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The World
Russian forces kicked off large-scale military maneuvers in the Arctic Sea. The drills include some 1,800 soldiers, up to 15 ships and 40 aircraft. According to the Northern Fleet, the exercises aim to protect "the security of Russia's merchant marine and sea lanes such as the Northeast Passage." It will test coordination between air, land and sea forces. NATO forces have also carried out drills in the Arctic region following Russia's full-scale invasion of Ukraine last year. The Northeast Passage is a sea lane that runs along Russia's northern icy coastline, from the Atlantic to the Pacific Oceans. Due to climate change, the passage has become more accessible and its economic and strategic importance has increased. (Deutsche Welle)
Chinese spies buying citizenship to third countries and slipping into UK: MI5 has warned ministers that Chinese spies are slipping into Britain by gaining citizenship through third countries and using their visa-free access to the UK, The Times can reveal. The concerns have led the Home Office to prepare new visa restrictions on a series of countries being exploited by the Chinese, senior government sources have said. (The Times)
U.S. defense industry plans first Taiwan trip in four years. Around 25 U.S. defense contractors plan to send representatives to Taiwan in early May to discuss joint production of drones and ammunition. The delegation will be led by Steven Rudder, the retired commander of the U.S. Marine Corps Forces Pacific. This would be the first large group of envoys focused specifically on the defense industry to visit Taiwan from the U.S. since 2019. (Nikkei Asia)
Pakistan condemned India's decision to hold Group of 20 meetings in the disputed Himalayan territory of Kashmir next month, calling the move "irresponsible". Kashmir is claimed in full but ruled in part by the two nuclear-armed neighbors who have fought two of their three wars over control of the region. (Reuters)
India-Pakistan spat threatens Cricket World Cup: Both countries are refusing to play on each other's home grounds. (Nikkei Asia Review)
Hungarian Prime Minister Viktor Orban named the U.S. as one of the top three adversaries for his Fidesz Party, according to a purportedly leaked Central Intelligence Agency assessment—underscoring the depth of a longtime rift between Washington and a NATO member that has increasingly defended its ties with Russia and China. The CIA intelligence update, dated March 2, said Mr. Orban’s inclusion of the U.S. as a top adversary in a Feb. 22 political strategy meeting “constitutes an escalation of the level of anti-American rhetoric.” The note listed the U.S. Embassy as the source for the information, raising the possibility of U.S. monitoring of the ruling party meeting. (Wall Street Journal)
COVID-19 Lab Leak Theory Widely Believed in Europe and Latin America: Meanwhile, the share of U.S. adults who said they believe the lab leak theory fell from a record high of 51% in early March to 46%. A majority of adults from seven countries surveyed said they believe the pandemic began because the coronavirus leaked from a Chinese lab, as opposed to the conclusion that the virus moved naturally from animals to humans, while a plurality from five countries said the same. Roughly 3 in 5 Italian, Chilean and Colombian adults said they believe the lab leak theory, the most of the countries surveyed. Nearly 2 in 5 German adults said they believe the virus moved naturally from animals to humans, the most of any country, and a similar share said they believe the lab leak conclusion. (Morning Consult)
Ernst & Young has axed its plan for a split of its auditing and consulting arms, marking a dramatic and costly retreat from a proposal that was meant to reshape the accounting profession but ended amid bitter infighting at the firm. Rather than creating two dynamic firms, EY is now left with a potential leadership vacuum, thousands of angry partners, a split between its U.S. and overseas partnerships and confused clients. EY spent more than a year and over $100 million on the effort only to see it upended by a small group of senior U.S. executives. “This is the beginning of a real period of nastiness,” said an EY U.S. partner who favored the deal. (Wall Street Journal)
US life expectancy has declined two years in a row, meaning that babies born today are expected to live about 2.5 years less than those born in 2019, according to the CDC. Americans on average will now kick the bucket at 76, the lowest age in the 21st century — and more than six years earlier than the rest of the G-7. The biggest contributor to Americans’ shortening life spans is drug overdoses, especially from fentanyl. The US saw more COVID deaths than other G-7 nations, while fatalities from suicide and alcohol-induced liver failure skyrocketed. (GZERO Media)
Economy
Top Fed officials debate need for further rate rise amid bank stress: Austan Goolsbee, president of the Chicago Fed, called for “prudence and patience” in setting monetary policy, in prepared remarks ahead of a speech at the Economic Club of Chicago, saying it was unclear how much regional banks might pull back on lending following the implosion of Silicon Valley Bank and Signature Bank. In a discussion that followed his speech, Goolsbee noted that the jobs market, while “unbelievably strong” was “cooling a bit”, suggesting that the Fed’s efforts to damp demand were starting to have an effect. (Financial Times)
