FINANCIAL TIMES
-JD Vance has criticized Europe's "threat from within" as more serious than the threat posed by Russia and China. In a speech at the Munich Security Conference, Vance criticized the cancellation of a recent election in Romania, the prosecution of an anti-abortion protester in the UK, and the exclusion of far-right and far-left German politicians. European officials were alarmed by Vance's attempts to link US security backing for the continent to his comments about freedom of speech and democracy. Germany's defense minister Boris Pistorius labelled the criticism as "unacceptable" and compared Europe's situation to what is happening in autocracies. EU chief diplomat Kaja Kallas was surprised by Vance's "lecturing."
-European leaders at the Munich Security Conference faced threats from both east and west, including the looming threat of an aggressive Russia and confirmation of their worst fears about the direction of the US under Donald Trump. Trump announced direct talks with Putin on an end to Russia's war, while his secretary of defense Pete Hegseth stated that Ukraine's territorial integrity was an "illusory goal" and there would be no NATO membership for Kiev and no US support for its future defense against Russia. Promises of peace bought through appeasing an aggressor with its European victim's territory will do little to reassure those who have observed Russia's preparations for further war. Mark Rutte, NATO's secretary-general, has been blunt in describing the challenge Europe faces, stating that they must prepare for war.
-Hamas released three more Israeli men from captivity in Gaza after the ceasefire nearly collapsed. The Israelis were handed over to the International Committee of the Red Cross in Khan Younis, a heavily destroyed city and Hamas stronghold. The men were taken hostage during the Palestinian militant group's assault on Israel on October 7, 2023, which killed around 1,200 people. Hamas fighters displayed weapons and uniforms captured from Israeli military bases during the cross-border raid. Israel is scheduled to release over 350 Palestinian prisoners later under the ceasefire terms. The agreement nearly collapsed earlier this week after Hamas claimed Israel was violating the ceasefire by blocking entry into Gaza.
-Berkshire Hathaway, owned by Warren Buffett, has reduced its stakes in some of the US's largest banks in the last three months of 2024. The conglomerate sold nearly three-quarters of its position in Citigroup, selling 40.6mn shares worth over $2.4bn. Berkshire also continued to sell shares of BofA, an investment that dates back to the financial crisis when Buffett intervened. Berkshire had cut its stake by a further 95mn shares since mid-October, when its ownership position fell below a 10% reporting threshold. The sales in the weeks following reduced Berkshire's stake in BofA to about 8.9%.
-Trump's recent 25% tariff on steel and aluminum imports has thrown a company into crisis, including Tompkins Products, a Detroit-based family business that uses imported cold drawn aluminum bar for US auto industry components. The move will make Tompkins' main input more expensive, unless they can source everything from their US supplier. Trump has also imposed additional tariffs on China and Canada and Mexico, and announced a plan for new, "fair and reciprocal" measures on trade. Businesspeople are warning that this new trade war could drive up costs, disrupt supply chains, hurt profits, and make products more expensive for American consumers. Ford CEO Jim Farley believes the impact on the automotive sector would be catastrophic, with a 25% tariff across the Mexico and Canadian border blowing a hole in the US industry. Ken Griffin, the billionaire founder of hedge fund Citadel, believes Trump's "bombastic rhetoric" has sparked CEOs and policymakers to question America's dependence on America as a trading partner.
-Second-home ownership in Europe has reached unprecedented levels, with 15% of households in the EU owning a second home, according to a 2014 survey by the European Central Bank. Despite protests and restrictions, buyers continue to seek second homes, and none of the interventions have been a silver bullet for reconciling homeowner desires with local community needs. The situation is exacerbated by local hostility and increasing costs. Both buyers and business models are adapting and changing to meet the changing needs of the market.
-Hedge fund Citadel has placed a £305M bet against GSK, marking the largest short position against the company in over a decade. The bet, worth 0.51% of the company's stock, was disclosed by billionaire Ken Griffin's hedge fund. GSK's shares have risen 11% in the last month due to the drugmaker raising its long-term sales forecast and a rare £2bn stock buyback. However, GSK has lagged rival pharmaceutical companies due to its failure to excite investors about its pipeline of new medicines and vaccines. In the past five years, GSK shares have fallen 15% compared to the S&P 500 pharmaceutical index.
