFL game early on Sunday after players kneeled during the national anthem as a protest against systemic racism — but many people suspect the White House of orchestrating the stunt at the expense of taxpayers. In a tweet on Sunday, NBC’s Peter Alexander reported that Pence’s press pool was ordered to wait outside the game because the vice president had planned to leave early.
“I asked @VP Pence to leave stadium if any players kneeled, disrespecting our country. I am proud of him and @SecondLady Karen,” Trump tweeted less than an hour later.
No matter what, this was almost certainly a predetermined attempt to gain political points by stirring up an issue that, once again, had begun to die down. Pence even quickly released a statement expressing his outrage.
President Donald Trump seemed to hint at action against North Korea, saying that “only one thing will work” to rein in the country’s nuclear ambitions.
North Korea leader Kim Jong Un defended his nuclear-weapons program, calling it a “treasured sword” protecting the country’s independence, as U.S. President Donald Trump said “only one thing will work” to rein in Pyongyang’s nuclear ambitions.
Kim Jong-un struck a defiant tone after President Trump said diplomacy had failed to end the crisis. And South Korean officials were worried that the North would conduct a major test Tuesday.
North Korean leader Kim Jong Un has promoted his younger sister to the nation’s top decision-making body as he further consolidates his family’s dynastic control over the reclusive Asian nation.
Iran’s president defended the 2015 nuclear deal with world powers on Saturday, saying not even 10 Donald Trumps can roll back its benefits to his country, state TV reported. Hassan Rouhani’s comments came as President Donald Trump appears to be stepping back from his campaign pledge to tear up the deal, instead aiming to take other measures against Iran and its affiliates.
Iran’s Revolutionary Guard Corps has warned the US not to designate it as a terrorist organisation, suggesting the US military could be at risk of attack if the elite force is targeted with sanctions.
US president Donald Trump is this week expected to decertify the nuclear accord that Tehran signed with major powers in 2015 and could impose additional sanctions on the Islamic Republic.
If that happens, it would be the first time since the 1979 Islamic Revolution that Iran’s military has faced sanctions. So far, entities and individuals affiliated to the Guards — one of the most powerful arms of the regime with numerous business interests — have been the target of international sanctions but not the Guards themselves.
Donald Trump is expected to designate an elite wing of the Iranian military as a terrorist organisation next week as part of a new hardline strategy against the Islamic republic. A senior administration official said the US president, who is poised to decertify a landmark nuclear deal between Iran and world powers next week, will not seek the reimposition of broad sanctions that would risk collapsing the 2015 accord.
Thousands of Russians marked President Vladimir Putin’s 65th birthday with protests in over 80 cities nationwide calling for him to allow opposition leader Alexei Navalny to stand in next year’s election.
Over two thousand people gathered on the Champs de Mars in St Petersburg, Mr Putin’s hometown, chanting “Free Navalny!” and “Putin is a thief!” before marching through the streets into the city centre. About half as many gathered in Moscow, where in a change from their usual tactics, police largely left protesters alone.
Russia is within its rights to restrict the operations of U.S. media organizations in Russia in retaliation for what Moscow calls U.S. pressure on a Kremlin-backed TV station, a Russian foreign ministry spokeswoman said on Sunday.
FACEBOOK POLITICAL FALLOUT
“Twitter is how [Trump] talked to the people, Facebook was going to be how he won,” Parscale tells Stahl. Parscale says he used the majority of his digital ad budget on Facebook ads and explained how efficient they could be, particularly in reaching the rural vote. “So now Facebook lets you get to…15 people in the Florida Panhandle that I would never buy a TV commercial for,” says Parscale. And people anywhere could be targeted with the messages they cared about. “Infrastructure…so I started making ads that showed the bridge crumbling…that’s micro targeting…I can find the 1,500 people in one town that care about infrastructure. Now, that might be a voter that normally votes Democrat,” he says. Parscale says the campaign would average 50-60,000 different ad versions every day, some days peaking at 100,000 separate iterations – changing design, colors, backgrounds and words – all in an effort to refine ads and engage users.
The entirely routine use of Facebook by Trump’s campaign and others — a major part of the $1.1 billion of paid digital advertising during the cycle — is likely to have had far greater reach than Russian bots and fake news sites. And beyond this reach, our research reveals that firms such as Facebook, Google, and Twitter now play a much more active role in electoral politics than has been widely acknowledged.
Those companies had staff working hand in hand with Trump campaign digital staffers, according to Gary Coby, the director of advertising at the RNC and director of digital advertising and fundraising for Trump’s general election campaign. “I required that if people wanted to work with us, they needed to send bodies to us in Texas and put people on the ground because Hillary had this giant machine, well-built out with digital operations, and we’re just a few guys and a big Twitter account,” he told us.
“Google, Twitter, and Facebook, we had people who were down there constantly and constantly working with us, helping us solve our problems in relation to how we’re using the platforms,” he said. “If we’re coming up with new ideas, bringing them into the fold to come up with ideas of how their platform could help us achieve our goals.”
Facebook’s recent revelations that it sold thousands of ads to a Russian troll operation seeking to foment discord during last year’s elections have led its executives to pledge cooperation with U.S. investigators. But the company’s role in the Russia probe is also prompting uncomfortable scrutiny of its increasingly lucrative political advertising business and how little is known about the ads voters are exposed to online.
The situation has the potential to affect a key profit center for Facebook. The same proprietary technology that has made Facebook the go-to advertising platform for political campaigns also enabled Russian operatives to target U.S. voters with inflammatory ads. Now lawmakers, noting that online companies are not subject to disclosure rules governing broadcast advertising, are calling for tighter regulations as Facebook is poised to play another major role in the 2018 and 2020 elections.
The Russian ad scandal has captured lawmakers’ attention in a way Facebook’s previous political crises — from allegations of bias in its Trending column to its role in spreading fake news — have not. It has crystallized a trio of individual fears — Facebook is too big, has too much influence, and cannot effectively monitor itself — into one big expression of all of them.
And now, with Congress scrutinizing it and the world watching, Facebook is scrambling to contain an metastasizing crisis that has tarnished its public image and conjured the threat of possible government regulation. In November, the House Intelligence Committee, of which Schiff is a key part, plans to hold an open hearing to discuss Russian election interference. And Schiff would very much like to see Facebook there. “We have an interest in having them come into our committee,” he said.
