Macro Links Sep 29th – Russian Operatives on Twitter
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MACRO LINKS TABLE OF CONTENTS (Click or Scroll Down)
- RUSSIAN OPERATIVES ON TWITTER
- HURRICANE AFTERMATH
- TAX PLAN
- RATES, LIQUIDITY, SYSTEMIC RISK, BALANCE SHEETS
- MACRO OP-EDS, INSIGHT, EVENTS AND TRENDS
- USA ECONOMY DATA, CITIES AND STATES
- GLOBAL ECONOMY DATA
- COLOR, EARNINGS, SENTIMENT, VALUATIONS
- DEALS, MERGERS, IPOs, LBOs, RESTRUCTURINGS
- FOREX, CRYPTOCURRENCY, EXCHANGE IMPACTS
- HEDGE FUNDS, PRIVATE EQUITY, MONEY MGMT
- BREXIT, SCOXIT, LONDON, UK ECONOMY
- GEOPOLITICS, CRIME, TERRORISM
- PROPAGANDA, CORRUPTION, AUTHORITARIANISM
- RESISTANCE, PROTEST, COUNTER-EFFORTS
- TRUMP WORLD
- TRADE, PROTECTIONISM, REGULATION, OVERSIGHT
- ELECTORAL POLITICS
- DEMOGRAPHICS, INEQUALITY & POPULISM
- SILICON VALLEY, UNICORNS, STARTUPS, VC
- RETAIL APPAREL, SPECIALTY, DINING, BIG BOX
- AUTOS, ELECTRIC, SELF-DRIVING
- SCIENCE, NATURE, PSYCHOLOGY
RUSSIAN OPERATIVES ON TWITTER
Twitter said Thursday that it had shut down 201 accounts that were tied to the same Russian operatives who posted thousands of political ads on Facebook, but the effort frustrated lawmakers who said the problem is far broader than the company appeared to know.
The company said it also found three accounts from the news site RT — which Twitter linked to the Kremlin — that spent $274,100 in ads on its platform in 2016.
Despite the disclosures, Sen. Mark R. Warner (D-Va.) questioned whether the company is doing enough to stop Russian operatives from using its platform to spread disinformation and division in U.S. society.
Warner said Twitter’s presentation to a closed-door meeting of Senate Intelligence Committee staffers Thursday morning was “deeply disappointing” and “inadequate on almost every level.” Twitter also made a presentation to House Intelligence Committee staffers in the afternoon.
The company “showed an enormous lack of understanding . . . about how serious this issue is, the threat it poses to democratic institutions,” a visibly frustrated Warner said.
Falsified news stories on social-media sites like Twitter flooded U.S. swing states ultimately won by President Trump—including Pennsylvania, Florida, and Michigan—in the days leading up Election Day last year, according to a study published by Oxford University on Thursday. In the hard-fought battleground states, the links in many cases emanated from Russian sources and WikiLeaks, the study showed.
“Many people use these platforms to find news and information that shapes their political identities and voting behavior,” Samantha Bradshaw, a lead researcher at Oxford’s Computational Propaganda Project, told Mother Jones. “We know the Russians have… invested in social media,” she said. “Swing states would be the ones you would want to target.”
As Facebook is turning over information on Russian-bought ads to Congress, it’s becoming clear that the disinformation campaign was much more sophisticated than just spreading fake stories about the Clintons killing an FBI agent.
But there’s an extra level to this. The Post reported that the massive collection of ads also includes pro-Black Lives Matter ads. In fact, according to a new CNN report, those ads showed up mainly in Baltimore and Ferguson. So the trolls weren’t just targeting right-wing Facebook users–they were also targeting left-wing voters to demoralize them.
And this is only looking at Facebook through an advertising-focused lens. In maybe the most distressing update on this whole mess, The Daily Beast has found that a fake account impersonated the social media for a real U.S.-based Muslim rights group, United Muslims of America. And those imposter accounts, which have been linked back to Russian operatives, show a complex operation.
Twitter informed congressional investigators of its findings in a series of briefings in Washington, D.C., on Thursday — and the revelations are sure to stoke further speculation on Capitol Hill that Kremlin agents sought to co-opt social media platforms to stir social and political unrest in the U.S.
For three weeks, a harsh spotlight has been trained on Facebook over its disclosure that Russians used fake pages and ads, designed to look like the work of American activists, to spread inflammatory messages during and since the presidential campaign.
But there is evidence that Twitter may have been used even more extensively than Facebook in the Russian influence campaign last year. In addition to Russia-linked Twitter accounts that posed as Americans, the platform was also used for large-scale automated messaging, using “bot” accounts to spread false stories and promote news articles about emails from Democratic operatives that had been obtained by Russian hackers.
A renowned Russian hacker arrested by Spanish authorities on a U.S. warrant, reportedly said Thursday he worked for Russian President Vladimir Putin’s party.
The storm knocked out the power grid on the island and left hundreds of thousands of people without potable water. With air traffic slowly resuming, island residents are likely to seek shelter — for months, if not longer — in mainland cities with large Puerto Rican populations, such as New York and Orlando in Florida.
“We are expecting a large influx of evacuees to the state,” said Teresa Jacobs, mayor of Orange County in Florida, which includes Orlando. “We will have a major evacuation population for an extended period of time — three months, six months.”
Puerto Rico is US territory — a status that gives its residents US citizenship but no right to vote in national elections — and large numbers of Puerto Ricans were already migrating to seek economic opportunity on the mainland.
Lawmakers and the Trump administration sought to accelerate efforts to get relief shipments to the island’s 3.4 million residents in the wake of criticism that the federal response has been sluggish.
