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The World
Treasury Secretary Yellen warned of “catastrophic” consequences if Congress failed to raise or suspend the statutory debt limit in less than three weeks, saying inaction could lead to a self-inflicted economic recession and a financial crisis. In her most public expression of alarm about the matter, she described the standoff within Congress as a self-inflicted wound of enormous proportions. Her warnings came as the stock market suffered its worst day since May. The S&P 500 fell 2 percent and yields on government bonds spiked to their highest level since June, reflecting expectations that the Fed will begin to slow its bond purchases as prices rise and the economy heals. (New York Times)
Liberal Democrats dug in against voting for a $1 trillion bipartisan infrastructure bill, angrily rejecting a decision by Speaker Nancy Pelosi to push the bill forward before the party could resolve bitter disagreements over a sprawling social policy and climate package. The day after Pelosi signaled she would follow through with a Thursday vote on the infrastructure plan, the backlash reflected deep mistrust in the Democratic ranks that threatens to derail President Biden’s domestic policy agenda. At the heart of the impasse was a lack of clarity from moderate and conservative Democrats about what they would accept in the broader social safety net package. (New York Times)
Sen. Elizabeth Warren said she would oppose Jay Powell’s renomination as chair of the Federal Reserve, calling him a “dangerous man” to lead the US central bank. Warren’s opposition to a second term for Powell will make it more difficult for President Biden to renominate him without facing a backlash from the left of the Democratic party. (Financial Times)
JPMorgan Chase has begun preparing for the possibility of the U.S. hitting its debt limit, Chief Executive Jamie Dimon told Reuters, adding he nevertheless expected policymakers to find a solution to avoid that "potentially catastrophic" event. (Reuters)
President Macron urged France’s European allies to “stop being naive” about the attitude of the U.S. and build up the continent’s own military defenses. Macron’s sharp remarks as he presented a French defense deal with Greece were his first public response to the affront that France suffered when Australia and the U.S. unveiled a secretly negotiated submarine defense arrangement. (The Times)
China’s Belt and Road Initiative has left scores of lower- and middle-income countries saddled with “hidden debts” totaling $385bn. New research suggests that many countries’ financial liabilities linked to President Xi Jinping’s hallmark foreign policy initiative have been systematically under-reported for years. This has resulted in mounting “hidden debts” that governments might be obliged to pay. (Financial Times)
President Biden is planning a US-led alternative to China’s “Belt and Road” infrastructure scheme in South America to thwart Beijing’s global ambitions. Biden will dispatch a team of officials to Colombia, Ecuador and Panama next week in a drive called “Build Back Better for the World.” It follows talks at the G7 in Cornwall to establish a scheme to rival China’s global investment initiative. (The Times)
As President Biden rolls out federal mandates requiring companies ensure their workforces are fully vaccinated, a survey of CEOs and Directors reveals mixed feelings from corporate America. While nearly two-thirds of the surveyed business leaders support the President’s decision, more than half are concerned about their ability to implement the mandate at their companies. An additional red flag: Roughly 30% of respondents believe the decision has negatively impacted their employees and the overall company culture. The survey gauged more than 100 CEOs and Board Directors, approximately 90% of whom are at companies with more than $1 billion in revenue. (The Conference Board)
United Airlines to lay off nearly 600 workers who refused to get vaccinated. (The Hill)
Cleveland Clinic forecasts latest COVID-19 surge will soon peak as nation sees declining hospitalizations. Lower volumes are a welcome sign for health systems that have been overwhelmed by patient volumes and forced to delay nonemergency procedures. The downward trend signals a return to normal for operators. (Healthcare Dive)
UK electric car inquiries are soaring during the fuel supply crisis, as sellers of plug-in vehicles say petrol shortages are driving people to adopt the new technology. (The Guardian)
Japan's ruling party votes for a new leader today who will almost certainly become the next prime minister ahead of a general election due in weeks and with the economy staggering from the COVID-19 pandemic. Running for the top post are popular vaccine minister Taro Kono, 58, a U.S.-educated former defence and foreign minister seen as a maverick; ex-foreign minister Fumio Kishida, 64, a consensus-builder saddled with a bland image; former internal affairs minister Sanae Takaichi, 60, an ultra-conservative; and Seiko Noda, 61, from the party's dwindling liberal wing. (Reuters)
Cuba kicked off COVID-19 vaccine exports with shipment to Vietnam. Meanwhile, Vietnam plans to ease coronavirus curbs and allow businesses to restart production from next week to prop up an economy which has suffered under lengthy lockdowns. (Reuters)
Gene editing of animals and crops will be approved under plans to use post-Brexit freedoms to improve productivity, make food more nutritious and reduce reliance on pesticides and antibiotics. Ministers will focus initially on relaxing the rules on gene-editing plants but they also plan to allow the technology to be used on animals and intend at a later stage to make it easier to sell genetically modified produce. (The Times)
Economy
The new annual Women in the Workplace report by McKinsey and LeanIn.org, which surveyed 423 organizations and 65,000 employees, tells us that 42% of women say they often or almost always feel burned out. That’s up from 32% last year and seven percentage points higher than their male peers. Women are carrying out more emotional labor at work than their male peers. Among employees with a female manager, 61% say she checks in on their overall wellbeing, 29% say she helps navigate work/life challenges, and 42% say she tries to ensure a manageable workload, compared to 54%, 24%, and 36% of workers with male managers, respectively. Considering these findings, it’s little surprise that women who manage teams have an even higher rate of feeling burned out—more than 50%—and 40% have considered leaving the workforce or downshifting their careers. (The Broadsheet, Women in the Workplace Report)