CATALAN SECESSION CRISIS
Catalonia’s silent supporters of Spanish unity found their voice on Sunday, thronging into the center of Barcelona as part of a huge rally that reverberated with chants in support of a united Spanish state and against agitators for independence.
They demonstrated solidarity with the vilified national police and proudly waved a red-and-yellow national flag that for decades had carried the stigma of a taboo nationalism. “Catalonia is not all for independence,” said José Manuel Alaminos, a 64-year-old lawyer. He said that Carles Puigdemont, the regional president who has led the independence movement, “is supposed to represent all of us.”
The separatist push has brought about one of Spain’s worst constitutional crises since the end of the Franco dictatorship nearly 43 years ago.
Hundreds of thousands of people took to the streets of Barcelona on Sunday to urge that Catalonia remain part of Spain, adding to pressure on the Catalan regional government as it considers whether to declare independence as early as this week.
The demonstrations came after Mariano Rajoy, Spain’s prime minister, reiterated his threat to suspend Catalonia’s autonomy if the region secedes, a sign Madrid has no intention of backing down from a potential conflict with the pro-independence Catalan government.
In a region that draws part of its identity from the toughness of farmers, their tractors are now among the symbols of Catalonians’ fight for independence. In recent months, farmers have lent their strength to marches, riding slowly with the demonstrating masses. During the contentious referendum on independence, the tractors were positioned outside polling stations as a line of defense against intervention by the Spanish police.
The center of the Catalan independence movement is Barcelona, a cosmopolitan metropolis, where urbanites are at the core of the demonstrations — which is why the tractors are a seemingly unlikely symbol. Some tractors cost over 100,000 euros, around $117,000, and feature computers, joysticks, control panels with LED lights and air-conditioned cabins. Others are secondhand clunkers.
Farmers in the rest of Spain and Europe have for decades used tractors in protests about the cost of gas or the wholesale price of produce. But they have rarely attracted as much attention and popular support as they have in recent weeks in Catalonia. And even as the protest schedule is busy, so is the schedule on the farm.
PUERTO RICO, HURRICANE NATE
“Emigration is a painful process, but for many on the island that may be the best option,” says Barry Bosworth, a senior fellow at the Brookings Institution in Washington, who estimates that the population could drop below 3m within a few years as annual migration doubles. “The economic problems are becoming increasingly evident.”
Ricardo Rosselló, the island’s governor, puts it in even starker terms: “You will not only be getting hundreds of thousands moving to the US, you will get millions, creating a devastating demographic shift in Puerto Rico . . . a brain drain”. Some may dismiss his warning as scaremongering, part of an effort to secure multibillion-dollar aid commitments from Washington. But flights out of Puerto Rico in the aftermath of the storm — which left at least 34 dead and 11,000 homeless — were fully booked.
The scale of migration envisioned by Mr Rosselló would cause a severe economic shock on the island and potentially weigh on the finances of US cities from Florida to New York that are most likely to receive the new arrivals.
Only 11% of customers have electricity as the antiquated grid, the financial straits of the local government and the island’s terrain hinder the effort.
Hurricane Nate lashed coastal Mississippi on Sunday morning, causing power outages and some flooding before racing north and weakening rapidly into a tropical depression.
Nate made landfall as a Category 1 storm with maximum sustained winds of 85 mph and, though downgraded, remains a sloppy-wet storm that is expected to deliver 3 to 6 inches of rain to Tennessee and the southern Appalachians. It is the fourth hurricane to make landfall this year in the United States in what has been an extraordinary season for tropical cyclones.
LAS VEGAS AFTERMATH, SHOOTER PROFILE, NRA, SCALISE
The gunman who killed 58 people here Sunday appears to have gone out to the desert to practice shooting two days before the massacre, according to a law-enforcement official familiar with the investigation.
The mayor of Las Vegas expressed confidence that tourism to the city would remain strong despite last Sunday’s mass shooting. Other cities have seen a short-term decline in visitors after big attacks.
The behavior of the man police say shot and killed 58 people in Las Vegas would have prompted a security probe before the massacre had he been staying again at Steve Wynn’s hotel, the billionaire casino magnate said Sunday.
Stephen Paddock was a contradiction: a gambler who took no chances. A man with houses everywhere who did not really live in any of them. Someone who liked the high life of casinos but drove a nondescript minivan and dressed casually, even sloppily, in flip-flops and sweatsuits. He did not use Facebook or Twitter, but spent the past 25 years staring at screens of video poker machines.
Mr. Paddock, a former postal worker and tax auditor, lived an intensely private, unsocial life that exploded into public view on Sunday, when he killed 58 people at a country music festival and then shot himself. But even with nationwide scrutiny on his life, the mystery of who he was has only seemed to deepen.
The National Rifle Association ventured into unfamiliar territory last week when it endorsed new restrictions on a device that accelerated gunfire in the Las Vegas massacre. But leaders of the gun lobby signaled Sunday they may draw a line at writing those restrictions into law.
In the wake of a blistering New York Times report that detailed nearly 30 years of his sexual misconduct, the embattled movie mogul has been “terminated, effective immediately” from The Weinstein Company.
Weinstein Company representative Nicole Quenqua sent a statement Sunday from The Weinstein Company’s board of representatives: “In light of new information about misconduct by Harvey Weinstein that has emerged in the past few days, the directors of The Weinstein Company — Robert Weinstein, Lance Maerov, Richard Koenigsberg and Tarak Ben Ammar — have determined, and have informed Harvey Weinstein, that his employment with The Weinstein Company is terminated, effective immediately.”
The incident took place a decade ago, according to Lauren Sivan, who at the time was a news anchor on a local cable channel in New York, Long Island 12. She says the experience left her shocked, and that while she told friends privately what happened, she remained quiet because she was in a long-term relationship and fearful of the power that Weinstein wielded in the media.
In making her announcement on Twitter, Ms. Bloom did not offer an explanation for her resignation. The tactics and tenor of her defense of Mr. Weinstein have varied, and there were often substantial differences in her public and private statements. The emails, viewed by The New York Times, reveal that at least two board members did not approve of her approach.
