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The World
A $5 trillion ‘wealth shock’ is cracking Americans’ nest eggs: The world’s richest nation is waking up to an unpleasant and unfamiliar sensation: It’s getting poorer. Americans’ collective net worth had been climbing at a dizzying rate for the past two years, even as families and businesses contended with the ravages of Covid-19. Households piled up an extra $38.5 trillion from early 2020 to the end of last year, bringing their collective net worth to a record $142 trillion, the Federal Reserve estimates. (Bloomberg)
The former head of Russia’s second-biggest oil group warned that a European ban on the country’s “impossible to replace” crude would be “the most negative scenario” for all parties as EU discussions on an embargo intensify. Vagit Alekperov, who stepped down as chief executive of Lukoil last month after he was hit by western sanctions, told the Financial Times that any EU move to cut off Russian oil imports would be “a shock for everyone”. “By imposing sanctions, western countries gave a clear signal and declared their position. There is no need to further tighten them,” the billionaire said in his first press interview since stepping down. (Financial Times)
Davos: Ukraine is top of the agenda for the four-day meeting of global business leaders, which kicks off in earnest on Monday with a video address by Ukrainian President Volodymyr Zelenskiy. Aside from the Ukraine crisis, the post-pandemic recovery, tackling climate change, the future of work, accelerating stakeholder capitalism and harnessing new technologies are among the topics scheduled for discussion at Davos. (Reuters)
Egypt’s finance minister warned that “millions” could die because of the food price crisis triggered by the Ukraine war, echoing warnings made by the UN and G7 countries as worries about a global wheat shortage intensify. In an interview during a visit to London, Mohamed Maait warned of “food insecurity” around the world. However, he insisted Egypt had enough wheat to last until the end of the year. His comments come days after UN secretary-general António Guterres warned the Ukraine conflict risked plunging “tens of millions” into famine. (Financial Times)
The change of power in Australia is a chance for the country’s new prime minister to improve ties with China and have a less “provocative” attitude towards Beijing, Chinese analysts said ahead of Anthony Albanese’s trip to Tokyo for a “Quad” meeting this week. Albanese led his Australian Labor Party to victory in the country’s federal election on Saturday, ending almost four years of government under Liberal leader Scott Morrison, a period marked by some of the worst ties with China in decades. A day after he is sworn in, Albanese’s first international appointment will be to meet the leaders of the United States, Japan and India – the countries that make up the strategic security dialogue known as the Quad – in Tokyo on Tuesday. (South China Morning Post)
A populist outsider is shaking up Colombia’s presidential election in the final days of campaigning, opening up what had largely been a two-horse race between radical leftwing senator Gustavo Petro and Federico Gutiérrez of the centre-right. Rodolfo Hernández, a 77-year-old businessman and anti-corruption crusader, has shot up in opinion polls and threatens to pip Gutiérrez to second place in next Sunday’s vote. If he does, he is likely to face Petro in a run-off in June — and polls suggest it would be a close fight. (Financial Times)
As more and more workplaces pause or end the expectation of three days a week in the office, a large-scale return may never be on the horizon. R.T.O. plans used to be held together with something like magic, or at least like math: Three days in the office — the bulk of the workweek — and two days at home. Three days for that mythic cafeteria banter, two days for pants that don’t button. Now? Forget it. The three-two weekday R.T.O. split, like so many other aspects of office reopening plans, has begun to seem less like gospel and more like gibberish. Office occupancy has remained fairly flat, just above 40 percent, since late March. Many company leaders who have reopened their offices are struggling to fill them, as the persistent delays in R.T.O. plans undermined both deadlines and details, like the specific days of the week that workers are expected back. “The word of the day is chaos,” said Becky Frankiewicz, U.S. president of ManpowerGroup, a global staffing agency with more than 4,500 offices. (New York Times)
The majority of Americans oppose the Biden administration’s decision to end a public health order used to expel migrants at the U.S. border, according to a new POLITICO-Harvard survey, underscoring how a law designed to stop the spread of disease is now widely seen as the best way to control immigration. The survey found that 55% of American adults oppose ending the use of the order, known as Title 42, to prevent migrants from entering the U.S., compared to 45% who think the order should end. (Politico)
