Macro Links Sep 25th – “If Anyone Can Hear Us”
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MACRO LINKS TABLE OF CONTENTS (Click or Scroll Down)
- PUERTO RICO DEVASTATION
- TRUMP VS ATHLETES
- JETGATE, TAX PUSH, HEALTH PUSH
- NORTH KOREA
- CATALONIA INDEPENDENCE VOTE
- UBER VS LONDON
- 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
- FOREX, CRYPTOCURRENCY, EXCHANGE IMPACTS
- ENERGY RENEWABLES, NUCLEAR
- CANADA, AUSTRALIA, NEW ZEALAND
- BREXIT, SCOXIT, LONDON, UK ECONOMY
- DACA, TRAVEL BAN, IMMIGRATION, WALL
- GEOPOLITICS, CRIME, TERRORISM
- PRIVACY, HACKING, CYBERWAR, SURVEILLANCE STATE
- TRADE, PROTECTIONISM, REGULATION, OVERSIGHT
- ELECTORAL POLITICS
- SCANDALS, LAWSUITS, FINES, REGULATORY
- SILICON VALLEY, UNICORNS, STARTUPS, VC
- CONSUMER TECH, SOCIAL MEDIA, E-COMMERCE, MOBILE
- RETAIL APPAREL, SPECIALTY, DINING, BIG BOX
- AUTOS, ELECTRIC, SELF-DRIVING
- SCIENCE, NATURE, PSYCHOLOGY
PUERTO RICO DEVASTATION
“There is horror in the streets,” San Juan Mayor Carmen Yulín Cruz said in a raw, emotional interview with The Washington Post. “People are actually becoming prisoners in their own homes.”
A dam in northwest Puerto Rico is in serious danger of collapse and threatening to flood nearby communities that are home to tens of thousands of people, authorities said.
TRUMP VS ATHLETES
President Trump took aim at two of the world’s most powerful sports leagues and some of their most popular athletes, directly inserting himself into an already fiery debate over race, social justice and athlete activism and stoking a running battle on social media over his comments.
In a speech on Friday and a series of tweets on Saturday, he urged N.F.L. owners to fire players who do not stand for the national anthem, suggested that football is declining because it is not as violent as it once was and seemed to disinvite the N.B.A. champion Golden State Warriors from the traditional White House visit because of their star player Stephen Curry’s public opposition to him.
“I don’t know why he feels the need to target certain individuals rather than others,” Curry told reporters in Oakland Saturday afternoon. “I have an idea of why, but, it’s just kind of beneath, I think, a leader of a country to go that route. It’s not what leaders do.”
Roger Goodell on Saturday called the president’s comments about firing NFL players who protest the national anthem ‘divisive,’ while NBA superstar LeBron James jumped in to defend his friend Steph Curry.
“People like yourselves.” “Those people.” “Son of a bitch.” This was the same sort of racial signalling that followed the Fascist and white-supremacist rally in Charlottesville, Virginia. It is no longer a matter of “dog whistling.” This is a form of racial demagoguery broadcast at the volume of a klaxon. There is no need for Steve Bannon’s behind-the-scenes scriptwriting. Trump, who is desperate to distract his base from his myriad failures of policy, from health care to immigration, is perfectly capable of devising his racist rhetoric all on his own.
JETGATE, TAX PUSH, HEALTH PUSH
Treasury Secretary Steven Mnuchin used a costly government jet to make the short journey from New York City to Washington D.C. following a meeting in Trump Tower last month, a flight that is now under review by department investigators, along with at least two other requests for government travel involving the secretary, multiple officials told ABC News.
Health and Human Services Secretary Tom Price told Fox News on Saturday that he’ll stop his taxpayer-funded travel on private jets, pending a formal review by his department’s inspector general. “We’ve heard the criticism. We’ve heard the concerns. We take that very seriously and have taken it to heart,” Price said.
President Trump and Republican leaders plan to cut the top tax rate for the wealthiest Americans to 35 percent and dramatically reduce taxes on big and small businesses, according to details leaked to Axios.
