>>> What to look at today - 2nd of October 2023

US stock futures advanced along with Asian equities after a deal was reached on the weekend to avoid an American government shutdown. Traders are waiting to hear Federal Reserve Chief Jerome Powell’s remarks for any clues on how much further rates will need to rise. Futures contracts on the S&P 500 raced higher Monday after US lawmakers late on Saturday passed compromise legislation to keep the government running until Nov. 17. Japanese stocks rose, while a number of Asian markets including China and South Korea were shut for holidays. Investors also found a measure of relief after data over the weekend showed China’s manufacturing activity expanded for the first time in six months, adding to signs some parts of the nation’s economy are finding a footing again. South Korea reported a slower decline in exports. While markets are gaining some relief from the US deal, attention will quickly shift to Powell as he speaks in a discussion later Monday. US manufacturing activity and jobs data will also be in the spotlight this week after the head of the New York Fed said Friday policymakers should leave interest rates high for some time. A gauge of dollar strength was little changed. Treasury yields climbed across the curve, with those on 10-year debt rising four basis points to 4.61%. Five-year yields rose by a similar amount to 4.66% to close in on a 16-year high again. The Bank of Japan announced it will conduct additional buying operation for government bonds on Wednesday. The 10-year bond futures trimmed losses on the notice and the yen remained weak at around 149.8 per dollar. Earlier the government bonds fell and stocks were boosted after Japan’s quarterly Tankan survey showed confidence among large manufacturers picked up more than expected, and a summary of the central bank’s policy meeting last month showed signs that officials were more positive about considering revising policy. 
Meanwhile, stock gains on the first trading day of October may put a temporary stay on a torrid period for global financial markets. Elevated interest rates made the July-to-September quarter the worst for MSCI’s all-country stock index since September 2022 as surging oil prices added fears over inflation and slowing economic growth. oil rose on speculation global demand is running ahead of supply.

Nikkei +0.13% Hang Seng Closed CSI Closed Shanghai Closed Shenzen Closed

Eur$ 1.0562 CNH 7.3073 CNY 7.2980 JPY 149.66 GBP 1.2178 CHF 0.9160 RUB 97.5511 TRY 27.4630 WTI$ 90.94 Gold 1,841 BTC 28,010 +3.28% ETH 1,720 +2.70%

S&P +0.36% Nasdaq +0.52% EuroStoxx -0.26% FTSE -0.33% Dax -0.11% SMI -0.10%

Macro :
- Bitcoin Breaks Back Above Key $28,000 Level
- Europe Telcos Ask EU to Make Big Tech Pay More for Networks: FT
- Ackman Wins Regulatory Approval for Blank-Check Rights Company
- UK Considers Copy of Canada’s Growth Fund to Boost Investment
- Turkey Ministry Hit by Bomb Attack on Parliament Opening Day
- Pro-Russia Fico Wins Election in Slovakia in Blow to Ukraine
- Polish Opposition Takes to the Streets to Energize Campaign
- European Growth Stocks Look Oversold, Citi’s Manthey Says

Keep an eye on :
- ABVX FP : Abivax Files for US IPO, Seeking Nasdaq Listing
- AAPL US : Apple Says Software, Apps Behind IPhone Overheating; Fix Coming
- ARYN SW : Aryzta FY Revenue Meets Estimates
- SPR GY : Axel Springer Keen to Join £600 Million Telegraph Auction: Sky
- BA/ LN : BAE Systems wins £3.95bn contract for Aukus nuclear submarines
- BBVA SM : BBVA Notifies Commencement of €1B Share Buyback
- BPT LN : Bridgepoint Mulls Sale of Humanetics for $1.5b With Debt: Rtrs
- CO FP : Casino Completes Sale of 61 Stores for €209M Ent. Value
- CLASB SS : Clas Ohlson Buys Spares From Verdane For Valuation of SEK500m
- DBK GY : Germany’s BaFin to Send Special Monitor to Deutsche Bank: HB
- DISH US : Dish Has Met Wireless Network Deadlines, FCC Says
- EOAN GY : Germany is failing to protect power groups from cyber attacks, warns Eon boss
- GSK LN : GSK, Pfizer $2 Billion 2023 RSV-Vaccine Sales Scope Overlooked
- NK FP : Announces that the intended sale of its assets serving the paper market to Syntagma Capital is highly unlikely to materialize
- KNEBV FH : Kone CEO Henrik Ehrnrooth to Step Down in First Half of 2024
- LULU US : SoftBank-Backed Lululemon Rival Vuori Said to Plan IPO Next Year
- MC FP : Arnault’s Lawyer Says Money Laundering Allegations Are Unfounded
- MANTA FH : Mandatum to Start Trading in Helsinki After Sampo Demerger
- MAU FP : Maurel & Prom to Review Expansions of ESG Programs In Gabon
- NXI FP : Nexity Considers Selling a Stake in Services Unit: Les Echos
- NDA FH : Nordea Beefs Up Workout Unit to Brace for More Company Failures
- NOVN SW : Novartis Iptacopan Study Meets Interim Analysis Primary Endpoint
- Planisware IPO : Planisware to Price IPO Between €16 and €18 Per Share
- REP SM : *PONTEGADEA VIES FOR 49% OF REPSOL REWABLES PORTFOLIO: EXPANSION
- TW/ LN : Weak UK Housing Could Need 4% Mortgage Rates for Market to Thaw
- TIT IM : European telecom groups ask Brussels to make Big Tech pay more for networks
- UBSG SW : UBS Says ‘Not Aware’ of DOJ Probe of Russia Sanction Compliance
- UBSG SW : UBS Reaches Settlement With Mozambique Over Tuna-Bond Scandal
- UN01 GY : Uniper CEO Expects to Repay KfW Loan Shortly: Rheinische Post
- VWS DC : Vestas 3Q Orders Seen at €5 Billion With More to Come: Sydbank
- VOMVB SS : UAW Says Nearly 4,000 Members at Mack Trucks Have Tentative Pact

WSJ : How Adidas Outran Nike With Its $500 ‘Super Shoe’

How Adidas Outran Nike With Its $500 ‘Super Shoe’
Tigst Assefa’s record-breaking run in the Berlin Marathon delivered a much-needed victory for the German brand in the running-shoe arms race

The new Adidas “super shoe” is designed to be worn only once—and to break world records.

