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Thiomargarita magnifica is 50 times larger than any microbes previously known to science

Gigantic bacteria 50 times larger than any bacterial species previously known to science have been discovered in a Caribbean mangrove swamp, a find that will stimulate new scientific ideas about the size and structure of living cells.

The filaments, which look like fine vermicelli and have individual cells growing up to 1cm long, have been called Thiomargarita magnifica. The discovery was led by researchers from Lawrence Berkeley National Laboratory in California and Université des Antilles in Guadeloupe.

T magnifica grows far beyond the maximum size for bacteria predicted by current theory, said Jean-Marie Volland, lead author of a paper describing the new bacterium in the journal Science.

“It’s 5,000 times bigger than most bacteria,” Volland said. “To put it into context, it would be like a human encountering another human as tall as Mount Everest . . . This is the first opportunity we have to manipulate individual bacteria with tweezers.”

All T magnifica specimens have so far been free of infection by smaller microbes. Genetic analysis suggests the species makes a range of antimicrobial compounds, which might be a useful source of antibiotics in future.

Bacteria are by far the most numerous and diverse form of life on Earth. The total number of bacterial species is unknown, with the vast majority still to be described scientifically. Almost all are visible only through microscopes.

Olivier Gros, a marine biology professor in Guadeloupe, originally spotted T magnifica as white threads growing from submerged leaves in a sulphurous mangrove swamp. Genetic analysis in his laboratory revealed their identity as a giant new species within the known bacterial genus Thiomargarita.

“I didn’t think they were bacteria because they were so big,” said Silvina Gonzalez-Rizzo, a molecular biologist at Université des Antilles.

T magnifica uses sulphides in the water as its energy source. With that metabolism, the bacterium could not infect humans or other animals.

The size of conventional bacteria is limited by the need for all the chemical compounds necessary for life to travel efficiently and speedily within their cells. T magnifica has overcome that limitation by evolving an internal structure that duplicates many biochemical functions within a single cellular filament.

The researchers are still in the early stages of investigating T magnifica. Working out how to cultivate the bacteria in the lab would be an important step forward. So would the discovery of other giant bacteria growing in different conditions. “The discovery of T magnifica suggests that large and more complex bacteria may be hiding in plain sight,” their scientific paper said.

Petra Levin, a microbiology professor at Washington University in St Louis, who was not involved in the research, called the discovery astonishing. “Bacteria are endlessly adaptable and always surprising — and should never be underestimated,” she said.

Valuations have collapsed even faster than they climbed, making fresh funding hard to come by

As a wave of fintechs rode successive funding rounds to ever-higher valuations over the past five years, Swedish buy now, pay later company Klarna declared its ambition to become the Ryanair, Tesla and Amazon of the sector.

But now as central banks raise rates in a fight against surging inflation, Klarna is trying to raise fresh cash at less than half its peak $46bn valuation and fintechs are having to come to terms with a world where expansion can no longer be fuelled by cheap money and business models must be demonstrated by profits.

A record amount of investment poured into fintech companies in 2021, but many now struggle to raise fresh funds and are discussing selling themselves or accepting lower valuations to stay afloat, according to investors, analysts and executives in the industry.

On Thursday, payments services provider SumUp raised cash at a valuation of €8bn — significantly below the €20bn valuation mooted earlier this year.

And as belts tighten, a fintech’s chances of survival may be measured by the amount of cash sitting on its balance sheet. “You are in panic mode if your runway is less than a year,” said Erik Podzuweit, founder and co-chief executive officer of German investment app Scalable Capital.

Venture capital firms more than doubled their investments in the sector last year to $134bn, helping fintech valuations outperform any other tech subsector, according to Crunchbase data. Funding peaked in the second quarter of 2021 as investors such as Accel, Sequoia Capital, SoftBank and Berkshire Hathaway backed groups including Brazilian digital lender Nubank, German broker Trade Republic and Amsterdam-based payments company Mollie. Financial services companies accounted for roughly $1 out of every $5 in venture capital investment last year.

