Weekend Papers Summary
FINANCIAL TIMES
-US investors have backed the Federal Reserve's forecast of three interest rate cuts this year, ending a months-long stand-off between markets and the central bank. Traders were pricing in only three quarter-point rate cuts by the end of the year, following economic data showing high US inflation. Before the unexpected rise in inflation, investors had bet on almost a full percentage point of cuts by December. The persistence of inflation has forced investors to back down, leading to US stocks falling on Friday. The markets now put the chance of an interest rate cut by June at just two in three, compared to a 100% probability last month.
-TikTok has reached $16B in US sales, even as its future in the country is uncertain. The app, owned by Beijing-based ByteDance, achieved record revenues in 2023, highlighting the scale of the group's operations in the country. ByteDance is on track to overtake Facebook owner Meta as the world's largest social media company by sales. In 2023, ByteDance racked up $120B in revenues, up about 40% from the previous year, driven by TikTok's growth. The US House of Representatives has approved a bill to force TikTok to be sold to a non-Chinese company within six months or be banned from US app stores.
-Apple has agreed to pay $490M to settle a class action accusing CEO Tim Cook of misleading investors in 2018 by exaggerating demand for the iPhone in China. The investors claimed Cook overstated demand on a November 2018 earnings call, leading to a 10% stock fall in January 2019 when it announced it would miss its revenue guidance by up to $9B. Apple has denied violating US securities law and the settlement still requires approval from the California federal judge overseeing the case. The settlement would mark Apple's largest US securities fraud class action settlement.
-The National Association of Realtors has reached a settlement with home sellers over alleged conspiracies to inflate agents' commissions. The association would pay $418M in damages and agree to changes to its rules that could reduce commission fees, which provide the majority of its 1.6M members' income. The system, which required sellers to hire realtors to expose their homes to buyers and advertise on multiple listing services, violated antitrust laws. Starting in July, listing services will no longer disclose commissions, allowing buyers and sellers to hire agents for reduced services or forgo them altogether. The NAR will also mandate agents to sign representation agreements outlining their fees and services.
-US prosecutors have suggested that Sam Bankman-Fried should face up to 50 years in prison for orchestrating one of the largest financial frauds in history. Bankman-Fried, who was found guilty of seven charges of fraud and money laundering, allegedly stole over $8B from customers and investors before his cryptocurrency exchange collapsed in November 2022. Federal prosecutors dismissed Bankman-Fried's lawyers' claim that leniency should be given due to the potential recovery of funds through FTX bankruptcy proceedings. Bankman-Fried's lawyers requested a sentence of no more than six-and-a-half years, arguing that a 100-year sentence was "grotesque" and "barbaric" for a person with autism spectrum disorder.
-G7 nations have raised concerns over Iran's military cooperation with Russia, including the transfer of advanced rockets. They are preparing to impose a new wave of sanctions on Tehran. While Washington has not confirmed the shipment of short-range ballistic missiles, a senior administration official said negotiations between Russia and Iran were actively advancing. The G7 is prepared to respond swiftly and in a coordinated manner, including with new measures against Iran, if Tehran continues to supply missiles or technology to Russia.
-Academics are boycotting Wiley's Gender, Work and Organization journal, citing an "anti-woke" drive against radical views. Nearly 500 advisers, reviewers, contributors, and readers have written resignation letters to Wiley, protesting the journal's "mainstreaming" and changing aims, including removing references to queer theory. The appointment of business academics as editors-in-chief has also been criticized. Professor Carl Rhodes, dean of the business school at the University of Technology Sydney, believes this is an "anti-woke backlash" against radical aspects of the journal.
THE NEW YORK TIMES
-President Biden praised Senator Chuck Schumer's speech criticizing Israeli Prime Minister Benjamin Netanyahu, calling it a "good speech" that raised concerns shared by many Americans. Although Biden did not explicitly endorse the speech's criticisms or Schumer's call for elections to replace Netanyahu, his comments were the latest in his escalating public critique of the Israeli prime minister. The two have clashed in private, but Biden has been reluctant to publicly split with Netanyahu. Schumer said delivering the speech was important to show that even if you strongly disagree with Netanyahu, you can still be a strong ally of Israel.