Weighing in at 138 grams, or less than a third of a pound, the shoe is so lightweight that elite runners initially doubted it could hold up over a long race. Amanal Petros, a German runner who in 2021 set the national record in the men’s marathon, laughed uncontrollably when he first held it.

So when a handful of runners laced up the Adizero Adios Pro Evo 1 at the Berlin Marathon last weekend, the German sneaker giant’s executives and designers gathered in a tent near the finish line without knowing exactly what to expect.

Then Ethiopia’s Tigst Assefa smashed the women’s world record by more than two minutes, while also beating her own time from last year’s race by nearly four minutes—huge margins in elite running. Five other athletes who wore the shoes also produced exceptional times, among them Petros, who broke his own national record in the men’s race.

“We were confident someone could run fast in the shoe,” said Charlotte Heidmann, Adidas’s senior global product manager, “but breaking the record by two minutes is something everyone was astonished about.”
The Adizero Adios Pro Evo 1. Adidas made 521 pairs of the shoe available for sale in mid-September. PHOTO: ADIDAS

Assefa’s winning run was a triumph for Adidas in the fiercely competitive arena of sports technology. It was also a welcome boost for a company still righting itself in the wake of the costly collapse of its Yeezy partnership with rapper Kanye West, who goes by Ye.

Adidas has endured a difficult period since terminating its partnership with West last year over his antisemitic remarks. The Yeezy collaboration was lucrative and had accounted for around 8% of Adidas’s total revenue.

The company recently said a turnaround plan was starting to deliver results, boosted by the decision to sell off leftover Yeezy inventory worth around $1 billion.

Adidas rival Nike has had its own tough run, with the value of its shares having fallen around 30% since May. Nike shares rebounded on Thursday, after the company reported a 2% increase in revenues compared with the same quarter last year, suggesting the company was regaining some momentum.

Nike said in a statement that it “pioneered the modern revolution of racing footwear technology” and that it has several prototype shoes being tested by its runners ahead of next year’s Paris Olympics.

Adidas made 521 pairs of the Pro Evo 1 available for sale in mid-September at a retail price of $500. They sold out within a few hours, demonstrating demand for the ultimate shoe among dedicated runners who care deeply about improving their personal bests. The company plans to put more on sale in November, said Patrick Nava, the company’s vice president for running and credibility sports.

Nike had led the race to develop a breakthrough running shoe since launching its first prototype super shoe at the 2016 U.S. Olympic marathon trials.

As controversy initially raged about the shoes’ legality, records started getting shattered. In 2018 in Berlin, Kenyan star Eliud Kipchoge broke the men’s marathon world record by more than a minute while wearing Nike super shoes. Last year he did it again in Nike’s latest update, the Alphafly 2.

Eliud Kipchoge wore Nike’s Alphafly prototype shoes during a 2019 attempt to run a marathon in less than two hours in Vienna. PHOTO: RONALD ZAK/ASSOCIATED PRESS

Super shoes’ designs have evolved, but the elements remain the same: thick soles made with superlight, energy-returning foams and fitted with a rigid plate, often made of carbon fiber. The combination creates a springlike effect.

When super shoes first appeared, critics said they appeared to violate rules set by World Athletics, the sport’s global governing body, against footwear that provides an “unfair assistance or advantage.” But in 2020 it effectively legalized Nike’s shoes by enacting rules limiting the thickness of the sole to no more than 40 millimeters and allowing carbon-fiber plates.

The ruling grandfathered in Nike’s pioneering shoes and its head start on the competition—until now.
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To overcome Nike’s lead, the team based at Adidas headquarters in Germany changed the way it normally develops a shoe, said Heidmann. Instead of trying them out with ordinary consumers, Adidas technicians only tested the shoe with elite athletes, including a group of top runners in Kenya.

Adidas developers made breakthroughs on several separate components that were ultimately combined in the Pro Evo 1. In particular, the invention of new lightweight materials enabled the creation of a shoe weighing only 138 grams—60% of the weight of Adidas’s previous elite running shoe. Among them was a new rubber material for the shoe’s outsole that saved weight without sacrificing grip, Nava said.

In another innovation, the rocker—the shoe’s pivot point—was moved further backward after analysis suggested it would improve running economy. The sole itself is made of a new type of foam that, combined with the carbon-fiber forks that Adidas uses instead of plates, provides the bounce that helps the wearer go faster.

More-affordable products drawing on the new technology underpinning the Pro Evo 1 will hit the market in due course, Nava said. The shoe will next be worn by Adidas-sponsored athletes at marathons in Chicago and New York.

The Pro Evo 1 “is for the 1 percenters,” said Nava. But “it’s important not just to cater to the elite. ”
Though developed for single use, there’s no sign that the shoe significantly degrades after 26 miles and it can likely be reused, he said.

While it’s too soon to judge the shoe’s commercial impact, its effect on Adidas’s credibility as a developer of sports technology will be invaluable, Nava said.

“Who has the best marathon shoe right now? That’s a claim we put out there on Sunday.”

FT : Hystar to expand electrolyser factory as it seeks to boost hydrogen product

Hystar to expand electrolyser factory as it seeks to boost hydrogen production
Norwegian company’s chief points to ‘very big gap’ between targets set by governments and output capacity

A company that makes electrolysers to produce hydrogen is planning to develop in Norway what will be one of the world’s largest factories, in a sign of the growth of the industry.

Norwegian company Hystar is planning to expand its plant in Høvik, near Oslo to a capacity of 4GW a year, up from 50MW today.

Electrolysers are used to split hydrogen from water and are in growing demand as countries around the world look to start replacing fossil fuels with hydrogen.

Hystar is also in talks over developing a large new factory in the US, encouraged by the support on offer for hydrogen development in the Inflation Reduction Act.

The International Energy Agency estimates that about 170GW a year of global electrolyser production capacity would be required by 2030, up from an estimated stated 14GW of capacity in 2022.

Hystar’s chief executive Fredrik Mowill said there was a “very big gap” between the targets set by various governments and current production capacity.

“This [expansion] will enable us to deliver at completely different scale,” he added.

The new factory, which will have an automated production line, should be running at full capacity in 2026.

Hystar makes proton exchange membrane electrolysers, which are considered well-suited to use with intermittent sources of electricity such as wind and solar power, as they can respond more easily to changes in electricity supply.

The company signed a three-year deal in May with Johnson Matthey for key electrolyser parts, with the latter’s chief executive Mark Wilson saying such partnerships were “essential to the development of the hydrogen economy”.

Hystar raised $26mn in January from backers including Mitsubishi and Nippon Steel Trading.