Americans are pessimistic about the economy and Joe Biden's presidency, a CBS News poll indicates, with 63% of respondents describing the state of the country as "uneasy" and "worrying." Biden's approval rating stands at 44% in the poll; 56% disapprove of his handling of the presidency. Sixty-five percent of people polled said they felt Biden is "slow to react" when issues arise, and 69% said the economy is "bad." (Axios, CBS News)
Economy
Small businesses are flashing warning signs on the U.S. economy as inflation, supply-chain snarls, a shortage of workers and rising interest rates darken the outlook for entrepreneurs. Fifty-seven percent of small-business owners expect economic conditions in the U.S. to worsen in the next year, up from 42% in April and equal to the all-time low recorded in April 2020, according to a survey of more than 600 small businesses conducted in May for The Wall Street Journal. The measure is one part of a broader confidence index that in May posted its largest year-over-year drop since the Covid-related shutdowns of April and May 2020. Despite rising prices, the portion of small businesses that expects revenue to increase in the coming year fell to 61%, down from 79% in May 2020. (Wall Street Journal)
Jamie Dimon’s reputation as a favorite of Wall Street will be put to the test next week as the JPMorgan Chase chief executive holds the company’s first investor day in two years, amid criticism of his pay package and spending plans for the biggest US bank. The showdown was scheduled in February after analysts raised concerns about Dimon’s announcement the previous month that JPMorgan would spend $15bn on new investments this year. So casual was Dimon in responding to queries about his strategy that Mike Mayo, a veteran Wells Fargo banking analyst, called it his worst investor call in almost a decade. (Financial Times)
Senior HSBC executives have distanced themselves from comments on the financial risks of climate change made by the global head of responsible investing at the bank’s asset management division. Chief executive Noel Quinn and Nuno Matos, head of HSBC’s wealth and personal banking business, criticized comments made by Stuart Kirk in which he accused central bankers and policymakers of overstating the risks in an attempt to “out-hyperbole the next guy”. (Financial Times)
European Central Bank President Christine Lagarde said crypto-currencies are “based on nothing” and should be regulated to steer people away from speculating on them with their life savings. Lagarde told Dutch television that she’s concerned about people “who have no understanding of the risks, who will lose it all and who will be terribly disappointed, which is why I believe that that should be regulated.” (Bloomberg)
New York developer targets top executives working remotely: Giant developer Related Cos. is launching a new lodging brand that targets business executives who split time between their primary residence and a place near their office. While a number of developers, lodging companies and startup firms have focused on offerings for mobile freelance staffers or employees working remotely, the New York developer aims to lure members of top management and others who can pay a premium for amenity-rich buildings where they can mingle with peers. (Wall Street Journal)
Technology
Ad tiers are crucial for streamers in their domestic battle for viewers: 57% of US adults prefer low-cost or free streaming services with ads to high-cost, without ads; 24% spend $16-$30 per month on streaming subscriptions. (Morning Consult)
Arm’s old CEO thought an IPO spelled doom. Its new CEO is planning one. Arm CEO Rene Haas told Protocol that Arm will be fine as a standalone company, as it focuses on efficient computing and giving customers a more finished product than a basic chip core design. (Protocol)
The FBI's Internet Crime Complaint Center released its 2021 Internet Crime Report which found that 2021 was another record year for both victims of internet crime and dollar losses in the U.S. The most frequent internet crimes recorded in 2021 were some form of Phishing/Vishing/Smishing/Pharming. Business Email Compromise and Email Compromise schemes and were the costliest internet crimes last year with adjusted losses of nearly $2.4 billion. (Statista)
Smart Links
London Lawfare: How lawyers helped Russia’s super-rich. (Financial Times)
Electric cars are cheaper to own in New Jersey than California. (Bloomberg)
Number of people receiving jobless benefits reached 52-year low in early May. (Wall Street Journal)
78,000 pounds of infant formula arrives in US. (Associated Press)
Anti-aging drugs are being tested as a way to treat covid. (MIT Technology Review)