TheChek News Flow

Qatar no longer willing to host Palestinian militant group as Gaza ceasefire talks with Israel remain deadlocked

The US has said it would warn the Turkish government that there could be “no more business as usual” with Hamas after members of the Palestinian militant group’s political leadership reportedly moved to Turkey.

State department spokesman Matt Miller on Monday told reporters: “We don’t believe that the leaders of a vicious terrorist organisation should be living comfortably anywhere, and that certainly includes in a major city of one of our key allies and partners.”

Miller added he could neither confirm nor deny reports that officials from the Palestinian militant group’s political leadership had relocated from Qatar to the Nato ally. But he said: “There can be no more business as usual with Hamas.”

The US warning comes as Biden administration officials have sought to blame Hamas for the failure of ceasefire talks with Israel, which have been stalled for months.

American officials are hoping that progress with Lebanon on ending the conflict between Hizbollah and Israel might also give impetus to the Hamas-Israel negotiations. Amos Hochstein, a senior adviser to US President Joe Biden, is due to arrive in the Lebanese capital on Tuesday to try to push the talks forward.

An Arab diplomat told the Financial Times that some of Hamas’s officials had relocated from Qatar to Turkey after Doha suspended its role as mediator in the talks to end the war in Gaza and secure the release of the remaining hostages held in the Gaza Strip.

Qatar warned the group last month that if it was not willing to engage seriously in the negotiations it would not be able to retain its political office the Gulf state. A second person familiar with the matter said some Hamas officials were in Turkey.

The Arab diplomat said it was not clear if the Hamas officials’ move to Turkey, which has long been sympathetic to the group, was permanent or temporary.

A Turkish foreign ministry official said members of the Hamas political bureau “occasionally visit Turkey”.

“The claims that the Hamas political bureau has moved to Turkey do not reflect reality,” the official added.

Qatar has hosted Hamas’s political office since 2012 and has been one of the main meditators, along with the US and Egypt, seeking to broker a deal to secure the release of Israeli hostages and a permanent ceasefire to end the more than year-long war in Gaza.

But the gas-rich Gulf state, which is an important US ally, has drawn criticism from some Washington lawmakers for its role in hosting the militant group’s political leadership.

Doha has also been angered by hostility from Israeli politicians, including Prime Minister Benjamin Netanyahu.

Qatar has been frustrated by the failure of both Netanyahu’s far-right government and Hamas’s leadership to reach a compromise and get a deal over the line.

The talks to end the conflict, which erupted after Hamas’s October 7 2023 attack killed about 1,200 people, according to Israeli officials, have been deadlocked for months.

Hamas has insisted it would only accept a version of a multi-phased deal that would lead to a permanent ceasefire and Israel’s withdrawal from the strip in return for the release of hostages, which it endorsed at the beginning of July.

Netanyahu, meanwhile, has repeatedly rejected a permanent end to the war and the withdrawal of Israeli troops from the devastated Gaza strip, where Israel’s offensive has killed more than 43,000 people, according to Palestinian health officials.

Truth Social owner is close to an all-share takeover of Intercontinental Exchange’s Bakkt

Donald Trump’s social media company is in advanced talks to buy Bakkt, a cryptocurrency trading venue owned by Intercontinental Exchange, as it pushes to expand beyond online conversation.

The US president-elect’s Trump Media and Technology Group, in which he has pledged to retain his 53 per cent stake, is closing in on an all-share purchase of Bakkt, said two people with knowledge of the talks. The valuation under discussion was not immediately clear but Bakkt’s market capitalisation stood at just over $150mn on Monday.

TMTG, which operates Truth Social, has become one of the most actively traded US stocks since Trump’s election victory as retail investors try to profit on its often-volatile trading moves. Although it has reported just $2.6mn in revenues this year, TMTG has a $6bn equity valuation, giving its management a valuable currency with which to buy other companies.

A successful deal would deepen Trump’s move into the cryptocurrency market after he began promoting a new crypto venture set up by longtime business partners, World Liberty Financial, from which he stands to earn significant fees. Crypto markets have also soared following his election victory, with bitcoin up more than 30 per cent on speculation that his administration would enact favourable legislation for the industry.