Hydrogen is a niche product used mainly in refining and some other industrial applications, but it is being looked at as a replacement for fossil fuels in other areas because it does not produce carbon dioxide emissions when burned.

However, most of the hydrogen in use today is made by splitting it from natural gas, which releases carbon dioxide in the process.

In a report published this month, the IEA said only 0.7 per cent of hydrogen made in 2022 was produced in a low carbon way: either from water, or from gas with the emissions captured and stored.

It added that, while electrolyser manufacturers had announced they had total capacity of 14GW per year, it estimated their output in 2022 was only about 1GW.

Overall, it said that “measures to stimulate low-emission hydrogen use . . . are still not sufficient to meet climate ambitions”.

“Without robust demand, producers of low-emission hydrogen will not secure sufficient off-takers to underpin large-scale investments, jeopardising the viability of the entire low-emission hydrogen industry,” it said.

In the US, the IRA provides a tax credit of up to $3 per kg for low carbon hydrogen.

“Both the US and Canada have attractive incentives on offer, demonstrating a clear commitment to providing our industry with much-needed certainty and financial support,” Mowill said.

FT : European telecom groups ask Brussels to make Big Tech pay more for networks

European telecom groups ask Brussels to make Big Tech pay more for networks
BT, Deutsche Telekom and Telefónica CEOs among those calling for internet traffic drivers to contribute to investment

Europe’s biggest telecoms companies have called on the EU to compel Big Tech to pay a “fair” contribution for using their networks, the latest stage in a battle for payments that has pitched the sector against companies such as Netflix and Google.

Technology companies that “benefit most” from telecoms infrastructure and drive traffic growth should contribute more to costs, according to the chief executives of 20 groups including BT, Deutsche Telekom and Telefónica, who signed an open letter seen by the Financial Times. It will be sent to the European Commission and members of the European parliament.

“Future investments are under serious pressure and regulatory action is needed to secure them,” they warned. “A fair and proportionate contribution from the largest traffic generators towards the costs of network infrastructure should form the basis of a new approach.”

They added that regulators need to take action to help secure future investment, with telecoms groups having to spend billions to support the rollout of 5G and upgrade to full-fibre networks.

Signatories included Timotheus Höttges at Deutsche Telekom, Christel Heydemann at Orange, José María Álvarez-Pallete at Telefónica and Pietro Labriola at Telecom Italia. It was also supported by outgoing BT chief executive Philip Jansen, his successor Allison Kirkby, who is currently chief executive at Telia, as well as Vodafone’s chief executive Margherita Della Valle.

They suggested that a payment mechanism might only make demands on “the very largest traffic generators” with a focus on “accountability and transparency on contributions . . . so that operators invest directly into Europe’s digital infrastructure”.

The so-called fair share initiative has been picking up support in Brussels, with the European parliament in June “call[ing] for the establishment of a policy framework where large traffic generators contribute fairly to the adequate funding of telecom networks without prejudice to net neutrality”.

The commission has said perhaps €200bn of additional investment is required to meet its connectivity targets of 5G in all populated areas and full gigabit coverage across the EU by 2030. The commission opened a consultation in February but the expectation of results by June has been delayed.

According to the letter’s signatories, data traffic has increased by an average of 20 per cent to 30 per cent each year — primarily driven by a “handful” of large technology companies. Telecoms groups expect this growth to continue but said it was unlikely to result in a corresponding return on investment under current conditions.

The letter’s signatories claimed that Big Tech companies pay “almost nothing for data transport in our networks” while some cloud providers charge customers “up to 80 times as much for the onward transport of data from the cloud”.

Tech groups have previously opposed fair share proposals and argued they already invest in internet infrastructure including subsea cables and data centres as well as content and services.

Daniel Friedlaender, head of CCIA Europe, which lobbies on behalf of the tech industry, argued telecom groups “have grown thanks to exciting content and services developed by creative and tech firms”.

“Now they’re trying to fool Europe into providing them with extra cash. Telcos want to get their networks fully subsidised by the same firms who have helped them grow and thrive,” he said. “Ultimately, these telecom giants want to make European consumers pay a second time through network fees, coming on top of their subscription.” 

The executives’ letter also called for an overhaul of telecoms regulation, with executives asking policymakers to accept “the need for scale to avoid market fragmentation”. 

The industry is waiting for a decision from the commission on a proposed Orange and MasMovil joint venture in Spain, regarded as a test case for regulators’ tolerance of further consolidation across Europe.

A commission spokesperson said that its recent consultation covered the issue of “fair contribution” to network costs. “This is a complex issue and any decision should be made by understanding the underlying facts and figures.”

FT : The debt-fuelled bet on US Treasuries that’s scaring regulators

The debt-fuelled bet on US Treasuries that’s scaring regulators
Policymakers are concerned about the huge leverage that hedge funds are employing as part of the so-called basis trade

One year ago, a pocket of borrowed money on the edge of UK bond markets imploded with enough force to topple a prime minister and draw the Bank of England into an emergency rescue.

Now the world’s most influential regulators are intensifying their scrutiny of a mounting potential risk to the gilt market’s much bigger cousin: the $25tn US government bond market.

Over the past month, the Bank for International Settlements, a convening body for the world’s central banks, and US Federal Reserve researchers have pointed to a rapid build-up in hedge fund bets in the Treasury market.

The so-called basis trade involves playing two very similar debt prices against each other — selling futures and buying bonds — and extracting gains from the small gap between the two using borrowed money.

Both the protagonists and the strategy itself are different from those involved in the UK’s liability-driven investment meltdown last year. But they have one thing in common: the collision of heavy leverage with sudden and unexpected market movements, and the speed with which that can cause potentially serious problems.

The scale of the basis trade is hard to pin down. Even the Fed lacks precise data. But leveraged funds’ short positions in the most liquid futures contracts reached an all-time high of almost $900bn in late August, according to Commodity Futures Trading Commission data. Even if not all of that is used for the basis trade, the Fed researchers said the strategy poses a “financial stability vulnerability” while the BIS said it had the potential to “dislocate” trading. 


Such risks matter because the US Treasury market underpins the global financial system. The yield on federal government debt represents the so-called risk-free rate that is the benchmark for every asset class. And the short but destructive UK market crisis a year ago highlighted how quickly markets can become disorderly when leverage has been employed — an increasingly pressing concern for regulators focusing on potential problems that accumulated during more than a decade of super-low interest rates.

