Marc Ross Daily
August 6, 2019
Curation and commentary from Marc A. Ross
Reporting from Alexandria, Virginia
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US-China, Ireland, Pakistan, 5G, Guns + Congress, Wayne Rooney, Evan Mobley
✔️ Trade war becomes currency war
✔️ Battery-powered ships next up in battle to tackle emissions
✔️ Republicans fear 'extinction in the suburbs' over gun control
✔️ Barneys New York files for bankruptcy
✔️ Rooney to make shock return to England as Derby County player-coach
Stocks close sharply lower as yuan reels and Trump jabs at China: WSJ reports, the Dow Jones Industrial Average sank more than 760 points, or 2.9%, in its biggest one-day percentage decline since December.
The Dow closed down 767 points for its worst day of 2019 — the S&P 500 tumbled almost 3% and the Nasdaq was off nearly 3.5% — as China let its currency weaken to historically low levels amid its ongoing and escalating trade war with the US.
"China’s central bank said ... Washington’s decision to label Beijing as a currency manipulator would “severely damage international financial order and cause chaos in financial markets."
WSJ: Stocks regain ground, yuan stabilizes
China’s central bank signaled it wouldn’t let the yuan fall much further, a day after escalating trade tensions triggered sharp declines on Wall Street.
The Times: Johnson to defy any vote of no confidence
Refusal to quit risks drawing the Queen into politics.
Boris Johnson would refuse to resign even after losing a confidence vote so he could force through a no-deal Brexit on October 31, under plans being considered by Downing Street.
Can a no-deal Brexit be prevented by the UK’s parliament? FT reports, even if PM loses a confidence vote he plans to delay an election until after EU departure.
Britain ‘delusional’ over prospect of US trade deal, says Larry Summers: The Times reports, Brexiteers are “delusional” if they believe that a “desperate” Britain can strike an advantageous trade deal with the United States, a former US treasury secretary has warned. Larry Summers, who served in Barack Obama’s administration as director of the National Economic Council, said that Britain had “no leverage” in any trade negotiations.
Ireland’s Brexit burn: The country’s biggest companies are getting a taste of the pain that could come from the UK crashing out of the European Union without a deal.
Ryanair, Bank of Ireland among those seeing Brexit impact
Irish stocks drop as impasse around border backstop deepens
Doubts rise over Europe’s readiness for a no-deal Brexit: WSJ reports, EU dusts off contingency plans for a messy split after Boris Johnson says the U.K. will leave with or without a pact by Oct. 31.
Nicola Sturgeon: ‘If we crash out with no deal, Corbyn will be almost as responsible as May or Johnson’: Guardian reports, Scotland’s first minister on her infamous doorstep encounter with the new PM, why the government’s Brexit plans are ‘catastrophic’ – and why people in England should move to Scotland.
The Fringe Festival hedges its bets: Fears of a no-deal Brexit have bludgeoned the pound—and Edinburgh's world famous Fringe Festival is feeling the impact. The festival's director said visiting artists are being paid in dollars or euros, and that to limit volatility, organizers hedged most of its currency dealings more than half a year ago.
German flying: In Germany, 16 percent of the country’s flights are domestic, in a nation roughly the size of Montana. The German government is a major consumer of those domestic flights, booking roughly 230,000 domestic flights in 2018, 52 percent of which were between Berlin and Cologne-Bonn Airport. Bonn is home to six of Germany’s 14 national ministries, owing in part to its history as the capital of West Germany.
Israel scrambles to avoid Trump blowback over Chinese investments: Axios reports, officials from Israel's Foreign Ministry warned in a classified Cabinet meeting last month that if the Israeli government doesn’t create a strong monitoring mechanism on Chinese investments, it could lead to a harsh confrontation with the Trump administration, 2 ministers who attended the meeting.
Uganda begins largest trial of experimental Ebola vaccine: AP reports, researchers in Uganda have launched the largest-ever trial of the experimental Ebola vaccine that is expected to be deployed in neighboring Congo, where a deadly outbreak has killed over 1,800 people. The trial of the Janssen Pharmaceuticals vaccine involves up to 800 people in the western district of Mbarara and is supported by Doctors without Borders and the London School of Hygiene and Tropical Medicine.
Venezuela: The Lima Group is a bloc of Latin American countries – and Canada – that is pushing for a transition to democracy in Venezuela. It meets in Peru tomorrow and several of the nations that have declared support for Venezuela’s embattled president, Nicolás Maduro, will be there, including Turkey and China. They’ll be alongside countries who want him gone – the US chief among them. “Tuesday’s meeting will be a way to engage some of the major international actors and see how committed they are to the Maduro administration,” says Antônio Sampaio, research associate at the International Institute for Strategic Studies in London.