-A judge's ruling on Friday resolved a major cliffhanger in the Georgia criminal case against Donald J. Trump, allowing Fani T. Willis to continue prosecuting the case if her ex-boyfriend withdrew from it. However, the resignation of former boyfriend Nathan J. Wade, whom Willis hired as a special prosecutor, only settled so much. A fresh array of problems lies ahead for Willis and one of the most significant state criminal cases in American history. The defense effort to disqualify Willis began in early January, making it unlikely to reach trial before the November rematch between Trump and Biden. Republicans have smelled blood, with G.O.P. lawmakers creating new ways to investigate Willis, potentially leading to her removal from office.
-Nathan J. Wade resigned as special prosecutor in the Georgia Trump investigation after an Atlanta judge gave his boss, Fani T. Willis, an ultimatum to step down. The ruling by Judge Scott McAfee on accusations of a conflict of interest cut a middle path between removing Willis and her full vindication. The judge criticized her for dating Wade, calling it a "tremendous lapse in judgment."
-Jared Kushner, son-in-law of Donald J. Trump, is reportedly closing in on major real estate deals in Albania and Serbia, marking the latest example of the Trump family doing business abroad. Kushner's plans in the Balkans have been influenced by relationships built during Trump's time in office. He is working on deals with Richard Grenell, who served as acting director of national intelligence and ambassador to Germany and special envoy to the Balkans. The proposed projects include developing an island off the coast of Albania into a luxury tourist destination, and a luxury hotel and 1,500 residential units in Belgrade, Serbia. The first two projects involve land now controlled by governments, and the third project is planned to be built on the Zvernec peninsula in Albania.
-A commission investigating the Lewiston mass shooting has concluded that local law enforcement officers should have taken the gunman into custody and seized his weapons before he killed 18 people. The commission argues that the decision to give the shooter's family responsibility for removing his weapons was an abdication of law enforcement's responsibility. The commission has held seven public meetings since November, collecting testimony from the shooter's Army Reserve supervisors, local and state police officers, survivors, and family members of the victims. The commission aims to provide early findings to legislators weighing proposals for changes to the state's laws.
-Senator Katie Britt, a Republican from Alabama, delivered a controversial speech to President Biden's State of the Union address, causing widespread criticism from both Republicans and Democrats. Britt used a misleading account of sex trafficking to criticize border policies, claiming it had occurred in Mexico during the administration of President George W. Bush. The speech, given before her first Senate speech, is now considered a defining moment in her early days on the national political stage and will likely be the single thing most Americans know about her.
-Mike Pence, the vice president of Donald J. Trump, has stated that he will not endorse the Republican presidential nominee, Donald Trump, as he has done with other rivals like Ron DeSantis, Vivek Ramaswamy, and Tim Scott. Pence stated that he could not in good conscience support Trump this year, and declined to say whether he would vote for Trump in the November election. He also ruled out running for president as a third-party or independent candidate, stating that he remained a Republican.
-Australia's foreign interference laws were passed six years ago to address concerns about Chinese government meddling in Western democracies. However, the first case, that of one Mr. Di Sanh “Sunny” Duong, was a low-stakes affair, involving the Australian government's involvement in a dispute over interpretations of two words and a $25,000 donation to a community hospital. In December, a jury found Mr. Duong guilty of preparing for or planning an act of foreign interference, and he was sentenced to two years and nine months in prison. He is expected to serve a year behind bars.
-The Justice Department is expanding its criminal investigation into the door plug that blew off a Boeing 737 Max 9 jetliner in January. The panel was detachment from the fuselage of an Alaska Airlines flight, causing passengers to be terrified and requiring an emergency landing at Portland International Airport. The National Transportation Safety Board reported that four bolts were missing before the panel blew off. The Justice Department has opened a criminal investigation into Boeing, which had reinstalled the door plug during maintenance in Renton, Wash., before delivering the plane to Alaska Airlines in October. The incident led to the Federal Aviation Administration grounding over 170 Max 9 planes, which were then inspected for construction flaws. Boeing has pledged to cooperate and prioritize safety.