Analysts, experts and investors argue that the Fed’s interventions in the Treasury market in September 2019 and March 2020, among others, have led to a belief that the Fed will intervene in any instance of extreme market instability, implicitly backstopping speculative trading. 

“I do think moral hazard is very real here,” says Morgan Ricks, a professor at Vanderbilt Law School, where he specialises in financial regulation. “So I don’t think it’s unreasonable to think that the Fed’s implicit backstop of this trade is encouraging more of the trade to happen.”

But hedge funds retort that they are now vital providers of liquidity in this sector. “The market needs arbitrageurs,” says Philippe Jordan, president of Capital Fund Management, a hedge fund with $10bn in assets. “Without them it’s going to be more expensive for the government to issue paper, and more expensive for pension funds to trade. There is a reason this ecosystem exists.”

Back to basis
Hedge funds have been playing an increasingly important role in the functioning of the Treasury market in recent years.

Primary dealers, the 24 banks that transact directly with the Treasury department and facilitate trading for investors, have pulled back from their role since 2008, deterred by rules that have made it more expensive for them to hold bonds.


As the Treasury market has grown — from about $5tn at the start of 2008 to $25tn today — hedge funds and high-speed traders, which are less transparent and less tightly regulated than banks, have picked up the slack. They now play an essential role, buying bonds and making prices for other investors, partly through the basis trade.

Basis trades have proliferated this year as the Fed has raised interest rates and the size of the Treasury market has grown. Both factors have pushed yields higher, increasing demand in the futures market from asset managers looking to lock in returns; their long positions in some Treasury futures have reached record highs in recent weeks.

The basis trade works by exploiting the gap in prices between Treasury futures, which commit users to buying at a certain price on a future date, and on cash bonds. Hedge funds sell the futures and buy the cash bonds, which they can deliver to the counterparty when the futures contract comes due.

The difference between Treasury and futures prices is small, often just a few fractions of a percentage point, so the return is minuscule. But hedge funds can magnify their bets that the gap will close by using borrowed money to fund the trade.


Because Treasuries are considered the highest quality collateral, the prime brokerage divisions of major Wall Street banks are happy to lend against them, often at their full face value rather than a slight discount. In the repo market — short-term lending that facilitates a lot of Treasury trading — hedge funds need to post only small amounts of cash against their credit lines, sometimes levering up by more than 100 times. 

There is borrowing on the other side of the trade too; futures are inherently leveraged products and again, hedge funds need to put up only a small amount of collateral to satisfy the margin requirements of futures exchanges. Ten-year Treasury futures offered by US exchange group CME allow trades of up to 54 times the cash margin posted, for instance.

By taking advantage of the ability to borrow on both sides of the trade, hedge funds can deploy huge leverage. The head of one fund that has engaged in this trade says traders have in the past been able to lever up to 500 times.

The strategy has attracted different types of hedge funds. Traders say diversified groups such as Citadel, Millennium Management and Rokos Capital Management as well as specialists such as Symmetry Investments and Garda Capital Partners are among many that are routinely using the basis trade. The funds in question either declined to comment, or did not respond to requests for comment.

What about the risks?
But central banks and regulators are fearful that the effect of any sudden dislocation in the market could quickly escalate and form ugly feedback loops.

Already there have been several warning shots. The Fed has said it believes stress on this trade played a role in hammering Treasury prices when Covid-19 lockdowns began in the US in March 2020, and it was also considered a factor in a brief seize-up in the repo market in September 2019.

There are several ways the trade can unravel. One is that banks can recoil from risk in moments of market stress, and cut back on the leverage they allow funds to deploy, or ramp up the cost of that short-term lending.

Another is that the clearing houses that facilitate futures trades can increase the amount of collateral they require against a trading position. This occurred when Silicon Valley Bank collapsed in March, with fears of contagion sparking a rapid surge in demand for the safety of US government bonds. In response, CME Clearing increased margins for 10-year Treasury note futures by 15 per cent.

Both make the trade less profitable and leave the hedge fund with a choice: keep the trade on for a higher cost or unwind it, potentially affecting broader markets. The trade is similarly vulnerable to a move in repo rates, which could reduce the amounts banks are willing to lend against hedge fund trades.

My biggest concern is that if we get a big unwind in this leveraged trade, it could really cause liquidity to dry up in the Treasury market

Matthew Scott, head of rates trading at AllianceBernstein
“All these strategies are at significant risk if liquidity worsens,” says an executive in this space at a large US bank. “For instance, if they can’t roll their repo trades or the [costs of] those trades increase.” 

Regulators say this all adds up to a situation where just a few large firms getting out of their bets could potentially encourage or force others to do the same, quickly leading to a doom loop of distressed selling in the world’s most important asset market. 

In such a situation, it would be highly unlikely for the US central bank to simply stand back and watch. The executive at the large US bank says: “The assumption is that the Fed will step in to save the repo market, which they have in the past, so my view is that they will step in again if anything happens.”

Intervention could involve buying bonds, thus undermining the central bank’s mission to tighten policy until it defeats inflation, and resembles an official safety net for the trade.

Some firms say they have started pulling back from the trade. “This is pretty crowded right now and there’s a lot of weight in it, so the concerns out there are not necessarily overblown,” says one executive at a large hedge fund. 

But most hedge funds active in this space say fears are misdirected and that any clampdown could have grim knock-on effects.

A senior executive at one of the world’s largest hedge funds says well-run entities are not taking on undue risks. “It’s not like an episode of Billions. You’re talking tiny margins on big positions,” the executive says. “If hedge funds stopped buying Treasuries, I don’t know who would buy them.”

A fixed-income trader at another large hedge fund says the basis trade “has been around for half a century and is well collateralised by design”. Provided it is properly managed, “it plays an essential role in the healthy functioning of the US Treasury market ecosystem”.

Funds also argue that the market is better protected thanks to the Fed’s creation of the standing repo facility, which will buy Treasuries and agency mortgage-backed securities from banks in exchange for overnight cash loans. Even though hedge funds do not have access to the facility, it helps prevent sudden spikes in repo rates. 

‘Free insurance’
The prospect of intervention if market conditions become unruly is tantamount to “free insurance,” says Ricks, of Vanderbilt Law School. “I think we should be worried about rent extraction by the funds that are engaged in this trade, who are piggybacking on a Fed backstop.”  

The executive at the large bank says that while the basis trade is “overfished”, it could “go on for quite some time because of this moral hazard”.

