FINANCIAL TIMES
-Global corporate debt sales reached an unprecedented $8T in 2024 thanks to higher investor demand for borrowing plans. Corporate bonds and leveraged loans issuance climbed by over a third from 2023 to $7.93T, with companies like AbbVie and Home Depot taking advantage of lower borrowing costs compared to government debt. This surge in activity exceeded a previous peak in 2021, as strong investor demand reduced costs for corporate borrowers even before the Federal Reserve and other central banks began cutting interest rates. Bankers attribute the cheap funding costs to companies pulling forward their issuance to avoid market turbulence around the US election. However, as spreads tightened, some companies decided to lock in next year's borrowing needs.
-For three decades, major powers like Trump, Xi Jinping, and Putin have largely embraced the Davos worldview, focusing on economic interdependence and geopolitical rivalries. However, these powers have now become revisionist powers seeking radical changes to the current world order. Putin's invasion of Ukraine in 2022 sacrificed his country's economic ties to the west for his vision of Russian grandeur. China has become more nationalistic and menacing towards Taiwan, and Trump is demanding fundamental changes to the international trading system and America's relationship with its allies. Russia and China are demanding changes to the world order, as Russia seeks to rebuild its lost influence and China seeks to accommodate its ambitions. American revisionism is both puzzling and far-reaching in its consequences.
-Italian journalist, Cecilia Sala, who writes for Il Foglio has been detained in Iran, marking the first arrest of a foreign press member since anti-regime protests triggered a crackdown amid heightened tensions. Sala was arrested on December 19 and authorities are trying to establish the details of her arrest. Her employer has decided to make her detention public due to reassurances from Italian authorities that this would not hinder efforts to bring her home. Italy has detained an Iranian national accused by the US of supplying drone technology to Tehran and another Iranian national in Switzerland. Italian defence minister Guido Crosetto called Sala's arrest "unacceptable." Italy's ambassador in Tehran has visited Sala in jail to verify her health and detention conditions.
-Elon Musk and MAGA supporters have clashed over immigration policies, highlighting a divide between Donald Trump's Silicon Valley backers and his more radical base. The disagreement stems from Trump's appointment of Sriram Krishnan as the White House's senior policy adviser for artificial intelligence. This led to a backlash from Trump's "Make America Great Again" base on X, which escalated into a debate over H-1B visas, aimed at highly skilled foreign labor critical to US technology groups. Far-right activist Laura Loomer expressed concern over the appointment of career leftists to Trump's administration, who share views in direct opposition to Trump's America First agenda.
-Arnab Ghatak, a former McKinsey partner, is seeking damages from the consulting firm following its $650M legal settlement with the US government. Ghatak claims that McKinsey's managing partner Bob Sternfels defamed him in a memo sent to staff and alumni after the agreement with the justice department. Ghatak was one of two partners fired in 2021 for violating the firm's professional standards due to an email exchange referencing document deletion. Martin Elling, the second partner, was found to have deleted over 100 files related to his work with Purdue Pharma and pleaded guilty to obstruction of justice.
-Vanguard has agreed to new control of its investments in US lenders, a move that could have significant implications for money managers and banks. The deal, disclosed by the US Federal Deposit Insurance Corp, allows Vanguard's funds to remain large shareholders in a wide range of US banks while increasing the watchdog's supervisory power over the $10tn money manager. This comes as investors have poured into passive funds that buy up shares in numerous stocks, raising concerns that these holdings could allow big passive fund managers to influence companies vital to the economy. FDIC board member Jonathan McKernan praised the agreement, stating it would help address concerns about gaps in the FDIC's monitoring of the purported passivity of the largest index fund complexes.
NEW YORK TIMES
-Western officials have long been concerned about Moscow's shadow fleet, an assemblage of aged tankers used to covertly carry Russian crude oil. However, the shadow fleet may now present a more pressing threat to the West. This week, Finnish commandos boarded an oil tanker that is suspected to have cut through vital underwater cables in the Baltic Sea, including one that carries electricity between Finland and Estonia. The Eagle S, bears all the hallmarks of vessels belonging to Russia's shadow fleet, and if confirmed, it would be the first known instance of a shadow fleet vessel being used to intentionally sabotage critical infrastructure in Europe.
-Finnish authorities seized an oil tanker suspected of severing vital undersea cables, leading NATO to increase security in northern seas and the European Union to threaten new sanctions against Russia. The Eagle S, an aging oil tanker registered in the Cook Islands, is being held under police and naval guard in the Gulf of Finland. The tanker is believed to be part of Russia's "shadow fleet," which President Vladimir V. Putin has used to circumvent Western sanctions on Russian oil exports and conduct acts of sabotage. The five cables, including a power cable from Finland to Estonia, were damaged before the tanker was seized.
-Homelessness has reached its highest level on record this year, with 770,000 people experiencing homelessness, an 18% increase from last year and the largest annual jump since 2007. The Department of Housing and Urban Development reported that homelessness has risen by a third in the past two years, after declining modestly over the previous decade. The report cited factors such as the end of pandemic-era measures to protect the needy, but Biden administration officials emphasized the role of asylum-seeking migrants who overwhelmed shelter systems. They argued that the migrant crisis had begun to abate since the annual count in January.
