Weekend News Items.
14 September 2019. By John Ellis.
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1. Bruce Riedel: "Eighteen years after the 9/11 attacks, the al-Qaida organization that carried them out is a shell of its previous self. The global campaign against Osama bin Laden’s creation has achieved notable success. The ideas that inspired bin Laden and his followers have lost some, but not all, of their attractiveness. There is no place for complacency, but the threat is different." Read the whole thing.
2. The Taliban sent a team to Russia, and plans to visit China, Iran and Central Asian states to gauge support for the U.S. to be forced to leave Afghanistan, Reuters reported, citing the group’s officials. The group wants to keep regional leaders informed about the breakdown of the talks and U.S. President Donald Trump’s decision to suspend the process just before a peace treaty, the report said, citing an unidentified senior Taliban leader.
3. Drone strikes caused fires at two facilities of Saudi Arabia’s vast state oil company early Saturday, the kingdom’s interior ministry said, marking the latest in a series of attacks on the country’s petroleum assets in recent months. Authorities were investigating the strikes on Aramco’s facility at Abqaiq in the kingdom’s Eastern Province and another at the Hijra Khurais oil field, the interior ministry said in a tweet.
4. UK Prime Minister Boris Johnson is planning to force a new Brexit deal through parliament in just 10 days — including holding late-night and weekend sittings — in a further sign of Downing Street’s determination to negotiate an orderly exit from the EU. According to Number 10 officials, Mr Johnson’s team has drawn up detailed plans under which the prime minister would secure a deal with the EU at a Brussels summit on October 17-18, before pushing the new withdrawal deal through parliament at breakneck speed.
5. Boris Johnson’s hopes of getting a deal through the Commons have been given a boost by Labour MPs who are indicating that they could back a new compromise. The prime minister said that a “rough shape of a deal to be done” was emerging before his first meeting with Jean-Claude Juncker, the outgoing president of the European Commission, on Monday. He will also meet Michel Barnier, the EU’s chief Brexit negotiator.
6. Mark Landler: "It started with claims that Prime Minister Boris Johnson of Britain lied to the people and ended with charges that he lied to the queen. In between, there was a political spectacle so gaudy and unheard-of in this country that it raised a stark question: Is Britain in a constitutional crisis? The answer, by most accounts, is not yet. But Britain is in a profound political crisis, one that has brought with it a strange argot of upheaval — prorogation, purges, lying — and a Parliament paralyzed by the task of carrying out the fateful vote of the British public to leave the European Union."
7. Wages in the eurozone increased at their fastest clip in a decade as the regional labour market shows it has stayed strong despite weakening economic growth. In the second quarter, nominal wages rose 2.7 per cent versus the comparable three months last year, data from Eurostat showed, equalling the revised figure for the first quarter and the fastest pace since 2009. “Robust employment growth and increasing wages continue to underpin the resilience of the euro area economy,” said Mario Draghi at his penultimate meeting as president of the European Central Bank when it announced new measures to boost the weakening eurozone economy.
8. China has called on its biggest state firms to take a more active role in Hong Kong, including stepping up investment and asserting more control of companies in the financial hub, executives familiar with the matter said, as Beijing attempts to calm months of unrest in the city. At a meeting this week in Shenzhen, the city bordering Hong Kong, senior representatives from nearly 100 of China’s largest state-run companies were urged to do their part to help cool China’s biggest political crisis in years, three executives, including one who was present, told Reuters.
9. Russia wants more Asian food companies to use farmland in its Far East as the country seeks to open up new export markets. The government has already helped to attract companies including Chinese conglomerate Legend Holdings Corp. and China Mengniu Dairy Co. Ltd. to invest in its Far East. Russia is now considering requests from Asian firms to farm another 1 million hectares (2.5 million acres) -- an area roughly the size of Jamaica, according to the head of a government agency.
10. Congress opened a new front in the government’s antitrust probe of giant technology firms, with House lawmakers on Friday, demanding emails and other records from some of the industry’s top chief executives as they look for evidence of anticompetitive behavior. The requests from House Judiciary Committee leaders from both parties to Amazon.com, Facebook, Apple and Alphabet, owner of Google, set up potential conflicts between tech leaders protective of their business tactics and lawmakers who want to scour their corporate records. Among other requests, the committee asked the firms to provide by Oct. 14 reams of documents, including executive communications and financial statements as well as information about competitors, market share, mergers and key business decisions.
