Weekend Papers Summary
FINANCIAL TIMES
-Central bankers in Europe and the US are close to declaring victory over the biggest inflation surge in a generation, with new data giving policymakers confidence they can cut rates by the summer. US jobs growth figures for December and January were downgraded, cementing investors' expectations of a rate cut by June. Eurozone data showed wage and profit growth easing. Federal Reserve chair Jay Powell said the US central bank was "not far" from having the confidence to start lowering borrowing costs. European Central Bank president Christine Lagarde said policymakers had begun discussing the dialing back of their restrictive stance and celebrating progress towards their inflation target. The question now is whether the Fed will wait to cut rates until September.
-President Biden faces a close race against a divisive predecessor who is alienating moderate and swing voters and has 91 criminal charges, including for his role in overturning the 2020 election results. His own problems could undercut his chances, including doubts about his physical and mental fitness, a backlash from the left over America's support for Israel, fears about immigration at the southern border, and persistent gloom over inflation. Some Democrats worry that Biden is behind, as he trails Trump by 1.8 percentage points in a head-to-head match up nationally and his approval rating is below 40%. Paul Begala, a Democratic strategist who advised former president Bill Clinton, believes that if the election were held today, he would lose. However, the election is not being held for 243 days, so Biden may have the right strategy and political skills to turn the tide.
-The Behshad, an Iranian dry bulk carrier, has been under increasing scrutiny for its role in providing targeting information to Houthi rebels. The vessel moved to the Gulf of Aden in January after years in the Red Sea, just as attacks on vessels surged in the vital waterway off Yemen. Experts have noted a drop in Houthi attacks during a period last month when the Behshad was seemingly out of action. Jon Gahagan, president of maritime risk specialist Sedna Global, said that for a supposed cargo vessel, the behavior of the Behshad, registered and flagged in Iran, was “extremely unusual”. He asked major questions about its role in the current crisis and the links to the attacks.
-The Pentagon has announced that it will take 60 days and over 1,000 forces to build a floating pier and causeway off the coast of Gaza to deliver humanitarian aid into the besieged territory. The plan comes amid growing frustration among Israel's allies over its failure to prevent a humanitarian crisis in Gaza, where easier land routes have been shut. The US will build the 1,800-foot pier and causeway at sea, then propel it into the shore. The floating structures will allow for the delivery of 2M meals per day. The US is coordinating with ally and partner nations, the UN, and humanitarian NGOs on the distribution of assistance into Gaza.
-The US Congress has approved legislation to fund key agreements with Pacific Island nations, including the Compacts of Free Association (COFA). The Senate provided $7.1B in funding over 20 years for the agreement, which grants the US exclusive military access to Palau, the Marshall Islands, and the Federated Republic of Micronesia in exchange for economic support. The funding was part of a $460B spending package to prevent government agencies from shutting down at midnight. The three small Pacific island nations provide critical access to the US, helping to overcome the Pentagon's "tyranny of distance" and base missiles and early warning radars.
-Wu Qing, the new head of the China Securities Regulatory Commission, has been criticized for his "broker butcher" nickname. He defended the key Chinese characters in market regulation, stating that the key Chinese characters are "strong" and "severe." Wu's more forceful approach, including crackdowns on quant funds, has produced visible results, with China's benchmark CSI 300 index climbing 14% since February. However, there is little renewed appetite among local and foreign investors, who want more monetary and fiscal stimulus from Beijing. A rally in Chinese government bonds reflects persistent concerns over slowing growth. The CSRC's punitive actions have been attributed to the "national team" of state-run institutions buying alongside the CSRC's actions.
-Donald Trump has posted a $91.6M bond to prevent the collection of an $83.3M civil judgment for defaming writer E Jean Carroll. The sum, insured by Chubb Corporation, was posted in Manhattan federal court as part of an appeal against the decision. Judge Lewis Kaplan, who oversaw the Carroll case, refused to grant Trump's request to temporarily stop Carroll's lawyers from collecting. Kaplan also declined to rush through a ruling on whether he should be allowed to appeal without posting the full amount.
-Israeli Cyber security startup Wiz is in talks to raise funds at a valuation of over $10B, indicating a revival in venture capital markets. Founded four years ago, Wiz is in talks with investors like Thrive, Light Speed Venture Partners, and G Squared to raise hundreds of millions of dollars. The company could aim to raise around $800M. The funding could help finance future acquisitions of other tech groups, bolstering Wiz's offering. Wiz, Thrive, Lightspeed, G Squared, Sequoia, and Cyberstarts declined to comment.
-French defense companies are planning to repair and manufacture military equipment locally in Ukraine as Paris seeks to rally western allies to help local forces resist the Russian invasion. The companies involved are KNDS, a joint-venture of France's Nexter and Germany's Krauss-Maffei Wegmann, Arquus, a military vehicle maker and supplier of chassis, and drone maker Delair. The first production could begin by this summer. The move is part of a broader push among European defense companies to shift production, repair, or maintenance functions into Ukraine as the war continues and shortages of ammunition hinder Ukrainian soldiers' ability to fight. Ukrainian President Volodymyr Zelenskyy hosted a conference in Kyiv in September to attract companies.
THE NEW YORK TIMES
-The Senate approved a $460B spending bill to fund half the federal government through the fall, a resolution to a spending stalemate that has pushed the government to the edge of shutdown. The 75-to-22 vote resolved a spending stalemate that consumed Congress for months. The White House halted shutdown preparations and President Biden is expected to sign the bill on Saturday. Top lawmakers are still negotiating spending bills for the other half of the government.