Bakkt, which has struggled for profitability since its launch, was created by ICE, and the owner of the New York Stock Exchange still holds a 55 per cent economic interest in it.

Bakkt’s first chief executive was Kelly Loeffler, a former head of marketing at ICE and a Republican ex-senator for Georgia during Trump’s first presidency. She is co-chair of the committee organising his inauguration in January. She is also married to Jeff Sprecher, ICE’s founder, chair and chief executive.

ICE and Bakkt declined to comment. TMTG did not immediately respond to a request for comment.

Bakkt has previously said its crypto custody business, which has a regulatory licence from New York authorities, is likely to be wound down. People familiar with the TMTG talks said it will not be included in the deal.

The crypto business had been set up to hold digital assets such as bitcoin and ether on behalf of customers but failed to gain traction and made operating losses of $27,000 from revenues of $328,000 in the three months to September 30. Bakkt is planning to build a trading platform for institutional investors.

Bakkt faced a delisting from NYSE owing to its lowly share price, until it effected a 1 for 25 reverse stock-split in April. Last week its share price rose 15 per cent. Its shares were up 1 per cent in afternoon trading in New York on Monday. TMTG was down 2.5 per cent.

Truth Social remains tiny in terms of its reach, averaging 646,000 daily visits to its website this month, according to Similarweb, compared with 155mn a day for Elon Musk’s X platform. Even so, the president-elect’s stake now accounts for more than half of his $5.7bn wealth, as calculated by Bloomberg.

Foreign ministers do not rule out sabotage as part of Russia’s ‘hybrid warfare’

Germany and Finland have said they are “deeply concerned” about a severed undersea communications cable between the two countries, saying that it raised suspicions of possible Russian sabotage.

Cinia, the Finnish state operator of the 1,200km C-Lion1 fibre optic cable between Helsinki in Finland and Rostock in Germany, said it had been cut early on Monday morning in the Baltic Sea close to Sweden and was almost certainly the result of an “external force”.

In a joint statement, the foreign ministers of the two countries said: “We are deeply concerned about the severed undersea cable connecting Finland and Germany in the Baltic Sea. The fact that such an incident immediately raises suspicions of intentional damage speaks volumes about the volatility of our times.”

Nato countries around the Baltic Sea have been on alert for potential sabotage of undersea infrastructure ever since the still-unexplained explosions of the Nord Stream gas pipelines between Russia and Germany in 2022.

Last year, a gas pipeline and two data cables were cut in the Gulf of Finland by the anchor of a Chinese ship, although authorities have not said whether they believe it was an accident or done on purpose.

Separately, Swedish telecoms operator Telia said that a communications cable between Sweden and Lithuania was damaged on Sunday morning, almost 24 hours before the Finnish-German severing.

Nato and its member countries have stepped up surveillance and monitoring of tens of thousands of kilometres of cables and pipelines, especially in the North and Baltic Seas.

Elina Valtonen, Finland’s foreign minister, and her German counterpart Annalena Baerbock said: “Our European security is not only under threat from Russia‘s war of aggression against Ukraine, but also from hybrid warfare by malicious actors. Safeguarding our shared critical infrastructure is vital to our security and the resilience of our societies.”

They added that an investigation was under way. Cinia declined to say if it believed it was sabotage or an intentional act, adding that a ship’s anchor or fishing trawler were also possible causes.

European countries have recently suffered several sabotage incidents, including fires and parcel bombs, with authorities in many cases pointing the finger at Russia. Valtonen said Finland would not hesitate to attribute blame for a “hybrid act” if it established that Russia or another country was behind it.

Cinia said it should take about five to 15 days to repair the cable that linked data centres. It added that there appeared to be no sign of increased seismic activity, which could have also severed the connection.

Since the days of Alan Turing, artificial intelligence developers have been captivated by the prospect of AI powerful enough to improve itself. OpenAI, we recently reported, has already developed an internal AI “research assistant” tool to help its researchers work faster, a possible first step in the development of AI that can conduct AI research on its own.