RATES, LIQUIDITY, SYSTEMIC RISK, BALANCE SHEETS
Wolfgang Schäuble has warned that spiralling levels of global debt and liquidity present a major risk to the world economy, in his parting shot as Germany’s finance minister.
In an interview with the Financial Times, the Europhile who has steered one of the world’s largest economies for the past eight years, said there was a danger of “new bubbles” forming due to the trillions of dollars that central banks have pumped into markets.
MACRO OP-EDS, INSIGHT, EVENTS AND TRENDS
The main argument against independence is economic. Independence would constitute a shock of an order of magnitude larger than the hardest of Brexits.
The EU does not want to Catalonia to leave, but it can also not act against Spain. Independence really means third-country status — Catalexit. In that case, Catalan citizens would lose their Spanish and EU citizenship because that privilege exists only in conjunction with the citizenship of a member state. The Catalan version of having your cake and eating it is to hope for dual citizenship. I think this is utterly unrealistic.
The border between Spain and Catalonia would become a heavily guarded external border of the EU and the Schengen zone of passport-free travel. Catalans would have to apply for visas if they want travel to Spain or the EU. As a non-member of the World Trade Organization, Catalonia would have no automatic right to reduced WTO tariffs.
What makes Catalan independence much worse than the most extreme version of Brexit is the immediate forced exit from the eurozone. Catalexit would constitute a dramatic sudden return of the eurozone crisis. The banking system in one of the world’s wealthiest regions could collapse.
Catalonia is also unprepared to introduce its own currency on independence day. It would be mad to try to run such a large developed economy without a central banking infrastructure. Extricating yourself from the EU is difficult enough, as we can see with the UK. To extricate yourself from a currency union at the same time is an economic suicide mission. The single strongest argument against Catalan independence at this stage is an utter lack of preparation.
That scene on the morning after the referendum encapsulates my disappointment with the country. Not only the division, but also the way it had been inflamed. Why would you allow a handful of billionaires to poison your national conversation with disinformation—either directly through the tabloids they own, or indirectly, by using those newspapers to intimidate the public broadcaster? Why would you allow them to use their papers to build up and co-opt politicians peddling those lies? Why would you let them get away with this stuff about “foreign judges” and the need to “take back control” when Britain’s own public opinion is routinely manipulated by five or six unaccountable rich white men, themselves either foreigners or foreign-domiciled?
Before coming to Britain I had always thought that the tabloids were like a misanthropic counterpoint to Monty Python. Like many Europeans, I saw these newspapers as a kind of English folklore, laying it on thick in the way that theatrical British politicians conduct their debates in the House of Commons. Newspapers in the Netherlands would carry on their opinion pages articles by commentators such as Oxford scholar Timothy Garton Ash—giving the impression that such voices represented the mainstream in Britain. Watching QI before coming to the UK, I remember seeing Stephen Fry banter with Jeremy Clarkson and imagining the former was the rule, and the latter the exception. Living in London taught me that it is the other way around. George Orwell is still correct: England is a family with the wrong members in charge.
A 2015 Journal of Experimental Psychology study, involving 166 subjects, found that when people’s phones beep or buzz while they’re in the middle of a challenging task, their focus wavers, and their work gets sloppier—whether they check the phone or not. Another 2015 study, which involved 41 iPhone users and appeared in the Journal of Computer-Mediated Communication, showed that when people hear their phone ring but are unable to answer it, their blood pressure spikes, their pulse quickens, and their problem-solving skills decline.
The earlier research didn’t explain whether and how smartphones differ from the many other sources of distraction that crowd our lives. Dr. Ward suspected that our attachment to our phones has grown so intense that their mere presence might diminish our intelligence.
California is the future. That’s the best way to understand the way forward for America, and ultimately the world. California is roughly 15 years ahead of the rest of America in confronting the very different realities of the 21st century. A world of transformative new technologies with capabilities that we are only just beginning to fully comprehend and harness. A polyglot world of diverse mixes of races and ethnicities that are both super-creative and periodically combustible. A world that increasingly is shaped by climate change and the immense challenges it poses for all of us.
California not only has faced up to the 21st-century challenges, but it’s begun to seriously adapt to them. Californians saw waves of new technologies early, then got a jump on leveraging and accommodating them, and occasionally constraining them. They began integrating a massive influx of Latino and Asian immigrants, coping with diversity in schools and work, and coming to terms with whites being the minority. Californians took a beating in climate-related catastrophes like the recent drought, and have aggressively moved forward with some of the most ambitious clean energy and sustainability measures in the world.
California is the future of American politics as well. The once Red and now deep Blue state has largely figured out a new political way forward for itself and by extension for America — as well as for other democracies — that’s up to the new realities and immense challenges of the 21st century. This is the most important insight for this historical juncture, this time of despair. It’s also the most difficult point for Americans on the east coast and the heartland to accept. But there is a compelling case to be made, based on data and an understanding of history, that what’s happening right now in California is going to come to the rest of America much sooner than almost anyone thinks.
Germany is a bit on edge these days, with the rise of white-supremacist groups, neo-Nazi groups, and right wing political parties around Europe, which seem to sanitize the tactics Hitler used to come to power in the early 1930s.
In Poland, the nationalist, anti-refugee government has actually taken control of the new WWII museum in Gdańsk because it gives the “wrong” spin to that history (a spin not friendly to its right-wing ideology). And in Hungary and Poland, the electorate is so fiercely split, it’s reminding people of the tense two-political-camps feeling during the 1930s when oftentimes families couldn’t even talk to each other.
My German friends explain that conventional conservative political powers supported Hitler in the early 1930s because they thought he would mobilize a certain political base, but then could be tamed or controlled once in power. They believed many Germans voted for Hitler because they didn’t take his promises seriously and just thought he’d shake things up.
When asked what Germany is doing to protect its democracy, my friend explained, “Today in Germany, the media always agrees on the facts. Truth still rules. From these facts, people with different politics can then editorialize and debate. This makes it difficult for populist factions to spread their message. Right-wing populist movements in Germany have to get and share their ‘news’ on Facebook because the media doesn’t give them a platform.”