US expands sanctions against Venezuela into an embargo: WSJ reports, new measures mark a significant escalation of pressure against the regime of President Nicolás Maduro and countries including Russia and China that continue to support him.
Commerce Department data shows both imports and exports fell in June, suggesting Trump’s trade rhetoric could be restricting global trade flows, Reuters reports.
The Times: Pakistan will stand by Kashmir ‘to the very end’
"Pakistan’s army has said it is “prepared and shall go to any extent” to support Kashmir after India imposed direct rule on the state, threatening a new crisis that could destabilise the region."
Bloomberg: Pakistan army will go to ‘any extent’ against India’s Kashmir move
In a tweet, the army said it “stands by the Kashmiris in their struggle to the very end.”
Indonesia and India seek Olympic glory with rival bids: Nikkei reports, both see 2032 Games as a chance to step out as global powers.
US-Japan trade deal: Talks between Washington and Tokyo are moving forward, but Japan’s top negotiator said it remains unclear whether the two sides will be able to reach a deal by the time Trump and Prime Minister Shinzo Abe meet in September.
China vows to punish Hong Kong protesters who break the law: WSJ reports, the Chinese government’s support for Hong Kong Chief Executive Carrie Lam is “firm and steadfast,” a spokesman said, pledging to punish protesters who break the law.
China warns Hong Kong protesters not to 'play with fire': Reuters reports, protesters in Hong Kong must not "play with fire" and mistake Beijing's restraint for weakness, China said on Tuesday in its sharpest rebuke yet of the "criminals" behind demonstrations in the city whom it vowed to bring to justice.
North Korea conducts 4th missile test in less than two weeks.
Bloomberg: A forever trade war looms as Trump deepens battle with China
"While we expect trade tensions with China to persist after 2020 regardless of the winner of the election, stocks that are highly sensitive to trade policy are likely to respond more strongly to the campaign and its outcome." -- Goldman Sachs
Bloomberg: China retaliation is ‘11’ on scale of 1 to 10, Wall Street warns
BMO asks how much further the yuan will be allowed to fall
Morgan Stanley’s Graseck sees investors’ eyes on bank margins
Hopes fade for quick end to US‑China trade war: The Times reports, investors have been warned to brace themselves for a prolonged dispute between Washington and Beijing as analysts taper predictions of an imminent resolution to Trump’s spralling trade war with China. Goldman Sachs no longer believes that the world’s two largest economies will strike a trade deal before next November, when Mr Trump will contest the second presidential election.
Guardian: China accuses US of 'deliberately destroying' world order
Trade war rhetoric ratchets up as Beijing responds to US claim of being ‘a currency manipulator.’
Bloomberg: China acts to limit yuan plunge, bringing some relief to markets
WP: Treasury Dept. designates China a ‘currency manipulator,’ a major escalation of the trade war
WSJ: US designates China as currency manipulator
Stocks tumble as the two nations swap blows over trade
FT: US Treasury labels China a currency manipulator
Decision comes after Beijing let renminbi fall through key level.
Politico: Treasury designates China as a currency manipulator
WP: Trump is increasingly relying on himself — not his aides — in trade war with China
The Treasury Department’s formal announcement that it had labeled China a “currency manipulator” came six hours after President Trump did it himself, on social media.
WSJ - Editorial: Trade war becomes currency war: Exchange-rate shifts introduce a new risk to global growth. https://on.wsj.com/2MFQvGc
"Trump claims trade wars are easy to win, but that boast looks worse than ever amid the financial carnage from his latest threat of tariffs on Chinese goods. His trade war has now become a currency war, which raises the potential economic harm to another level."
FT - Editorial: China shows its strength by allowing the renminbi to slide: The drop through Rmb 7 per dollar will have limited economic impact.
Alan Beattie: Currency manipulator: not that one again. (October 18, 2012) https://on.ft.com/2MBhJ0K
Penalties for being a currency manipulator?
If the Secretary considers that such manipulation is occurring with respect to countries that (1) have material global current account surpluses; and (2) have significant bilateral trade surpluses with the United States, the Secretary of the Treasury shall take action to initiate negotiations with such foreign countries on an expedited basis, in the International Monetary Fund or bilaterally.
And that’s it. It is linked to no other piece of legislation and carries no more sanctions. None.
Mark Sobel and David Marsh: 'Foolhardy' to cry manipulation: No basis today for US Treasury to label China a currency manipulator. http://bit.ly/2YsIBad
Paul Krugman: Trump’s China shock: What the heck is going on? https://nyti.ms/2MFPw8Y
"So how does this all end? I have no idea. More important, neither does anyone else. It looks to me as if both Trump and Xi have now staked their reputations on hanging tough."