The Securities and Exchange Commission, led by chair Gary Gensler, has proposed several new regulations that would constrain hedge funds and high-speed dealers in the Treasury market.

Under one rule, these types of market participants would be required to register as dealers, which would increase oversight of and transparency in their trading activity. But the final version of that rule has not yet been published or implemented and one Washington insider believes hedge funds will resist any highly restrictive dealer rule through litigation. 

The clearest argument made by hedge funds, however, is not that the trade is risk-free, but that in the current market environment it has become essential to the functioning of the system. 

“The total amount of US Treasury debt is growing and deficits are here to stay, just as the Fed is reducing the size of its balance sheet,” says Don Wilson, chief executive of DRW, one of the world’s largest proprietary trading firms.

“The need for leveraged market participants to facilitate that cash-to-derivative transformation will keep growing, and discouraging it will bring significant adverse consequences.”

Barrons : Detroit and Hollywood Are Just the Advance Guard. Expect More Strikes.

Detroit and Hollywood Are Just the Advance Guard. Expect More Strikes.
After decades of losing ground to corporate cost-cutting and globalization, labor unions face their biggest opportunity in years to forge a comeback. It won't be easy.

Picket lines across the U.S. swelled in recent weeks as thousands of members of the United Auto Workers walked off the job in a historic strike that simultaneously targeted the Big Three Detroit auto makers.

Erika White spent about 10 hours with the strikers, even though she doesn’t have a direct stake in the outcome of the UAW’s negotiations with
Ford Motor, General Motors, GM, Stellantis. As president of the Communications Workers of America Local 4319 in a Toledo, Ohio, suburb, White says she has been following the UAW’s internal reforms and bargaining in hopes that success will reverberate across organized labor.

Every labor leader and member has to start thinking more strategically, White says. “We have to take risks to get things done because not one thing in this country has been gained without a fight,” she says. “It’s time that we have to be more creative.”

After decades of losing ground to corporate cost-cutting and globalization, unions face their biggest opportunity in years to forge a comeback. For many, the moment is right as politicians in both political parties focus on bringing manufacturing jobs back to the U.S. There’s also a growing recognition that workers have been left behind even as CEO pay rises to new heights. This past week, President Joe Biden took the unprecedented step of joining a UAW picket line in Michigan.

White, a longtime telecommunications specialist for AT&T, is among a range of workers closely watching the recent showdowns between labor and business in the belief that what affects one union affects them all. The outcomes will help determine the success or failure of future bargaining and mobilization efforts. But while worker activism may increase, efforts to modernize unions for the 21st century still face an uphill climb.

At stake in the auto talks and other negotiations is the balance of power between labor and management after years of tilting away from labor. The auto makers say they have already made generous offers and that contracts that are too costly would put them at a steep disadvantage to Tesla (TSLA) and other nonunion competitors. More broadly, a UAW victory would encourage workers in other unions to take more aggressive stands at the bargaining table—potentially complicating the Federal Reserve’s effort to tame inflation.

“If these big negotiations lead to good settlements for the workforce, we will see more activity blossom in other settings,” says Thomas Kochan, a Massachusetts Institute of Technology professor and co-director of the Sloan Institute for Work and Employment Research. “If [workers] end up in long strikes that don’t achieve their objectives, then I think there’ll be the lesson that even with a lot of power, workers can’t seem to organize.”

Building Momentum
Fueled by the long-term impact of relatively slow wage growth, soaring rates of wealth inequality, and rising household costs, workers in a range of industries are taking more-aggressive approaches to contract talks.

“The income inequality has gotten to a breaking point,” D. Taylor, international president of Unite Here, which primarily represents workers in hotels and other hospitality sectors, tells Barron’s. “Nobody expects Corporate America to come to their rescue, and nor do they expect the government—so they’re looking around for what institution can actually truly help them, and I think that’s where the labor movement should and needs to be.”

Public perception is encouraging the pushback, as well. Three-quarters of Americans support employee unions in general, according to a survey of more than 2,100 U.S. adults conducted by the Harris Poll after the UAW strikes began in September. That’s up four percentage points from January 2022.

The tight labor market of recent years has provided workers with more leverage, further boosting calls for worker activism. Yet even as that eases, union activity may not. Historically, strike waves and organizing activity have taken place even when there have been very high levels of unemployment, says Tod Rutherford, a labor expert and professor at Syracuse University.

Recent wins—such as the Teamsters’ contract with United Parcel Service and airline pilots’ big raises at American Airlines Group Delta Air Lines (DAL), and United Airlines Holdings (UAL) earlier this year—have spurred other ambitious demands and expectations. After 148 days, the Writers Guild reached an agreement with film and television studios this past week that union leaders termed “exceptional,” fueling hopes that SAG-AFTRA will be able to soon reach a similar deal for actors.

“When we go through a period like this, there is an imitation, or contagion, effect,” says MIT’s Kochan.

This past summer, there were 113 strikes, according to Cornell University’s Labor Action Tracker. In August, strikes amounted to a total of 4.1 million workdays, according to Bureau of Labor Statistics data. That’s the highest level since 2000.

Those levels look poised to continue or even grow during the fourth quarter. About 53,000 Las Vegas hospitality workers represented by the Culinary Workers and Bartenders Unions voted to authorize a strike this week, while roughly 26,000 American Airlines flight attendants and 10,000 Southwest pilots authorized strikes at the end of August. Strike authorizations give union leaders the ability to call a strike if contract agreements aren’t reached. About 75,000 Kaiser healthcare workers plan a three-day strike on Oct. 4 that could disrupt access to care for up to 12 million people.

Only 7.2 million or 6% of the U.S. private workforce is unionized, down from nearly 17% four decades ago. In the case of auto workers, the UAW is employing a novel but risky ever-expanding strike tactic that targets key facilities to keep the auto makers guessing. On Friday, the UAW expanded its strikes to include another Ford assembly plant in Chicago and a GM facility in Lansing, Mich., meaning about 25,000 of its approximately 150,000 Big Three members are on strike.

“Is it death by a thousand cuts? I don’t know, but to be able to cause some pain to each company—which has never been done…that’s a beautiful thing,” UAW regional director David Green tells Barron’s. “The UAW, as an organization, has been reactive to everything in my lifetime. Now, we’re proactive for the first time.”