George Orwell, long before he wrote his nightmare novel of totalitarianism, 1984, noted that a special contribution of the Nazis was to destroy the very notion of commonly accepted facts. “Nazi theory,” Orwell wrote in 1942, “specifically denies that such a thing as ‘the truth’ exists. There is, for instance, no such thing as ‘science.’ There is only ‘German science,’ ‘Jewish science,’ etc. The implied objective of this line of thought is a nightmare world in which the Leader, or some ruling clique, controls not only the future but the past. If the Leader says of such and such an event, ‘It never happened’—well, it never happened. If he says that two and two are five—well, two and two are five.”
Some modern-day neo-Nazis like to use the Lügenpresse slur, not in spite of its associations, but because of them. This, even though Nazi propagandists used it mainly against the foreign press. (They used even more abusive terms to vilify the domestic press—before taking control of it.) But the term’s ugly history is such that others on the extreme right, even today, even in the United States, are put off by it.
The US administration’s tax plan is not a plan. It is a mélange of ideas put forth without precision or arithmetic. It is not clear enough to permit the kind of careful quantitative analysis of budget costs, economic impacts and distributional implications that precedes legislation in a serious country. It is clear enough to demonstrate that the claims of Steven Mnuchin, Treasury secretary, Gary Cohn, director of the National Economic Council, and Kevin Hassett, chair of the Council of Economic Advisers, are some combination of ignorant, disingenuous and dishonest.
I have strong disagreements on tax policy with Republican economists like Greg Mankiw, Glenn Hubbard and Martin Feldstein and with Treasury alumni like Nick Brady, John Snow and Hank Paulson. Nothing I have ever heard or read from them seems absurd or dishonest in the way that almost everything coming out of this administration has that character.
We know enough to know that a tax reform plan along the lines of the administration’s sketch will not substantially increase growth, will blow out the budget deficit and will make America an even more unequal place.
The Republican Party has largely abandoned its platform of fiscal restraint, pivoting sharply in a way that could add trillions of dollars in federal debt over the next decade. Cutting spending to balance the budget was almost religion to the Republican Party for much of the past eight years. But all year long, despite their control of the White House and Congress, Republicans have not taken steps to balance the budget, to overhaul entitlement programs such as Medicare and Medicaid, or to arrest the growth of the country’s $20 trillion in debt.
With the House passing a critical budget resolution this past week, GOP lawmakers are charging forward next week with plans to cut taxes in a way that could add more than $1.5 trillion to the government’s debt over 10 years, with the goal of legislation by early next month. That is on top of an effort to significantly increase military spending. White House officials say their focus is on growing the economy now and dealing with the debt later.
Tesla Chief Executive Elon Musk is known as a risk-taker, which has endeared him to Wall Street analysts and investors alike. There is a fine line, however, between setting aggressive goals and misleading shareholders. There is far more at stake here than just semantics. Investors have bid Tesla to a nearly $60 billion equity valuation on expectations the company will dominate the automobile market. That will be a fantasy if Tesla can’t produce enough cars profitably.
Tesla doesn’t have the financial wherewithal for investors to be patient. It burned more than $1 billion of cash in the second quarter and has nearly $20 billion in liabilities on its balance sheet. Tesla’s soaring stock reignited the interest of better-capitalized car rivals in electric cars. Fresh competition is coming.
At 67 times 2019’s expected earnings, Tesla stock is valued as though the company can execute on its vision flawlessly. The facts suggest the opposite. It is high time for Tesla—and Wall Street—to acknowledge reality.
That concentrated wealth is strangling our economy, our economic growth, our national prosperity. Wealth concentration drives a vicious, downward cycle, throttling the very engine of wealth creation itself.
Because: people with lots of money don’t spend it. They just sit on it, like Smaug in his cave. The more money you have, the less of it you spend every year. If you have $10,000, you might spend it this year. If you have $10 million, you’re not gonna. If you have $1,000, you’re at least somewhat likely to spend it this month.
Ask yourself: would Apple be as successful as it is if its business model was based on selling eight-million-dollar diamond-encrusted iPhones? Broad prosperity is what made Apple, Apple. Concentrated wealth distorts producers’ incentives, so they produce, for instance, a million-dollar Maserati instead of forty (40) $25,000 Toyotas — because that’s what the people with the money are buying. Which delivers more prosperity and well-being?
In the words of England’s chief medical officer, Sally Davies: “The world is facing an antibiotic apocalypse.” Unless action is taken to halt the practices that have allowed antimicrobial resistance to spread and ways are found to develop new types of antibiotics, we could return to the days when routine operations, simple wounds or straightforward infections could pose real threats to life, she warns.
The arithmetic is stark and disturbing, as the conference organisers make clear. At present about 700,000 people a year die from drug-resistant infections. However, this global figure is growing relentlessly and could reach 10 million a year by 2050.
The danger, say scientists, is one of the greatest that humanity has faced in recent times. In a drug-resistant world, many aspects of modern medicine would simply become impossible. An example is provided by transplant surgery. During operations, patients’ immune systems have to be suppressed to stop them rejecting a new organ, leaving them prey to infections. So doctors use immunosuppressant cancer drugs. In future, however, these may no longer be effective.
As work takes an ever more central place in our lives, engineers, architects and scientists are beginning to view our workplaces as sealed structures that must actively manage their internal environments, while mitigating pollution and other hazards that are the cost of doing business in many of the world’s most economically productive cities.
Scientists have been trying for decades to figure out how to help humans survive long-haul missions in orbit and to Mars. They take into account light levels, temperature, humidity and dozens of other factors including working styles. The biggest difference between that research and what’s happening here on Earth is that office optimization isn’t about survival, but productivity—getting the most out of every worker.
New office designs are coming to a workplace near you, with layouts meant to cater to the variety of tasks required of modern white-collar workers. Put another way, it means people don’t sit in just one place.
It’s partly a backlash against the one-size-fits-all mind-set, not to mention the corporate penny-pinching, embodied in the move toward pure open floor plans that packed more workers into less and less space. That idea was supposed to drive collaboration, but many experts agree it often went too far, with row upon row of desks and workbench-style seating more likely to generate ennui than efficiency.