-President-elect Donald Trump has filed a brief requesting the Supreme Court to block a law that requires TikTok to be sold or shut down by January 19. The deadline falls a day before Trump's inauguration, and the brief argues that Trump opposes banning TikTok and seeks to resolve the issue through political means once he takes office. The brief does not take a position on the legal question of whether Congress violated the First Amendment by effectively banning TikTok. Instead, it praises Trump's expertise, electoral mandate, and political will to negotiate a resolution to save the platform while addressing national security concerns. The brief also notes that Trump is particularly knowledgeable about social media, particularly TikTok.
-Treasury Secretary Janet L. Yellen warned Congress that if lawmakers do not raise or suspend the nation's debt limit by January 14, she would likely need to use "extraordinary measures" to prevent the US from defaulting on its debt. The warning comes at a tense political moment, with Republicans set to take control of the US next month. President-elect Donald J. Trump has already called on Congress to abolish the debt limit before pushing through tax cuts and spending priorities. The debt limit was suspended in June 2023 after a contentious negotiation over federal spending, work requirements for government benefits, and funding for the Internal Revenue Service. The suspension is set to expire on January 2, forcing Treasury to begin using extraordinary measures to allow the federal government to continue paying its bills.
-Myanmar's military junta, which overthrew a democratic government in 2021, has lost control of two-thirds of the country's territory. The armed resistance, including the Arakan Army, is accused of massacring Rohingya, including their parents, in a display of ethnic chauvinism. Over a million Rohingya have been expelled from Rakhine State to neighboring Bangladesh, making them the world's largest stateless population. The armed resistance's victories offer no moral certainty.
-The US set the stage for their own defeat before the Taliban's rise in August 2021. The US empowered warlords and criminals to conduct the war on its behalf, inspiring hatred and turning their presence into a Taliban recruiting tool. Lt. Gen. Abdul Raziq, the police chief of Kandahar Province, was responsible for Afghanistan's largest known campaign of mass disappearances during the war. The Americans turned allies into enemies by blindly trampling into places they did not understand, seeding hatred and resulting in errant airstrikes that killed innocents and American allies. The Taliban declared an amnesty and an end to poppy, indicating that the fighting was over and former enemies were prohibited from settling scores. The Taliban also declared an end to poppy, seemingly accomplishing Washington's key war goals. The remnants of a poppy boom town in the desert, Bakwa, were once a barely inhabited stretch of desert, but thanks to American efforts to eradicate poppy and the opium trade, people flocked to the desert district, where the Taliban embraced them.
-Before President-elect Donald Trump takes office, a major divide has emerged among his supporters over immigration and the role of foreign workers in the US labor market. The debate revolves around the administration's tolerance for skilled immigrants brought into the country on work visas. This divide pits immigration hard-liners against prominent tech industry backers, including Elon Musk and David Sacks. Critics argue that the tech industry's long-reliance on foreign skilled workers undercuts wages for American citizens, and the debate is a significant issue for the incoming administration.
-Canadian ministers met with Trump's circle in Florida to discuss a border security plan to counter Trump's threats to impose tariffs on imports from Canada. The meeting was based on a Thanksgiving dinner with Trump and a recent telephone conversation between Trudeau's cabinet and Trump's designated border czar, Thomas D. Homan. Canada's foreign minister, Melanie Joly, and finance minister Dominic LeBlanc arrived in Florida to discuss the plan with Commerce Secretary Howard Lutnick and Interior Department coordinator Doug Burgum. Trump has threatened to impose 25% tariffs on imports from Canada if the country doesn't reduce the flow of migrants and fentanyl into the US. This could be devastating for Canada, whose economy heavily relies on exports to the US.
-A new rocket, New Glenn, built by Jeff Bezos' company Blue Origin, successfully conducted a dress rehearsal of a launch countdown, with the booster stage's seven engines firing for 24 seconds. The vehicle remained firmly clamped to the launchpad at Cape Canaveral Space Force Station in Florida. The test, known as a hot fire, was the last big technical hurdle. The rocket, known as New Glenn, should be heading to space on its inaugural flight. Neither Bezos nor his company announced a launch date, but an aviation industry website indicates it may miss that target by at least a few days into the new year, potentially launching as early as January 6. The Federal Aviation Administration has issued a launch license for New Glenn, and the rocket will now head back to the hangar for technicians to install the payload, a prototype of a spacecraft called Blue Ring.
NEW YORK POST
-A federal judge has dismissed Rudy Giuliani's contempt hearing next Friday, as two Georgia election poll workers attempt to collect a $148 million defamation award they won against him. Judge Lewis J. Liman in Manhattan issued an order dismissing Giuliani and his lawyer's attempts to dodge providing information to the election workers' lawyers. He said the litigants should be ready at the contempt hearing to explain why he should not grant a request by lawyers for the two election workers that he make adverse inferences from evidence in the case that would put Giuliani's Palm Beach, Florida, condominium in danger of being surrendered to satisfy the defamation award. Giuliani has maintained that the Palm Beach property is his personal residence and should be shielded from the judgment.
-Brooklyn-based startup It's Electric is aiming to increase NYC's electric vehicle charging network from 1,400 to 10,000 by 2030. The company installs public curbside chargers in front of commercial and residential properties and compensates owners for the electricity they provide. The US aims for half of all cars sold to be electric by 2030, and New York City alone expects EV registrations to rise from 62,000 to about 3 million. However, finding where to charge the millions of new vehicles is a challenge, especially in cities like New York where few people have home driveways or garages and instead rely on street parking.