But now public fintech valuations have collapsed even faster than they climbed as funding slowed sharply in the first quarter. Fintech valuations have had a steeper decline than any other technology sector, according to a recent report by Andreessen Horowitz partners, which cited data from Capital IQ. Valuations fell from 25 times forward revenue in October of 2021 to four times in May.

Fintech fundraising in the most recent quarter dropped 21 per cent to $28.8bn from the record high of $36.6bn reached in the second quarter of last year, according to CB Insights.

“It was easy for funds that raised a ton of money to say, ‘oh, we’re just going to double the valuation’ . . . it doesn’t necessarily follow company performance,” said Jonathan Keidan, managing partner of Torch Capital, which has invested in fintechs such as Acorns and Compass. “The effects will be public by the fall.”

Many fintech companies raised capital at lofty valuations based on ambitious growth targets, said Arjun Kapur, managing partner at Forecast Labs. “With all the market changes, most of them are not going to hit the goals they signed up for, which means the business is not worth what it raised.”

Though he expects the sector will bounce back over the long term, “many businesses will get squeezed out in the process”.

Investors have grown particularly sceptical of consumer-facing digital challenger banks as high inflation lowers how much people can save and increases the likelihood of defaults. Funding to banking fintechs plunged 48 per cent to $4.4bn in the first quarter compared with the same period last year, according to CB Insights.

Robert Le, fintech analyst at PitchBook, said that a bifurcation in funding was likely, as consumer-facing fintechs struggle while those selling software to other businesses will prove more stable. Among those is UK cloud banking fintech Thought Machine, which doubled its valuation to $2.7bn in its latest funding round in May.

Meanwhile, executives such as Yorick Naeff, chief executive of Dutch broker Bux, are considering postponing planned fundraising rounds. “These companies, including us, should focus more on the path to profitability,” he told the Financial Times. “If you are organised in a way that is just focused on growth . . . you are going to run into trouble.”

Many consumer fintech companies in the US had started to dial back their marketing budgets in an attempt to conserve cash, said David Sosna, chief executive of Personetics, which provides marketing insights for the banking industry. “We definitely see some [clients] saying, ‘OK, maybe we need to stop or slow down.’” 

Bankers are advising companies to conserve as much cash as possible to ride out what will probably be a difficult two years for fundraising. 

“When you factor in the time it takes to raise a round, you probably need 30 to 36 months runway so you’re not forced back to the market,” said a senior banker at a US commercial bank. Only extremely strong companies would be able to raise even at the same level as last year, the person added.

Freetrade, the UK broker valued at £650mn in November, raised £30mn through a loan last month. Chief executive Adam Dodds said at the time that the move aimed to shore up the company’s balance sheet without having to revalue it: “It’s choppy markets. To zero in on a valuation at this point is maybe not that helpful.”

In addition to a lower valuation, which can be an embarrassing signal to markets and hurt morale internally, down rounds may carry stricter terms such as strengthened liquidation protocols and anti-dilution protection, said S&P Global Market Intelligence analyst Tom Mason.

Selling out entirely was becoming an increasingly attractive option for many companies, said Keidan at Torch Capital. Apple’s privacy changes have significantly increased customer acquisition costs, making existing customer bases more valuable at the same time fintech valuations are coming down. Boards began exploring potential sales in the spring, he said.

Fintech acquisitions — already on track to pass 2021’s record — will probably accelerate through the rest of the year as traditional financial companies such as JPMorgan Chase and Mastercard take advantage of relatively cheap software groups.

“I’m seeing it brewing very fast right now,” said Michael Abbott, global banking lead at Accenture, adding that tie-ups between fintech challengers and incumbents are on the rise.

Deals so far this year include UBS’s acquisition of Wealthfront and Fiserv’s purchase of Finxact.