How China’s crypto crackdown could backfire on Beijing: Businesses that avoided China could look smart as they pick up more business. And ultimately, technologies that route around central government control could get more powerful. Exchanges are a volume game. Binance, Huobi and OKEx still dominate the crypto industry, but a loss of Chinese customers could have some impact on their businesses. Other countries are throwing down a welcome mat for crypto — see El Salvador's embrace of bitcoin as legal tender. Then there's DeFi — self-running software programs for financial transactions that operate on blockchains and don't depend on a central intermediary. China risks driving its crypto enthusiasts deeper into the DeFi camp, and unleashing their creativity on an ever-more decentralized financial infrastructure. (Protocol)
Coal, carbon and European gas prices have all hit record highs as crude oil pushed above $80 a barrel in the clearest signs yet that the world is heading into an energy crunch likely to weigh on economic growth. Brent rose as much as 0.9% to $80.22 a barrel, hitting a three-year high for the second consecutive day before settling at $79.09. (Financial Times)
U.S. has reached out to China about cutting oil imports from Iran. (Reuters)
Tech staff sizes still aren’t rising much, but valuations are: For years, we’ve been tracking the relationship between a tech company’s valuation and the number of people it employs. Consistently, the finding has been that recently public tech companies have gotten much bigger in terms of valuation, but not so much in terms of staff size. (Crunchbase)
Technology
Investors appear to be losing confidence in Facebook, which is trading at a lower valuation than any other major consumer tech company. Most significantly, Facebook is now trading at its biggest-ever discount to Alphabet’s valuation. That performance is despite a 25% rally in its price this year that lifted its market capitalization to just under $1 trillion. And it suggests multiple factors are affecting Facebook shares: worries about the impact on its ad business of Apple’s clampdown on ad targeting, not to mention the constant barrage of negative media coverage and a federal government antitrust lawsuit. (The Information)
Even as more and more Americans have access to their medical records online, most are still far more likely to use their computers to log in to patient portals than a smartphone app, according to a new report from the Office of the National Coordinator for Health Information Technology. Almost 40% of US adults said that they accessed their health records through a patient portal in 2020. That’s up from 25% in 2014. (The Verge, National Coordinator for Health Information Technology)
Several leading automakers have partnered to use Google’s Android operating system in their new cars, including Honda, which announced its plans last week. So, when one of the Google higher-ups behind Android Automotive leaves to join a startup working on AR navigation for cars, it’s worth taking note. Phiar Technologies announced that Gene Karshenboym has signed on as the company’s new CEO, after first joining the board last year. For six of his eight years at Google, Karshenboym focused on automotive products, most recently serving as the Global Head for Android automotive platforms. The news coincided with the announcement of a $12 million Series A round for Phiar led by State Farm Ventures. The company could attract some automaker partnerships or become an attractive acquisition target. (The Information)
France goes after Amazon’s books business: A French bill would set minimum rates for book deliveries, raising prices from near-zero for companies like Amazon. (Politico EU)
Here’s a deluge of announcements from Amazon’s fall devices event 11: Amazon’s Astro is the company’s new home robot; the Echo Show 15 is a 15-inch smart display that can hang on your wall; Amazon’s new Halo View is a Fitbit-like fitness tracker with a display; Disney’s new “Hey Disney” virtual assistant is built on Alexa; Amazon reveals a new smart thermostat; you can request an invite for Ring’s Always Home cam drone; Ring Alarm Pro combines Ring’s security system with an Eero. (The Verge)
Amazon wants you to meet a different Astro, one that’s not quite as fantastical or futuristic as the Jetsons, but actually available in our present. Amazon’s Astro is not a dog; instead, it’s the company’s long-rumored home assistant robot. Though Amazon denies taking inspiration for the name from The Jetsons, it was hard to ignore the resemblance to a faithful pet when I got to see the Astro in action last week. The Astro, which will initially cost $999.99 and available as a Day 1 Edition product that you can request an invite for the privilege of buying, is Amazon’s most ambitious in-home product yet. Amazon sees it as bringing together many different parts of the company — robotics, AI, home monitoring, cloud services — all into one device. Best described as the love child between a Roomba and an Echo Show smart display, the Astro is meant to be the next step in what Amazons believes to be the seemingly inevitable home robot. (The Verge)
Amazon and Disney partner on “Hey, Disney”, a custom voice assistant built around Alexa, rolling out to consumers and the Orlando Disney World Resort next year. (TechCrunch)
Smart Links
US home price gains hit new record for fourth straight month; Increase of almost 20% from last year. (Financial Times)
N.Korea tests new hypersonic missile as it ramps up weapon systems. (Reuters)
Bank mergers are on track to hit highest level since the financial crisis. (Wall Street Journal)
Banks consider climate risk for home loans, a process called ‘blue-lining’. (CNBC)
How climate change helped fires cross the Sierra Nevada for the first times. (Scientific American)
In memo to teams, NBA crafts protocols requiring unvaccinated players to be under many of same restrictions as last season. (ESPN)
Tomato is first CRISPR-edited food to go on sale in the world. (New Scientist)
Cost of living globally: Where living is the most expensive. (Statista)