The Defense Department on Thursday deployed a three-star general to Puerto Rico to oversee relief efforts, and the Department of Homeland Security waived the Jones Act, allowing non-U.S. ships to carry cargo from the U.S. mainland to Puerto Rico. In addition, the Transportation Department said it was making $40 million immediately available to pay for road and bridge repairs.
Lifting the restrictions on foreign-flag vessels serving hurricane-ravaged Puerto Rico will help quell criticism over the relief efforts, but logistics experts say the action won’t do much to speed desperately needed supplies to the island’s shattered interior.
The Department of Homeland Security on Thursday waived enforcement of the Jones Act for 10 days to allow foreign ships to carry aid to the U.S. territory. The Trump administration acted after the severe damage to the island became clearer and Puerto Rico’s governor asked for a waiver to get goods delivered.
Thousands of cargo containers bearing millions of emergency meals and other relief supplies have been piling up on San Juan’s docks since Saturday. The mountains of materiel may not reach storm survivors for days.
Distributors for big-box companies and smaller retailers are unloading 4,000 20-foot containers full of necessities like food, water and soap this week at a dock in Puerto Rico’s capital operated by Crowley Maritime Corp. In the past few days, Tote Maritime’s terminal has taken the equivalent of almost 3,000. Even with moves to ease shipping to the island, like the Trump administration’s waiver of the Jones Act on Thursday, the facilities have become choke points in the effort to aid survivors of Hurricane Maria.
With nearly half of Puerto Ricans without clean drinking water, and with the territory’s electricity systems “totally shot,” according to President Trump, the Caribbean island is in dire need of hurricane assistance. But that’s not all: A report Wednesday by the Federal Communications Commission shows that cellular service has been all but obliterated in Puerto Rico as a result of Hurricane Maria.
“Will the island ever recover? I think it depends,” Setser said. “If Puerto Rico’s population decides that the US government doesn’t care and that they can get a better deal all around — better services, more federal benefits — by moving to Florida, they will move.”
“That could lead to a death spiral,” he said. “If folks lack electricity for many months, I am not sure they will choose to rebuild in Puerto Rico.”
Lloyd’s said it was too early to reliably estimate the full financial impact of the two storms but preliminary analysis put the figure at $4.5bn.
According to RMS, a modelling firm, total insured losses from the two hurricanes will reach $60bn to $90bn for the industry as a whole. But Ms Beale said it would be years before the exact scale of the losses was clear.
“There is quite a lot of complexity. The bulk [of the claims] will be clear in a few months but in the US a lot of policies do not cover floods . . . so you have to assess whether the damage has been caused by wind or floods.”
From the moment the waters began rising in Texas last month, disease was on health officials’ minds. Floodwaters, after all, are filthy.
When Hurricane Harvey finally moved north and the feet of flooding drained, hospitals saw a spike in skin and gastrointestinal infections, but Texans were spared some of the most serious illnesses that contaminated water can spread: cholera, for instance, and typhoid.
On Tuesday, however, the Harris County medical examiner’s office announced that the death of a 77-year-old woman 11 days earlier had been caused by necrotizing fasciitis: a gruesome and often deadly infection commonly known as flesh-eating bacteria.
Republicans’ release of a sweeping plan to rewrite the tax code has set off a scramble among Washington lobbyists and trade groups to protect valuable tax breaks and other long-ingrained provisions.
The plan’s scant details make it hard to know what, exactly, is on the chopping block. But within hours of the plan’s unveiling on Wednesday, flash points emerged over measures that supporters said could hurt the housing market, raise borrowing costs and increase the tax burden on families in high-tax states.
Gary Cohn, head of the White House economic council, said on Thursday that Mr Trump had not wavered in his determination to close a “loophole” that is worth billions of dollars to Wall Street money managers.
“The president made it clear to the tax writers in the Congress that that is his position,” Mr Cohn told CNBC. “That was his position during the campaign and he continues to support the position that carried interest is one of the loopholes we talk about when we talk about getting rid of loopholes that affect wealthy Americans.”
Carried interest is a share of investment profits paid to an investment manager. The tax break on carried interest allows recipients to pay a lower tax rate than salaried workers and has become an emblem of wealthy privilege. Scrapping it was not mentioned in the nine-page tax plan released by the White House on Wednesday.
While its elimination would be costly for those who benefit, Democrats and some tax experts say this would be more than offset by other gains for the US’s wealthiest taxpayers.
“I can’t guarantee anything,” said Cohn, the director of the White House Economic Council. “You can always find a unique family somewhere.”
He said Trump’s plan is “purely aimed at middle-class families.” But Cohn acknowledged that “it depends which state you live in.”
The list of those who stand to benefit from the proposed tax plan, which Mr. Trump promoted on Wednesday during a speech in Indianapolis, is long. Individual earners, small businesses, law firms, hedge funds, manufacturers and multinational corporations could all see dramatic tax cuts.
There is no certainty that the main points in the White House plan will become law. Congress must now turn the nine-page proposal into a passable piece of legislation. But business leaders were nonetheless quick to applaud the broad outlines of the proposal, claiming that tax cuts they would spur new investment and grow the economy.
The chairman of the powerful Republican Study Committee on Thursday lamented that deficit reduction has taken a back seat among GOP concerns now that the party controls the House, Senate and White House.
Rep. Mark Walker (R-N.C.) told The New York Times that deficit reduction is a more popular “talking point” when Republicans are in the minority in Washington.