While up to 150,000 UAW members may ultimately be involved in the continuing strike efforts, every vehicle that rolls off assembly lines of a Detroit Big Three auto maker contains from 8,000 to 12,000 different components manufactured by roughly 5,600 U.S. suppliers, according to the Washington, D.C.-based American Automotive Policy Council’s 2020 Economic Contribution Report. For many of those suppliers, contracts from the Big Three can account for up to 70% of their business, and these auto-parts companies collectively employ 871,000 workers in the U.S.

The strike activity nationwide has had only minimal impact on unemployment and job openings so far, but the Big Three Detroit auto makers are suffering $15 million a day in lost income, before taxes or interest, from the three manufacturing plants initially targeted, according to Benchmark analyst Michael Ward. Research shows that companies facing successful unionization efforts could lose up to 10% of shareholder value, according to Sanjai Bhagat, professor of finance at the University of Colorado at Boulder. The stock market response is based, in large part, on the assumed inefficiencies caused by the union.

Some argue that the costs of these strikes also are starting to hit consumer prices. “The decision by the United Auto Workers to initiate a strike will have far-reaching negative consequences for our economy,” said Suzanne Clark, president and CEO, U.S. Chamber of Commerce, in a statement. She said the UAW strikes could increase costs for new cars, and cause a sudden loss in income for those in related industries and for restaurants and local businesses whose customers are now on strike.

Uphill Battle
The recent momentum for organized labor arguably started in 2018 with a West Virginia teachers’ strike, which resulted in 5% wage gains and spawned copycat walkouts that raised educator pay in Arizona and Oklahoma. Since then, there has been an uptick in union activity. There were 2,510 union representation petitions filed at the National Labor Relations Board, or NLRB, for fiscal-year 2022, up from 1,597 filed in 2018. During the first six months of fiscal-year 2023, there have been 1,200 filed so far, slightly ahead of the 2022 pace during the same period.

Some of those mobilization efforts have concentrated on sectors and employers that haven’t been traditional union targets in the past, such as Starbucks (SBUX) and Amazon.com (AMZN). Since late 2021, workers at about 350 U.S. Starbucks locations have voted to primarily join Workers United out of a potential 9,480 company-owned U.S. Starbucks stores.

Despite the new momentum, unions have a steep climb to reverse the decades- long decline. Recent union drives, while gaining attention, haven’t produced a plethora of new labor contracts. Many existing union members also are working under expired agreements while negotiations drag on.

Current laws and regulations do little to help, says Margaret Poydock, a senior policy analyst with the Economic Policy Institute, a nonprofit think tank. Union advocates say the NLRB is limited in its ability to protect workers, providing weak antiretaliation and whistleblower protections. And the federal Protecting the Right to Organize Act—which would allow the NLRB to impose financial penalties on employers that violate workers’ rights and provide for arbitration to resolve bargaining gridlocks—has little chance of passage if Republicans control either chamber.

It’s going to take a mass activist movement of workers standing up for themselves to roll back decades of union declines, says Christian Sweeney, deputy director of organizing for the AFL-CIO, an umbrella organization for unions. “Organizing begets more organizing.”

But new members and younger workers provide some optimism for union advocates. “There’s something in the air. Young people, old people, union members are standing up and saying, ‘ enough,’” says Brent Booker, general president of the Laborers’ International Union of North America.

Joy Vaughn joined union efforts at Dallas Fort Worth International Airport about a month after she started working as a baggage handler 18 months ago. Vaughn-, who makes $15 an hour-, says she joined to gain better pay and benefits, as well as improved working conditions at the airport.

“Things have got to get better,” Vaughn says. “I’m not only fighting for myself, but also I’m fighting for generations to come and those around me.”

FT : BAE Systems wins £3.95bn contract for Aukus nuclear submarines

BAE Systems wins £3.95bn contract for Aukus nuclear submarines
Ships being built as part of security pact with US and Australia set to bring jobs and investment to Cumbria

BAE Systems, Britain’s biggest defence contractor, has won a £3.95bn contract to build a new generation of attack submarines as the UK moves ahead with the trilateral Aukus security pact.

The US, Australia and Britain in March unveiled details of the Aukus plan to provide Australia with nuclear-powered attack submarines from the early 2030s to counter China’s ambitions in the Indo-Pacific.

BAE said the funding would cover development work until 2028, allowing it to start the detailed design phase of the programme and start to buy long-lead items. 

Charles Woodburn, chief executive of BAE, said the funding “reinforces the government’s support to our UK submarine enterprise and allows us to mature the design, and invest in critical skills and infrastructure”.

“These hunter-killer Aukus submarines will empower the Royal Navy to maintain our strategic advantage under the sea, enabling us to compete with emerging navies anywhere in the world as our world becomes more unpredictable and dangerous,” said Grant Shapps, defence minister, at the start of the Conservative party conference in Manchester on Sunday. 

The submarines will be based on a British design for the next generation of attack boats that will replace the current Astute class. Australia and the UK will both operate the so-called SSN-Aukus. Manufacture of the boats will start towards the end of the decade, with the first SSN-Aukus boat due to be delivered in the late 2030s.

Aukus is seen by ministers as a key part in the government’s “levelling up” agenda to narrow regional economic differences. Cabinet minister Michael Gove name-checked Barrow-in-Furness, the Cumbrian town where BAE Systems builds the submarines for the Royal Navy, in a speech in July, promising to make it a new “powerhouse of the North”. 

“By backing British businesses to develop them, we’re taking the long term decisions we need to boost our defence industry and to grow our economy,” said Shapps. 

The agreement promises decades-long work at BAE’s yard at Barrow. BAE said on Sunday that the contract award would also fund significant infrastructure investment at Barrow, investment in its supply chain and the recruitment of more than 5,000 people. 

The money will help to preserve submarine shipbuilding in the UK led by BAE and Rolls-Royce, which builds the reactors that power the Navy’s submarines. Rolls-Royce in June announced plans to double the size of its Raynesway site in Derby as a result of the Aukus deal. 

Babcock International, which maintains and supports all of the UK’s submarines, said on Sunday that it had signed a five-year contract with the MoD to provide input into the detailed design of SSN-Aukus. 

David Lockwood, Babcock CEO, said the “importance of applying our extensive knowledge and longstanding experience is being recognised through this contract award”.

WSJ : Bill Ackman Tweets a Lot of Big Ideas. His Biggest Might Be Combining With

Bill Ackman Tweets a Lot of Big Ideas. His Biggest Might Be Combining With Twitter Itself.
Prolific social-media user says he would consider a deal with Elon Musk’s platform, now called X, for his new vehicle

Bill Ackman has amassed nearly 800,000 followers on X, the social-media platform formerly known as Twitter, by broadcasting his thoughts on topics ranging from how to end the war in Ukraine to Robert F. Kennedy Jr.’s controversial stance on vaccines.

