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The World
Peru’s President Tried to Dissolve Congress. By Day’s End, He Was Arrested. Peru's Congress swore in Vice President Dina Boluarte as president in a day of sweeping political drama that saw the former leader, Pedro Castillo, ousted in an impeachment trial hours after he attempted a last-ditch bid to stay in power by trying to dissolve Congress. Ignoring Castillo's attempt to shut down the legislature by decree, lawmakers moved ahead with the previously planned impeachment trial, with 101 votes in favor of removing him, six against and 10 abstentions. The leftist teacher-turned-president had survived two previous attempts to impeach him since he began his term in July 2021. But after Wednesday's attempt to dissolve Congress his allies abandoned him, his ministers resigned, and regional powers underlined the need for democratic stability. (New York Times, Reuters)
Brazil's leftsit President-elect Luiz Inacio Lula da Silva is expected to travel to the U.S. to meet President Joe Biden in January. (Reuters)
The Federal Reserve’s efforts to stamp out high inflation will push the US unemployment rate up to at least 5.5% as the world’s largest economy tips into a recession next year, according to a majority of leading academic economists polled by the Financial Times. The latest survey, conducted by the Initiative on Global Markets at the University of Chicago Booth School of Business in partnership with the FT, suggests waning optimism that the central bank can tame price pressures without causing material job losses. (Financial Times)
A Russian oil tanker sought to disguise its whereabouts by using sanction-busting techniques — altering a transponder signal to show it was moving in circles off Greece when it was in fact visiting an offshore mooring near Malta — adding to growing evidence that Moscow-linked operators have acquired the means to blunt western oil export restrictions. The findings by non-governmental organisation Global Fishing Watch, which were independently verified by the Financial Times, come as shipping brokers have warned that Russia has amassed a “shadow fleet” of more than 100 tankers to carry crude. (Financial Times)
In the UK, hundreds of thousands of passengers will have their Christmas and new year plans ruined as airport border staff walk out this month. Airlines are being told by officials to cancel up to 30% of flights on strike days to prevent chaos in airport arrival halls. More than 1,000 Members of the Public and Commercial Services (PCS) union employed by the Home Office to operate passport booths will stage two walkouts over the holiday. (The Times)
The Supreme Court seemed splintered about whether to adopt a legal theory that would radically reshape how federal elections are conducted, giving state legislatures largely unchecked power to set all sorts of election rules and draw congressional maps warped by partisan gerrymandering. The three most conservative justices appeared prepared to embrace an expansive version of the theory, while the three liberal justices were adamant that it should be rejected. The remaining members of the court — Chief Justice John G. Roberts Jr. and Justices Brett M. Kavanaugh and Amy Coney Barrett — seemed to be searching for a compromise under which state supreme courts would generally have the last word on disputes over state laws governing federal elections but be subject to oversight from federal courts in rare cases. (New York Times)
Used vehicle demand and prices continue to decline from record highs: Wholesale prices of used vehicles reached their lowest level in more than a year last month, as retail sales decline amid interest rate hikes, rising new vehicle availability and recessionary fears. The Manheim Used Vehicle Value Index, which tracks prices of used vehicles sold at its U.S. wholesale auctions, has declined about 16% from record levels in January. The decline is good news for potential car buyers, however not great for companies such as Carvana that purchased vehicles at record highs and are now trying to sell them at a profit. (CNBC)
Carvana Founder's Fortune Plunges 98% as Firm Burns Through Cash: Ernie Garcia III has seen his fortune fall $6.7 billion this year to $119 million, according to the Bloomberg Billionaires Index, a percentage decline topped only by Sam Bankman-Fried. (Bloomberg)
The 4-day week: does it actually work? Researchers at Cambridge university, Boston College and Oxford university will measure the impact of a shorter week on productivity and wellbeing. Parallel pilots running in Ireland and the US, comprising 33 companies and 903 employees, show signs of promise. A report by 4 Day Week Global found that “physical and mental health . . . work-life balance and satisfaction increased.” While revenues rose about 8 per cent over the trial, “absenteeism was reduced and resignations declined slightly”. Interest in the four-day week has been gathering momentum. Last year, Unilever’s New Zealand operations switched to four days, recently extending it to Australia. In the UK, Atom Bank last year introduced a 34-hour week. While in Belgium, workers won the right to compress five days into four. The 4 Day Week trial will not publish its findings until February next year. But three of the four companies the FT spoke to plan to stick with it. Stellar Management’s Hine says it has made a “massive difference” in terms of attracting hires and retaining staff. (Financial Times)
Economy