In devising any complicated plan, there will be some knotty issues when it is tempting to offer vague promises of fixes that come later. The new Republican tax plan includes just such language, about a provision that wealthier Americans might find tempting to abuse.
“The framework contemplates that the committees will adopt measures to prevent the recharacterization of personal income into business income to prevent wealthy individuals from avoiding the top personal tax rate,” says the tax reform blueprint presented on Wednesday by congressional Republicans and the Trump administration.
A lower corporate tax rate as called for in the tax framework unveiled by the Trump administration should immediately boost banks’ own profits. Bankers expect some pain points, but are confident the benefits will outweigh them.
Morgan Stanley Chief Executive James Gorman said at an industry conference in June that a 25% corporate tax rate would lift his bank’s earnings by 15%, assuming no changes to the business mix. The Trump framework calls for a 20% rate, so the benefit could be even greater.
Politico has now detailed over $1 million in taxpayer-funded non-commercial flights taken by Health and Human Services Secretary Tom Price, with new revelations of $500,000 in military flights to Africa, Asia and Europe. The White House signed off on the military travel.
After being rebuked by President Trump for racking up at least $400,000 in travel on chartered flights, Health and Human Services Secretary Tom Price said on Thursday that he would pay back taxpayers for his part of the bill and stop flying on private jets.
But that does not mean his job is safe.
Mr. Trump has grown incensed by Mr. Price’s liberal renting of expensive planes, which he views as undercutting his drain-the-swamp campaign message, according to several administration officials with direct knowledge of the president’s thinking. Through intermediaries and the media, Mr. Trump has let it be known that offering reimbursement as repentance was no guarantee that Mr. Price would keep his job.
Health and Human Services Secretary Tom Price said Thursday that he would reimburse the government for a fraction of the costs of his flights on charter planes in recent months, after coming under sharp criticism from members of both parties for the expensive practice.
“Today, I will write a personal check to the U.S. Treasury for the expenses of my travel on private charter planes. The taxpayers won’t pay a dime for my seat on those planes,” Price said in a statement, adding that he will no longer take private planes while serving as secretary. “No exceptions.”
The move came as House and Senate investigators are pressing Price, as well as other Cabinet members, to disclose the extent to which they have relied on noncommercial travel to travel across the United States and overseas. The recent revelations about these costly trips on military and private aircraft, at a time when the same officials have proposed dramatic cuts in the agencies they oversee, has put the administration on the defensive.
RATES, LIQUIDITY, SYSTEMIC RISK, BALANCE SHEETS
Private equity transactions have hit a post-financial crisis high this year as cheap debt and record sums of ready cash lifted the value of deals to $212bn.
Buyout values surged nearly 25 per cent in the first nine months of the year, representing just under one-tenth of total M&A dealmaking, according to data from Thomson Reuters, with activity in the US and Europe at its strongest since 2007 when it reached $526bn in the same period.
Worldwide M&A activity totalled $2.4tn during the year-to-date 2017, up 2 per cent compared with the same period last year.
The latest figures include some of the private equity industry’s biggest deals since the financial crisis, including an $18bn deal for Toshiba’s memory chip unit by a Bain Capital-led consortium, a planned $6.5bn takeover of US office supply retailer Staples by Sycamore Partners and the $5.3bn buyout of Scandinavian payments processor Nets A/S by Hellman & Friedman.
Toronto is the global city with the highest risk of being in a property bubble, outpacing even super expensive New York, London and Hong Kong, according to Swiss bank UBS.
It’s the first time that Canada’s most populous city has topped the annual ranking of 20 major cities. Vancouver, on the west coast of Canada, wasn’t far behind.
UBS researchers said that prices in Toronto have doubled over the past 13 years, while rents have increased by only 5% over the same period. Home price increases have far outpaced salaries.
The number of millionaires in the world risen by nearly 8% last year to an all-time high of around 16.5 million people, with record total wealth of $63.5 trillion (£47.53 trillion), according to a report by global consultancy firm Capgemini.
The wealth of high net worth individuals (HNWI) — which Capgemini defines as those with investable assets of $1 million or more, excluding the primary residence, collectibles and consumables — rose 8.2% on the year in 2016 and is on track to surpass $100 trillion by 2025.
Stronger hurricanes, hotter heat waves, more frequent wildfires and more severe public-health issues are all adding to the costs of climate change, which will reach almost $1 billion a day in the U.S. within a decade, according to a report released Wednesday.
The share of people not making payments on their federal student loans within three years of leaving college has risen, reversing five years of reported declines in new defaults.
With France and Germany’s high-stakes elections out of the way, investors are gearing up for perhaps Europe’s most important vote—Italy’s. For some money managers, the threat of a populist upset in the eurozone’s most debt-laden and slowest-growing major economy is a greater risk than any other election in this poll-packed year.
But that risk, in part, means that Italian government debt offers higher returns than its peers, presenting an attractive bet for some investors.
“Italy just looks cheap next to other investment grade credit,” said Myles Bradshaw, head of global aggregate fixed income at asset manager Amundi, who is overweight on Italy, Spain and Portugal. “The economy is turning round, and it’s got potential.”
MACRO OP-EDS, INSIGHT, EVENTS AND TRENDS
The Puerto Rico we once knew was dwindling into an unstable situation well before Hurricane Maria. The Americans trapped on this island territory have zero hope to see a recovery to any form of prior glory. The storm dealt a fatal blow on what was previously an uncertain end-game of long standing debt restructuring. The population had been quickly disappearing , cumulatively ~10% less than since the start of the global financial crisis of 2008. The best and most noble talent have gone. The island has been in an economic depression since, and all this while the world around them has been impressively growing and innovating for many years.