-Republicans claimed to use their majority to cut the budgets of federal agencies, including the Federal Bureau of Investigation (F.B.I.), which they claimed had been weaponized against them. Speaker Mike Johnson unveiled a package of six government spending bills he negotiated with Democrats, which is on track to clear Congress. However, the story of the F.B.I. cut is more about how a powerful senator used budgetary sleight of hand to steer hundreds of millions of dollars to a single project in his state, only to see the money slashed by members of his own party after he retired.
-Canada will resume funding for the United Nations Relief and Works Agency (UNRWA), the main agency supporting Palestinian refugees in Gaza, following allegations by Israel that a dozen of UNRWA's 13,000 employees were involved in Hamas-led attacks on Israel. The announcement follows an interim report from the UN office investigating the claims and the agency's immediate steps to improve oversight and accountability. The UN has also commissioned an external review.
-President Biden and Israeli Prime Minister Benjamin Netanyahu are set to hold a "come-to-Jesus meeting" to address the humanitarian crisis in Gaza. This comes amid rising tensions between the two leaders, as the civilian death toll in Gaza has risen. Biden has been under pressure to pressure Israel to agree to a cease-fire. He had expressed hope for a six-week cease-fire deal by Ramadan, but negotiations between Israel and Hamas have reached an impasse. Biden has stated that a deal is "looking tough" and that a deal cannot be reached by Ramadan.
-President Biden launched his second term campaign with a populist pitch and an aggressive attack on his Republican challenger, former President Donald J. Trump. Biden used the themes of his State of the Union address at a rally in Wallingford, Pa., to capitalize on his nationally televised performance and galvanize Democrats who have been anxious about his age and poor poll numbers. He targeted billionaires, corporations, pharmaceutical companies, banks, credit card companies, and potato chip makers as targets to gouge consumers and duck their fair share of taxes. However, his favorite villain will still be Trump, his opponent from 2020, in a rematch set by this week's Super Tuesday primaries. Biden cited Trump and the MAGA Republicans as trying to take away our freedoms, stating that Democrats will not let him.
-Donald Trump and President Biden both addressed the upcoming presidential election, presenting different visions of the nation's past, present, and future. Trump evoked the halcyon days of his presidency, where there were no wars and the nation was universally admired and united in egalitarian prosperity. Biden, on the other hand, conjured a mirror image of a country that is now "literally the envy of the world" and a past that was "one of the toughest periods in the nation's history." Both men shared the political goal of rallying their base voters, rather than pivoting to the center to appeal to fence-sitters and foes.
-A private dinner in Paris on July 4, 2022, aimed to strengthen the relationship between France and Germany. Chancellor Olaf Scholz praised the exchanges, but President Emmanuel Macron warned that the situation would be challenging. In 2024, the exchanges have revealed deeper differences over Ukraine, Russia, and the US. Macron reiterated his refusal to rule out Western troops in Ukraine, surprising allies who wanted to avoid direct confrontation with Russia. Germany pushed back, but Macron responded in kind. Macron criticized Berlin for its postwar history after the Nazi trauma, a jab Berlin took as an insult. German defense minister Boris Pistorius responded that discussions about boots on the ground or having more or less courage were unnecessary. The Franco-German relationship, built since 1945, remains central to Europe's cohesion and global power. However, the bond seems to be fraying at a time marked by a European war and uncertainty over America's future commitment to Europe.
-OpenAI has concluded an investigation into the firing of Sam Altman over three months ago, marking a victory for the CEO as he regains control of the artificial intelligence company he helped create. OpenAI stated that Altman did not do anything that justified his removal and would regain the role of a board of directors. Altman's ouster stunned Silicon Valley and threatened the future of one of the tech industry's most influential start-ups. When he returned to OpenAI in November, he agreed to an investigation of his behavior and board actions. Two members who voted for his removal agreed to step down, and their replacements, from outside the company, oversaw the investigation by the law firm, WilmerHale. Bret Taylor, chairman of OpenAI's board, said the highly anticipated report about the episode was finished, but the company did not release the report.
THE NEW YORK POST
-Former President Donald Trump has expressed his opposition to a proposed TikTok ban in Congress, claiming it would benefit Facebook, which he referred to as "a true Enemy of the People." Trump referred to Meta founder and CEO Mark Zuckerberg as "Zuckerschmuck" in a Truth Social post. Zuckerberg banned Trump from Facebook and Instagram in January 2021, following a storming of the US Capitol by his supporters. Trump later stated that he would not have dinners with Zuckerberg and his wife, stating that the next time he was in the White House, it would be all business. The move comes after Zuckerberg banned Trump from Facebook and Instagram in January 2021.
-Apple has restored Epic Games' permissions to offer its own app store to iPhone customers in Europe, following concerns from European Union regulators that its move to block Epic may have violated a new antitrust law. Apple faced scrutiny under the European Union's Digital Markets Act, which requires Apple to allow developers to run their own app stores. Epic Games, which has been in a legal battle with Apple over its App Store policies, said it would move forward with its plans to offer Fortnite and its Epic Games Store. Epic Games said the decision sends a strong signal to developers that the European Commission will act swiftly to enforce the Digital Markets Act and hold gatekeepers accountable. CEO Tim Sweeney praised the company's decision as a "big win for European rule of law, for the European Commission, and for the freedom of developers worldwide to speak up."