Later this week, researchers at Model Evaluation and Threat Research, a nonprofit group, will publish a first-of-its-kind evaluation of how large language models from OpenAI and Anthropic perform when asked to solve seven AI research problems. An early look at the results show Anthropic did very well compared to OpenAI.

In five of the seven tests METR ran, the latest version of Anthropic’s most advanced model, Claude Sonnet 3.5, outperformed OpenAI’s most advanced model, o1-preview—and Claude won by a wide margin in two of them. O1-preview beat Claude on the other two tests, including a decisive win in one of the tests.

(Each test took 8 hours. For these results, the models were reset every 30 minutes because they tended to do best when they tried multiple times in that window. When the models were only allowed a single 8-hour attempt, Claude’s average score fell below o1-preview’s.)

Notably, both models were no match for the top human researchers who took the same tests, who scored more than twice as high as the models on average.

But METR gave the AI credit where credit was due: Claude was basically as good as the average human researcher in solving two of the problems, and o1-preview was about as good as an average human researcher in another problem.

In the AIs’ defense, the problems METR chose are difficult. Solving them requires a researcher’s full arsenal of techniques, from thinking up hypotheses to designing and running experiments, analyzing results and revising the hypotheses. It also requires a lot of creativity.

For example, one of the problems involved writing code for a language model from scratch, without using division or exponents—which are usually essential for that task. Another problem involves experimenting with traditional AI scaling laws, just like an employee at OpenAI might do, but using only a small amount of computing power.

Human Disadvantage

These problems aren’t exactly representative of the day-to-day work of an AI researcher. Most AI projects are not wrapped up in eight hours, and who ever heard of an AI researcher who couldn’t use division?

In fact, these tests are designed to put human participants at a disadvantage. That way, even if AI models catch up to humans on these tests, that would still mean the models are less capable than top human researchers overall and would give the AI firms time to make adjustments to improve their safety, said Hjalmar Wijk, who oversaw the tests.

For their part, OpenAI, Anthropic and other major AI developers also say that for the same reasons, they will measure their models’ ability to do AI research before releasing them. And both OpenAI and Anthropic let METR run its tests on their latest models before the models were released publicly.

The feds will be watching too, of course. A recent Biden memo on AI directed the U.S. AI Safety Institute, which sets standards for safe AI development, to test advanced AI models for their ability to “automate development and deployment” of AI with dangerous capabilities. The EU, meanwhile, referred to AI that develops AI as a “systemic risk” in a first draft of rules for the bloc’s AI Act, published last week.

AI companies undoubtedly have a strong incentive to develop AI that makes better AI, also known as recursive self-improvement. Our reporting on the recent challenges of traditional AI scaling methods suggest such AI isn’t nigh, but AI researchers have a habit of overcoming obstacles, so it’s never a bad idea to be ready!

Retailers and designers talk about the future of luxury’s tie-in with the streetwear market and where it’s heading next.

Is luxury‘s love affair with streetwear over?

Some might think so looking at the men’s runways over the last few seasons, which have pivoted from streetwear- and sneaker-dominated designs to more tailored styles with classic footwear.

But the streetwear gang says: Not so fast.

The link between streetwear and luxury reached its height over the last decade, with virtually every major design house tapping into the culture and appealing to a demographic that it had generally ignored in the past.

This year, streetwear’s position in the luxury market has been questioned following high-profile sales of Supreme, which was sold by VF Corp. to EssilorLuxottica after four years, and Off-White, which LVMH sold to Bluestar Alliance after three years, and the latest runway shows that displayed less streetwear-inspired silhouettes than prior years.

According to industry experts, streetwear still has a place in the luxury market, but its presence will likely shift as the overall fashion industry continues to face challenges and as there’s a growing appetite among streetwear customers for the brands to go back to their roots.

“Streetwear to me has always been this revolt against the status quo,” said Chris Gibbs, founder of streetwear store Union LA. “Admittedly, I think everyone in streetwear — especially in the last 10 years as streetwear kind of became the ‘it thing’ — a big part of who we’ve always been is doing these kinds of [fashion] collaborations. The more you collaborate with the thing you’re revolting against, the lines kind of get blurred.”