Kurt M. Campbell and Jake Sullivan: Competition without catastrophe: How America can both challenge and coexist with China. https://fam.ag/2MMmox3
Richard McGregor: How the state runs business in China: Much of modern China’s epic growth was driven by private enterprise – but under Xi Jinping, the Communist party has returned to being the ultimate authority in business as well as politics. http://bit.ly/2YqGZOh
China warns US against Asia missile deployment: DW reports, Beijing "will be forced to take countermeasures," if the US deploys intermediate-range missiles in the region. A senior official also called on neighboring countries to "exercise prudence" about hosting any missiles.
British frigate shadows Chinese warship in the English Channel: AP reports, Britain’s Royal Navy says one of its ships shadowed a Chinese destroyer as it sailed through the English Channel.
Cold War II: Ian Bremmer, president of the Eurasia Group, in a letter to clients, calls them "geopolitical 'fat tail' risks." Tensions between the US and China, he writes, have "hit a tipping point," with the risk of destabilizing global technology supply chains.
Italy fiscal crisis
China vs. Hong Kong
Trump and Taiwan
Bremmer's bottom line: The likelihood of every single one of these "is likely to increase over coming months. [I]f in a normal geopolitical environment these would be, individually, 1-5% scenarios, over the coming year they’re more like 10-30%. [I]n other words, we should expect at least one or two to actually happen. [A]nd that’s not priced into the markets right now."
Here's how Jeb Bush put it on Twitter: Apart from the two tragic mass murders, this weekend saw: China's devaluation of the yuan and suspension of US ag exports into the country; Japan and South Korea in a full fledged diplomatic fight started over Japan's occupation of Korea 80 years ago; ... the escalation of the crisis in Hong Kong; India scrapping the special autonomous status in parts of Kashmir; Turkey amassing tens of thousands of troops along the Syrian border to attack the Kurds; Moscow police arresting 600 people for participating in an "unsanctioned rally" ... no progress on Brexit; and Iran interdicting an Iraqi fuel vessel. And to think many now believe that America's leadership in the world is not necessary."
Drone delivery coming soon? The first FAA-approved 'beyond-line-of-sight' drone flight has been completed, in a pilot program with the University of Alaska Fairbanks over an oil pipeline. The major advance is welcome news for retailers like Amazon seeking to speed up deliveries by drone.
What nimbler and more autonomous drones mean?
5G connectivity will make a drone's communications harder to jam or hack into, and increase its range.
A new independence from GPS — which nearly all drones currently rely on — will make jamming them harder. Cameras, sensors and built-in maps will take its place.
Drone swarms, already being tested by militaries, could easily overwhelm defenses just by sheer numbers.
Electric scooters aren’t quite as climate-friendly as we thought: A life cycle analysis of the dockless scooter industry reveals plenty of carbon emissions.
Battery-powered ships next up in battle to tackle emissions: Four Japanese companies have teamed up to build the world’s first zero-emission tanker by mid-2021 that will be powered by large-capacity batteries and will operate in Tokyo Bay, according to a statement on Tuesday. The new company e5 Lab Inc. is a venture between Asahi Tanker Co., Exeno Yamamizu Corp., Mitsui O.S.K. Lines Ltd. and Mitsubishi Corp.
Guns + Congress: Nancy Pelosi and Chuck Schumer called on Mitch McConnell this afternoon to bring the Senate back from its August recess for a special session to take up a gun background checks bill passed by the House earlier this year.
Bloomberg: Republicans fear 'extinction in the suburbs' over gun control
WSJ: Trump campaign plans an economy-focused pitch to women. Will it work?
Many women in swing suburban districts say their views on the president’s behavior and policies, not economic expansion during his tenure, will drive their votes in 2020
Laurie Walker, 52, of Ashburn, VA, who voted for Trump in 2016 and is undecided about 2020, said the president is “managing the economy and economic decisions well. Everything else is terrible.”
Trump wants to pull all US troops out of Afghanistan by 2020 election, officials say: NBC News reports, Trump has told his advisers that he wants to pull all US troops out of Afghanistan by the November 2020 presidential election, according to five current and former administration and military officials.
Poll: Dems say Warren reigned in second primary debates: Sen. Elizabeth Warren easily prevailed in last week’s primary debates in Detroit, according to a new poll out Tuesday. Three out of 10 respondents dubbed Warren the winner for her debate performance last week, a POLITICO/Morning Consult poll of registered Democratic primary voters found. Sen. Bernie Sanders and former Vice President Joe Biden rounded out the top three with 18 percent and 14 percent of respondents dubbing them the top performers, respectively.
Hickenlooper for Senate? Some politicos are saying that former Colorado Gov. John Hickenlooper is poised to end his failed presidential campaign and return home to challenge Sen. Cory Gardner (R-CO). The speculation is largely coming because new Hickenlooper for Senate campaign domain names were just registered in the past few days.
Democrats become the Hannibal Lecter party: Politico reports, Republicans made a virtual industry of lionizing Ronald Reagan after he left office. The same cannot be said of Democrats' treatment of Barack Obama's legacy.