President Trump pressed holdout Republican senators to support a GOP health-care bill, in a bid to revive Republicans’ last-ditch effort to roll back the Affordable Care Act.
On Friday, Mr McCain said he could not support the legislation “in good conscience”, citing the fact that the legislation had not been properly debated and vetted by the appropriate subcommittees, and the fact that it did not have any bipartisan support.
American warplanes flew close to North Korea’s coast on Saturday, the same day that the North’s foreign minister told the United Nations General Assembly that President Trump’s threats against the country were “making our rocket’s visit to the entire U.S. mainland inevitable all the more.”
At the General Assembly on Saturday, Mr. Ri said that North Korea intended to have a “nuclear hammer of justice” against its rivals and boasted that it was “a few steps away” from becoming a nuclear power.
Ri said that Trump’s bombast had made “our rockets’ visit to the entire U.S. mainland inevitable” and linked it to Trump’s insulting shorthand references to Kim. Harsh sanctions placed on North Korea’s trade with the outside world will have no impact on its ability to complete building a nuclear bomb capable of reaching the United States, Ri said, suggesting that stage is imminent.
“The very reason the DPRK had to possess nuclear weapons is because of the U.S.,” Ri told the gathering in a 22-minute speech, using an acronym for North Korea’s formal name. “The U.S. hostile policy and nuclear threats have continued over 70 years, and these have led the situation on the Korean peninsula to a touch-and-go point.”
Russia’s foreign minister says Donald Trump and Kim Jong-un are acting like fighting schoolchildren. Moscow’s Sergei Lavrov said a pause was needed, “to calm down the hotheads”.
Two-thirds of Americans oppose launching a preemptive military strike against North Korea, with a majority trusting the U.S. military to handle the escalating nuclear crisis responsibly but not President Trump, a new Washington Post-ABC News poll finds.
CATALONIA INDEPENDENCE VOTE
panish authorities’ efforts to stop Catalonia’s independence referendum by arresting separatist leaders and confiscating ballots appear to have diminished the prospect that millions of Catalans will formally vote on Oct. 1, but that doesn’t mean a crisis has been averted.
Leaders on both sides of the bitter divide expect hundreds of thousands of separatists to protest if they aren’t able to cast their vote. Pro-independence leaders might declare Catalonia an independent republic regardless of how any vote unfolds, they say, presenting Spain with its worst political impasse in decades and leaving the country even more torn about the future of the rebellious region.
The struggle risks becoming the greatest political and constitutional crisis in Spain since the country’s return to democracy 40 years ago as the Catalan government heads full-speed towards unilaterally declaring independence.
On Saturday, the state prosecutor in Catalonia told all local and national police forces that they had been temporarily placed under a single chain of command reporting directly to the interior ministry in Madrid.
UBER VS LONDON
The firm’s application for a new licence in London was rejected by Transport for London on the basis that the company is not a “fit and proper” private car hire operator.
Uber’s cars will not disappear immediately as its current licence expires on 30 September and it plans to challenge the ruling by London’s transport authority in the courts immediately. The firm can continue to operate in the capital – where it has 3.5 million users – until it has exhausted the appeals process, which could take months.
When Transport for London, an independent regulator overseen by the mayor, announced that Uber’s operating licence would not be renewed, the reaction was swift. “Brilliant victory for unions, labour movement and London’s cabbies. Uber destroys the fabric of cities and evades social responsibility,” tweeted the Corbynite journalist Paul Mason. “Oh, bloody hell,” went pretty much everyone else. Within 24 hours, the company’s petition to “Save Your Uber in London” had attracted half a million signatures.
U.S. taxi firm Uber is prepared to make concessions as it seeks to reverse a decision by London authorities not to renew its license in the city, which represents a potentially big blow for the fast-growing company, a newspaper reported.
Half a million people have signed an online petition in under 24 hours backing Uber’s bid to stay on the roads of London, showing the company is turning to its tried-and-tested tactic of asking customers for help when it locks horns with regulators.
Londoners are much more supportive of the company than any other region, with 60% in favour of it continuing to operate and 29% saying it should stop.