“When used as a generic answer for work space design, it’s terrible,” said David Lathrop, a researcher at Steelcase, a big office furniture maker. The new model is largely open, but not entirely. Under the revised thinking, breaking down walls to bring people together is good, but so are “team spaces” and standing tables, comfortable couches and movable walls.
Family firms, which make up about 90 percent of China’s 21.6 million private businesses, are on the cusp of a sweeping succession wave that may be the biggest the world’s seen yet. Some three million founders will hand over the reins in five to ten years, Wu Xiaobo, author of a book on the history of China’s private companies, wrote in a commentary published last year.
China hasn’t experienced such a wealth transfer of this scale before. Private firms didn’t emerge until after the country abandoned its socialist path for market reform in 1978. “Deng Xiaoping only allowed private businesses starting in the 1980s, so these family businesses are all relatively young,” says Roger King, director of Tanoto Center for Asian Family Business and Entrepreneurship Studies at The Hong Kong University of Science and Technology. “Now their founders are reaching retirement age.”
CENTRAL BANKS & MONETARY POLICY
A synchronized global economic expansion is leading to a big shift in monetary policy around the world—toward central banks shrinking rather than growing—with implications for markets, inflation and the outlook for growth.
Following the financial crisis from 2007-2009, the world’s big central banks had been net buyers of financial assets in global markets, expanding their portfolios of government bonds, mortgage debt and corporate securities by 1% to 3% of global economic output per year for much of the past six years.
Now that’s changing. The Bank of England announced in February it would mostly end its bond purchases, the Fed stopped buying bonds at the end of 2014 and announced in September it would move ahead with a plan to gradually shrink its holdings, and the European Central Bank is expected to announce at the end of October it will slow its pace of purchases.
The Federal Reserve must respond to “very tight” U.S. labor markets by gradually raising interest rates or risk halting the economic recovery, a hawkish Fed official said on Saturday.
“Prudent risk management would argue for the continued gradual removal of monetary policy accommodation in order to minimize the risk of outcomes that might prematurely shorten the current economic recovery,” said Rosengren, who was speaking at the International Atlantic Economic Conference in Montreal, adding he expects the U.S. economy will likely continue to grow above its potential.
Imagine being a money manager sitting on profits of over $30 billion in the third quarter alone that you can’t cash in. Welcome to the topsy-turvy world of Swiss central banking.
The Swiss National Bank likely generated profits in the region of 30 billion Swiss francs ($31 billion) last quarter, based on a Wall Street Journal analysis of SNB foreign-reserves data released Friday. That’s thanks to a goldilocks combination of a weaker franc and higher prices for gold, stocks and bonds.
But the central bank can’t lock in these paper profits by selling chunks of their cache of foreign stocks and bonds without the risk of strengthening the franc, which could leave it vulnerable to future losses.
The value of the SNB’s huge foreign reserves swelled to 724 billion francs ($740 billion) in September compared with 694 billion francs at the end of June. Unlike in previous quarters, the 30-billion-franc increase probably represents profit on existing holdings, rather than any new purchases.
USA ECONOMY DATA, CITIES AND STATES
Friday’s September jobs report was a doozy, with the US economy losing jobs for the first time since September 2010. While there was weakness across the economy, the sudden drop in employment was especially concentrated in one sector. The hospitality-and-leisure industry lost 111,000 jobs in September, making it the largest loss for the sector since the start of the jobs report in 1939.
“It’s almost as if the Visigoths are at the gates, and the gates are starting to crumble,” Dr. Andrew said. “I’m not an alarmist by nature, but this is not overhyped. It has completely overwhelmed us.”
Education Secretary Betsy DeVos has touted online learning as a school-choice solution for rural America, saying that virtual charter schools provide educational options that wouldn’t otherwise exist.
But in Pennsylvania, an early adopter where more than 30,000 kids log into virtual charter schools from home most days, the graduation rate is a dismal 48 percent. Not one virtual charter school meets the state’s “passing” benchmark. And the founder of one of the state’s largest virtual schools pleaded guilty to a tax crime last year.
“Here’s what I would say to Betsy DeVos — do those parents really understand what they’re sending their kids to?” said Mark DiRocco, executive director of the Pennsylvania Association of School Administrators.
Real-estate experts believe Amazon’s decision might inflict more harm to Seattle area growth than Boeing Co. did when it moved its corporate headquarters to Chicago in 2001. Boeing moved “a few hundred headquarters jobs” but maintained most of its manufacturing operations in the Seattle area, noted Simon Stevenson, chairman of the real estate department at the University of Washington.
In technology businesses, the distinction between manufacturing and headquarters jobs “is a lot more blurred,” he said. “You could see a lot more movement of staff.” Mr. Stevenson also pointed out that the Amazon move coupled to the earlier Boeing decision might create an image problem for Seattle among businesses considering locating there. “At what point do people start thinking it’s a Seattle problem,” he said.
GLOBAL ECONOMY DATA
German exporters are benefiting from a global recovery. The 19-nation euro area is set to expand this year at the fastest rate in a decade, with factories scrambling to add jobs to keep up with burgeoning order books. The Bundesbank said the German economy will continue on its course of strong growth in the third quarter, albeit with slightly less momentum than in the first half of the year.
POSITIONING, INFLECTION, MARKET CALLS
In Bernstein’s study, a stock gets more crowded when a rising number of institutional owners have it as one of their 20 biggest holdings versus benchmarks. Crowdedness also goes up if institutions are net buyers over several straight quarters, or if there are a lot of buy ratings, or even if earnings estimates have gone up rapidly over a period of years. Price momentum is also a factor.
Using that standard, material producers have surpassed technology as the most crowded group relative to their own history, with European energy stocks also joining the ranks. While the rotation out of high-flying tech names is seen by many as something helping broaden stock participation, the growing list of stocks with these characteristics shows the congestion not only hasn’t been cured, but is getting worse.
COLOR, EARNINGS, SENTIMENT, VALUATIONS
U.S. airlines jumped the most in a year after a Delta Air Lines Inc. traffic report showed an increase in pricing power despite three major hurricanes and a continuing fare war. Passenger revenue for each seat flown a mile rose about 2 percent in the third quarter, Delta reported Tuesday. That matched the low end of a forecast the airline made early last month, meaning the benchmark gauge largely held up amid a challenging quarter.