Don C, the streetwear designer and founder of Chicago-based retailer RSVP Gallery, shared Gibbs’ sentiment, stating that streetwear isn’t dead, it just needs to refocus its values and mission.

“I don’t think that anything is dead, I just think things aren’t as strong as they were,” he said. “That might just be because subjectively I am more used to it or it’s not where I am in my life as a subject looking at it. I bet there are certain kids today that are having the same energy or feeling the same feeling like when I first discovered things. I think streetwear is involved in every part of fashion. I see it on the runways, I see it on the streets. It’s just weird — the whole categorization of it.”

According to Luca Benini, the streetwear maven responsible for igniting streetwear in Europe in the late ‘80s, even if streetwear is no longer fueled by hype culture, the consequences of the unprecedented tie-ups and crossover between the luxury fashion establishment and streetwear players that have dominated the late 2010s and early 2020s have changed the industry for good.

“When Off-White came into the picture with its firepower, it had a strong impact. There is probably a little bit more of a stasis right now,” he said. “Of course, there are seasonal fluctuations, but I think that this cross-pollination has stuck, to the benefit of both parties. The fashion system as a whole benefited from it, on the one side with [luxury embracing] important cultural topics that were not part of the conversation before and on the other triggering streetwear brands to upscale their offering.”

Streetwear designer and author Bobby Hundreds thinks that the slowdown of luxury and streetwear will help set healthier and more realistic expectations for brands, many of which can’t scale to the levels of luxury players. These expectations can help streetwear brands connect with their subculture roots and communities, which have always been the backbone of the market.

“Over the next five years specifically, there’s going to be a correction in terms of more of a healthier balance around culture,” he said. “Communities are going to become more important. There’s going to be an emphasis on design and product, and for me, because I’m a writer and I believe in storytelling, so much of it’s going to come back to story.”

Laura Baker, the cofounder of New York City concept store Essx, thinks there will be a more distinct separation between streetwear and luxury aesthetically as streetwear brands reconnect with their origins.

“You have to go back to define what streetwear is,” she said. “Like, streetwear is what people are wearing outside. It’s what’s happening in the youth and in the culture and in the communities. It’s never meant to be just one thing. It’s not just about skateboard culture. It’s about all subcultures and it’s like, what’s the subculture of the moment?”

Streetwear is and always will be anchored on casual styles like T-shirts, hoodies and sneakers, but luxury’s impact on the streetwear market has influenced brands and newer labels to embrace classic menswear and suiting, and give it a streetwear touch.

“In the past decade, streetwear hung its hat on T-shirts, hoodies, logos and sweatpants, and it was bit sloppy,” Baker said. “I’m seeing a lot more design pieces. I’m seeing a lot more tailoring. I’m seeing a lot more style in it. I’m seeing a lot more individuality in streetwear where in the past decade, at least, it just felt very one-note across any brand, whether it was luxury or not luxury. Now it feels a lot more diverse. There’s room for a lot of different avenues and subcultures and people to enjoy streetwear.”

Many are also pointing to the merging of streetwear and traditional aesthetics to the maturation of the streetwear customer, who is getting older and looking for more sophisticated silhouettes.

“At the end of the day, every culture gets a little bit sophisticated as it gets older,” Don C said. “Similar with streetwear, hip-hop is like that, so as the people participating start experiencing other things because of wisdom or age or just wanting to be different and evolve a bit, that subculture will evolve. It’s all positive. To add suiting to streetwear, it’s cool that you can still be considered streetwear in a proper suit or something because, to me, it’s the attitude that you give that makes you streetwear, not the item.”

At Union LA, Gibbs stated he’s seeing a new subset of luxury streetwear brands that are blending elevated materials and craftsmanship with traditional silhouettes. Gibbs named brands like Satoshi Nakamoto, RRR-123, B1 Archive and Better With Age as some standouts in the category.

“Streetwear is a very graphic-based proposition,” Gibbs said. “These guys are taking those graphics, but building really considered, interesting architectural shapes and drapes in a way that I think is fun and interesting and I’m happy to see the evolution and how the consumer is consuming and digesting that and playing with it.”