Two Democratic senators on Friday circulated a letter to members of Congress calling for legislation to “formalise and expand” transparency pledges Facebook made this week, after the company agreed to hand congressional investigators several thousand political ads purchased by Russian operatives.
New revelations over Moscow’s use of social media in the 2016 US election have triggered a fierce backlash against Facebook in Washington, where longstanding respect for the company has given way in a matter of weeks to angry calls for more scrutiny and accountability.
Facebook is giving up on a share shake-up designed to help Mark Zuckerberg keep control of the company while giving away stock to charity, with the chief executive instead planning to sell up to 75m shares worth $12.75bn at present prices.
The Facebook co-founder has avoided a potentially embarrassing court appearance scheduled for next week as a result, by settling a lawsuit brought by shareholders unhappy with a reclassification of stock that they described as “self-interested” and that would dilute the value of ordinary shares.
RATES, LIQUIDITY, SYSTEMIC RISK, BALANCE SHEETS
What is one thing making life a little easier on a Federal Reserve wrestling with the “mystery” of low inflation? At least traders don’t expect inflation’s evil cousin — deflation — to show up to the party any time soon.
The cost of an inflation floor that compensates its holder should the annual change in the consumer price index dip into negative territory a year down the road has fallen below a cent — its cheapest level since May 2011, when crude oil futures reached $100 per barrel.
Foreigners predicting doom for China’s banks have got it all wrong, according to James Stent, who spent more than a decade serving on the boards of two Chinese lenders. Instead of falling into a debt-fueled crisis, China’s banks are able to stave off trouble because of the willingness of the government to throw money at problems in order to ensure financial stability, Stent argues.
While his view contrasts with those of doomsayers such as analyst Charlene Chu and hedge fund manager Kyle Bass, Stent doesn’t dismiss all the concerns around China’s lenders. He says there are worry spots that could cause disruptions, such as risks around lending to privately owned companies rather than state-owned ones. Yet any bank failures will be dealt with quietly and imperceptibly, such that the outside world won’t even know about them, he says.
China’s latest push to revive its bloated state-owned sector is set to pick up pace this year, with bankers and investors expecting possible spin-offs and asset sales to follow a key Communist Party Congress in October. But the effort is likely to only involve a limited role for private money, even as Beijing has been promoting it as crucial for reforming state-owned enterprises (SOEs), according to people familiar with China’s plans.
MACRO OP-EDS, INSIGHT, EVENTS AND TRENDS
This is unprecedented: senators are moving ahead with a vote on a bill that would alter the health care of every American family and the condition of a sixth of our entire economy, without waiting to hear any official, independent estimates of the consequences. The irresponsibility is as blithe as it is breathtaking. Before becoming a senator, Cassidy spent twenty-five years working as a physician in hospitals devoted to the uninsured. I find it baffling that a person with his experience would not recognize the danger of this bill. But here we are.
Two earthquakes, three monstrous hurricanes and the North Korean missile crisis have U.S. survivalists convinced that the end of the world is nigh. And they are clearing store shelves to stock bunkers in anticipation of Earth’s final chapter.
Sales of freeze-dried food, gas masks and other survival equipment have spiked in recent weeks as so-called “preppers” get ready to ride out any disaster, whether natural or man-made.
Inspiring their actions: images of people helpless against floodwater from Hurricanes Harvey, Irma and Maria and island towns obliterated by their fury. People buried in rubble after earthquakes rattled Mexico. Footage of North Korea’s missiles blazing into the sky.
Bubbles can be toxic and destructive when investment in new areas is fueled by debt. “We find that the severity of the economic crisis following the bursting of the bubble is less linked to the type of asset than to the financing of the bubble,” Mr. Brunnermeier concluded in a 2015 examination of bubbles dating back to “Tulipmania” in the 1600s. “Crises are most severe when accompanied by a lending boom and high leverage of market players, and when financial institutions themselves are participating in the buying frenzy.”
On the one hand, the lack of buzz around Germany’s federal elections makes a good bit of sense. To avoid a repetition of the humanitarian, physical, and political devastation of World War II, Germany has intentionally built a system that contains the structures and institutions needed to instill resilience and reliability into the political process. Or, to put it differently, German politics is known for being, well, predictable, and thus boring. Nothing has brought this sense of calm to the electoral arena quite like German Chancellor Angela Merkel, whose steady, measured leadership will most likely guide Germany again over the next four years.