However… New York Fed President John Williams said that Fed officials still have more work to do to bring down prices, echoing remarks from his colleagues in recent days, and suggested they will stay the course despite new uncertainty from turmoil in the banking sector. (Bloomberg)
The IMF trimmed its 2023 global growth outlook slightly as higher interest rates cool activity but warned that a severe flare-up of financial system turmoil could slash output to near recessionary levels. Meanwhile, the UK is set to be one of the worst performing major economies in the world this year, according to the IMF. It says the UK economy's performance in 2023 will be the worst among the 20 biggest economies, known as the G20, which includes sanctions-hit Russia. (Nikkei Asia, BBC)
Big US banks expected to report deposit flight in upcoming earnings. (Financial Times)
Low-income countries will face their biggest bills for servicing foreign debts in a quarter of a century this year, putting spending on health and education at risk. Repayments on public debt owed to non-residents for a group of 91 of the world’s poorest countries will take up an average of more than 16 per cent of government revenues in 2023, rising to almost 17% next year. The figures — the highest since 1998 — follow a steep rise in global borrowing costs last year, when central banks sought to counter high inflation with rapid rate rises. (Financial Times)
European VC funding drops as seed takes a hit, US investors retreat: This year is off to a bleak start for the startup ecosystem in Europe. Startups raised $10.6 billion in funding, down 18% quarter over quarter and a whopping 66% year over year, per Crunchbase data, as American investors pulled back. (Crunchbase News)
HSBC has hired more than 40 investment bankers who used to work at Silicon Valley Bank, the latest move by the British lender to scoop up parts of the failed tech-focused bank. (Financial Times)
The price cap on Russian oil seems to be working: Russian oil and gas revenues dove by 45% in the first quarter, as its deficit exploded due to the costs of the war. The average price for Russia's Urals grade crude oil was $47.85 a barrel in March, down from $89.05 last March. In a sign of the economic stress Russia faces, the ruble just suffered its worst week of the year, hitting its lowest level against the dollar since April 2022. (Axios Markets)
Technology
Garry Tan’s First Big Move as Y Combinator CEO Roils Founders. The first big change made by Y Combinator’s new CEO and president Garry Tan—to shutter a fund investing in mature startups so it could sharpen its focus on much younger companies—has set off an uproar among founders backed by the esteemed startup accelerator. Ten startups, including YC graduates such as payroll provider Deel and credit card startup Brex, said they were “surprised and deeply disappointed” with YC’s recent decision to suddenly eliminate its late-stage Continuity fund last month, according to a letter sent to YC March 14 and viewed by The Information. (The Information)
Elon Musk's Twitter is working on generative AI after buying ~10K GPUs and reportedly poaching DeepMind researchers; source: the work involves an LLM. (Insider)
Ford said it will spend $1.34 billion (C$1.8B) to turn its 70-year-old Oakville facility in Canada into an assembly plant for its next-generation of electric vehicles. The campus, which first opened in 1953, will be renamed Oakville Electric Vehicle Complex. The company said Tuesday it will begin modernizing the 487-acre site in the second quarter of 2024. The upgrade includes completely retooling the facility that currently produces the internal combustion engine-powered Ford Edge and Lincoln Nautilus to own that only produces EVs. This is the first time that Ford has completely retooled an existing plant for EVs in North America. (TechCrunch)
Office space available for lease in the U.S. is at a record high: Remote work is already crushing the office market, and the data is a sign that the distress is going to get worse — vacancies, already at historic highs, will likely go higher. Looking at office availability is different from looking at office vacancy rates. Availability doesn't just look at empty offices. It includes occupied office space where the tenant notified the landlord they won't be renewing. And, crucially, availability takes into account leased office space where a tenant is trying to sublet the office. And, crucially, availability takes into account leased office space where a tenant is trying to sublet the office. (Axios Markets)
Smart Links
Top Colleges for High-Paying Jobs in Finance (Tl;dr: MIT is no. 1). (Wall Street Journal)
Google drops global vaccine requirement to enter buildings, says ‘world is in a very different place’. (CNBC)
Walmart says it’s never made money in Chicago, closes 4 stores, halving its footprint in the city. (Bloomberg)
YouTube says NFL Sunday Ticket packages will cost between $249 and $489 depending on the user's subscription. (The Verge)
4 in 10 say next vehicle may be electric (Associated Press)