Without Irma, “it would’ve been plus 3 percent, which is pretty remarkable, considering the recent capacity spats between United and Spirit and all the hurricanes,” said Paul Lambert, an analyst at Tocqueville Asset Management, which held about 627,000 Delta shares on June 30.
“There was a fear that, as we head into the fourth quarter, things could get worse” and that the fare war could spread, she said. “This is giving some people comfort that it’s not getting worse.”
Mr Peltz, fighting only the third proxy battle of his career, told the Financial Times that the company needed to regain its sense of urgency to take back the market share it has lost as its sales growth has continued to lag behind rivals.
P&G “have been losing market share for 10 years”, Mr Peltz said. “I’ve spent half my life in consumer [industries], and it’s easy to get a consumer to try your product. They’ll either like it or they won’t. But it’s really hard to get a consumer who’s been using your product and has chosen to go somewhere else to get them to come back.”
DEALS, MERGERS, IPOs, LBOs, RESTRUCTURINGS
Switch Inc. raised $531 million in its initial public offering, making it the third-biggest technology IPO this year in the U.S. The data center company sold 31.25 million shares for $17 each after marketing them for $14 to $16 apiece, Switch said in a statement. Only Snap Inc.’s $3.9 billion IPO and Altice USA Inc.’s $2.2 billion offering topped Switch’s deal, according to data compiled by Bloomberg.
FOREX, CRYPTOCURRENCY, EXCHANGE IMPACTS
Regulators across the globe are increasingly taking an interest in initial coin offerings, with European Central Bank Governing Council member Ewald Nowotny being the latest to weigh in.
The ECB is discussing putting “concrete legal restrictions in place” as the hype around digital currencies like bitcoin is “dangerous and deeply dubious,” Nowotny said in an interview with Austrian weekly magazine Trend. It’s unclear what those legal restrictions may be and what powers the ECB has over ICOs. What’s clear though, is that central banks are likely to be skeptical about a technology that was created to bypass them.
HEDGE FUNDS, PRIVATE EQUITY, MONEY MGMT
Two multimillion-dollar house purchases have rankled employees at Guggenheim Partners LLC and spurred questions from clients concerned about possible distractions at the investment firm’s core money-management operations, according to clients and people familiar with the firm.
One home purchased in May was an $85 million mansion in Malibu, Calif., with Guggenheim Chief Executive Mark Walter as a co-investor in the purchase. A second, $13 million home was bought last year in nearby Pacific Palisades, and Guggenheim distribution executive Alexandra Court subsequently moved in, according to people familiar with the matter.
ENERGY COMPANIES, NOCs, INDUSTRY
The oil industry may have an inferiority complex. That’s the takeaway from a survey of drillers and lenders that found crude producers were more pessimistic about the future than the banks holding their loans. With oil CEOs and CFOs on the cusp of their semi-annual credit reviews, bankers say the threat of explorers seeing their borrowing bases shrink is receding, according to the survey by law firm Haynes and Boone LLP released Friday.
Only five percent of respondents expect borrowing base cuts will tip companies into bankruptcy, compared with 13 percent a year ago, according to the survey. Haynes and Boone attributed the brightening forecast to cost-cutting by oil producers and their equipment providers that enabled them to cope with the tumble in crude prices from above $100 a barrel as recently as three years ago.
The divergent outlook between drillers and bankers “seems counter-intuitive, since producers by nature are more optimistic and bankers are more conservative,” Buddy Clark, Hayes and Boone’s energy practice co-chair, said in a statement that accompanied the survey results.
ENERGY CRUDE OIL, OIL SANDS, SHALE
OPEC and other oil producers may need to take “some extraordinary measures” next year to rebalance the oil market, the OPEC secretary-general said on Sunday.
“There is a growing consensus that … a rebalancing process is under way. We are gradually but steadily achieving our common and noble objectives,” Mohammad Barkindo told reporters at the India Energy Forum organized by CERAWeek in New Delhi.
Oil companies on Thursday began shutting down offshore platforms in the gulf, halting 1.2m barrels per day or 71 per cent of the region’s production, according to the US Bureau of Safety and Environmental Enforcement. Nate’s expected track would take it through a region of the central gulf that holds a large number of oil and gas installations.
Investors had initially been concerned over the storm, “given how it’s another punch to the Gulf Coast refining corridor and deep-water Gulf production platforms, but that fear has receded,” said Chris Kettenmann, chief energy strategist at Macro Risk Advisors LLC, in interview in New York. “People are basically taking money off the table, locking in profits from the September rally, and getting out of the market.”
It doesn’t help that U.S. crude stockpiles remain above their five-year average by more than 70 million barrels at a time when refineries are starting to shut for maintenance. Meanwhile, the top American shale plays, led by the Permian and Eagle Ford basins in Texas, are set to produce a record amount of crude this month.
COMMODITIES AGRICULTURE & SOFTS
An explosion in berry farming here, fed by a growing American obsession with breakfast smoothies and antioxidant-rich fruits, is fueling one of the thorniest disagreements in the talks to redo the North American Free Trade Agreement that resume this coming week.
French winemakers are lamenting the smallest vintage in 60 years after spring frost damaged vines at Bordeaux chateaus like Angelus and Canon La Gaffeliere, while summer storms caused grape rot in Champagne.
POLLUTION, CLIMATE & ENVIRONMENT
The U.S. enjoys a giant trade surplus in scrap, including household recycling, says the Institute of Scrap Recycling Industries Inc. According to the trade group’s chief economist, Joe Pickard : “We’re like the Saudi Arabia of scrap.”
Now there’s a heap of trouble confronting America’s separators of paper and plastic: The biggest buyer of the stuff doesn’t want it anymore. In July, China filed a notice with the World Trade Organization about its plans to limit the entry of “foreign waste.” Even before that, starting this spring, scrap shippers say, some Chinese customers hadn’t been able to renew their import licenses.
Panama’s $5 billion investment to expand its century-old canal is paying off as shipping lines send more U.S.-bound cargoes through the passage instead of the Suez Canal.
Ships nearly three times as large as the ones crossing before the expanded locks opened in June of 2016 are bringing tens of millions of additional dollars in tolls and a trading boom to U.S. East Coast ports, allaying some fears that investments to cater to the bigger vessels wouldn’t see enough returns.