On the other hand, this lack of interest is concerning, given what is at stake in the German election. Whoever leads Germany in the coming years and how this person responds to some of the most important challenges hanging over today’s tenuous political landscape will deeply shape Europe—and the rest of world.
Something is deeply amiss when a company can ascend to almost a half trillion dollars in market value—becoming the fifth most valuable firm in the world—without paying any meaningful income tax. Does Amazon really owe so little to support public revenue and public needs? If a giant firm pays less than the average 24% in income taxes that the companies of the S&P 500 pay, it logically means that less-successful firms pay more. In this way, Amazon further adds to the winner-take-all tendencies plaguing our economy.
Because Amazon is more efficient than other retailers, it is able to transact the same amount of business with half the employees. If Amazon continues to grow its business by $20 billion a year, the annual toll of lost jobs for merchants, buyers and cashiers will be in the tens of thousands by my calculations. Disruption in the U.S. labor force is nothing new—we have just never dealt with a company that is so ruthless and single-minded about it.
The iPhone helped to catapult Apple into its position as the world’s most valuable publicly traded company. But now Apple has another and, arguably, more exalted stock market distinction. In the history of the markets since 1926, Apple has generated more profit for investors than any other American company.
That conclusion emerges from a study of stock market returns by Hendrik Bessembinder, a finance professor at the W. P. Carey School of Business at Arizona State University. His broad findings on the market are startling: Most stocks aren’t good investments. They don’t even beat the paltry returns of one-month Treasury bills, he has found.
But a relative handful of stocks are extraordinary performers. Only 4 percent of all publicly traded stocks account for all of the net wealth earned by investors in the stock market since 1926, he has found. A mere 30 stocks account for 30 percent of the net wealth generated by stocks in that long period, and 50 stocks account for 40 percent of the net wealth.
The length of time large-cap stocks have spent in the benchmark index has been declining, from 33 years on average in 1985 to 20 years as of 1990. And their window is forecast to get even smaller in the future, shrinking to 14 years by 2026, CLSA wrote in a client note, citing data from Innosight.
Those dwindling S&P 500 shelf lives are being driven by record merger-and-acquisition activity as well as the rapid growth of startups that are achieving multibillion-dollar valuations faster than ever, the CLSA investment strategist Damian Kestel said.
Mr. Srinivasan has called the stateless digital currency bitcoin “the most important technology of the decade.” I ask him to explain why, and he says, in fact, that he’s amped up the description. “I’d update that today,” he tells me, “to say that the blockchain—which is not just bitcoin—is the most important invention since the internet.” My eyes widen, and he says: “Yep. I’m not sure if that’s consensus among Silicon Valley now, but it’s getting there.” The “blockchain,” he will explain, is like the internet of money—with similar decentralizing and liberating potential.
When I ask him to explain the “blockchain,” Mr. Srinivasan starts to roll with relish. “Short version? Bitcoin is a way to have programmable scarcity. The blockchain is the data structure that records the transfer of scarce objects.” I ask him to regard me as a dummy, and to give me the longer version.
We can understand bitcoin and blockchain in four steps, he says. “One, cash. When A gives a dollar bill to B, he’s transferring a physical object. B has it, and A no longer does. There’s implicit scarcity in the physical world.”
Step 2 supposes that we treat the serial numbers on those Federal Reserve bills as “a form of naive digital cash. Then A emails those numbers to B. Now B has a copy. But A still has a copy!” So if those serial numbers were treated as cash, A can “double-spend” the numbers by sending them to another party, C. This, Mr. Srinivasan says, is the fundamental issue with digital cash: “the double-spend problem. How do we introduce scarcity into the digital system?”
The way we resolved this problem before bitcoin, Mr. Srinivasan explains in his third step, “was through the use of centralized institutions called banks. Whenever you use PayPal or a similar technology to send money from A to B digitally, the bank is trusted to debit A and credit B.” This, he says, is how “scarcity” is introduced into a digital system; but it is “inelegant, from a computer-science perspective, to have a central, trusted node in any networking topology”—a word my dictionary defines, in this context, as being the way in which constituent parts are interrelated or arranged.
