A Landmark Step.

News Items is “the most valuable newsletter out there.” — Peggy Noonan.

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1. Scientists in the UK have taken the first steps in a new program to create whole human genomes from laboratory chemicals, which they say could eventually transform biology and medicine. It will allow human DNA to be altered on a scale that is not possible with the more limited gene-editing techniques available today, and could be used for many applications such as making human cells resistant to viruses or altering the immune system. The £10mn Synthetic Human Genome Project, funded by the Wellcome Trust, has successfully demonstrated that a synthetic chromosome can be transferred to a human cell. It is a “landmark step for synthetic biology”, said James Collins, professor of medical engineering at Massachusetts Institute of Technology, who is not involved in the project. “This work lays essential groundwork for the engineering of synthetic human genomes and the transformative applications that will follow.” (Source: ft.com)

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2. China is redrawing the global science map, according to an analysis of citation data by the analytics firm Clarivate. The country is increasing research collaborations with European partners, even as it expands into emerging areas from southeast Asia to the Middle East and Africa. The United States, meanwhile, is losing its long-held lead as a research powerhouse and collaborator in world science. The analysis, which is based on a quarter of a century of citation data from the Web of Science, also warns of the looming consequences of policies instituted by the administration of US President Donald Trump. Among other actions, it has cut grant funding, sought to restrict the number of foreign students and undermined research in crucial areas such as vaccines and climate change. “We have expected throughout our lifetimes to see the US leading everything, and it isn’t any more,” says Jonathan Adams, chief scientist at Clarivate’s Institute of Scientific Information in London. “From the point of view of wealth creation and quality of life in the US, that’s a significant concern.” (Sources: nature.com, clarivate.com)

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3. Robin Brooks:

Back in September, I wrote a series of pieces on how falling short-term interest rates were concealing a scary rise in long-term yields. This issue has grown even more acute since then. The Fed has resumed its easing cycle, short-term interest rates have fallen further and longer-term yields - when properly measured - are at or near their highs. We’re in the early stages of a global debt crisis that’s building and intensifying….

Traditional safe havens are failing: in the past, Japan and Germany would have been safe harbors in this kind of environment, but these days they’re at the heart of the rise in long-term yields. In Japan, this is because the Bank of Japan (BoJ) is stepping back from keeping long-term yields artificially low in order to stabilize the Yen. In Germany, it’s about the current government’s large fiscal stimulus and recent moves to soften up the debt brake.

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4. Ambrose Evans-Pritchard:

Yields on Japanese debt have spiked wildly across the maturity curve since Sanae Takaichi took power six weeks ago and shocked investors with a “low quality” fiscal expansion of $135 billion, including such gems as rice vouchers and subsidies for fossil fuels – ploys to mask the inflationary consequences of her own policies.

The scale of this populist misadventure is sending tremors through the international financial system, as well as horrifying the economic establishment in Tokyo.

The benchmark 10-year bond yield jumped to 1.94 percent in intraday trading in Tokyo, up from 1.79 percent a week ago and a whisker shy of highs last seen in 1997. The speed of the move in the once-glacial $12 trillion market for Japanese public and private debt is almost frightening. (Source: telegraph.co.uk)

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5. Chancellor Friedrich Merz’s ruling coalition with the Social Democrats faces a key vote in parliament today that could precipitate its demise only seven months into its four-year term. A group of about 18 younger lawmakers from the conservative leader’s own party has rebelled against the government’s pension bill, which is due to go to a final ballot in the Bundestag at around 12:30 p.m. in Berlin. Although it’s unclear how many of them might reject the law, it threatens to wipe out the coalition’s majority of just 12 seats and deal another blow to Merz’s credibility. If he is unable to control his own parliamentary caucus over a signature issue for the SPD, it could cause irreparable damage to the government’s ability to pass legislation and prompt one or both partners to pull the plug on their alliance. That could lead to a new election at a time when the far-right Alternative for Germany, or AfD, is in first place in some polls. (Source: bloomberg.com)