“What consumers want is the best of what the neobanks have to offer in terms of experience and an ability to get products quickly, but at the same time what they’re going to need in a rising rate environment is the balance sheet of a bank,” said Abbott.

One investor at a large private equity firm said they had received a steady drumbeat of pitches from fintechs looking to sell themselves in recent weeks but had passed on all of them.

“Who’s to say this price is really the right price? What if six months from now that price is actually considered too expensive?”

Power provider says rules governing priority supplies must be standardised between countries in case of rationing

EU solidarity will come under severe strain this winter if Russian gas supplies are cut off, the head of Germany utility RWE has warned, saying there will be “chaos” across the continent unless the bloc acts now to establish rules on energy sharing.

“The real fear I have is that European solidarity will come under significant stress if we don’t sort it out before the situation happens,” Markus Krebber said. He added that countries such as Germany and the Netherlands, which will import gas via carrier ships, could be accused of hoarding the fuel if companies and households are not treated equally across member states.

“I’m not so much concerned that we cannot find agreement, but it is better to discuss emergency proceedings when you still have time and not when the house is on fire,” Krebber told the Financial Times on Wednesday.

“If you don’t operationalise it then you end up in chaos.”

Germany’s biggest power supplier has been among the utility providers hit by a drastic reduction in gas deliveries from Russia’s Gazprom, which has forced Berlin to implement an emergency plan under which mothballed coal-fired power plants will be revived to bridge the gap. RWE is currently receiving just 40 per cent of the gas it has contracted from Russia.

Krebber’s comments illustrate the fears in the EU that gas supplies may need to be rationed this winter. The International Energy Agency warned this week that Europe must prepare for a complete cessation of Russian gas as Moscow retaliates against sanctions imposed after the invasion of Ukraine.

On Thursday Germany moved a step closer to rationing, triggering stage 2 of its emergency gas plan and warning it would struggle to fill storage needed to meet peak winter demand if Russian supplies are not restored.

A so-called pan-European “solidarity plan” for gas deliveries is due to be drawn up by the European Commission, and diplomats in Brussels expect it to be ready by the end of July.

However plans to ration gas supply to companies this winter, and to encourage households to limit their consumption, are currently being worked out on a national level by Germany’s Federal Network Agency.

A Europe-wide framework would need to be in place to ensure supplies reach countries like the Czech Republic and Hungary, Krebber said, while ensuring fairness over how each country defines priority customers.

“Otherwise, transmission system operators do not know on what basis to make its decision,” Krebber said. “How much gas to keep, and how much gas to send to other countries.”

Krebber said rules needed to be formalised across EU states over what should take priority in the event of a severe gas shortage. The industry fears a political crisis if countries have different limits on heating for public buildings or criteria for prioritising gas supplies in a crisis.

“You need a unified definition of protected customers,” he said. “You need decision making procedures and it starts from information gathering. Without the relevant information you cannot make the correct decisions.”

Italy introduced caps on heating and cooling demands in April, with public buildings not allowed to be heated above 19 degrees centigrade in winter or cooled with air conditioning below 25 degrees in summer. The majority of EU countries are yet to introduce such restrictions, but they are seen as more likely if Russian gas supplies are completely cut off.

There have been legal battles in the past over the right of member states to define protected customers such as homes, hospitals and schools.

James Waddell, an analyst at Energy Aspect, said there was the potential for a huge political fallout if countries feel they are being treated unfairly.

“The free movement of energy is one of the key pillars of the EU,” Waddell said. “But in a crisis the potential for the system to come under severe political strain is very real, with countries trying to prioritise their own citizens first.”

Andrei Ilaș, co-founder of Romanian energy business nrgi.ai, warned, however, against trying to create a “command and control” economy for energy supplies.

“They are afraid of chaos and political bickering, but top-down control will not work,” Ilaș said. “To effectively shut down the market would be very dangerous, as you need price signals to tell you where the energy needs to move.”