Mr. Srinivasan concedes it’s “a big claim” to say the blockchain is the most consequential technology since the internet. “The internet is programmable information. The blockchain is programmable scarcity.” He elaborates: “All of these previously disparate things—from physical mail to television to music to movies to telephony—basically got turned into packets of information and got remixed by the internet. Plus things that we normally didn’t even think of as information—your Fitbit , your steps, your Facebook settings—became programmable.” It’s fair to say, he continues, “that the internet and all things downstream—search engines, social networks, ride sharing, and so on—have basically been the technological story of the last 25 years.”
Fed Chairwoman Janet Yellen on Wednesday came as close as she’s ever likely to get to accepting that quantitative easing is still poorly understood even by the experts. Explaining why the central bank prefers to set short-term rates rather than buy or sell stuff, she said it was because “we believe we understand pretty well what the effects [of rate changes] are on the economy,” and so do investors. Left unsaid: No one’s really sure how, or if, QE works.
The basic investor belief about QE is simple: It makes bond yields go down, shares go up and the currency go down. All make intuitive sense. Buying more bonds pushes up their price (so reducing yield). Those who sold bonds have to redeploy their money and so buy shares, while the combination of lower yields and money creation weakens the currency. On top of this “portfolio balance” effect, there’s a signaling effect, because QE suggests no rate increases for a long time.
One might then assume that reversing QE will mean the opposite: Bond yields rise, shares fall and the dollar strengthens. There are at least three reasons not to worry too much about this happening—and one good reason to be concerned.
CENTRAL BANKS & MONETARY POLICY
Federal Reserve officials with competing views about inflation laid out on Friday the quandary facing U.S. policymakers as they wrestle over whether a recent dip in the pace of price increases is trivial, or the result of global forces that could permanently throw off the Fed’s policy calculus.
The resolution of that debate will be critical to whether the Fed proceeds with an expected December rate increase and more hikes next year, or concludes that the inflation “mystery” is evidence of a change in how global prices are set. It is also central to an issue of broad political and economic importance: how low the unemployment rate can fall before rising wages and competition for goods starts pushing price increases to uncomfortable levels.
USA ECONOMY DATA, CITIES AND STATES
The typical student debt load for millennials in the U.S. is $41,200, surpassing their median annual income of $38,800. One impact of that burden: first-time home purchases are being delayed by seven years.
GLOBAL ECONOMY DATA
The reputations of the U.S. and U.K. as good places to live and work are in free fall among some of the world’s most mobile and cosmopolitan people.
Since last year’s presidential and Brexit votes, both the U.S. and Britain are perceived as less friendly to foreigners and less politically stable, according to a survey of almost 13,000 expatriates of 166 nationalities. Expats also say the two countries’ quality of life is declining by other measures, especially the affordability of child care and health care in the U.S. and housing in the U.K.
The global economy is getting stronger and will grow at the fastest pace since 2011 this year, according to the Organisation for Economic Cooperation and Development. Expansion will accelerate next year, with the biggest economies all contributing, the OECD said in its Interim Economic Outlook.
FOREX, CRYPTOCURRENCY, EXCHANGE IMPACTS
One of the eurozone’s most senior central bankers has waded into the debate over bitcoin, dismissing the cryptocurrency as “an instrument of speculation” and saying its sharp rise in value was akin to the 17th century tulip craze.
The views of Vítor Constâncio, the vice-president of the European Central Bank, echo those of JPMorgan Chase chief Jamie Dimon, who has described bitcoin as a “fraud”.
“Bitcoin is a sort of tulip,” Mr Constâncio said. Tulipmania, which erupted in the Netherlands in the 1600s, is often cited as one of the oldest examples of a financial bubble. “It’s an instrument of speculation,” the ECB vice-president told the audience at a conference in Frankfurt on Friday. “But [it is] certainly not a currency and we don’t see it as a threat to central bank policy.”