It’s our higher calling after a crisis to not blame victims for being immobile; it could be any of us. We can express much-needed water and supplies, but there is no revival and little economic connection to the rest of the world. Let alone the rest of the U.S. Most will of course never be able to afford transportation to the mainland.
Since every story has a political angle these days, consider this. Since 2010, Pennsylvania’s Puerto Rican population has grown by 78,000. Donald Trump won Pennsylvania in 2016 by only 44,000 voters. Since 2010, Florida’s Puerto Rican population has grown by 220,000. Trump won that state by 113,000 votes. If Democrats flip those two states in 2020 and every other state voted as it did in 2016, Democrats will win the presidency. Now imagine Pennsylvania takes in another 100,000 Puerto Ricans, and Florida takes in another 300,000 over the next few years, all of whom would be eligible voters.
Puerto Rico’s future has been irrevocably altered as a result of Hurricane Maria. And as its residents decide where to move forward with the rest of their lives. Perhaps the rest of the country’s future has changed as well.
It’s true. The U.S. does have the highest corporate tax rate of any OECD country … but that doesn’t mean companies pay those tax rates in full. In fact, some don’t pay any taxes at all.
The Institute on Taxation and Economic Policy examined 258 Fortune 500 companies that were profitable from 2008 to 2015 and found 100 companies paid zero — or less — in federal income taxes for at least one year. Some companies like PG&E (Pacific Gas and Electric Company) didn’t pay taxes at all. Plus, many received some form of a tax rebate from the U.S. Treasury, often totaling hundreds of millions of dollars.
Because of extensive loopholes and special tax breaks, most companies don’t pay the full 35 percent tax rate. The Treasury Department’s latest calculations found that, on average, the effective tax rate for companies was about 22 percent. Trump has proposed a corporate tax rate of 15 percent, which means companies could pay even less.
In 2001, when surging budget surpluses fueled hopes of extinguishing the national debt, a pitched battle broke out over President George W. Bush’s proposed $1.6 trillion tax cut. Never mind that the tax cut’s 10-year tab was supposed to leave behind more than $3 trillion in surpluses — Democrats and some Republicans said that the tax cut was just too large.
Fast forward to President Trump’s Washington, where the budget deficit for this fiscal year is projected to near $700 billion and the federal debt has topped $20 trillion. A new tax cut is emerging to rival those of the Bush years, and the deficit hawks have hardly peeped.
This is the crux of the issue. Last spring I said the Trump phenomenon was a product of what I termed ‘nonsense debt‘. Republicans had spent years pumping their voters up on increasingly extreme and nonsensical claims and promises. This worked very well for winning elections. But it had also built up a debt that eventually had to be repaid. Concretely, they were making claims and promises that were either factually ridiculous, politically unviable or unacceptable to a broad swath of the voting public. Eventually, you get elected and need to produce. By definition that’s never really possible: both because the claims and promises are nonsensical and unviable but also because a politics based on reclamation, revenge, and impulse is almost impossible to satisfy through normal legislative politics.
Now we have all of this coming home to roost in a far more explosive way. Republicans were never going to be able to turn back Obamacare and its death panels while Obama was President. That was straight up obvious. Anyone should have understood that. But it really should have been possible for them to do it when they controlled the entire government. They clearly can’t. That same pattern has played out across the whole legislative landscape. But it’s not really a matter of two groups battling each other. It’s the fallout of a conservative movement engaging in massive resistance against the rest of the country and the inevitable cycle of extremity and betrayal that goes with that.
“Have you just got out of prison?” the slaughterhouse foreman asks his new recruit. It is a question seemingly posed in jest, but probably only to mask a genuine suspicion that a spell in clink is the most likely explanation for an odd situation.
The new boy stands out because he is a rare Briton reporting for stomach-churning, minimum-wage work at an intensive chicken processing plant in Devon, where his typical colleague is eastern European and speaks almost no English.
This reliance on immigrant labour is hardly a unique situation within UK industry, but it is a striking feature of 2 Sisters Food Group, a giant £3bn-revenue food processor that produces industrial quantities of the country’s favourite meat.
Every week a sizeable chunk of the company’s 23,000 workers – drawn from 36 different nationalities – churns out 6 million chickens, part of an operation that produces a third of all the poultry products consumed in the UK. Its products are found on the shelves of the major UK supermarket groups. This summer, two undercover reporters for the Guardian and ITV News were among its workforce.
Here is a measure of America’s democratic quandary: most of the world is banking on the country’s generals to restrain its commander-in-chief. It is usually the other way round.
When asked whom they trusted to “deal with North Korea responsibly”, more than 70 per cent of Americans said the US military. Just 37 per cent opted for Donald Trump, their elected civilian president. We have not seen this movie before. When we look to uniforms to protect the world’s greatest constitutional republic from itself, something is amiss.
Yet it is where most people’s hopes now lie. In the past few days, Mr Trump has shredded America’s longstanding — and intuitive — doctrine of nuclear deterrence. Its key tenet is that the US will retaliate overwhelmingly to any attack on itself or its allies by a nuclear adversary — in this case by North Korea on the US, or on its main regional partners, Japan and South Korea. The doctrine of mutually assured destruction was understood by a succession of Soviet autocrats during the cold war. Until now, Washington’s public stance was that deterrence would also work on Kim Jong Un, North Korea’s dictator.
The end of an era. Wolfgang Schäuble is to depart from the German finance ministry, ending a stint at the top of European financial policymaking that straddled the crisis years and very much defined them.