Since the start of the year, transiting tonnage at the Panama Canal has increased by nearly 23%, canal executives say. Last week marked the 2,000th transit of a ship that wouldn’t have fit through the old locks.
Since the early 2000s, the Philippines added more than a million jobs as foreign companies outsourced customer support and sales tasks to the Southeast Asian nation.
Now a looming wave of automation is threatening employment at call centers and forcing the industry to retrain workers to meet the demand for higher skilled jobs in areas such as healthcare, banking, finance and insurance.
“The biggest challenge is people,” Jojo Uligan, president of the Contact Center Association of the Philippines or CCAP, said in an interview at his office in Manila on Wednesday. “We lack people with enough technical expertise and experience to service emerging needs.”
BREXIT, SCOXIT, LONDON, UK ECONOMY
Berlin’s tough stance will be of particular concern to London, coming just a week after Angela Merkel, the German chancellor, met Mrs May to discuss Brexit and her Florence speech, which offered to use transition payments to cover an EU budget shortfall of at least €20bn. The setback comes amid further signs that post-Florence hopes of smoother Brexit sailing are beginning to fade.
Goldman Sachs has booked dozens of international school places in Frankfurt — one year ahead of its planned Brexit-related staff moves. The US investment banking giant, which employs more than 6,000 staff in the UK, is understood to have already paid fees of up to €22,000 (£19,700) per student at about five schools for the academic year that started in September.
One banker, who has been briefed on Goldman Sachs’s plans, said that as a result of paying the fees in advance there will be a number of empty seats in many Frankfurt schools this year.
Many in the Conservative party would like to bring fresh talent to the top of government. Such a move could also be a way for Mrs May try to reassert her authority after last week’s disastrous Conservative party conference.
Still, some suggested on Sunday that she was unlikely to embark immediately on such a move. One senior aide pointed out that she had stressed in a Sunday Times interview that she had a “terrific cabinet.”
Theresa May is under pressure to publish secret legal advice that is believed to state that parliament could still stop Brexit before the end of March 2019 if MPs judge that a change of mind is in the national interest. The move comes as concern grows that exit talks with Brussels are heading for disaster.
The calls for the prime minister to reveal advice from the country’s top legal experts follow government statements declaring that Brexit is now unstoppable, and that MPs will have to choose between whatever deal is on offer next year – even if it is a bad one – or no deal at all.
Emmanuel Macron’s administration will propose a tax on luxury yachts, supercars and precious metals in France’s 2018 budget. Lawmakers will propose amendments after critics attacked the President’s move to scrap the wealth tax in France. Mr Macron abolished the tax, which has been seen as a symbol of social justice for the left but blamed by others for driving thousands of millionaires abroad.
Ms. Koike founded a new national party two weeks ago, and Japan is watching to see whether she goes for broke and runs for parliamentary office herself in elections this month, which would put her in position to challenge Mr. Abe.
Ms. Koike, 65, who was elected governor of Tokyo just over a year ago, has made no secret of her ambition to become Japan’s first female prime minister. This month’s lower-house election, called early by Mr. Abe in an effort to consolidate his power, provides an opportunity for her.
So far, Ms. Koike has insisted that she will not run for national office. “I was given a passionate offer, but as I have repeatedly said, I don’t have any intention to run in the lower-house poll,” she told reporters as recently as Thursday. But Ms. Koike has until Tuesday, the official start of the election campaign, to make a final declaration.
GEOPOLITICS, CRIME, TERRORISM
A federal court in Manhattan on Friday unsealed terrorism charges against three alleged Isis supporters who are accused of plotting several bomb attacks in New York, including against the city’s subway, Times Square and multiple concert venues.
The defendants conspired to carry out the attacks during the Islamic holy month of Ramadan in 2016, which ended on July 5 last year, according to court documents. But an undercover FBI agent posing as a collaborator broke up the plot, which was designed to mimic the high casualty tolls of earlier terror strikes in Brussels and Paris.
An explosion at a gas station in Ghana’s capital killed at least seven people and injured more than 130 others on Saturday, government officials and news reports said. Videos on social media showed giant balls of flames that set the night sky aglow.
The defeat of Islamic State in Hawija, Iraq, removed the last buffer between Kurdish and Iraqi forces just as tensions between their respective leaders are intensifying over last month’s referendum in which Kurds voted overwhelmingly for independence.
More than 1,000 militants turned themselves in after the latest in a string of humiliating defeats in Iraq and Syria. Many claim to have been only cooks or clerks.
The United States has suspended the processing of the vast majority of new visas in Turkey after Turkish authorities arrested a US embassy employee last week, escalating a brewing diplomatic crisis between the two allies and, in effect, blocking thousands of Turks from travel to the US.
The increasingly strained alliance between Turkey and the United States took a sharp downward turn Sunday when both governments abruptly announced they were canceling most visitor visas between the countries, sowing confusion among travelers and exposing a widening rift between the NATO partners.
The crisis began when the U.S. Embassy in Ankara, the Turkish capital, announced it was immediately suspending all nonimmigrant visa services at diplomatic facilities across Turkey. The move appeared to be retaliatory, coming days after the government of President Recep Tayyip Erdogan arrested an employee of the U.S. Consulate in Istanbul.
An embassy statement said it was limiting visitors to U.S. missions while it “reassesses” Turkey’s commitment to the security of American personnel — an extraordinary rebuke that underscored a rapidly deteriorating relationship between the longtime allies. Within hours, the Turkish Embassy in Washington released a nearly identical statement announcing its own suspension of nonimmigrant visas for Americans.
PRIVACY, HACKING, CYBERWAR, SURVEILLANCE STATE
A computer virus has reportedly infected the US military drone fleet, Wired.com reported, citing three sources familiar with the matter. The military’s Host Based Security System detected the virus two weeks ago, according to the news outlet, which added that it so far has not appeared to affect overseas missions by either interfering with pilots’ navigation or leaking classified information.
PROPAGANDA, CORRUPTION, AUTHORITARIANISM
The mayor said white nationalists aren’t welcome in Charlottesville, and he mentioned legal options to stop them from coming. There might not be any.