Canadian regulators said in August that ICOs — companies that raise funds by issuing their own cryptocurrency — may be considered securities, requiring them to comply with a raft of rules, including ensuring the identity checks of their investors. At the same time, the Canadian Securities Administrators, which represent provincial regulators, have created a “sandbox” that provides firms relief from securities laws for a limited time under certain conditions, to test new ways of raising capital.
ENERGY RENEWABLES, NUCLEAR
GM already has plans to soon power 100 percent of its Arlington, Texas, plant using wind, where more than 100,000 SUV’s are made every year. Wind’s low cost, down 66 percent since 2009, has made it an attractive option for GM as it works toward meeting its 100 percent renewable goal.
China is becoming the testing ground for a new breed of nuclear power stations designed to be safer and cheaper, as scientists from the U.S. and other Western nations find it difficult to raise enough money to build experimental plants at home.
CANADA, AUSTRALIA, NEW ZEALAND
After a tumultuous campaign, the center-right governing party in New Zealand placed first in the country’s general election on Saturday, but failed to capture a parliamentary majority, meaning it will have to assemble a coalition if it wants to extend its nine-year hold on power.
BREXIT, SCOXIT, LONDON, UK ECONOMY
Within an hour, the Treasury hit back, accusing Moody’s of being out of date. “The assessments made about Brexit in this report are outdated. The prime minister has just set out an ambitious vision for the UK’s future relationship with the EU, making clear that both sides will benefit from a new and unique partnership,” the Treasury said in a statement.
The UK’s credit rating has been cut over concerns about the UK’s public finances and fears Brexit could damage the country’s economic growth. Moody’s, one of the major ratings agencies, downgraded the UK to an Aa2 rating from Aa1. It said leaving the European Union was creating economic uncertainty at a time when the UK’s debt reduction plans were already off course.
In a statement Saturday, the 57-year-old Firth said he and his wife had never thought much about their different passports, “but now, with some of the uncertainty around, we thought it sensible that we should all get the same.” Firth has been quoted as calling Brexit a disaster.
The speech delighted business leaders who believe Mrs May’s plan for a transition period of “around two years” after Brexit in March 2019 will avoid a cliff-edge and was welcomed by Michel Barnier, the EU’s chief negotiator.
Even though most of Berlin’s political hacks remain convinced Angela Merkel will win by a comfortable margin in Sunday’s parliamentary election, they’re unnerved by a last-minute surge by the Alternative for Germany (AfD), a far-right party that until a few weeks ago many in the establishment believed had been defanged, at least for the moment.
As the campaign winds to a close, all but one of Germany’s leading pollsters project the party will finish in double digits. It scored 12 percent in the benchmark Deutschlandtrend poll last week, for example. Germany’s two biggest parties, Merkel’s Christian Democrats and the center-left Social Democrats (SPD), meanwhile, have suffered slight losses in recent weeks.
Finland, a first-rate place in which to be a mother, has registered the lowest number of newborns in nearly 150 years. The birth rate has been falling steadily since the start of the decade, and there’s little to suggest a reversal in the trend.
Demographics are a concern across the developed world, of course. But they are particularly problematic for countries with a generous welfare state, since they endanger its long-term survival.
Hong Kong is on the verge of seeing its economy surpassed in size by the former fishing village Shenzhen, a role reversal long foreshadowed by China’s massive supply of cheap labor and subsidized capital.
Shenzhen — less than 20 miles north of central Hong Kong — will see its gross domestic product jump to $350 billion in 2018, ahead of its rival’s projected $345 billion, according to an analysis by Michael Parker, head of Asia Pacific strategy at Sanford C. Bernstein & Co.
DACA, TRAVEL BAN, IMMIGRATION, WALL
In the president’s short time in office, his promises and policies — from the “Muslim ban” to a directive that may alter who gets a work visa — have convinced many foreign nationals that they are not welcome. For many of the 2.4 million Indian nationals living in the United States, including roughly 1 million who are scientists and engineers, the fears are existential; although roughly 45 percent are naturalized citizens, hundreds of thousands still depend on impermanent visas that must be periodically renewed.