Krebber cautioned that Germany would not be able to fully replace Russian gas deliveries with alternatives such as liquefied natural gas shipments or wind and solar power generation until the winter of 2024/25. 

“Probably we have a more normalised situation after the winter of 2023/24 . . . and then full replacement of the volumes one winter later,” he said.

Krebber defended Germany’s decision to continue with the decommissioning of its last three nuclear power plants, which are due to close before the end of the year, saying the technical and safety challenges could not be overcome before this winter. He argued that the 3GW of capacity they represent was not large enough to justify the effort.

“These plants have been running for a decade, they were technically, commercially optimised until the end of this year. Refuelling takes more than three months. It takes 12-15 months.”

“It’s not a question of does it [nuclear] help on the gas supply side — there coal does the trick.”

Pan-Atlantic recession ‘increasingly likely’, warn economists

Aggressive rate rises and European energy supply worries are leading to sharp downgrades

The risks of the US and Europe sliding into recession have picked up sharply, economists have warned ahead of the G7 summit that begins this weekend in Bavaria.

Economists on both sides of the Atlantic told the Financial Times they had become increasingly pessimistic following the Federal Reserve’s decision to go big on rate rises to counter soaring inflation, and on mounting concerns over Europe’s gas supply in the run-up to winter.

Holger Schmieding, chief economist at Berenberg Bank, said the balance had now “tipped” in favour of an economic contraction next year in the US and Europe. “What used to be a rising risk has now turned into the base case.”

Goldman Sachs doubled the risk of the US entering a recession this year from 15 per cent to 30 per cent, with a 48 per cent probability of a recession over a two-year horizon in the wake of the Fed’s first 75 basis point rise since 1994.

“US recession risks are uncomfortably high and rising. I would put them at 40 per cent in the next 12 months, and more or less even odds over the next 24,” Mark Zandi, chief economist of Moody’s Analytics, said. He added that Europe was even more vulnerable.

“To avoid recession, the global economy needs a bit of luck and for the economic fallout from the coronavirus pandemic and Russian aggression to wind down quickly, along with some deft policymaking by the Fed and other central banks,” Zandi said.

G7 leaders will discuss the state of the global economy at their working lunch on Sunday, with inflation set to dominate proceedings. President Volodymyr Zelenskyy of Ukraine will take part remotely by video link in Monday’s talks, which will focus on the crisis prompted by Russia’s war.

The global economic outlook has been darkening since Russia’s invasion of Ukraine in February sent energy and food prices spiralling. Over the course of June central banks from Washington to Zurich raised rates by bigger margins than markets expected, signalling they would do whatever it takes to rein in surging inflation — even if that means triggering a recession.

Gas supply to Europe has become more uncertain following Russia’s decision to cut flows to many countries. Supply chain disruptions resulting from China’s zero-tolerance Covid policies continue to weigh on growth prospects.

The Fed’s rise prompted private sector economists to downgrade their US forecasts for 2023 by the biggest margin so far this year, with even larger downgrades than those made at the start of the Ukraine war, according to Consensus Economics, which tracks growth and inflation forecasts.

Peter Hooper, economist at Deutsche Bank and a former Fed official, who in April became one of the first on Wall Street to forecast a recession, warned that the inflation picture in the near term “does not look good”, meaning the central bank may need to raise rates even more aggressively than currently expected. The bank has since pulled forward its contraction call to the middle of next year. “It will be exceedingly difficult to fine tune this to the point of bringing inflation down with only a half a percentage point increase in unemployment over the next couple of years,” he said.

Economists also cut sharply their 2023 outlook for the eurozone, the UK and eight in 10 other countries and regions tracked by Consensus Economics.

Neil Shearing, Capital Economics chief economist, said the recession risks are highest in Europe, where the inflation-induced cost of living crisis is coupled with possible gas shortages. Like in the US, the UK and the eurozone are also dealing with inflation at multi-decade highs.