Revered and reviled in equal measure (in Germany and Greece respectively), the eurozone’s longest serving finance minister will step down from his post after eight years to become president of the German parliament.
Mr Schäuble was a passionate pro-European, but also a convenient foil for Ms Merkel in Brussels, pushing a tough-talking line on everything from eurozone budgetary rules to a Greek exit from the euro. The salt-and-pepper double act ends just as the EMU debate moves from crisis to consolidation.
This is a change of guard that will transform the dynamics among finance ministers, where Mr Schäuble was often the dominant voice in the room. “The uncertainty from his departure will have massive initial impact on Germany’s ability to shape the discourse at the eurogroup,” says Guntram Wolff, director of the Bruegel think-tank.
A global grains glut is now in its fourth year, with supplies bloated by favorable weather, increasingly high-tech farm practices and tougher plant breeds.
The bin-busting harvests of cheap corn, wheat and soybeans are undermining the business models of the world’s largest agriculture firms and the farmers who use their products and services. Some analysts say the firms have effectively innovated their way into a stubbornly oversupplied market.
Never has the world produced so much more food than can be consumed in one season. World ending stocks of total grains – the leftover supplies before a new harvest – have climbed for four straight years and are poised to reach a record 638 million tonnes in 2016/17, according to USDA data.
Farmers and agriculture firms could once count on periodic bouts of crop-destroying weather to tame gluts and drive up prices. But genetically modified crops that repel plant-chewing insects, withstand lethal chemicals and mature faster have made the trend toward oversupply more resistant to traditional boom-and-bust agrarian cycles, experts say.
Another key factor: China – the world’s second-biggest corn grower – adopted stockpiling policies a decade ago when crop supplies ran thin, resulting in greater production than the world needs.
The UK government, particularly its trade minister Liam Fox, places great faith in a trade agreement with the US, arguing that Britain will get a good deal because of the dense commercial links between the two countries. But trade deals are all about leverage, and leverage is determined by the size of the market. A comparatively small economy such as the UK’s would enjoy little leverage in its negotiation with the US. And if the two countries do not agree a deal, the UK would have to settle disputes with the WTO: cases take years and rulings are often ignored. By contrast, the EU is in a strong position when it comes to disputes with the US; its huge domestic market gives it greater negotiating power. And the US cannot afford to take unilateral action against it of the kind seen in the Bombardier case.
Brexiters assume Britain will face a benign international environment once freed from the EU to take advantage of open markets elsewhere. They take for granted that the UK would be able to rely on the US underwriting the global trading system. This was always naive, but has become delusional with the election of Donald Trump: globalisation can only flourish with wholehearted US support. And that is, at the very least, now in doubt with a more protectionist White House.
As his administration this week imposed punitive tariffs on a Canadian airplane manufacturer, it exacerbated confusion over where Mr. Trump might venture next in his zeal to redraw the terms of American commerce with the world.
Trade experts strained to find evidence of a cohesive strategy, noting that Mr. Trump has sparred over trade with a sometimes bewildering array of nations.
He has frequently trained his wrath on China and Mexico, accusing them of stealing American jobs. He has attacked Germany for its exporting prowess. He has threatened to blow up a trade deal with South Korea.
Few could have foreseen that a primary target of Mr. Trump’s actions would be a stalwart ally, Canada.
“He has not had a discernible trade policy from the beginning,” said Pietra Rivoli, a trade expert at Georgetown University’s McDonough School of Business. “I don’t think there’s a theory that unites the various decisions of his administration’s trade policies, other than things that make a news splash.”
Wahid — a portly man who travels by private jet, mixes with the glitterati and says some of his staff enjoy “above-top-secret” security clearance from the US government — belongs to a booming industry. It extends from CIA contractors to masters of propaganda, from the offshore accountants who launder ill-gotten wealth to the sleuths who try to follow the money.
Its practitioners are often investigators by trade — former spies, prosecutors and journalists — but they also include lobbyists and establishment luminaries. For handsome fees, teams from this largely unregulated industry will set about the extraction, dissemination and, sometimes, manipulation of information to serve a client’s agenda and target that client’s enemies — enemies who have, often, assembled a similar team of their own.
The North Korean spy, posing as a member of his country’s trade delegation in Belarus, thought he was photographing a secret scientific report on missile technology as he snapped away with a small camera in a dingy garage in the Ukrainian city of Dnipro, the home of Ukraine’s Soviet-era rocket industry.
But the report he took pictures of was a fake, part of a sting operation mounted by Ukraine’s security service to prevent the leak of missile secrets, and now the spy, 56-year-old Ri Tae-gil, is in prison convicted of espionage. He sleeps on the bottom bunk in a cell shared with eight Ukrainian inmates, four of them convicted murderers.
USA ECONOMY DATA, CITIES AND STATES
U.S. economic output grew at a 3.1% annual rate in the second quarter, slightly stronger than previously thought and marking the best growth in two years.
The estimate, based on revised data released by the Commerce Department on Thursday, replaces a previous tally of 3% growth. Economists surveyed by The Wall Street Journal had expected the estimate to remain 3%.
IBM has shifted its center of gravity halfway around the world to India, making it a high-tech example of the globalization trends that the Trump administration has railed against.
Jim Lowry, who’s been in the funeral business for 62 years, came out of retirement three years ago to help Charleston Mortuary Services handle the increase in bodies that must be shipped to the state morgues. Needle marks on arms and hands and body bag tags that read “Pending Tox” identify those who likely died of a drug overdose. They are mostly younger adults, ages 18 to 30.