Ivanka aeternum: New York Magazine reports, after the White House, she probably can’t go back to the city that made her. So she has cannily devised another exit strategy.
Brigadoon Annapolis 2019 | Salon Dinner + Sailing
Topic: Thought Leader Mindset
Sailing: Liberte, The Schooner
More details + tickets - here.
Berkshire Hathaway's cash pile: Warren Buffett's business now has $122 billion in cash—a fresh record, driven by a rising U.S. stock market.
Andreessen Horowitz has participated in 127 deals totaling $7.3 billion in the past 18 months. From real estate to early-stage blockchain to computational biology.
For digital sports media, the goal is getting their audience to wear them: The core competency for digital sports media publishers, both legacy brands and startups, has traditionally been some form of content: text, video, social media and now podcasts, for some. But publishers’ focus in recent months has shifted to e-commerce, especially merchandise and apparel.
Facebook to slap its name on Instagram and Whatsapp: Facebook has confirmed earlier reports that it’s going to add its name to the Instagram and Whatsapp brands. According to Bloomberg, the platforms will be branded as “Instagram from Facebook” and “WhatsApp from Facebook.”
Barneys New York files for bankruptcy: FT report, luxury department store chain plans closures as it secures $75m in emergency funding
An American living in Germany digitally: Some US Twitter users are moving their account profiles to Germany to avoid online hate, according to CNBC. In Germany, local laws prevent pro-Nazi content.
WSJ: GateHouse Media parent to buy Gannett for $1.4 billion
Deal combines largest owner of US newspapers by titles and the largest newspaper group by circulation.
US restaurants are resorting to fake guacamole: Soaring avocado prices are to blame for knockoff recipes which incorporate squash or other alien veggies.
More beards = less revenue: P&G announced a $5.24 billion loss due to the struggles of its Gillette shaving business, in part because many hirsute men are ditching razors. P&G reported an after-tax charge of $8 billion on its Gillette Shave Care line, reflecting accumulated currency devaluations since it acquired the business, and because many men have stopped shaving. “Lower shaving frequency has reduced the size of the developed blades and razor’s market,” said Jon Moeller, P&G’s chief financial officer, in the post-earnings call with analysts, also blaming new, lower-priced competitors like Unilever’s Dollar Shave Club and Harry’s.
Douglas Brundage: Benetton was the master of viral marketing long before the term even existed: United Colors of Benetton was founded in 1965 by siblings Luciano, Giuliana, Carlo, and Gilberto Benetton. Clothing worker Luciano had been selling sweaters made at home by Giuliana to stores in nearby Treviso since 1955 before Carlo and Gilberto came aboard in 1965 and Benetton opened its first factory. The brand the Benettons went on to build is important not only because of the clothing but because of the way it was sold. For those wanting to learn how brands today market their products successfully in a crowded global marketplace, there is no better case study than Benetton. http://bit.ly/2MGuuHa
Tencent in talks to buy 10% of Universal Music Group.
Who is the most popular game show host? Alex Trebek of ‘Jeopardy!’ tops list, followed by Vanna White and Pat Sajak of ‘Wheel of Fortune.’
How London became the center of the world: Three decades of growth reinvented the urban landscape in London—and transformed it into the preeminent global city. But amid growing pains and with Brexit looming, can it stay on top? https://on.natgeo.com/2YumCQa
Wayne Rooney to make shock return to England as Derby County player-coach in January: The Times reports, Wayne Rooney is set to join Derby County. This time three years ago he planned to end his career at Manchester United. But then came his emotional homecoming to Everton, followed by a lucrative move to Major League Soccer to play for DC United and now, all smiles as he landed at Heathrow this morning, he appears ready to put the finishing touches to an improbable move to Derby.
College hoops: Evan Mobley, the 7-foot-tall No. 1 prospect in the 2020 class, announced his commitment to USC on Monday.
The finals of the FIFA eWorld Cup: Contested on Xbox and Playstation since 2004, unfolded over 58 hours of digital soccer action at London’s O2 Arena. Mohammed “Mo Auba” Harkous of Germany won the title and the $250,000 prize. Millions entered the tournament’s early stages and were whittled to a final group of 32 in London.
Superstar athletes popularize unproven stem cell procedures: Treatments for baseball pitcher Max Scherzer and other pros may mislead fans about costly, controversial, unapproved stem cell shots.
Sally Jenkins: How does Tom Brady do it? It starts with science and ends with something less precise. Laugh at Brady’s avocado-chia smoothies if you want, but at age 42 and with a new contract in hand, his health and training habits line up with everything scientists know about anti-aging and avoiding illnesses such as arthritis. https://wapo.st/2Yrcsjy
Enjoy the ride + plan accordingly.