Changes in the U.S. skilled visa scheme could trigger large economic and intellectual losses, especially in states with many South Asian residents such as California and New Jersey. Some foreign nationals there wonder if Trump’s policies will trigger an Indian brain drain.
GEOPOLITICS, CRIME, TERRORISM
Kurds seeking independence from Iraq came under intense pressure on Saturday from their powerful neighbor, Turkey, which demanded that Iraqi Kurdistan cancel an independence vote scheduled for Monday.
Turkey, the main link to the outside world for the autonomous Kurdish enclave in northern Iraq, threatened economic and diplomatic retaliation if Kurds carried out a referendum that the Turkish government called a “terrible mistake.”
PRIVACY, HACKING, CYBERWAR, SURVEILLANCE STATE
A wave of attacks by Chinese hackers on Germany’s cutting-edge manufacturers is raising alarm in Berlin and prompting the government to step in to defend the country’s competitive edge. The small and midsize companies that make Germany an export powerhouse have landed in the crosshairs of foreign hackers attracted to the firms’ valuable but often poorly protected intellectual property, German intelligence officials warn.
The lapse at the S.E.C. and the breach before it at Equifax, the credit monitoring agency, should both be wake-up calls for investors who regularly trade stocks. In fact, these breakdowns raise questions about significant gaps in the S.E.C.’s computer security rules for stock exchanges and certain other significant trading platforms.
TRADE, PROTECTIONISM, REGULATION, OVERSIGHT
The future of the US solar power industry has been placed in the hands of President Donald Trump after the country’s International Trade Commission ruled that domestic panel manufacturers had suffered serious injury from foreign competitors.
The finding of injury in a 4-0 vote of the commissioners, following an inquiry launched in May, means the ITC will now move on to make recommendations for remedial action, due on November 13. The ultimate decision on whether to impose tariffs or other remedies lies with the president, who has been looking for ways to use trade barriers to protect US manufacturing.
Renewable energy groups warned that imposing tariffs on imported panels would raise prices for consumers, and could cost tens of thousands of jobs in the US solar industry in marketing, installation and maintenance.
President Trump’s pledge to offer American companies more aggressive protection from foreign competition got fresh ammunition Friday, when a government board cleared the way for him to deploy a long-dormant legal weapon to restrict solar panel imports.
On Monday, former Vice President Joe Biden wrote a blog post that proves two things: Blogging isn’t dead and neither is Biden’s political career. In fact, in Biden’s essay, and in other little-noticed public pronouncements, you can see him sculpting a role for the 2020 presidential campaign that perhaps only he could get away with playing: the voice of anti-populism.
SCANDALS, LAWSUITS, FINES, REGULATORY
SILICON VALLEY, UNICORNS, STARTUPS, VC
By winning over restaurant owners like Mr. Gordon, Uber has barreled into the crowded, cutthroat space of food delivery. As its new chief executive, Dara Khosrowshahi, assesses the strengths and weaknesses of the company with an eye toward an initial public offering in the next 18 to 36 months, top executives believe UberEats could generate enormous growth. Even as Mr. Khosrowshahi grapples with issues such as Uber’s loss of its operating license in London, he has said UberEats has been a “wonderful surprise,” according to a person who has spoken with him.
UberEats stands out even from the rest of the company’s fast-growing — and unprofitable — business. The delivery service, available in more than 120 markets globally, sometimes eclipses Uber’s main ride-hailing business in markets like Tokyo; Taipei, Taiwan; and Seoul, South Korea, the company said. The number of trips taken by UberEats drivers grew by more than 24 times between March 2016 and March 2017. As of July, UberEats was profitable in 27 of the 108 cities where it operated. Uber declined to reveal the service’s revenue.
“There’s a global trend towards delivery,” said Jason Droege, vice president of UberEverything, the division under which UberEats operates. “As people use mobile phones more and more for everything in their lives, we’re starting to see a secular change in how people eat.”
CONSUMER TECH, SOCIAL MEDIA, E-COMMERCE, MOBILE
Silicon Valley is home to the world’s most influential consumer-tech firms, but China’s online corporate titans are way ahead in the race to build mobile-payment services in many of the world’s fastest-growing consumer markets.