The International Energy Agency warned this week that Europe must prepare immediately for the complete severance of Russian gas exports this winter.

Martin Wolburg, senior economist at insurer Generali, said: “If Russia were to fully cut gas supply to the EU, a euro area recession would become the new base case with the German economy hit especially hard.”

Katharina Utermöhl, senior economist at insurer Allianz, was more optimistic: “The strong post-lockdown rebound in the sectors most impacted by the pandemic — notably travel and hospitality — should keep the eurozone economy afloat over the summer months.”

In the UK, the Bank of England is expected to raise rates even though it expects the economy to stagnate over the next two years. “The big picture is that the economy may be only fractionally larger this time next year than it was before the pandemic,” said Thomas Pugh, economist at RSM UK, a tax and consulting firm.

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Official sector forecasts by central banks and multilateral organisations such as the OECD and IMF still show the world’s big advanced economies growing this year and next.

However, Fed chair Jay Powell acknowledged this week in congressional hearings that a US recession was “certainly a possibility”, while pledging that the central bank’s commitment to restoring price stability is “unconditional”.

The adult industry’s de facto regulator isn’t government, international convention or business itself. It’s Mastercard and Visa

Bill Ackman was at home in the Hamptons, killing time on a Saturday morning in December 2020, when a New York Times article caught his eye. He read it on his phone, got angry, re-read it and logged on to Twitter to express his outrage. Then, the 56-year-old billionaire started plotting the downfall of America’s best-known porn site.

Moments like this often trigger Ackman’s sibling, Jeanne, to send an email of sisterly guidance: Bill, what on earth are you doing? Why are you weighing in on this topic? You’re a hedge fund manager. What makes you an expert? And Ackman usually ploughs ahead anyway. His métier is meddling in other people’s business, ideally without an invitation.

Ackman is the founder and CEO of Pershing Square Capital Management, an activist fund that uses its billions to buy stakes in publicly traded companies and goad them into changing their business practices or, at the very least, increasing their stock price.

Before the pandemic, Ackman was best known for a quixotic and bitter campaign against Herbalife, a purveyor of health supplements he accused of being a covert pyramid scheme. (It wasn’t entirely successful, and Pershing lost nearly half a billion dollars.) In 2020, he became the talk of Wall Street again with a trade that turned a $27mn hedge on Covid-19 uncertainty into a $2.6bn windfall, all within a month. “I’ve been called the most persistent person in America,” he says. “And I take that as a compliment.”

Now Ackman had found a new target in the pages of the Times: Pornhub, the most-visited website of the world’s biggest porn company, MindGeek. Nicholas Kristof’s column that week included testimony from victims of abusive videos, spy-cams and revenge porn and argued the site was “infested with rape videos”, from which it was profiting. (Pornhub denied the allegations, insisting it had better moderation than most social media platforms.)

Bill Ackman, founder and CEO of Pershing Square Capital Management © REUTERS

While Ackman is not against pornography per se, the “appalling accounts of exploitation” just “hit a nerve”. “The problem with the topic is people don’t want to talk about it,” he says, which is why he took a public position with his tweets.

What he did next was more consequential. Ackman texted Ajay Banga, who was then the chief executive of Mastercard, writing “Ajay, please read the above” and sharing Kristof’s piece. Ackman wrote that Mastercard was “facilitating sex trafficking” and should immediately stop working with Pornhub. “Call to discuss if you disagree,” he concluded, with delicious passive aggression. Not long after Banga replied: “On it.”

Ackman knew Banga from the tennis circuit; they share a passion for the sport. He also understood the power Mastercard and Visa wielded over Pornhub’s parent company. Most videos on the site are free to watch, but MindGeek offered subscriptions and took credit card payments from small advertisers. Roughly half of the company’s overall revenues, which peaked at about $460mn in 2018, came from paid-for porn.