11. Technology start-ups spent $44 billion on advertising and cloud computing from Facebook, Google and Amazon last year, according to new estimates that underline the growing economic clout of venture capital-backed businesses. Research by the hedge fund Bridgewater found that spending by private tech start-ups made up about 10 per cent of the revenue of tech giants and accounted for more than 0.4 per cent of global economic activity. That figure is close to the peak of roughly 0.6 per cent reached during the tech bubble of 2000 and will stoke concerns of overheating in private markets, where deep-pocketed backers are subsidizing frequently unprofitable tech business models.
12. The talk among industry insiders at the Frankfurt International Auto Show, one of the industry’s biggest events, reflected the existential threats that carmakers face. European and global auto markets are in decline. Carmakers are betting their futures on electric vehicles whose marketability is untested. Manufacturers are under intense public and regulatory pressure because of the role that vehicles play in climate change. The global trade war has disrupted supply chains. Even auto shows are under threat.
13. U.S. retail sales increased more than expected in August, pointing to solid consumer spending that should continue to support a moderate pace of economic growth. The report from the Commerce Department on Friday could further allay financial market concerns of a recession, which have been fueled by a year-long trade war between the United States and China as well as slowing global growth.
14. U.S. government bond yields posted their biggest weekly advance in more than six years, rising for five consecutive sessions after signs of a thaw in trade tensions eased fears about the direction of the economy. Yields climbed Friday after the Commerce Department said that retail sales rose a better-than-expected 0.4% last month. That pushed yields on the benchmark 10-year Treasury note to a close of 1.901%, up from 1.789% Thursday.
15. U.S. state and local governments, along with universities, are joining companies in a dash to issue debt and lock in low rates, sometimes for up to 100 years. Adding to the urgency for issuers: the lows in bond yields may already have passed. The yield on the 10-year U.S. Treasury note, for example, has jumped by more than a quarter percentage point in recent days.
16. SoftBank Group Corp. plans to buy at least $750 million of the shares in WeWork’s impending IPO, a move that could allow the office-sharing company to shore up an offering that has been plagued by tepid investor demand. The Japanese technology conglomerate, already the biggest investor in WeWork’s parent, would end up with 25% or more of the shares sold in an offering that’s expected to raise at least $3 billion and value the startup at between $15 billion and $20 billion, according to people familiar with the matter.
17 This seems preposterous, but here it is: "Federal investigators are probing the conduct and practices of Mithril Capital, a venture capital firm co-founded by Peter Thiel, Recode has learned. US officials — including the FBI — have in recent months questioned some people close to Mithril regarding concerns of possible financial misconduct at the firm, according to people familiar with the matter who insisted on anonymity given its sensitivity. Mithril confirmed in a statement that its lawyers are in touch with government authorities."
18. Lawfare: “Did a federal grand jury refuse to hand up an indictment of former FBI Deputy Director Andrew McCabe? No media organization has reported that this is what happened Thursday, but something clearly happened when the grand jury met—and that something wasn’t the McCabe indictment that everyone was expecting…..It is hard to express what an incredibly rare occurrence a grand jury refusal to return what is called a “true bill” would be, if that is indeed what took place. It may not be quite accurate that, as the saying goes, a prosecutor can get a grand jury to indict a ham sandwich, but the sentiment gets at something real. The Bureau of Justice Statistics indicates that between October 2013 and September 2014—the last year these data were publicly available—the department investigated almost 200,000 cases and declined to prosecute roughly 31,500. Of the latter category, just five of those cases were declined because a grand jury returned no true bill—a percentage so small that the Bureau of Justice Statistics declines to actually write it out.”
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Political Links: Tunisian presidential election is tomorrow. Israel's election is Tuesday. Netanyahu will almost certainly win. Mr. Cameron regrets. Matteo Renzi ready to undermine Italian coalition with new party. The AfD's ongoing slide toward right-wing extremism. Wall Street Journal analysis: Slowdown isn't hurting Trump in key Midwest counties. Trump hopes to put New Mexico in play in 2020. Senator Cruz (R-TX) hopes to run again for president. Peggy Noonan: "everyone knows Donald Trump is a mental case." Not The Onion: House GOP to run on reducing national debt. Post-debate blather; a compendium. Los Angeles Times poll: Biden leads, Sanders "second," Warren rising.