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The World
‘It will take years to recover’ from Tuberville blockade, top Navy nominee says: President Joe Biden’s nominee to be the Navy’s top officer, Adm. Lisa Franchetti, said it could take the service years to recover from the impacts of Sen. Tommy Tuberville‘s blockade of hundreds of senior military promotions. Franchetti told the Senate Armed Services Committee during her confirmation hearing Thursday that the impasse has created “a lot of uncertainty” for Navy families. “Just at the three-star level, it would take about three to four months just to move all the people around,” Franchetti said. “But it will take years to recover … from the promotion delays that we would see.” More than 300 general and flag officer nominees have no clear path to confirmation over Tuberville’s objections, which he put in place over his opposition to the Pentagon’s policy that reimburses troops who need to travel to seek abortions and other reproductive care. The Pentagon is standing by the policy and Tuberville has vowed to continue his procedural hold, so there’s no end in sight to the standoff. (Politico)
The US government believes Chinese defense minister Li Shangfu has been placed under investigation in the latest sign of turmoil among elite members of Beijing’s military and foreign policy establishment. Three US officials and two people briefed on the intelligence said the US had concluded that Li, who has not been seen in public for more than two weeks, had been stripped of his responsibilities as defence minister. The move comes two months after China’s president Xi Jinping removed the two top generals at the People’s Liberation Army Rocket Force, which oversees China’s rapidly expanding arsenal of long-range missiles and nuclear weapons. The investigation into Li also follows the disappearance of Qin Gang, who was ousted as Chinese foreign minister in July. (Financial Times)
EU risks trade war with China over electric vehicles. In the midst of an invasion by Chinese electric cars, European Commission President Ursula von der Leyen launched an anti-subsidy investigation Wednesday against Chinese imports. It's a step that risks snowballing into a trade war that could make a tussle over solar panels with Beijing a decade ago look like a tea party. "Global markets are now flooded with cheaper Chinese electric cars. And their price is kept artificially low by huge state subsidies,” von der Leyen said in her annual State of the Union address. “This is distorting our market.” The stakes couldn't be higher: China's massive investments have established it as the dominant maker of the battery technology that powers clean cars. Global sales of electric vehicles are forecast to grow by nearly a third in 2023 alone to nearly more than 14 million units — worth $560 billion — and without fair competition the EU sees its industry losing out. First reported exclusively by POLITICO in June as a key demand from Paris, the move against China delighted French ministers. (Politico)
U.S. Poverty Rate Jumps up as Covid-Era Tax Credits Expire: When Congress did not renew the Covid-era child tax credit enhancement last year, the number of poor children in the U.S. more than doubled. A new release from the Census Bureau shows that 5.2 percent of U.S. children were classified as poor in 2021 while that number had increased to 12.4 percent last year. In 2021 and into 2022, the annual tax credit per child was raised from $2,000 to $3,000-$3,600 for qualifying low-income families. In 2019, the share of poor children in the U.S. had stood equally high than in 2022, at 12.6 percent. Looking at all Americans, the discontinued enhanced child tax credit as well as the end of stimulus payments meant that last year, the poverty rate went up to 12.4 percent from 7.8 percent in 2021. This is according to the Supplemental Poverty Measure, a more refined gauge of people's needs and costs that accounts for tax credits and other non-cash benefits as well. (Statista)
The Black poverty rate just hit a record low: The official poverty rate for Black Americans declined to 17.1% in 2022, the lowest on record dating back to 1959. The so-called official rate is different from what's known as the Supplemental Poverty Measure, which takes into account government benefits like pandemic-era aid and SNAP. (Axios)
An urgent push by Speaker Kevin McCarthy to avert a government shutdown collapsed as he bowed to resistance from his most conservative members and abandoned an effort to bring up a Pentagon spending measure this week. The surrender to the far right underscored the difficulties facing Mr. McCarthy as he tries to find a way to advance a series of spending bills and avoid a shutdown in two weeks, all while grasping to hold onto his post amid right-wing threats to oust him. It also illustrated his lack of influence over the far right as the opposition persisted despite his repeated urgings for lawmakers to speed approval of the funding measures to put the Republican-led House in a better bargaining position with the Democrat-controlled Senate, which on Thursday hit its first roadblock in advancing bipartisan spending legislation. (New York Times)