Now, the investor might take his enthusiasm for the Elon Musk-owned platform to the next level.

Ackman’s firm, Pershing Square PSH 0.69%increase; green up pointing triangle, received regulatory signoff Friday for a novel investment vehicle whose purpose is to invest in a privately held company and take it public. When asked by The Wall Street Journal if he would consider a transaction with X, the billionaire investor said “Absolutely.”

Other companies that could fit the bill include private-equity-owned businesses, divisions of public companies or “mature unicorns” eyeing initial public offerings, according to the vehicle’s regulatory filing.

The chances of Ackman pulling off a deal for X aren’t great. Musk spent $44 billion just a year ago to buy the company and told people around then he could take it public in a few years. X’s ad revenues have dropped, Musk has said, in part because his management has scared advertisers away, and his purchase added $13 billion in debt, metrics that are unlikely to play well with public investors.

Ackman says he has no idea if X is interested and would still need to determine whether or not a deal is doable. X had no comment.

Either way, Ackman said he has “enormous respect” for Musk and what he is doing with the platform. Ackman, a registered Democrat, has become a big defender of Musk’s vision of X as a free-speech haven where unpopular opinions, especially those from the right, can be voiced without fear of censorship.

After spending most of his career as an activist investor, Ackman, 57, also fancies himself an expert at helping companies shine and could see an opportunity to help improve X’s results. His vehicle could also give X some much-needed cash to pay down its heavy debt burden.

While Ackman doesn’t know Musk well, his foundation made a small investment in X when the Tesla chief bought it, and he has occasionally tweeted ideas for the platform. One was adding an opposite button of sorts to certain tweets that would bring the user to the most popular tweet containing a counterargument. Musk responded, “Good idea.”

Ackman’s ‘SPARC’
Ackman is billing his new investment vehicle as an elevated version of the traditional special-purpose acquisition companies whose popularity surged before fizzling last year. While a SPAC raises money from investors before finding a company to merge with and take public, his version, called Pershing Square SPARC Holdings, flips the order. The “r” stands for “rights,” signaling investors’ rights to buy in after a target is identified.

Ackman has been waiting for the Securities and Exchange Commission to bless his creation for roughly two years, ever since regulatory concerns forced him to walk away from a large SPAC deal he orchestrated with Universal Music Group. At the time, he gave his investors their money back and warrants for the SPARC. (His investment firm took a 10% stake in Universal instead.)

The SPARC is expected to have at least $1.5 billion to invest in a deal, the filing says, which can be used by the company or to buy out existing investors. Pershing Square will contribute between $250 million and $3.5 billion.

Rights holders, a mix of retail and institutional investors, would contribute around $1.22 billion, and possibly much more. The rights price is set as part of the deal negotiation and there is no upward limit.

After a deal is announced, holders would get 20 business days to exercise or sell their rights, which will be trading on an over-the-counter market. A deal could close 10 business days later, the filing says.

On Friday, after regulators blessed the SPARC, Ackman took to X: “If your large private growth company wants to go public without the risks and expenses of a typical IPO, with Pershing Square as your anchor shareholder, please call me. We promise a quick yes or no.”

Ackman on X
Ackman rose to fame on Wall Street by pushing companies to make changes to boost their stock prices. He stepped back from activism—and the spotlight—several years ago after losing billions on a series of bad bets. He’s since rehabilitated Pershing Square, which now manages $16.5 billion, by placing friendlier wagers on companies such as Hilton and Chipotle.

When Ackman joined Twitter in 2017, his tweeting appeared like that of most public figures and companies—a forced exercise to further business interests. (“Eating our own cooking @ChipotleTweets,” read one of his first posts, which included a photo of him in line at the burrito joint.)

His account had been dormant for nearly a year when he picked it back up in the early days of Covid-19, tweeting impassioned pleas for swift government action to get the virus under control and later, mass vaccination.

In the years since, his account has morphed into continual reactions to current events and musings on everything from the best exercises for people with back issues to the “karmic quality” of seeing a short-seller attack his rival, Carl Icahn.

Ackman says X has become one of his principal ways of keeping track of current events after the Harvard professor and psychologist Steven Pinker called his attention to its usefulness at a dinner party years ago.

“It’s like one big brain,” Ackman says, referencing the various “takes” on any given topic found on the platform.

Ackman, like many hedge-fund managers, is famous for a contrarian streak when it comes to markets, but on X, he stokes debate in areas far afield from investing.

He took to the platform after he and his wife, the architect Neri Oxman, who he’s described as the female Elon Musk, watched testimony of Kyle Rittenhouse, the teenager charged with killing two people at a Wisconsin protest using an AR-15-style rifle.

“We came away believing that #Kyle is telling the truth and that he acted in self defense. We found him to be a civic-minded patriot with a history of helping his community,” began a more than 300-word missive.

The tweet prompted a reporter to text Ackman asking if his account had been hacked, he tweeted at the time. Rittenhouse was found not guilty.

After FTX founder Sam Bankman-Fried denied knowing what was going on at his $32 billion cryptocurrency exchange soon after its collapse, Ackman tweeted, “Call me crazy, but I think @sbf is telling the truth.” Several X users took him up on it, with one tweeting, “Bill are you currently under duress?”

His changeability has been on full display when it comes to the presidential election.

“I am going to make a bold and early call. @VivekGRamaswamy will run for POTUS and win,” he said in February of the Republican candidate. Two months later, he backtracked, saying some of the far-right candidate’s views were too extreme.

The following month, he urged JPMorgan Chase CEO Jamie Dimon to run in a tweet that spanned over 600 words.

“If you agree that he should be our next POTUS, give him a call, send him an email or go see him, and like and retweet this tweet,” it read. While Dimon has briefly considered running before, he has decided against running and said so publicly this summer.

Ackman has since resumed promoting Ramaswamy and also tweeted approvingly of vaccine skeptic Kennedy, which has increased his audience while startling some people close to him.

Alongside his growing popularity on the platform, Ackman has picked up the pace of public appearances too, stoking speculation he could run for office himself one day.