“Now, it’s nothing for us to have two or three in the same day … or six or seven in a week,” said Lowry, a licensed embalmer. “It’s just out of sight.”
Payday lending is declining as the U.S. economic expansion matures and Americans’ financial situations improve, according to figures from the Federal Reserve’s Survey of Consumer Finances report released Wednesday. The percentage of Americans who said they took out a payday loan in 2016 dropped to 3.4 percent from 4.2 percent in 2013, the report showed.
GLOBAL ECONOMY DATA
Economic confidence in the eurozone climbed ahead of expectations to hit its strongest level since June 2007 this month, with businesses increasingly encouraged by recovery across the region.
The European Commission’s official economic sentiment indicator climbed to 113, from 111.9 last month. Consensus estimates compile by Reuters had expected only a slight rise to 112.
Industrial, retail trade and construction firms were all more optimistic, while confidence among service providers and consumers stayed fairly steady at already-high levels. At the national level, the Netherlands and Italy saw the largest rises.
COLOR, EARNINGS, SENTIMENT, VALUATIONS
Rovio Entertainment has priced its stock market flotation at the top of its price range as investors showed strong interest in the maker of Angry Birds. The stock is due to start trading on Friday at a price of €11.50, which values the Finnish company at €896m.
That is below the $2bn valuation pushed by some of Rovio’s backers in the summer and estimates of as much as $9bn at the peak of Angry Bird’s success in 2011.
The munchies are driving up fast-food sales in states where marijuana is legal. Cannabis has been shown to increase users’ appetite, sending many customers of legalized dispensaries to fast-food chains, according to a new study by Green Market Report and Consumer Research Around Cannabis.
Forty-three percent of legal-marijuana users ate at a McDonald’s restaurant in the past four weeks, the survey found. Eighteen percent ate at Taco Bell, while 17.8 percent went to Wendy’s. Those results were significantly higher than among respondents who hadn’t visited a dispensary.
DEALS, MERGERS, IPOs, LBOs, RESTRUCTURINGS
TaskRabbit is one of the best-known startups in the so-called “gig” economy that links freelance workers with jobs, from handymen to movers to assistants. It has about 60 employees, but over 60,000 independent workers use its platform.
The purchase of TaskRabbit was fueled by Ikea’s need to further bolster its digital customer service capabilities to better compete with rivals likes Amazon, which has stepped up its home goods and installation offerings. The purchase is Ikea’s first step into the on-demand platform space.
TaskRabbit had already struck a pilot partnership with Ikea around furniture assembly in the United Kingdom and also had marketed its workers’ ability to put together Ikea items in the U.S. and elsewhere.
But a purchase of TaskRabbit will get Ikea even more deeply into the tech space, although it has not been without some tech innovation of late. The company — which has sales of more the $36 billion annually and 183,000 workers — recently announced an initiative to shift its 389 stores worldwide to electric car transportation and infrastructure.
Shares of video streaming firm Roku Inc rose more than 67 percent in their market debut on Thursday, giving the U.S. IPO market a much-needed shot in the arm.
Roku ended trading on the Nasdaq with a share price of $23.50, giving it a market capitalization of about $2.23 billion. The IPO market is struggling to finish on a high note even though it has already notched more money so far this year than in 2016.
FOREX, CRYPTOCURRENCY, EXCHANGE IMPACTS
An effort to allow investors to trade digital currencies as easily as stocks stumbled when backers withdrew two proposals to list bitcoin funds.
Intercontinental Exchange Inc’s NYSE Arca exchange on Wednesday withdrew an application with the U.S. Securities and Exchange Commission (SEC) to list Grayscale Investments LLC’s Bitcoin Investment Trust.
Also on Wednesday, Van Eck Associates Corp pulled a registration document for a bitcoin fund after saying the SEC told them they would not review the filing until futures contracts on the digital currency start trading.
“Although digital currency market regulation continues to rapidly evolve, at this time Grayscale does not believe there have been enough regulatory developments to prompt the SEC to approve the … application,” Grayscale said in a statement. They said they would continue their dialogue with regulators.
HEDGE FUNDS, PRIVATE EQUITY, MONEY MGMT
There could be details of this transaction that haven’t been disclosed that make it more attractive for the buyers. But it shows how far some are going to earn income in a predictable, uncorrelated way.
When markets skew so far to one side so as to make investors desperate, that’s a recipe for irresponsible decisions. While this particular investment seems harmless enough, albeit not particularly lucrative for the buyers, it shows the degree to which markets have become distorted.
Whitney Tilson is closing his hedge fund, the latest high-profile investor to close shop amid an extended period of disappointing returns for the industry.
Mr. Tilson, 50 years old, shared his decision with clients on Sunday, according to people close to the matter. His firm, Kase Capital Management LLC, has lost about 8% so far this year, compared with a gain of 13.7% for the S&P 500, including dividends. Mr. Tilson manages about $50 million, down from a peak of $180 million in 2010.
In a letter to clients announcing the shutdown, Mr. Tilson wrote, “If I were managing only my own money, the fund’s recent results wouldn’t bother me quite so much. But investing and running a money management business are two very different things, and reporting sustained underperformance to you was making me miserable.”
BREXIT, SCOXIT, LONDON, UK ECONOMY
Seen from Brussels, Britain’s request to part ways with the EU through a two-year Brexit transition might appear a “dream deal”.
“The Brits pay the bills, they have to accept everything, but they have no say on law making,” Guntram Wolff, director of the Bruegel think-tank, said of the proposal for the UK to remain in the EU’s legal order. “Why, in principle, would you not want this to last?”