The world’s largest sovereign wealth fund will become a more vocal shareholder and plans to vote against companies that fail to set a net zero target, overpay their top leaders, or do not have sufficiently diverse boards. Nicolai Tangen, chief executive of the $1.3tn Norwegian oil fund, told the Financial Times’ Global Boardroom event that the fund would become more aggressive on environmental, social and governance (ESG) issues as well as aim to be a more contrarian and long-term investor. Tangen’s words serve as a warning to corporates worldwide as the oil fund on average owns 1.5 per cent of every listed company. (Financial Times)
Vanguard, the world’s second-largest mutual and exchange-traded fund manager, is pulling out of a major financial-sector alliance intended to help tackle climate change. Vanguard says it will track its environmental progress independent of the Net Zero Asset Managers alliance as an effort to provide ‘clarity’ to investors; critics say it’s caving to an ‘anti-woke’ movement. NZAM was launched in late 2020 to encourage asset managers to hit a net-zero emission target by 2050 and help keep a rise in global temperature to 1.5 degrees Celsius. That’s a voluntary temperature goal agreed to at the pivotal 2015 Paris climate meetings and is seen as the marker key to slowing atmospheric warming, calming acidifying oceans, preventing coastal erosion, and limiting severe droughts and other deadly and expensive environmental changes. (MarketWatch)
UK house prices recorded the biggest monthly drop since the financial crisis as rising borrowing costs warded off prospective buyers and prompted a market slowdown. The average price of a house in the UK fell by 2.3 per cent in November, marking the third consecutive month of decline and the biggest drop since October 2008. (The Times)
The U.S. SEC will vote on whether to propose some of the biggest changes to the American equity markets in nearly two decades at a Dec. 14 meeting. The potential changes include new rules that would require marketable retail stock orders to be sent to auctions before they are executed, a new standard for brokers to show they get the best possible executions for client orders, and lower trading increments and access fees on exchanges, the SEC said. (Reuters)
India's central bank raised its key policy rate by 35 basis points to 6.25%, the highest in over three years and its fifth straight increase, while the Bank of Canada is expected to hike its benchmark overnight rate to its highest level in 14 years. (Reuters)
Euro zone GDP grew by slightly more than initially estimated, data from the European statistics agency Eurostat showed, with household spending and business investment propping up the economy. (Reuters)
Technology
Apple is planning to significantly expand its data-encryption practices, a step that is likely to create tensions with law enforcement and governments around the world as the company continues to build new privacy protections for millions of iPhone users. The expanded end-to-end encryption system, an optional feature called Advanced Data Protection, would keep most data secure that’s stored in iCloud, an Apple service used by many of its users to store photos, back up their iPhones or save specific device data such as Notes and Messages. The data would be protected in the event that Apple is hacked , and it also wouldn’t be accessible to law enforcement, even with a warrant. (Wall Street Journal)
Google, Oracle, Amazon, and Microsoft awarded $9 billion Pentagon cloud deals. (CNBC)
Indiana has sued the popular social media platform TikTok over allegations it fails to protect children from mature content, and that it deceived users about the Chinese government's ability to access their data. The two lawsuits, filed Wednesday in Allen County court, mark the first time a state has sued the platform. (Indianapolis Star)
Texas Gov. Greg Abbott orders ban of TikTok on government-issued devices. FBI Director Chris Wray has said China could use the platform to collect data on its users that could be used for espionage. (Dallas Morning News)
A potential deal between the Biden administration and TikTok—once expected around year-end—has run into more delays, as worry grows over national-security concerns that U.S. officials say the popular app poses. (Wall Street Journal)
Lina Khan clearly has Microsoft executives very, very nervous. The Federal Trade Commission, led by Khan, is scheduled to meet today at 11 a.m. for what its calendar describes as a “closed commission meeting” to consider a “nonpublic law enforcement matter.” Hmmm…what could that be? One bet is that the FTC will decide whether it will sue to block Microsoft’s $69 billion Activision Blizzard acquisition. (The Information)
Microsoft signs 10-year ‘Call of Duty’ deal with Nintendo. (Financial Times)
Most early-stage startups have less than one year of runway, adding to pressure on these companies to raise capital despite unfavorable market conditions. As capital reserves dwindle, investors expect there will be a rush of companies seeking capital in 2023. Investment firm January Ventures found that of the 450 founders in the U.S. and Europe polled, 85% had less than 12 months of cash on hand. (The Information)
Smart Links
Southwest to Resume Quarterly Dividend After Two-Plus Years. (Wall Street Journal)
Goldman Sachs hopes to tap young talent with new Dallas job hub. (Dallas Morning News)
Just 8% of Americans have a positive view of cryptocurrencies now. (CNBC)
The wonky reason why deflation appears to be hitting sports tickets. (Axios)