-Blackstone Group has put First Eagle Investment Management up for sale for over $4B to offload a large stake it has owned for a decade. The buyout groups, Blackstone and Corsair Capital, have hired Morgan Stanley to lead the sale process. First Eagle generates about $500M of annual earnings before interest, taxes, depreciation, and amortization, and is expected to fetch a valuation of over $4B. The company, founded in Dresden to finance local businesses, is best known as an early training ground for investor George Soros. The acquisition was financed with leverage and has pulled dividends from First Eagle.
-Uber has filed a lawsuit in California accusing rival food delivery service DoorDash of anti-competitive practices. The San Francisco-based company claims DoorDash coerced restaurants into working exclusively with it by threatening penalties or demoting them in the DoorDash app. Uber is seeking unspecified damages and a judgment that would force DoorDash to change its business practices. The lawsuit opens a new front in the battle between the companies for market share in the competitive food delivery services market that accelerated during the Covid-19 pandemic. DoorDash Drive enables restaurants and takeaway chains to operate their own branded apps and websites but has all delivery logistics handled by DoorDash.
-The Democratic Republic of Congo is urging the National Basketball Association (NBA) to end its ties with Rwanda, citing its support for rebels in the country's east. The NBA has been urged to consider whether its affiliation with Rwanda aligns with its commitment to social justice and respect for human rights. Rwanda's capital Kigali hosts all four Basketball Africa League championships, with several Rwandan entities being affiliate sponsors. The NBA has also written to Formula One motor racing about a Rwandan bid to host a Grand Prix and European football clubs to end their sponsorship deals with Visit Rwanda.
-Danielle Sassoon, the top federal prosecutor in Manhattan, has resigned following an order from Donald Trump's administration to drop the corruption prosecution of New York City mayor Eric Adams. Sassoon, who took over as US attorney for the Southern District of New York in December, was charged with accepting illegal foreign campaign contributions and doing official favors on behalf of Turkey's government. Trump denied involvement in the decision and said he knew nothing about it.
NEW YORK TIMES
-The Department of Justice has dropped corruption charges against New York's mayor, Eric Adams, after Manhattan's acting U.S. attorney resigned. Emil Bove III, who had ordered Manhattan federal prosecutors to seek the case's dismissal, was compelled to sign the motion himself, along with two other Washington prosecutors. Bove's reason for dismissing the case was that it would hinder Adams's ability to cooperate with the Trump administration's immigration policies. This was an unusual rationale for dismissing a criminal case, which is typically evaluated based on facts and law.
-New York City is facing a crisis of confidence in Mayor Eric Adams, prompting civic leaders and elected officials to pressure Gov. Kathy Hochul to remove him from office. The move was deemed necessary after the prosecutor overseeing a federal corruption case revealed a corrupt deal between Adams and the Justice Department. Hochul, a Democrat, is seeking views from her advisers, but five sources say she favors a deliberative approach and has not yet determined if Adams poses an urgent threat to the city's governance.
-The Trump administration has accelerated plans for widespread workforce cuts across the government, with agencies like the Environmental Protection Agency and the Agriculture Department among the latest to be hit with layoffs. The administration has focused on an estimated 200,000 probationary workers, who do not receive the same protections as many other federal employees. The Energy Department has been the hardest hit, with around 1,000 probationary employees being informed they would be losing their jobs. The administration has emphasized the importance of creating a more effective and efficient federal government that serves all Americans.
-The Trump administration has increased security requirements for migrant child sponsors, potentially making it harder for minors crossing the border to be released from federal custody and reunited with family members in the US. This move is similar to the first Trump administration's policy, which aimed to tighten vetting processes for those living with migrant children. Immigration activists argue that these requirements have fueled overcrowding in federal shelters and detention facilities. The Office of Refugee Resettlement now requires fingerprinting of all adult members of a household where a child is to live in the US.
-A federal judge denied eight former inspectors general who were fired by President Trump immediate reinstatement to their jobs, citing their lawyers' argument that their emergency request had wasted the court's time. The ruling marks a rare victory for the Trump administration in lawsuits following its attempts to slash the federal workforce, freeze funding, dismantle agencies, and install officials loyal to the president. Judge Ana C. Reyes criticized the case more on procedural grounds and allowed it to proceed on a less urgent schedule.