But negotiating Theresa May’s proposal, made in the British prime minister’s Florence speech last Friday, nevertheless poses a stiff test for the remaining members of the bloc. The EU27 have yet to reach consensus on what transition guarantees to offer, when to do it, or on how long the terms should last.
On one side stands a group of 19 European countries, including the region’s largest economies, who want the likes of Google, Amazon and others to pay more into their national coffers and whose impatience over tax peaked this month. These demands follow years of complaints that tech giants earn billions of euros from these countries’ consumers without paying their fair share. The tech companies deny the allegations.
Opposing this renewed effort to tax digital goods and services are a shrinking number of countries, including Ireland, that have become a home-away-from-home for Silicon Valley’s largest companies. That includes offering low corporate tax rates and other financial incentives to set up shop in Dublin, Luxembourg and elsewhere.
“Macron has no taboo over who owns plants or companies. He belongs to a generation that doesn’t have that sort of attachment,” said Patrick Artus, head of economic research at Natixis. “National champions [a concept coined by Charles de Gaulle in the 1960s] make no sense to him. The appropriate level is Europe for him.”
Angela Merkel gave her strongest signal yet that she is prepared to engage with France in discussions about reforming the EU, saying there was a “high degree” of consensus between Europe’s two biggest countries.
The German chancellor, who emerged victorious but bruised by the election result where her party lost seats, said the speech by French President Emmanuel Macron this week had set “important building blocks” for EU negotiations to come, although she cautioned the two countries still had “to talk about the details”.
Speaking to reporters in Hong Kong on Wednesday, after talks with top Chinese officials including Premier Li Keqiang in Beijing, Mr Ross singled out China’s substantial subsidies for industrial automation as an emerging threat to the US economy.
“Overcapacity is a big problem already and given the 2025 plan and the subsidies that it contemplates for a number of new industries, one of the worries that one has to have is that that may result in future overcapacity,” he said.
Mr Ross has previously warned that Beijing’s plan to upgrade its industrial sector — called “Made in China 2025” — is an “attack” on “American genius”. US President Donald Trump’s administration last month launched a probe into Chinese trade practices, including allegations about intellectual property theft.
Shares of China’s first online-only insurer rose strongly in its market debut in Hong Kong on Thursday, with ZhongAn Online P&C Insurance Co. providing a boost to what’s been a muted year for initial public offerings there.
ZhongAn is Asia’s largest-ever fintech offering and one of Hong Kong’s biggest IPOs this year; the company planned to raise $1.5 billion and have an initial market value of $11 billion. The deal saw big investor demand, with the Hong Kong public-offer portion receiving orders 393 times the 10 million shares that were to initially be sold.
Prime Minister Shinzo Abe faced one of the biggest threats to his solid hold on power after the leading opposition force agreed to line up behind a new party led by popular Tokyo Gov. Yuriko Koike.
Parliament’s lower house was dissolved on Thursday, and the government formally set a general election for Oct. 22, affirming a plan Mr. Abe announced earlier in the week.
In the two weeks before Prime Minister Shinzo Abe called a snap election, foreign investors using the futures market — which are often hedge funds — suddenly turned hugely positive on Japanese shares.
Foreigners bought a net 2.1 trillion yen ($19 billion) of Japanese stock futures from Sept. 11 to 22, according to data released by Osaka Exchange Inc. on Thursday and last week. That came after they sold more than $7 billion in cash equities this year through mid-September.
“If the ruling party wins, Japanese shares will rise even more,” said Norihiro Fujito, a senior strategist at Mitsubishi UFJ Morgan Stanley Securities Co. in Tokyo. “That’s why hedge funds bought like crazy.”
GEOPOLITICS, CRIME, TERRORISM
U.S. officials plan to limit foreign flights over Hawaii under the Treaty on Open Skies, in a move aimed at protesting what they see as Russian military secrecy.
The unverified recording referred to geopolitical developments, including U.S. tensions with North Korea, in an apparent attempt to quell reports the leader had been killed.
A year ago this month, Aung San Suu Kyi, Myanmar’s de facto leader, was welcomed to the White House on the slipstream of a historic election victory and an outpouring of international goodwill.
The former political prisoner, whose party had triumphed in a 2015 election, promised a fresh start built on the “true strength of our diversity”, for a country blighted by multiple ethnic insurgencies and decades of military rule.
Then President Barack Obama hailed “a new way of doing business and a new government”, as he lifted sanctions.
A year later, Myanmar’s international reputation, and that of its 72-year-old leader, are in tatters after a brutal military campaign by security forces in the western state of Rakhine that has made homeless nearly half a million mostly Muslim Rohingya over the space of a month.
PROPAGANDA, CORRUPTION, AUTHORITARIANISM
Street protests, media bans and days of parliamentary brawls are roiling Uganda as President Yoweri Museveni seeks to abolish a constitutional age cap to extend his 31-year rule.
Parliament descended into pandemonium for the second consecutive day on Wednesday as opposition lawmakers threw chairs and microphone stands at security guards trying to eject them. The speaker suspended one ruling party legislator for entering the chamber armed with a pistol.
RESISTANCE, PROTEST, COUNTER-EFFORTS
Resistance against the Trump administration continued to drive most protests. We estimate that 82.7 percent of the events we recorded were opposing Trump’s policies, a higher percentage of events than in July. About 62 percent overall were explicitly anti-Trump while another 21 percent overall took stances on issues that contradict those of the president.
