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The World
Thousands of NATO troops are taking part in the largest ever exercise to test their air and missile defense systems amid fears that President Putin’s war in Ukraine could spill over into other territory. As jets pretending to be hostile flew over Poland and the Baltic states as part of the war games, defense ministers gathered in Iceland for talks on the continuing hostilities. Speaking in Reykjavik, Thordis Gylfadottir, Iceland’s foreign minister, told the “northern group” of 12 nations, including the UK, that they must prepare for the “worst-case scenario” where Russia was concerned. (The Times)
Hundreds of millions of people are at risk of “hunger and destitution” because of food shortages due to the Ukraine war, the chief of the UN warned, as talks stalled over ending Russia’s blockade of Black Sea grain shipments. António Guterres spoke as negotiators from Russia and Turkey failed to break an impasse over how to get export food from Ukraine, one of the world’s biggest wheat exporters. Talks have foundered over Moscow’s refusal to allow ships to leave Ukraine’s main port of Odesa and Kyiv’s fear of opening itself to more attacks. (Financial Times)
Iran has begun installing advanced IR-6 centrifuges in a cluster at an underground enrichment plant in line with a longstanding plan and now intends to add two more such clusters, or cascades, the U.N. nuclear watchdog told its member states on Wednesday. The moves are described in a confidential International Atomic Energy Agency report sent to member states shortly before the IAEA's 35-nation Board of Governors passed a resolution criticizing Iran for failing to explain uranium traces found at undeclared sites. Iran had warned of retaliation (Reuters)
Rebel Tory MPs are betting that Boris Johnson will “blow himself up” with further scandals over the summer so that the rules protecting him from another confidence vote can be changed to force him from office. Under Conservative party rules, Johnson is immune from another vote for 12 months. But the Guardian understands that the 1922 Committee, which oversees such votes, could cut that period to six months, or even less. (The Guardian)
The world’s largest four-day workweek pilot just launched in the U.K.: Thousands of workers in Britain had another reason to celebrate after returning from a long weekend to mark Queen Elizabeth II’s Platinum Jubilee. They’re participating in the world’s biggest trial of the four-day workweek, as the global movement toward fewer workdays gathers momentum in the wake of the coronavirus pandemic. From fish-and-chip shops to big corporations, more than 3,300 workers from 70 companies will work 80 percent of their hours for 100 percent of their pay — provided they commit to maintaining 100 percent productivity. The six-month trial, coordinated by nonprofit groups 4 Day Week Global and 4 Day Week U.K. Campaign, with researchers from Cambridge and Oxford universities and Boston College, and labor think tank Autonomy, comes as workplaces are grappling with pandemic burnout and the phenomenon dubbed the “Great Resignation.” (Washington Post)
Hong Kong universities’ international reputation takes a hit in latest world rankings, but result still ‘broadly positive’. Four Hong Kong tertiary institutions gain ground in latest World University Rankings 2023, with Polytechnic University’s strength in research highlighted. Hong Kong University of Science and Technology falls six spots to 40th, with two others also registering drops. (South China Morning Post)
Americans swarm Golden Visa programs as political tensions boil: US citizens are looking to move abroad as soaring inflation and societal tensions make second passports more attractive. Amy Leavitt, 66, and her husband, Ralph, 73, were dismayed by the bitter divisions laid bare by the pandemic, so they swapped their woodsy Vermont farm for 27 acres on Portugal’s southwest coast. It was difficult to pass up the opportunity for a seaside spread where Ralph — an organic farmer — can grow flowers and vegetables year-round. It didn’t hurt that the property taxes are one-tenth what they pay in Vermont. (Bloomberg)
How San Francisco became a failed city: San Francisco voters decided to turn their district attorney, Chesa Boudin, out of office. They did it because he didn’t seem to care that he was making the citizens of our city miserable in service of an ideology that made sense everywhere but in reality. It’s not just about Boudin, though. There is a sense that, on everything from housing to schools, San Francisco has lost the plot—that progressive leaders here have been LARPing left-wing values instead of working to create a livable city. And many San Franciscans have had enough. (The Atlantic)
Economy
Japan is struggling to place more women on corporate boards even as Europe and Asian hubs like Hong Kong make progress, dealing a potential blow to Tokyo's ambition to become a center of global finance. Women held 12.6% of board seats across major Japanese companies in 2021, according to the Organization for Economic Cooperation and Development. The figure is even lower among constituents of the Tokyo Stock Exchange's Prime market, at 9.3%. A total of 539 companies, or about 30%, did not have a single woman on their boards. In contrast, women held 45.3% of board seats in France, 36% in Germany and 29.7% in the U.S. (Nikkei Asia Review)