Unlike the last time, Charlottesville 3.0 had been organized in private. It came with no warning and ended with a promise: “We will be back,” the men beneath the statue chanted. “We will be back, we will be back.”
U.S. officials appear powerless to secure their release, and the dozen detainees may be bargaining chips in Turkey’s attempts to have Fethullah Gulen extradited.
Cyrus Mann, a nine-year member of the Philadelphia Police Department, shot three people in just over three years. One proved fatal, and the commissioner tried to fire Mann. He would fail. Mann’s story shows how little power police chiefs hold in deciding which officers remain among their ranks.
White House officials once debated a scorched-earth strategy of publicly criticizing and undercutting Robert S. Mueller III, the special counsel investigating Russian efforts to disrupt last year’s election. Now, President Trump’s lawyers are pursuing a different course: cooperating with the special counsel in the hope that Mr. Mueller will declare in the coming months that Mr. Trump is not a target of the Russia inquiry.
Mr. Trump has long sought such a public declaration. He fired his F.B.I. director, James B. Comey, in May after Mr. Comey refused to say openly that Mr. Trump was not under investigation.
The president’s legal team is working swiftly to respond to requests from Mr. Mueller for emails, documents and memos, and will make White House officials available for interviews. Once Mr. Mueller has combed through the evidence, Mr. Trump’s lawyers plan to ask him to affirm that Mr. Trump is not under investigation, either for colluding with Russian operatives or for trying to obstruct justice.
Whether the strategy will work is another matter. The plan rests on the premise that Mr. Trump has done nothing wrong — something the president has repeatedly told his lawyers and said publicly — and some lawyers connected to the investigation say that Mr. Cobb has been too willing to take the president at his word. If the White House moves too hastily, they argue, materials could end up in Mr. Mueller’s hands that might damage the president and other administration officials.
Donald Trump boasts of making great deals, but a financial report filed with the British government shows he has lost millions of dollars for three years running on a couple of his more recent big investments: his Scottish golf resorts. A report from Britain’s Companies House released late Friday shows losses last year at the two resorts more than doubled to 17.6 million pounds ($23 million). Revenue also fell sharply.
“At the time of “The Apprentice,” Donald Trump’s companies had already been through four bankruptcies, and there were two more to come, including the Taj Mahal. Airbrushing all this out is what Bill Pruitt says he feels most guilty about now. He says he was a good con artist, and his con helped take Donald Trump all the way to the White House.”
If Mr. Prince runs, he would be a high-profile contender in a fledgling drive to oust establishment lawmakers with insurgents in the mold of President Trump.
The upending of the left comes amid a broader realignment in American politics, with the Republican Party establishment also contending with a rising rebellion, driven by pro-Trump populists. Just as the new forces on the right are threatening primary challenges to establishment Republicans, some groups on the left have begun talking about targeting Democratic incumbents in the 2018 midterm elections.
RETAIL APPAREL, SPECIALTY, DINING, BIG BOX
Swatch and other high-end brands are staying away from Amazon’s online marketplace, saying it undermines the strict control that is key to maintaining a sense of exclusivity—and keeping prices high.
AUTOS, ELECTRIC, SELF-DRIVING
Tesla Inc Chief Executive Elon Musk on Friday pushed back the unveiling of the company’s big rig truck until mid-November, tweeting that the electric vehicle maker was diverting resources to fix production bottlenecks of its new Model 3 sedan and to help Puerto Rico.
Musk said Tesla’s Model 3 was “deep in production hell” echoing his own comments in July, when he showed off some of the first cars of that model. The Model 3 could help Tesla approach its goal of becoming more of a mass market producer. Recent comments have tempered expectations about the speed of the increase in production, though.
AEROSPACE, MILITARY & DEFENSE
The Pentagon has taken over an effort to cut the cost of the F-35 combat jet, after rejecting plans proposed by Lockheed Martin Corp. and its partners, as it tries to make a program estimated to cost $400 billion more affordable.
The U.S. plans to buy more than 2,400 of the jets over the next three decades to replace much of its combat fleet. But after years of delays and overruns drew flak from lawmakers and Donald Trump, the military has been pressing suppliers to reduce the cost of producing and flying the F-35.
When Sundar Pichai was growing up in Chennai, south-east India, he had to make regular trips to the hospital to pick up his mother’s blood-test results. It took an hour and 20 minutes by bus, and when he got there he would have to stand and queue for an hour, often to be told the results weren’t ready.
It took five years for his family to get their first rotary telephone, when Pichai was 12. It was a landmark moment. “It would take me 10 minutes to call the hospital, and maybe they’d tell me, ‘No, come back tomorrow’,” Pichai says. “We waited a long time to get a refrigerator, too, and I saw how my mom’s life changed: she didn’t need to cook every day, she could spend more time with us. So there is a side of me that has viscerally seen how technology can make a difference, and I still feel it. I feel the optimism and energy, and the moral imperative to accelerate that progress.”
Historically, people feared and loathed these intelligent invertebrates we’re now coming to respect. Octopus fear dates back to the Roman Empire, at least. “No animal is more savage in causing the death of man in the water, for it struggles with him by coiling round him and it swallows him with sucker-cups and drags him asunder,” wrote Pliny the Elder in Naturalis Historia in 79 AD.
This early account set the negative tone for our views of cephalopods for centuries. For example, Pierre Denys de Montfort wrote in 1801 in Histoire Naturelle Générale et Particulière des Mollusques of a vicious octopus attack at the beach—an account later dismissed as unreliable—and provided an illustration of a creepy creature resembling the Kraken, a legendary Norse sea monster that is believed to be based on the giant squid.
The bad buzz for cephalopods culminated in the creation in 1926 of possibly the most famous and horrible octopus-inspired literary sea creature ever, Cthulhu. Classic horror writer HP Lovecraft’s Cthulhu was a “monster of vaguely anthropoid outline, but with an octopus-like head whose face was a mass of feelers, a scaly, rubbery-looking body, prodigious claws on hind and fore feet, and long, narrow wings behind.”
Lane was overly pessimistic, however. We’ve evolved when it comes to cephalopods; the strangeness that once repulsed us is now a source of fascination, seen as a sign that they have much to reveal.
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