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The World
Oil price jumped above $80 and natural gas races higher, turbocharged by supply shortages, hitting a fresh seven-year high on fears that fuel demand was recovering faster from last year’s economic slowdown than producers could bring supply to the market. Crude prices are outpacing copper and other commodities by the widest margin in more than a decade. Crude’s persistent rise in the face of those growth concerns shows the extent to which many traders expect weak supply to buoy prices, lifting fuel costs for consumers and businesses. Energy supply shortages are slowing factory activity around the world and contributing to a recent pickup in inflation. Worries about accelerating consumer prices and climbing government-bond yields have in turn sparked volatility in U.S. stocks in recent weeks. (Wall Street Journal, Financial Times)
How China stumbled into a giant energy shortage: The perfect storm that created China's worst power crunch grew out of surging energy demand amid the post-pandemic recovery at the same time that coal supply plunged under the government's emission-reduction campaign. Since late September, many parts of China have suffered severe electricity supply shortages. Local governments imposed power cuts and rationing on industrial users and even residents. The ripple effects disrupted global supply chains as textile, steel and other factories shut down and production plunged. (Straits Times)
The Kremlin’s ambassador to the EU called on Europe to mend ties with Moscow in order to avoid future gas shortages, but insisted that Russia had nothing to do with the recent jump in prices. Russia’s permanent representative to the EU said he expected Gazprom, the state-controlled exporter that supplies 35% of European gas needs, to respond swiftly to instructions from president Vladimir Putin to adjust output. (Financial Times)
If you live in continental Europe or the UK the natural gas that heats your home this October is costing at least five times more than it did a year ago. The reasons are varied: among them are earthquakes in the Netherlands, China’s attempt to clean up its air and Russian president Vladimir Putin’s power politics. But the impact is clear. The record prices being paid by suppliers in Europe and shortfalls in gas supply across the continent have stoked fears of an energy crisis should the weather be even marginally colder than normal. (Financial Times)
Chinese President Xi Jinping is zeroing in on the ties that China’s state banks and other financial stalwarts have developed with big private-sector players, expanding his push to curb capitalist forces in the economy. Xi, who started his campaign late last year with a regulatory assault on private technology giants, is launching a sweeping round of inspections of financial institutions. According to people with knowledge of the plan, the inspections, announced in September with few details, focus on whether state-owned banks, investment funds and financial regulators have become too chummy with private firms. (Wall Street Journal)
Is Brexit breaking Britain? When the UK left the EU at the end of last year, Prime Minister Boris Johnson promised that his country would put its new freedom to good use. A more open and dynamic "Global Britain" would still benefit from solid ties with Europe, he pledged, but aligning its foreign and trade policies more closely with democracies in other regions – the United States, India, South Korea, Australia and others — would lift the UK into a new era of security and prosperity. But critics warned that Brexit, the most dramatic and abrupt large-scale commercial realignment in modern history, would inflict both short-term and lasting damage to Britain's economy. Turn on the news now in Britain, and it appears the critics were right, at least about the short-term pain. Brexit won't break Britain's economy – despite the shortages and anxiety it's now provoking. But it might yet break up the UK politically if the current economic disruption and public anger across the country continues long enough for Scottish and Irish secessionists to build momentum for exit plans of their own. (GZERO Media)
Texas Gov. Greg Abbott issued another executive order cracking down on COVID-19 vaccine mandates — this time banning any entity in Texas, including private businesses, from requiring vaccinations for employees or customers. Abbott also called on the Legislature to pass a law with the same effect. The Legislature is in its third special legislative session, which ends Oct. 19. (Texas Tribune)
At least 85% of the world’s population has been affected by human-induced climate change. Researchers used machine learning to analyze more than 100,000 studies of weather events and found four-fifths of the world’s land area has suffered impacts linked to global warming. (Washington Post, Nature)
About 25%, or 1 in 4 units of critical infrastructure, such as police stations, airports and hospitals, are at risk of being rendered inoperable due to flooding. The First Street Foundation report — the first of its kind — points to climate change for heightening risks. About 2 million miles of road are currently at risk of becoming "impassable" due to flooding. Nearly a million commercial properties, 17% of all social infrastructure facilities, and 12.4 million residential properties also have "operational risk.” (Yahoo News)
Already, 18 weather disasters, each costing $1 billion or more, have hit the U.S. this year. 2021 is on pace to be among the most active and costliest years for these disasters. (Washington Post)