Majority of Gen Z Consider College Education Important: A majority of Generation Z (83%) in the U.S. say that a college education today is “very important” or “fairly important,” according to new data from the Gallup and Walton Family Foundation-State of American Youth Survey. Thirty-nine percent of Gen Z, defined for this study as people aged 12 to 26, think a college education is very important. This favorable perception of higher education among Gen Z is noteworthy given that, among U.S. adults more generally, concern about college affordability remains high and confidence in higher education is low. In fact, confidence in higher education as a U.S. institution has dropped 21 percentage points since 2015. Within the Gen Z cohort, the youngest youth are slightly more likely than their older counterparts to rate a college education as important. Eighty-seven percent of youth aged 12 to 15 deem a college education very or fairly important, compared with 80% of 16- to 18-year-olds, 85% of 19- to 21-year-olds and 82% of 22- to 26-year-olds. (Gallup)
Economy
China’s retail sales surprise with faster growth, up 4.6% in August: Retail sales grew by 4.6% in August from a year ago, beating expectations for 3% growth forecast by a Reuters poll. The increase was also faster than the 2.5% year-on-year pace in July. The slew of economic data came a day after China announced it was cutting the amount of cash that banks need to have on hand by 25 basis points, effective Friday. It was the second reserve requirement ratio (RRR) cut this year since one in March. (CNBC)
Delta Loyalty Program Changes Reward Biggest Spenders Most: Airline also will curtail lounge access for some credit-card holders to ease crowding. The carrier is shifting to a model that ties status exclusively to how much people spend, either on travel with the airline and its partners, on co-branded credit cards, or by booking hotels, rental cars and vacation packages through Delta channels. (Wall Street Journal)
Salesforce to Hire 3,300 People After Layoffs Earlier This Year: It marks a new investment after it eliminated 10% of its workforce in a restructuring. (Bloomberg)
The Cayman Islands has chosen “neutral” Singapore as its first base in Asia, as the British Caribbean territory steps up a campaign to attract more capital controlled by Asia’s wealthy. Cayman Islands financial services minister André Ebanks said the Singapore office, set to open this year, would allow the territory to capitalise on “many new business opportunities” in Asia. Singapore’s connectivity and “relatively neutral position in the region” made it the right choice, he added. The Cayman Islands had also considered Hong Kong and Ebanks said the Chinese territory remained an “important locale”. (Financial Times)
Technology
Disney to Cut Target for Disney+ Streaming Subscribers: Walt Disney Co. expects to fall tens of millions of subscribers short of its last publicly stated 2024 target for the Disney+ streaming service, according to people familiar with the matter. The goal of 215 million to 245 million subscribers was set in August 2022 by then-Chief Executive Officer Bob Chapek. In February, returning CEO Bob Iger said Disney would no longer provide subscriber forecasts, matching a decision at Netflix Inc. (Bloomberg)
Disney, Charter deal reshapes media landscape, executives say. (Reuters)
Byron Allen has submitted a $10 billion offer to Walt Disney Co. to acquire its ABC TV network, local stations, as well as the FX and National Geographic cable channels, according to person familiar with his proposal. The offer is preliminary and could change, said the person, who asked to not be identified. Allen is basing his offer on the assumption that the properties generated $1.25 billion in earnings before interest, taxes, depreciation and amortization over the past 12 months. If that number is lower or higher, Allen would change his proposed price, which is based on a multiple of eight times ebitda. (Bloomberg)
Apple Counts on Wireless Carriers to Avoid an iPhone Slump: AT&T, Verizon, T-Mobile return to deals that offer deep discounts on phones for customers who commit to top-tier plans. (Wall Street Journal)
Instacart Was All About Grocery Delivery. No Longer. As it prepares to go public next week, Instacart shows that one secret to making money as a gig economy company is to become an advertising company. When Fidji Simo took over as chief executive of Instacart in 2021, the grocery delivery start-up’s growth was cratering as its pandemic boom ebbed. The board of directors asked her to find new ways for the company to earn money. Ms. Simo, a former executive at Meta with experience in advertising, played to her strengths. She aggressively expanded Instacart’s advertising business, begun in 2019, which allows food brands to pay for better placement in the company’s app. Brands had questioned whether the ads were helping, so Ms. Simo commissioned studies demonstrating their efficacy, two people familiar with the company said. She also hatched a plan to sell software tools and other products to grocery companies to help improve shopping experiences, they said. Then she embarked on a good-will tour to visit the grocery companies and hosted their executives at her home in Carmel, Calif. As Instacart prepares to go public next week, it is a markedly different company. (New York Times)
Smart Links
Johnson & Johnson is getting rid of its script logo after more than 130 years. (STAT News)
Trudeau and Modi aren't vibing: What the G20 summit revealed about the Modi Trudeau relationship. (GZERO North)
Chip Designer Arm Jumps 25% in Debut Win for Owner SoftBank. (Bloomberg)
High-Speed Train Linking Orlando and Miami Gets Long-Awaited Start. (Bloomberg)
The percentage of uninsured Texans in 2022 dropped to the lowest in a decade; Texas is still the state with the highest percentage of uninsured residents, at nearly 17 percent. (Texas Tribune)