Within days of Kristof’s piece and Ackman’s message, the payments giants cut Pornhub off. The effect on MindGeek was debilitating. The company’s cash flow dried up. It broke the conditions of its loans, prompting a notice of default from its lenders. And the pressure kept building, as Visa considered making its temporary suspension permanent.

So MindGeek buckled. Almost overnight, the company removed most of the porn available on its flagship site. Pornhub went from hosting 13 million videos to about four million. Millions of videos uploaded by “unverified” providers disappeared. It was probably the biggest takedown of content in internet history.

Mastercard and Visa hardly ever shut out a big merchant. ­Ackman’s text wasn’t the main reason they did so in late 2020, but it is not hard to imagine it helped tip the balance. While governments might be slow and bureaucratic, Ackman realised that payment companies, when they want to, can act decisively. “They have to be de facto regulators of what’s permissible content and what’s not,” he says.

What Ackman didn’t realise is that Visa and Mastercard have increasingly been doing that job for close to 20 years. The biggest and third-biggest financial companies in the world now exercise more control over the global porn business than any government.

They wield this power in total discomfort and do so by relying on a cadre of satraps responsible for making precise and occasionally bizarre distinctions — what distinguishes a performer dressed as an alien from bestiality, what are the conditions of acceptable vampire sex — that determine exactly what you can and cannot see.

The moving picture has stoked fears of moral depravity from the start. In the 1930s, Hollywood developed and adopted the Hays Code, a regime of self-censorship intended to affirm the industry’s rectitude. The provisions — no lustful kissing, no interracial relationships, no sexual perversion, whatever that meant — applied to most major films released for about three decades.

Porn’s Hays equivalent isn’t maintained by the industry, but by an ecosystem of payments companies, banks, billers and service providers ultimately overseen by Mastercard and Visa. It is a vast domain. Porn accounts for close to 8 per cent of all internet traffic, according to data provider SimilarWeb, and generates 18.5 billion visits a month or a total of 158 billion page views.

As part of a year-long FT investigation into the adult industry for our Hot Money podcast, a door to this world was opened to us when a porn executive mentioned, almost in passing, some oddities in production guidelines, the dos and don’ts for making porn. We asked her to dig up a hard copy, and she shared a short document of “best practices” compiled by a Florida-based company called MobiusPay.

It was just a page. But it was packed with unacceptable terms, definitions of extreme content and bans on everything from weapons to depictions of real harm, implied rape or incest. There were also a few puzzling provisions on hypnosis and mind control. Its author is Jonathan Corona, a softly spoken, bespectacled 39-year-old executive. We met in Los Angeles on the margins of Xbiz, a porn-industry conference where performers mixed with fans, payment companies and tech geeks, as delegates nursed hangovers from the previous evening’s “lingerie and pyjama” party.

Companies like MobiusPay provide essential services to the adult industry. As one executive put it, “The story of the porn industry is the story of trying to take payments.” For a business to charge credit cards, it needs a merchant account from a sponsor in the Visa and Mastercard network. MobiusPay helps sort that out, acting as a bridge between higher-risk businesses — legal cannabis sales, gambling, porn — and credit card companies. That access comes with conditions in the form of content standards.

Corona, MobiusPay’s chief operating officer, explained the almost ­Talmudic way in which these standards are derived. Visa and Mastercard set down rules for the payments community on porn, essentially core principles and goals. Then banks and payment processors like MobiusPay make fine distinctions on what these mean in practice, often with informal help from Visa and Mastercard. The result is lists. Many lists.

Mastercard’s core rules take up 436 pages but only devote one paragraph to porn, rule 5.12.7.2, found in the “illegal or brand-damaging transactions” section. It states that the company is against the sale of any image or service that is “patently offensive” or lacks “serious artistic value”. It bans nonconsensual sexual behaviour, sexual exploitation of a minor, nonconsensual mutilation of a person or body part and bestiality. Mastercard, it states, is also against “any other material that the Corporation deems unacceptable”.