For the future of streetwear, experts agree that staying in tune with communities and subcultures and not letting business pressures impact the creative side too much is key for its success.

“It’s a healthier balance for streetwear, which is a blend of transaction and commerce and art and culture,” Hundreds said. “It just can’t be heavily tilted one way or another. It needs to be a little bit more symmetrical. We’re seeing a new generation and a new school of independent brands, emerging designers and really revolutionary artists coming about and questioning a lot of the rules that have been put into place over the last decade, and that’s symptomatic and exemplary of much of the macro market, the macro economy, the macro culture. You’re seeing a high turn against institutions, a challenging of established rules.”

When it comes to streetwear’s link with luxury, there’s still opportunity for the two worlds to continue working together.

“If the market and the finance worlds’ impressions of streetwear are not as glowing as they were a decade ago, that is going to have a ramification down to the smaller brands and to the end user and to the consumer,” Hundreds said. “But, it doesn’t mean that it won’t stoke and inspire a next-generation brand to come in and reset the rules. Maybe much of the old way of that last decade or two decades is not the same anymore, but that’s kind of the magic of streetwear — it’s continually evolving. I always say that streetwear generation is about regeneration. I always say streetwear is dead because it’s then born again the next morning. It just keeps turning over and over and responding back to itself.”

ECB president also warns of heightened global trade tensions as ‘rival blocs’ form

Europe will not be able to afford its generous welfare state provision and increased investment in defence and in tackling climate change unless the region fixes a persistent decline in growth, the European Central Bank’s president Christine Lagarde has warned.

Without bold economic policies, the EU “will not be able to generate the wealth we will need to meet our rising spending needs to ensure our security, combat climate change and protect the environment”, Lagarde warned in a speech in Paris on Monday.

She added that the bloc was at risk of facing “a future of lower tax revenues and higher debt ratios” which would result in “fewer resources for social spending”.

A potential trade war, deemed more likely by analysts after Donald Trump won a second US presidential term this month, could further damage the wider region’s economy, Lagarde warned.

Without directly addressing the risk of US tariffs against imports from the EU and China, she stressed that the “geopolitical landscape” was “fragmenting into rival blocs, where attitudes towards free trade are being called into question”.

“We need to adapt quickly to a changing geopolitical environment and regain lost ground in competitiveness and innovation,” said Lagarde.

Joachim Nagel, Bundesbank president and a member of the ECB’s governing council, also warned that the world might be “on the brink of significant escalation” of “geoeconomic fragmentation”. “This is a concerning development, and we should all strive to restore co-operation and free trade,” he said in a speech earlier on Monday in Tokyo.

Even without a trade war, the gap between European and US GDP is set to widen further by the end of the decade, the IMF said last month in a report that sounded an alarm about the continent’s “lack of business dynamism”.

Europe’s ageing workforce and low productivity growth would reduce the continent’s average annual GDP growth for the 10 years until 2029 to just 1.45 per cent, compared with 2.29 per cent for the US over the same period. US growth has outpaced Europe’s since the global financial crisis, particularly since the Covid-19 pandemic.

In September, a report by former ECB president Mario Draghi argued that the EU had to invest more in a bid to tackle the bloc’s lagging competitiveness.

Europe was particularly exposed to the fallout from a potential trade war as it was “more open than others”, Lagarde said, pointing to the fact that trade accounted for more than half of Europe’s total economic output.

At the same time, the continent was “falling behind in emerging technologies that will drive future growth” such as artificial intelligence.

“We are specialised in technologies that were mostly developed in the last century. Only four of the world’s top 50 tech companies are European,” she warned.

The EU needed to respond to this by defining itself as a “single, large economy with predominantly shared interests” that should be pooling its resources in areas such as defence and the green transition, the ECB president said, adding that Europe’s “large, rich economy” had the necessary tools to “adapt” to the challenges.

“We can no longer see ourselves as a loose club of independent economies,” the ECB president said, adding that this view was “outdated in a world that is fragmenting into geopolitical blocs centred around the largest economies.”