Bridgewater is betting on a sell-off in corporate bonds this year as the world’s biggest hedge fund takes a gloomy view on the trajectory of the global economy. The wager against US and European corporate debt underscores Bridgewater’s assessment that recent weakness across major financial markets will not be shortlived. “We’re in a radically different world,” Greg Jensen, one of Bridgewater’s chief investment officers, told the Financial Times. “We’re approaching a slowdown.” (Financial Times)
Trading in Russian government bonds has ground to a halt after the US Treasury moved to bar American investors from buying the country’s debt in the secondary market. (Financial Times)
A measure of mortgage applications fell to its lowest level in 22 years last week, another sign the U.S. housing market is coming back to Earth after a red-hot, two-year stretch. Applications fell 6.5% in the week ended June 3, the fourth consecutive week of declines. Refinance and purchase activity fell 6% and 7%, respectively. (Wall Street Journal)
SEC Chair Gary Gensler unveiled a planned overhaul of Wall Street retail stock trading rules, aiming to boost competition for handling orders by commission-free brokerages to ensure mom-and-pop investors get the best price for trades. The SEC plans to scrutinize growth in recent years of the payment for order flow (PFOF) practice, which is banned in Canada, the UK and Australia. (Reuters)
Citadel Securities is building a “cryptocurrency trading ecosystem” in partnership with market maker Virtu, VC firms Sequoia and Paradigm, and others. (CoinDesk)
Austin, Nashville, Denver and 7 other top cities for entry-level workers. (CNBC)
Technology
More than 17,000 workers in the US tech sector have been laid off in mass job cuts so far in 2022, including by Clubhouse, Fast, Glossier, Noom, and others. (Crunchbase)
Apple will handle the lending itself for a new “buy now, pay later” offering, sidestepping partners as the tech giant pushes deeper into the financial services industry. A wholly owned subsidiary will oversee credit checks and make decisions on loans for the service, which is called Apple Pay Later. The business -- Apple Financing LLC -- has necessary state lending licenses to offer the feature, though it operates separately from the main Apple corporation, the company said in response to Bloomberg questions. (Bloomberg)
After a weeks-long impasse, Twitter’s board plans to comply with Elon Musk’s demands for internal data by offering access to its full “firehose,” the massive stream of data comprising more than 500 million tweets posted each day, according to a person familiar with the company’s thinking, who spoke on the condition of anonymity to describe the state of negotiations. The move aims to end a standoff with the billionaire, who has threatened to pull out of his $44 billion deal to buy Twitter unless the company provides access to data he says is necessary to evaluate the number of fake users on the platform. Currently some two dozen companies pay for access to the trove, which comprises not only a real-time record of tweets but the devices they tweet from, as well as information about the accounts that tweet. (Washington Post)
Microsoft is substantially reducing its business in Russia, joining the list of prominent technology firms cutting back or exiting the country altogether after the Russian invasion of Ukraine. “As a result of the changes to the economic outlook and the impact on our business in Russia, we have made the decision to significantly scale down our operations in Russia,” the company said in an emailed statement. “We will continue to fulfill our existing contractual obligations with Russian customers while the suspension of new sales remains in effect.” (Bloomberg)
Spotify targets one billion listeners by 2030: In 2021, Spotify’s podcast business generated nearly €200 million in revenue, according to CFO Paul Vogel — up 300% year over year. About 30% of Spotify’s user base, or more than 125 million monthly users, listened to podcasts in the first quarter of 2022, representing 7% of total listening hours on the platform in the period. However, the podcast business in 2021 had a negative gross margin of -57%, according to Vogel — and he said the losses will be even higher this year, peaking in 2022. That said, Spotify monetized only 14% of podcast listening on the platform in Q1, Vogel said, suggesting that the company has room to expand the podcast advertising business. In 2021, Spotify’s music business had a 28.3% gross margin. (Variety)
Smart Links
The IRS is coming for your Venmo income. (Bloomberg Businessweek)
Deloitte explores splitting auditing, consulting arms, following Ernst & Young. (Wall Street Journal)
UK faces the fastest rise in petrol price since 2005. (The Times)
Yen is a whisker away from sliding to the lowest in about 24 years. (Bloomberg)
TikTok executive to ‘step back’ following FT probe into aggressive work culture. (Financial Times)
U.S. to ban sale of single-use plastic on public lands, national parks by 2032. (CNBC)
Homeowners buying two properties in bet that hybrid work sticks. (Bloomberg)
The five most dreaded words at the office: ‘Let’s start a Google Doc’. (Wall Street Journal)