From this ambiguous guidance — not even 10 commandments — people like Corona must flesh out a regime of specific regulation. Since mutilation is off limits, MobiusPay interprets that to mean all blood is prohibited. In a section on “creatures”, the company helpfully clarifies that aliens, whether real or ersatz, are given the same protection as animals when it comes to porn.

For a censor, outright bans are routine; it’s nuance that is difficult. Corona read us a sample of “concern words” matter-of-factly, “twink, nymph, nymphet, teen”, and explained how these terms are not banned but “tend to create problems”, specifically with Visa and Mastercard. The conversation turned to the question of twinks, slang for young, hairless gay men. Presumably working this all out, categorising words and behaviours, must require conversations with Visa and Mastercard? “Absolutely,” Corona said. “It’s self-censorship and self-policing. Ultimately, if you want to accept Visa and Mastercard, then you have to follow their rules.”

Seen in its totality, the system looks very much like an apparatus of control. There are rules. Registration requirements for adult merchants. Enforcement responsibilities, delegated to banks and processors and service providers. See-through powers allow Visa and Mastercard to inspect any site at any time. ­Penalties, fines and even the threat of being cut off, as MindGeek discovered. There are conferences and seminars and interpretative communiqués. It is a highly regulated market, without any government regulators.

Both Visa and Mastercard declined interview requests. In statements the companies stressed their priorities are supporting legal commerce, even when a transaction is objectionable or morally dubious. The main test is legality. Mastercard explicitly justified its 2020 action against MindGeek on the grounds it had identified “unlawful” content on Pornhub.

Visa and Mastercard play an important role in policing highly regulated, high-risk commerce such as gambling or pharmaceuticals, or other sectors prone to fraud. But when they do intervene, the credit card companies do so carefully and cleave to the law, since their success stems from their ubiquity.

Porn is the exception. Both companies play the role with reluctance but, on a day-to-day basis, they do restrict access to porn that is, strictly speaking, legal. These curbs are justified on the basis that condoning such content, even implicitly, could hurt their brand. Some are clear-cut prohibitions; others are standards that evolve and change with the sexual culture. That means behaviour that might be fine on Netflix may be unacceptable on a porn site taking credit cards.

We asked Corona why his list forbids, for example, depictions of hypnosis and sex while someone appears to be asleep or under the influence of mind control. “Of course they are acting,” he said. “But being asleep . . . or hypnotising someone removes the ability to render consent.” Which might, in other words, damage Mastercard or Visa.

Jessica Stoya is a career pornographer, model and author. We met in her modest, three-room Brooklyn apartment. Outside the streets were white with fresh snow. Jessica’s origins, and the inspiration for her stage name Stoya, are Serbian. She was wearing a baggy top, her black hair pulled back. Fifteen years after being signed as a “contract star” for Digital Playground, a prolific hardcore studio, Stoya, 36, is still recognised on the street while wearing a Covid mask, just from “her eyes and eyebrows”.

She is a porn star who has written for The New York Times and Slate and authored a book of essays called Philosophy, Pussycats & Porn. Fans of her live shows would not be surprised by the odd reference to the French intellectual Georges Bataille.

But in these performances, on so-called camsites or paid social media platforms such as OnlyFans, there are some more straightforward things that must go unsaid. Everyday words that cannot be spoken. Phrases that payment companies decide are beyond the pale.

“I’m in lingerie. And people tip me. And I take my bra off or pull the cups down and I jiggle my shoulders while saying, ‘T-h-a-n-k-y-o-u,’” she says, making her voice go jittery and giving a brief shimmy. “It’s very cute. When I get my period, I have cramps and really don’t want to be vigorously jiggling. But I also want people to know, like, don’t be disappointed. It would be nice to be able to say — ‘It’s because I have my period’— but I cannot,” she says. “It is a banned word.” She cannot type “period” into the chatbox of her porn platform. Stoya says when it comes to porn, Visa and Mastercard have more power than the Pope.