Remote workers can live anywhere; these cities (and small towns) are luring them with perks. Topeka is on a growing list of locations—from Bemidji, Minn., to the state of West Virginia—dangling incentives to entice remote workers. Many companies are offering office-free jobs, and some workers are willing to relocate for cash, cheaper housing or other perks. In addition to financial offers, some places are offering extra perks, like a free year at a co-working space in Bemidji, free coffee and martial arts classes in Stillwater, Okla., and subsidized rafting and rock climbing in West Virginia. A new program in Greensburg, Ind., includes a couple in town who offered to serve as “grandparents on demand” to help with babysitting and Grandparents Day at school. These incentive programs mark a shift from an older economic-development model: trying to persuade companies, rather than individuals, to relocate. In some cases, communities say they are hurting more for people than for jobs. They also hope an influx of skilled workers will make them look more appealing to large employers. (Wall Street Journal)
Economy
CEO sentiment has hit its lowest level since November 2020, as a greater number of CEOs now forecast conditions to worsen over the coming year rather than improve. Polled CEOs say frustration with Congress, supply chain disruptions, labor constraints, inflation pressures and the fact that the pandemic is still impacting business are part of the long list of reasons for their declining optimism. (Chief Executive)
September's unemployment rate decline signals that some people are giving up on finding jobs (at least for now), at a time when there are still 5 million fewer people working than there were in February 2020. Two reasons: Women and recent retirees. The participation rate for women, often primary caregivers for kids or elderly family members, slipped again in September, to 57.1% (the rate for men went up, to 70%). And more — mostly affluent — people near retirement age are calling it quits early. (Axios)
2020 was the second-best year for the industry since the financial crisis of 2008-09, according to McKinsey. Global assets under management as of year-end 2020 reached an all-time high at $114.7 trillion (a 9.4% increase from $103.9 trillion at the end of 2019), not only due to extraordinary market performance but strong net new flows from clients. (Pensions & Investments)
‘Turbocharged’ M&A market could hit a record $6 trillion by year end, says KPMG. (CNBC)
JPMorgan Chase CEO Jamie Dimon said that cryptocurrencies will be regulated by governments and that he personally thinks bitcoin is "worthless." The CEOs of Twitter and Coinbase had a few choice words Dimon, a long-time crypto skeptic, after he questioned whether the algorithms behind the cryptocurrency would actually keep the supply capped at 21 million. Coinbase CEO Brian Armstrong implied Dimon just didn’t get it how bitcoin worked. “CEOs without a science/engineering background are going to be at a disadvantage in the coming decades I think,” tweeted Armstrong. He said he read and understood the code behind bitcoin. (Reuters, The Information)
Two of Facebook’s top engineers on its blockchain and digital currency project left the company to join Andreessen Horowitz’s crypto team. (CNBC)
Kaiser Permanente healthcare workers have voted in favor of authorizing a strike in California. Of the 24,000 union members eligible to cast a ballot, more than 18,000 voted and 96% were in favor of a strike. The outcome does not mean a strike will start immediately. The results give union leaders the authority to set a strike date so long as they give the required 10-day notice in writing to Kaiser Permanente. (Healthcare Dive)
Carbon might be your company’s biggest financial liability: Through some combination of government intervention and the development of carbon trading markets, it seems inevitable that a price will eventually be put on carbon around the world. Underscoring this, a carbon price has been proposed as part of several bills before Congress, but other mechanisms like a cap on emissions in a sector or geography would achieve the same effect. Economic models and the experience of the EU Emissions Trading System suggests that a price could likely be between $50 and $100 per ton of CO2 in the near term and rise from there. At $100 per ton that would represent five percent of the global economy. Five percent of the global economy is a huge number. But where does this liability sit? With the world’s corporations. (Harvard Business Review)
Technology
Amazon will let team leaders determine whether people need to show up to the office, backing off from a previous edict that stated everyone had to return to the office at least three days a week starting in 2022. (The Information)
Bob Iger’s Long Goodbye: 18 months into media’s most consequential transition, Disney’s respected ex-CEO lingers while successor Bob Chapek provokes anxiety as he moves aggressively to reshape the Magic Kingdom. (Hollywood Reporter)
The new British CEO of Bally’s, which just closed a merger with European online betting house Gamesys Group, aims to breathe new life into decades-old casinos with some innovative programming. (Bloomberg)
Facebook is having demographic problems. A section of a complaint filed by whistleblower France Haugen’s lawyers refers to young users in “more developed economies” using Facebook less. It quotes an internal document stating that Facebook’s daily teenage and young adult (18-24) users have “been in decline since 2012-13” and “only users 25 and above are increasing their use of Facebook”. Further research reveals “engagement is declining for teens in most western, and several non-western, countries”. Haugen said that engagement is a key metric for Facebook, because it means users spend longer on the platform, which in turn appeals to advertisers who account for $84bn (£62bn) of the company’s $86bn in annual revenue. (The Guardian)
Smart Links
U.S. Christmas retail crush comes early as supply chains buckle. (Financial Times)
New York and Texas are winning the war to attract bitcoin miners. (CNBC)
Twentysomethings join the SPAC rush. (Bloomberg Businessweek)
Millennials team up to fulfill the dream of homeownership. (Wall Street Journal)
Japan PM Kishida approval rating at 49%. (Reuters)
Southwest cancels over 350 flights, delays around 600. (Axios)
Manhattan’s office towers are a tale of the haves and the have-nots. (Financial Times)
What Slack does for women. (The Atlantic)