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The World
A high-stakes standoff between Democrats and Republicans over how to raise the debt ceiling intensified markedly as President Biden said he could not guarantee that the U.S. government wouldn’t default — and Republicans reiterated their refusal to address the issue. The brinkmanship played out over a series of tersely worded letters and statements between Congress and the White House, with three of the most powerful political leaders in Washington all trying to assign early blame if they do not avoid default in the next two weeks. (Washington Post)
Senate Majority Leader Chuck Schumer set up a vote by tomorrow on increasing the federal government’s borrowing ceiling, but didn’t lay out how Democrats planned to pass a bill without Republican votes. (Wall Street Journal)
The U.S. Chamber of Commerce is withdrawing its support of the Senate-passed $1.2 trillion bipartisan infrastructure bill just hours after Punchbowl News reported House Republicans were booting it from its strategy calls. The Chamber's chief policy officer, Neil Bradley, announced the policy shift in a letter to its Board of Directors. (Axios, Punchbowl News)
US oil prices rose to the highest level in seven years after Opec and its allies declined to accelerate plans to increase crude production, snubbing calls from the White House to help tackle a growing global energy crunch. The expanded Opec+ group, which has included Russia since 2016, said it would stick with a plan formulated this summer of only gradually increasing oil production by 400,000 barrels a day each month, despite warnings of a growing deficit between supply and demand. (Financial Times)
Surging energy prices hit Asian stock markets. (Nikkei Asian Review)
Taiwan needs to be on alert for China's "over the top" military activities which are violating regional peace, Premier Su Tseng-chang said on Tuesday, after 56 Chinese aircraft flew into Taiwan's air defense zone on Monday, the highest ever. Taiwan has reported 148 Chinese air force planes in the southern and southwestern part of its air defence zone over a four day period beginning on Friday, the same day China marked a key patriotic holiday, National Day. (Reuters)
The lack of communication between Beijing and Taipei risks further escalation of tension across the Taiwan Strait, a mainland Chinese defense expert warned. Former People’s Liberation Army researcher Zhang Tuosheng said that while dialogue channels between China and the U.S. gave the parties a “fairly strong” prospect of avoiding military conflict, there was a greater risk of conflict between Beijing and Taipei. (South China Morning Post)
Japan PM Kishida and Biden commit to defending Senkaku Islands. (Nikkei Asian Review)
Pandora Papers: South Dakota is sheltering billions of dollars in wealth, some linked to individuals and companies accused of financial crimes or serious wrongdoing, according to documents in the Pandora papers. The files suggest the US midwestern state now rivals Switzerland, Panama, the Cayman Islands and other famous tax havens as a premier venue for the international rich seeking to protect their assets from local taxes or the authorities. Wealthy foreign individuals and their families are moving millions of dollars to South Dakota trust funds, which enjoy some of the world’s most powerful legal protections from taxes, creditors and prying eyes. (The Guardian)
The effectiveness of the Pfizer/BioNTech vaccine in preventing infection by the coronavirus dropped to 47% from 88% six months after the second dose, according to data published that U.S. health agencies considered when deciding on the need for booster shots. The data, which was published in the Lancet medical journal, had been previously released in August ahead of peer review. (Reuters)
A study published in the Proceedings of the National Academy of Sciences found that in more than 13,000 cities worldwide, residents were exposed to triple the amount of extreme heat days since the 1980s due to a combination of growing urban population and rising temperatures. Researchers also found that 17% of cities experienced an extra month of extreme heat days each year. (The Guardian)
Economy
Shares of big tech companies slid, with stocks such as Apple, Microsoft, Facebook and Amazon dragging the S&P 500 to its lowest close since late July. The benchmark index fell 1.3%, taking it more than halfway to an official correction — when stocks drop 10% from their all-time high. Some of the index’s tech heavyweights propelled the decline. Facebook was among the five worst-performing stocks on the S&P 500, declining 4.9%. (Financial Times)
Three months after putting together a crypto team, Bank of America released a report that called the digital asset industry “too large to ignore.” The report, from the bank’s investment bank and brokerage arm, estimated that the sector has more than 200 million crypto users and a market value worth more than $2 trillion. The report touched on a lot of things we already know about crypto (the rising popularity of NFTs, uses for decentralized finance, as well as the looming specter of regulation), but it’s still significant that the world’s second-largest bank views crypto as an asset and technology with long-term potential. (The Information)
The wealth-management industry is starting to make the case that cryptocurrencies have a place alongside stocks and bonds in investment portfolios, even retirement accounts. A number of personal money managers are offering products that let investors buy their own stashes of bitcoin, ether and other digital currencies through their brokerage accounts. (Wall Street Journal)