President Trump continues to speak out against NFL players who kneel during the national
anthem, but according to a new survey, 84% of people support the players’ right to protest. 16% of respondents say that protesters should be dropped from their team.
In his closed interview with the Senate intelligence committee staff, Jared Kushner did not share the existence of his personal email account, CNN has learned.
Facebook, under fire after the American presidential election, responded to criticism from President Trump and touted its efforts for the German elections on Sunday.
TRADE, PROTECTIONISM, REGULATION, OVERSIGHT
Trump took office pledging to round up as many as 3 million drug dealers, gang members and other criminals he said were living in the United States illegally. But the most recent figures from Immigration and Customs Enforcement (ICE) indicate the government may be having a hard time finding enough eligible “bad hombres,” as the president described them, to quickly meet those targets.
The easy Senate primary victory of the archconservative Roy Moore in Alabama and the announcement by Senator Bob Corker of Tennessee that he would retire represented real steps backward for those who had seen faint signs of a thaw in the partisanship that has gripped Washington for years.
Mr. Corker was a deal maker and senior Republican trusted by Democrats as someone they could partner with on tough issues. More important, the win by Mr. Moore, a no-compromise candidate in the vanguard of a series of challengers to sitting Senate Republicans, is likely to push nervous incumbents to the right to try to fend off aggressive attempts to unseat them.
DEMOGRAPHICS, INEQUALITY & POPULISM
Sex work is one of the more unusual ways that adjuncts have avoided living in poverty, and perhaps even homelessness. A quarter of part-time college academics (many of whom are adjuncts, though it’s not uncommon for adjuncts to work 40 hours a week or more) are said to be enrolled in public assistance programs such as Medicaid.
They resort to food banks and Goodwill, and there is even an adjuncts’ cookbook that shows how to turn items like beef scraps, chicken bones and orange peel into meals. And then there are those who are either on the streets or teetering on the edge of losing stable housing. The Guardian has spoken to several such academics, including an adjunct living in a “shack” north of Miami, and another sleeping in her car in Silicon Valley.
SILICON VALLEY, UNICORNS, STARTUPS, VC
Alphabet Inc. informed users of its Google Finance product last week that the core of the offering, the portfolio feature, will soon disappear as the stocks-focused product undergoes a transformation that bundles it into Google’s core search offering.
RETAIL APPAREL, SPECIALTY, DINING, BIG BOX
Amazon.com’s expanding reach is prompting investors to dump shares of retailers far from the U.S. While the “Amazon effect” has been most pronounced in the U.S., investor concern overseas has risen.
“Virtually every retailer needs to assume Amazon is coming for them,” said Eddie Perkin, chief equity investment officer at Eaton Vance EV 0.94% Investment Managers. “What companies and investors thought were immune categories have turned out not to be immune.” Mr. Perkin has been avoiding shares of many brick-and-mortar retailers even as their prices have fallen.
AUTOS, ELECTRIC, SELF-DRIVING
China will force most car makers in the country to start manufacturing electric vehicles in 2019—a one-year reprieve from an earlier proposal, but still the strongest national initiative yet to spur alternatives to gasoline and diesel cars.
SCIENCE, NATURE, PSYCHOLOGY
Rocks from northern Labrador have been found to contain the oldest known evidence of life on Earth. Graphite — a form of pure carbon — found in the 3.95-billion-year-old rocks shows the geochemical signature of having come from the decomposition of living organisms, researchers report in a new study published today in Nature.
That’s at least 150 million years older than the oldest graphite from living organisms previously found in 3.7 billion to 3.8 billion-year-old rocks in Greenland and northern Quebec. It’s also not much more than 500 million years after the Earth formed, about 4.5 billion years ago.
Some of the signatures in the Labrador rocks suggests that the organisms that left them were autotrophic — that is, they could produce their own food from chemicals in their environment, as algae and some kinds of bacteria do — report researchers led by Takayuki Tashiro and Tsuyoshi Komiya at the University of Tokyo.
Hugh Hefner, who created Playboy magazine and spun it into a media and entertainment-industry giant — all the while, as its very public avatar, squiring attractive young women (and sometimes marrying them) well into his 80s — died on Wednesday at his home, the Playboy Mansion, in the Holmby Hills area of Los Angeles. He was 91.
Hefner the man and Playboy the brand were inseparable. Both advertised themselves as emblems of the sexual revolution, an escape from American priggishness and wider social intolerance. Both were derided over the years — as vulgar, as adolescent, as exploitative and finally as anachronistic. But Mr. Hefner was a stunning success from the moment he emerged in the early 1950s. His timing was perfect.
He was compared to Jay Gatsby, Citizen Kane and Walt Disney, but Mr. Hefner was his own production. He repeatedly likened his life to a romantic movie; it starred an ageless sophisticate in silk pajamas and smoking jacket hosting a never-ending party for famous and fascinating people.
The rules of the home were strict — no swearing, no drinking, no playing cards, no radio on Sundays — and reflected the Puritan upbringing of Hefner’s parents, who grew up on Nebraska farms. His father, Glenn, was an accountant at an aluminum company. His mother, Grace, was a school teacher.
Grace was sexually demure to a degree notable even for that time, Gay Talese wrote in “Thy Neighbor’s Wife,” his bestselling book about sex in America, which chronicled Hefner’s rise. As for Glenn, he was “a remote, repressed man who seldom revealed his feelings to his family and spent most of his time working quietly… six days a week, sometimes seven.”
Less than two weeks after her record-setting Emmy win for “Veep,” Julia Louis-Dreyfus announced on Thursday that she has breast cancer. The news drew words of support from many, including a former vice president.
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