-Hamas has released three Israeli hostages from captivity in Gaza, extending a fragile cease-fire with Israel. The Palestinian captors forced the Israelis to give speeches in Hebrew against a backdrop of Hamas leaders' portraits. The hostages appeared frail and gaunt, with rifle-toting militants and Palestinian Islamic Jihad members nearby. The militants displayed pictures of Matan Zangauker and his mother, Einav Zangauker, alongside an hourglass and the message "Time is running out." However, the gunmen did not force the hostages to thank their captors, which shocked Israelis who saw the show of gratitude as psychological torture.
-German Chancellor Olaf Scholz accused Vice President JD Vance of unacceptable interference in Germany's upcoming elections. Scholz accused Vance of supporting a party that downplays Nazi atrocities and urged German leaders to drop their firewall and allow the Alternative for Germany (AfD) to enter their federal government. Scholz accused Vance of violating a commitment to never allow Germany to be led by fascists who could repeat the horrors of the Holocaust. He stated that a commitment to never again is not reconcilable with support for the AfD. Scholz's statement came at the Munich Security Conference.
-OpenAI's board of directors rejected a $97.4B bid by Elon Musk and a consortium of investors to acquire control of the artificial intelligence company, escalating a feud between Musk and OpenAI's CEO, Sam Altman. Bret Taylor, the board's chairman, stated that OpenAI is not for sale and the board has unanimously rejected Musk's attempt to disrupt competition. OpenAI sent a letter to Marc Toberoff, the lawyer representing Musk and the investors, stating the offer was not in the best interests of the company's mission of building AI that benefits humanity. Musk's bid was seen as interference in Altman's plan to change OpenAI's corporate structure, which aims to shift control to OpenAI's investors, including Microsoft.
-Intel is working with the Trump administration to turn over the operation of its chip-making plants to Taiwan Semiconductor Manufacturing Company (TSMC). The company is looking into splitting its manufacturing business from its semiconductor design and products business. Frank Yeary, the interim executive chairman of Intel, has spoken with administration officials and leaders of TSMC about a deal that would separate Intel's ailing manufacturing business from its semiconductor design and product business. TSMC, which produces an estimated 90% of the world's most advanced semiconductors, would assume control of Intel's manufacturing business and take a majority stake in the business alongside a consortium of investors that could include private equity firms and other tech companies. The plan is expected to help Intel pull out of a yearslong slump.
NEW YORK POST
-Luigi Mangione, the accused killer of UnitedHealthcare CEO Brian Thompson, expressed gratitude to his fans in his first public statement released two months after his arrest. The statement was featured on a new website created by the murder suspect's legal defense team to combat misinformation and offer updates on the multiple cases levied against him for the high-profile assassination in the Big Apple. Mangione, who is being held at Brooklyn's Metropolitan Detention Center, thanked his supporters for their support, which has transcended political, racial, and class divisions. He thanked everyone who took the time to write and looked forward to hearing more in the future. The statement comes just days after Mangione accepted nearly $300,000 in donations raised by more than 10,000 donors supporting his cause. Mangione is currently being held at Brooklyn's Metropolitan Detention Center.
-Mayor Eric Adams is facing pressure to resign and Gov. Kathy Hochul faces pressure to oust him for being beholden to President Trump after the Justice Department dropped his criminal case. This situation comes as Hizzoner has become increasingly isolated from once-loyal allies, with some turning against Adams and others wrestling with the choice to continue supporting the second black leader of the Big Apple. Hochul is said to have started having behind-the-scenes conversations on booting Adams from City Hall, after consulting state officials about his future. The Rev. Al Sharpton is also convening a meeting of top black elected officials in New York City and the state to weigh their next move. Democratic pundits argue that black leaders are still torn because Adams is the second black mayor, and that they are not going to spend political capital on him.
-The rising cost of eggs due to the bird flu outbreak may lead to price hikes on beef and veal products due to shrinking herd levels. Supply chain expert Joe Camberato suggests that there is a perfect storm driving up beef and veal prices. The lack of rainy storms has caused chaos in the cattle industry, with droughts and abnormally dry conditions affecting ranchers and slaughterhouses. Dry conditions reduce the amount of grass available for grazing, making farmers more reliant on feed. As demand for feed grew, prices became inflated, piling on new costs for ranchers and forcing them to shrink their herds. The New World Screwworm, discovered in Mexican cattle herds, further hampering supply. As of January, US cattle herds had shrunk 1% from the year before, hitting a 64-year low. As of this month, Washington resumed cattle imports from Mexico, but President Trump has threatened to levy hefty tariffs on the neighboring country, potentially keeping cattle prices high.