Senate Republicans are warning President Biden not to nominate Lael Brainard, currently a Fed governor, to replace Fed Chair Jerome Powell — hinting she could face a difficult confirmation process. (Axios)
US Trade Representative Katherine Tai announced that the White House would begin a process to exempt some Chinese goods from Trump-era tariffs, but declined to give details on a schedule or which specific industries the change would affect. Tai’s measured criticism of Chinese trade policies threaded with her explicit commitment to not "inflame trade tensions with China" underscores the administration’s determination to restart trade talks with China without alienating domestic and international allies or providing political ammunition to a highly partisan Congress. (South China Morning Post, Politico)
The European Union's 27 leaders will seek a new approach to China today in their first summit on Sino-European strategy since the bloc imposed sanctions on Beijing in March and faced retaliation, jeopardizing a new investment pact. (Reuters)
Hedge fund billionaire Ken Griffin tells Economic Club of Chicago that Citadel may move its corporate headquarters unless the city changes course. (Chicago Tribune)
Postal Banking: The U.S. Postal Service quietly began offering paycheck-cashing services at several East Coast post offices last month, testing a plan that financial experts say has the potential to transform how low-wage and underserved Americans access their money. Postal customers can now redeem paychecks in Washington, Baltimore, Falls Church, Va., and the Bronx, for Visa gift cards topping out at $500, an agency spokesperson said. Postal officials expect to expand the pilot into a fuller study with more locations and financial products, such as bill-paying services and ATMs, according to three people involved with the program who spoke on the condition of anonymity to discuss sensitive business strategy. (Washington Post)
Technology
Facebook’s apps — which include Facebook, Instagram, WhatsApp, Messenger and Oculus — began displaying error messages around 11:40 a.m. Eastern time, users reported. Within minutes, Facebook had disappeared from the internet. The outage lasted over five hours, before some apps slowly flickered back to life. The impact was far-reaching and severe. Facebook has built itself into a linchpin platform with messaging, livestreaming, virtual reality and many other digital services. In some countries, like Myanmar and India, Facebook is synonymous with the internet. More than 3.5 billion people around the world use Facebook, Instagram, Messenger and WhatsApp to communicate with friends and family, distribute political messaging, and expand their businesses through advertising and outreach. (New York Times)
The disruption hobbled communication both essential and mundane, cut off small businesses from customers and slowed e-commerce across myriad countries. Some companies saw their operations and revenues curtailed, while others sent out marketing pitches based on the services going dark, underscoring the extent to which Facebook—despite the many controversies and challenges it faces—is at the center of daily life all over the globe. (Wall Street Journal)
Inside Facebook, the outage broke nearly all of the internal systems employees use to communicate and work. Several employees told The Verge they resorted to talking through their work-provided Outlook email accounts, though employees can’t receive emails from external addresses. Employees who were logged into work tools such as Google Docs and Zoom before the outage can still use those, but any employee who needs to log in with their work email was blocked. (The Verge)
At Uber and Lyft, ride-price inflation is here to stay: A research note out last week from Gordon Haskett Research Advisors showed ride-share fares up nearly 50% from 2019 levels on a per-mile basis in Chicago in August, citing publicly available data from the city. The data show pricing has increased steadily since November as ride-share volumes improved. It has recently been cheaper on a per-mile basis to hail a taxi in Chicago than call an Uber or Lyft, a phenomenon that analyst Robert Mollins says is “the opposite of historical norms.” Back in January 2020, it cost nearly 50% more to travel in a taxi than to use solo ride-share service around the Windy City. Chicago is but one small piece of the pie, making up just 5% of all ride-share spending in the U.S. as of August, according to Edison Trends data. New York, however, commanded 23%, and trends there suggest Chicago isn’t a total anomaly. Data from the New York City Taxi and Limousine Commission show that taxis have been retaking share. (Wall Street Journal)
Amazon says Prime members can send gifts with a phone number or email address, no physical address required, rolling out to mobile users in the continental US. (The Verge)
Smart Links
Black former Tesla worker awarded more than $130 million in damages. (Wall Street Journal)
Global airlines commit to net zero CO2 emissions by 2050. (Financial Times)
McDonald’s sets target of net zero emissions by 2050. (Chicago Tribune)
Worldwide, urban home values are outperforming their national average; U.S. cities saw prices rise by 19.6%, while Chinese metros saw just a 5.6% jump. (Mansion Global)
Hollywood crews vote ‘yes’ on strike authorization, raising the stakes for streaming giants. (dot.LA)
Why most Ivies offer few online degrees. (EdSurge)
Wealthy colleges see double-digit returns in fiscal 2021. (Inside Higher Ed)
Warhol’s portrait of Basquiat could fetch more than $20 million at Christie’s. (Barron’s)