China’s digital-payments market, by far the world’s largest, is dominated by e-commerce giant Alibaba Group Holding Ltd. and social-media champ Tencent Holdings Ltd. Now the two are imparting money and know-how to mobile-money startups in other Asian markets, from Indonesia to India.
As people across Asia increasingly move from cash to smartphone apps for buying goods and transferring money between individuals, U.S. firms are “still very focused on their home market,” trying to increase usage there, said Shiv Putcha, an analyst at research firm IDC in Mumbai.
RETAIL APPAREL, SPECIALTY, DINING, BIG BOX
Chief Executive Officer Jeff Bezos has allocated $5 billion toward Amazon’s expansion in India as it seeks to secure an advantage over local rivals in the South Asian nation. The e-commerce giant has a lot riding in the country after its washout in China, where the dominance of Alibaba Group Holding Ltd. and other domestic players made Amazon’s entry difficult.
AUTOS, ELECTRIC, SELF-DRIVING
Russia’s state-owned nuclear corporation is joining the lithium rush. After a collapse in the price of uranium, Rosatom Corp. plans to start mining and trading the metal used in batteries as it seeks to profit from the rapid rise of electric vehicles.
“The evolution of the car business is going much faster than predicted,” Kirill Komarov, the company’s first deputy head, said in an interview. “We plan to accumulate the whole integrated line of everything starting from lithium and up to final batteries or even some cooperation with car producers.”
SCIENCE, NATURE, PSYCHOLOGY
“We know it must be very important. Otherwise, we would just lose it,” Bedbrook said. If animals could evolve a way to live without sleep, surely they would have. But many experiments suggest that when creatures such as mice are deprived of sleep for too long, they die. Scientists have shown that animals as simple as the roundworm C. elegans, with a brain of just 302 neurons, need sleep to survive.
The revelations about jellyfish sleep are important because they show how basic sleep is. It appears to be a “conserved” behavior, one that arose relatively early in life’s history and has persisted for millions of years. If the behavior is conserved, then perhaps the biological mechanism is too. Understanding why jellyfish, with their simple nerve nets, need sleep could lead scientists to the function of sleep in humans.
On East 83rd Street there’s a squat brick walk-up that’s a viable contender for the least fancy apartment building on Manhattan’s Upper East Side. But for the past 25 years, Wall Street machers and captains of industry have marched up to its gray-carpeted third floor to learn the secrets of attack and defense from Lev Alburt, a three-time U.S. chess champion and one of the most prominent Soviet defectors of the 1970s. Alburt has long been giving patter-filled private lessons to New Yorkers from all walks of life, encouraging, cajoling, and reprimanding men and women as they attempt to learn the so-called game of kings.
“I’d take a walk up there, spend an hour with the chessboard with [Alburt]. We were friendly, we might talk about life a little bit,” says corporate raider Carl Icahn, who took lessons with Alburt for years in an attempt to outplay his son, Brett. “The more you play, the better you get, if you have the time to do it. But obviously [Icahn vs. Alburt] is like a college player who plays Federer. You can never touch a guy like that,” he says. Icahn stopped taking lessons once his son could consistently beat him. (“It takes the fun out of it,” he says.)
Mr. Franklin has been trying to quit gambling for years. What usually drags him back in is a particular kind of gambling machine, known as a fixed odds betting terminal, that lies at the heart of a bitter debate about the future of British gambling. Campaigners and some researchers say the machine is an unusually addictive form of gambling that is sucking billions out of Britain’s poorest communities, and some hope it will be banned after a government review next month.
But bookmakers, backed by other researchers, counter that there is no clear evidence that the machine is any more addictive than other kinds of gambling — like the online casino, a product that is restricted in the United States but legal in Britain. They warn that banning the machines, which are found only in British betting shops and provide more than half their profits, would lead to the loss of thousands of jobs.
Today, there are roughly 33,000 such machines spread across Britain’s 9,000 betting shops. They collectively provided a profit of more than £1.8 billion last year, far more than those outlets made from bets on horse races, dog races and soccer matches combined.
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