-Ferdinand Marcos Jr., the first Philippine president to visit Germany, emphasized the importance of maintaining the South China Sea as a safe passage for international commerce. Analysts believe this diplomacy could deter China, but they also acknowledge Beijing's increasing territorial claims, increasing the risk of a conflict that could draw the United States, the Philippines' oldest treaty ally. Washington has condemned Beijing's actions and pledged to aid Manila in case of an armed conflict. Marcos' foreign policy strategy is different from his predecessor, Rodrigo Duterte, which focused on the West and China. He has revived ties with traditional security partners like the United States and Japan, cultivated new relations with Sweden and France, and pushed for arms deals and military drills. Tensions flared again this month when Chinese boats blocked Philippine vessels off the Second Thomas Shoal, a contested reef 120 miles off the coast of Palawan.
-United Nations investigators have discovered new evidence of systematic and widespread torture of Ukrainian prisoners held by Russian security forces two years after Russia's invasion of Ukraine. The United Nations Commission of Inquiry detailed a range of Russian war crimes, including summary executions, sexual violence, and forced transfer of Ukrainian children into Russia. The commission paid special attention to the "horrific" treatment of Ukrainian prisoners by Russian security services at detention centers in Russia and occupied Ukraine. The commission will deliver a report to the Human Rights Council in Geneva next week, detailing accounts of torture from four locations in Russia and seven in occupied Ukraine.
-Iran and the US held secret, indirect talks in Oman in January to address the threat posed to Red Sea shipping by the Houthis in Yemen and attacks on American bases by Iran-backed militias in Iraq. The talks were held in Muscat, Oman, with Iranian and American delegations sharing messages. The meeting was the first time Iranian and American officials had held in-person negotiations in nearly eight months. Iran requested the meeting in January, and the Omanis strongly recommended that the US accept it. Since the beginning of the war in Gaza after Hamas's attacks on Israel, the US and Iran have reassured each other that neither was seeking a direct confrontation, conveyed through intermediaries.
-A convoy bringing aid to hunger-stricken northern Gaza ended in bloodshed late Thursday, with Palestinians killed and wounded in an attack surrounding the trucks. Gazan health officials and the Israeli military have offered divergent accounts of what happened. The Gaza Health Ministry claimed that at least 20 people were killed and over 150 injured, accusing Israeli forces of carrying out a "targeted" attack against a gathering of civilians waiting for humanitarian aid near the Kuwait traffic circle in Gaza City. The Israeli military denied the allegation, blaming Palestinian gunmen and stating that no tank fire, airstrike, or gunfire was carried out toward the Gazan civilians at the aid convoy.
-New York's legal obligation to provide shelter to homeless people will be significantly reduced under an agreement announced on Friday. Adult migrants will be allowed to stay in shelters for only 30 days, with some longer stays if they meet certain conditions, such as having a medical disability or an "extenuating circumstance." This change is a significant shift in a policy that has set New York apart from other big US cities. The agreement resolved months of negotiations in state court between city officials and plaintiffs in the original consent decree. The new rules will apply temporarily during the migrant crisis, which has led to over 180,000 migrants passing through the city's shelter system since spring 2022.
-The Senate appears to have little enthusiasm for a bill that would force TikTok's Chinese parent company, ByteDance, to sell its stake in the app or face a nationwide ban. The bill passed the House with a 352 to 65 vote, but has not been decided on its floor. Senator Chuck Schumer of New York has not decided whether to bring the bill to the floor. The Senate is keeping its cards close to their vest about their stance on the TikTok measure, despite acknowledging the House's vote. The legislation mandates that ByteDance sell its stake in the app within six months or face a ban.
THE NEW YORK POST
-New York City will continue to limit shelter stays under a settlement with the Mayor Eric Adams administration and the Legal Aid Society. The agreement allows the city to limit a single adult migrant's ability to reapply for shelter after their 30-day stay. However, only those with a disability or "extenuating circumstances" will be approved on a case-by-case basis. The settlement also allows younger adult migrants aged 18-23 to have up to 60 days in the shelter system before being booted. This agreement will still house thousands of migrants each week.
-The US is expanding its investigation into India's Adani Group, focusing on its founder, Gautam Adani, and potential bribery ties. Prosecutors are investigating whether Adani or its associates, including Adani, paid Indian officials for favorable treatment on an energy project. The investigation is being handled by the US Attorney's office for the Eastern District of New York and the Justice Department's fraud unit.