Visa and Mastercard have no explicit rule against blood. But most payment companies and banks in the Visa and Mastercard networks associate blood with violence or mutilation, which is prohibited. So blood is banned, even blood obviously made of ketchup. This is a disaster for vampire porn, which is akin to a forbidden good on the internet. And it puts special constraints on female performers like Stoya. “We’re raising people who are becoming sexual in a culture where menstruation is completely erased,” she says.

Out of curiosity, about five years ago Stoya contacted CCBill, one of the biggest payment companies specialising in porn. Rather than the “acceptable use” policy on its website, she asked if she could see their full guidance. The detailed list. The one that precisely laid out the limits of what CCBill believed Visa and ­Mastercard would tolerate.

The four pages of rules shared with her are written in a lawyerly tone and are, in parts, totally bizarre. A section on furries, an online subculture interested in anthropomorphic animal characters with human personalities, reads “content that depicts furries and humans engaged in sexual acts are not permitted across the board. Content that depicts furry engaged in sexual acts with another furry is acceptable across the board.” Lest that leave any room for misinterpretation: “Please note, per Visa ­regulations a furry that contains human-like characteristics is not permitted.” So, no half-man, half-furry.

The codification is patchy and inconsistent though. Most tube sites, where free porn is accessible to anyone who clicks on a link, including children, have lighter restrictions than subscription porn or live video platforms, which depend on credit cards and are harder for kids to access. Visa and Mastercard do not want to be seen taking the lead, so payment providers and the porn sites are left to look for subtle signals that a boundary has changed.

“Golden showers”, for instance, were long banned from most commercial porn sites. Urinating on others was deemed inappropriate. Then, in 2016, the kink shot to prominence when Donald Trump denied rumours he had taken part in the practice, declaring: “I’m not into golden showers.” Before long, the term started to appear on more commercial porn sites, without problems.

In their approach to adult content, credit card company executives see themselves as showing restraint, only going beyond the law in limited cases to maintain basic standards. But for operators in the payments network, it is like guessing the wishes of an all-powerful monarch. You only know you’re wrong when you are punished. “Instead of the government defining what is and is not considered sexually acceptable, it is a corporation, a credit card company,” says Stoya.

Yet unlike most governments, there is no process of regulation. No consultation. Few public explanations. No names. No sense of who the arbiters of acceptable porn might be. “You know, it is not like I can go down to the Mastercard office and be like: ‘Hello, I would like to have a civil dialogue about this.’ That’s not going to happen,” she says. “Who is the arbiter of what can be done with sexual media? I have no idea who they are. Did they take a philosophy class? Do they have a degree in women’s studies?”

During the course of making our podcast series, we did meet some of these people. None were philosophers, but there was one sociologist and a few lawyers. Most considered themselves to be payments professionals, managers of risk, facilitators of commerce. Not porn cops. But is that any surprise? Pornography is deeply uncomfortable to talk about, let alone acknowledging its place in our culture or in our lives online. Perhaps it’s only to be expected that our porn regulators feel the same.

The risks of the US and Europe sliding into recession have risen sharply, economists have warned ahead of the G7 summit that begins on Sunday.

Economists on both sides of the Atlantic told the Financial Times they had become increasingly pessimistic after the Federal Reserve’s jumbo rate rise to counter soaring inflation, and as concerns mounted over the security of European gas supplies this winter as Russia reduces exports.

Holger Schmieding, chief economist at Berenberg Bank, said the balance had “tipped” in favour of an economic contraction next year in the US and Europe. “What used to be a rising risk has now turned into the base case.”

Goldman Sachs doubled the risk of the US entering a recession this year from 15 per cent to 30 per cent, with a 48 per cent probability of a recession over a two-year horizon in the wake of the Fed’s first 75 basis point rise since 1994.