On Thursday, during an appearance at CNBC’s Delivering Alpha conference, he praised X, crediting the platform for influencing some of his most winning investments. In 2020 and 2021, combing through tweets helped prompt him to place a pair of bets that the market was misjudging Covid-19’s toll. They’ve made him $5.5 billion.

“I’ve comfortably covered the cost of my blue-check,” Ackman says, in reference to the $84 he pays annually for a premium X account.

WSJ : A Disastrous Start Doomed the U.S. as Europe Wins the Ryder Cup

A Disastrous Start Doomed the U.S. as Europe Wins the Ryder Cup
While the Americans threatened to make a push after tempers flared on Saturday, Europe maintained its home dominance

GUIDONIA MONTECELIO, Italy—The most anticipated moment of the Ryder Cup’s final day arrived when American golfer Patrick Cantlay and his caddie stepped into the amphitheater for the final session. Less than a day earlier, Cantlay’s long putt delivered the Americans a dramatic victory on the 18th hole, and his caddie’s celebration stirred up altercations with Rory McIlroy.

The fans greeted Cantlay with jeers and by waving their hats at him—mocking his decision to not wear a cap this week, and referencing how his caddie waved his own hat at the crowd during the controversial celebration. The question facing the Americans was whether the fiery conclusion to Saturday could spark a record comeback on Sunday.

But after an inspired effort on the final day, the Americans failed to erase their struggles to begin the competition.

Europe withstood a late U.S. push to reclaim the Ryder Cup with a 16.5 to 11.5 win here at Marco Simone Golf Club, continuing their dominance on home soil in this biennial event. The Americans haven’t won on this continent since 1993 and have more broadly watched as their counterparts have come to own this competition: Europe has now won eight out of the last 11 Ryder Cups.

“At one point I was looking at the board trying to figure out how we get to 14.5 points,” European captain Luke Donald said. “But in the end, we got there easily.”

How Europe eventually clinched was peculiar. The deciding moment came when Rickie Fowler conceded a putt to Englishman Tommy Fleetwood on the 16th green—a decision that quickly drew scrutiny given the stakes. That didn’t matter to the jubilant fans here, whose supercharged energy went up another notch. One gray-haired fan celebrated by taking a plunge into one of the ponds on the course.

Down by five points entering Sunday, the U.S. needed the biggest final day comeback ever in order to win. There were moments when that didn’t seem entirely unreasonable, as a half dozen of Americans charged ahead in their matches while others were tied. Until late, a draw was also in play and that practically would have been a win for the visiting side. In the case of a tie, the team that last won the Ryder Cup—in this case, that was the U.S. after its big win in 2021—retains it.

“I couldn’t believe what we were seeing on the board, to be honest,” Irishman Shane Lowry said. Those last couple of hours were probably two of the most stressful hours on the golf course I’ve had.

But the Americans failed to capitalize on the opportunities that they needed to convert on to pull off something improbable. World No. 1 Scottie Scheffler, in the opening pairing against Spanish golf star Jon Rahm, grinded his way back from two down and was ahead heading into the 18th hole. Yet when Rahm’s putt from 90 feet away gave him a mere tap-in for birdie, that left Scheffler needing to chip-in from a short distance away to maintain his lead.

Instead, Scheffler’s ball scooted right of the hole, delivering Rahm a draw that felt like a win for Europe, which needed only four of 12 points going into the day to prevail. Once Englishman Tyrrell Hatton topped British Open champion Brian Harman, Europe had 14 of the 28 points and the Americans’ only option was to do something distinctly European: play for a draw.

But after Fowler went into the water on the short par-4 16th, while Englishman Tommy Fleetwood drove the green, Fowler eventually conceded the hole. The Europeans could safely say veni, vidi, vici.

The Americans ultimately doomed themselves on the first day of the event with a performance that was nothing short of a disaster. They didn’t win one of the eight matches, allowing Europe to race out to an early five-point lead that ultimately proved insurmountable.

Europe built on that lead early on Saturday, but the Americans soon had their first burst of hope when they won three out of the four afternoon matches. That’s also when tensions flared inside the ropes and spilled into the parking lot.

In the final four-ball match of that day, Cantlay sunk a long putt on the 18th hole to deliver the U.S. a dramatic, comeback win over a pairing including McIlroy, sending the American team and its fans into a frenzy of hat waving. (Cantlay said the U.S. hats didn’t fit him, and that an unsubstantiated report that claimed he was not wearing a hat over compensation was completely false. He didn’t directly answer whether it had to do with not wanting a tan line when he gets married on Monday.)

Those celebrating included Cantlay’s caddie, Joe LaCava, whose antics got in the way of McIlroy, who still needed to putt. McIlroy could be seen asking LaCava to move before the two got into it, and soon Lowry was shouting at the caddie.

That wasn’t the end of it. Later, video showed McIlroy shouting and pointing in the direction of Justin Thomas’s caddie before McIlroy was restrained by Lowry and got into a car.

“He was just the first American I saw after I got out of the locker room,” McIlroy said.

Everyone leaned into the controversy on the final day. European fans mocked Cantlay relentlessly. U.S. fans embraced it and chanted “no hat Pat!” Some American players, including Justin Thomas, played hatless like Cantlay. After holes during his win against Austrian Sepp Straka, Thomas celebrated by pretending to tip a cap that wasn’t on his head.

And players on both sides said the incident motivated their teams.

“We needed to rally around something,” Scheffler said.

“I let it fuel me,” McIlroy said after he beat Sam Burns on Sunday.

But even though the Americans showed pluck in the singles matches, there was no overcoming how their star players were utterly dominated over the first couple of days. Scheffler finished without having won a match while suffering the most lopsided defeat in the event’s history. That happened on Saturday morning when he and Brooks Koepka lost to Norwegian Viktor Hovland and Sweden’s Ludvig Aberg down by nine with seven holes to play. Afterward, television footage showed Scheffler appearing to wipe away tears.

Although some Americans such as Homa and Cantlay, who both won on Sunday delivered strong performances, the U.S. ultimately got clobbered by Europe’s stalwarts. McIlroy’s win on Sunday gave him an event-leading four points. Hovland also won his singles match, giving him 3.5 points. Rahm had two wins and two incredible draws—both in matches against Scheffler where he won the final hole to earn the half point.

The defeat will lead to inevitable soul searching for the Americans about why they lost an away Ryder Cup yet again. Captain Zach Johnson indicated after their early struggles that there was an illness running through the team.

Whatever the reason, the U.S. still hasn’t won a Ryder Cup on this continent in 30 years. And now it will be at least another four more.