Know someone who would like this newsletter? Forward it to them.
The World
“Over a thousand miles from Gaza, a naval crisis is unfolding that could transform the war between Israel and Hamas into a global affair with implications for the world economy.” Since Friday, four of the world’s five largest container-shipping companies “have paused or suspended their services in the Red Sea, the route through which traffic from the Suez Canal must pass, as Iran-backed Houthi militants, armed with sophisticated weapons, escalate their attacks on global shipping flows.” The closing of “one of the world’s major trade arteries “could lead the U.S. and its allies to attack the Houthis “in order to re-establish free passage.” (The Economist)
Chinese diplomat Xue Bing was sent to Ethiopia last week “to meet central government and regional leaders as they worked to ensure full implementation” of a peace deal that ended the Tigray War. The visit gives Beijing “a chance to test its crisis diplomacy skills.” (South China Morning Post)
North Korea fired a short-range ballistic missile into the sea, South Korea said, in a possible display of defiance against the latest steps by Washington and Seoul to tighten their nuclear deterrence plans against North Korean threats. South Korea’s Joint Chiefs of Staff said the missile was fired from an area near the North Korean capital of Pyongyang at around 10:38 p.m. and flew 570 kilometers (354 miles) before landing in the sea. (Associated Press)
Activists warned that large segments of Chile’s population stands “to lose out should a new draft constitution drawn up by conservative lawmakers be approved in a nationwide referendum on Sunday.” Chileans turned out in a “compulsory vote to decide whether the 1980 constitution written during Augusto Pinochet’s dictatorship, and since reformed, should be replaced.” (The Guardian)
The Democratic Republic of Congo holds its presidential election on Wednesday, with “some 44 million registered voters and more than 900 parties” expected to take part. President Felix Tshisekedi is seeking re-election “after a controversial victory in 2018 following his on then off pact with former president Joseph Kabila and then later former vice-president Jean-Pierre Bemba.” (Semafor)
The U.S. has expressed concerns to Mexico “over an imminent wave of Chinese investment into the country, as three of China’s largest electric-vehicle makers prepare to build factories south of the US border.” BYD, Chery, and MG “have all been speaking to officials in Mexico to find sites this year,” and another Chinese company plans a $12 billion battery plant. Mexico is the world’s seventh-largest carmaking nation. (Financial Times)
Key senators “were working to meet a self-imposed deadline to hammer out a framework for border-security measures that Republicans have demanded as a condition of passing Democrats’ $110.5 billion aid package containing new funding for Ukraine.” Lawmakers “have been at an impasse for months, after GOP lawmakers said that any efforts to help Ukraine must also include provisions to stop a historic level of illegal migration at the U.S. southern border.” (Wall Street Journal)
Sen. John Cornyn (R-TX), one of the negotiators, “expressed doubts that ongoing Senate negotiations over border policy will lead to legislation that will be enacted.” (Politico)
“Lawmakers have officially punted a debate over the renewal of a controversial government surveillance program to the new year.” The decision leaves Section 702 of the Foreign Intelligence Surveillance Act “intact without changes until April 19, saving it from expiration at the end of this year.” (Axios)
Economy
“Home buyers keeling over from sticker shock might think it crazy that housing could deliver significant relief on inflation. Yet that is economists’ base case for 2024.” The “single most important factor” in keeping inflation from returing to the Fed’s two percent target rate “is shelter: it rose 6.5% in the year through November. And because it makes up 35% of the CPI, it has an outsize impact. Without shelter, inflation in that period would have been just 1.4%.” (Wall Street Journal)
“America is short around 3.2 million homes, a big reason why prices are still high. That's 2.5% of existing U.S. inventory as of 2022.” (Axios)
U.S. shale “is rearing its head just months after the sector was all but written off as a threat” to OPEC. Shale drillers “have ramped up oil production well beyond what analysts foresaw, pushing output to a record just as OPEC and its allies put the brakes on supplies in a bid to arrest price declines.” While 2023 domestic production was initially predicted to average 12.5 million barrels per day during the current quarter, that estimate has been increased to 13.3 million — the equivalent of “adding a new Venezuela to global supplies.” (Bloomberg)
India’s central bank has moved to curb rising stress in the burgeoning market for unsecured consumer loans, hitting fintech lenders such as Paytm who had been increasingly relying on riskier borrowing for growth. The Reserve Bank of India announced in November that lenders had to increase the risk weight, the minimum amount of capital they must hold in relation to the asset, for personal loans from 100 per cent to 125 per cent after data showed the share of delayed payments was rising. (Financial Times)
Citigroup has again told most of its employees that they can work remotely for the remainder of 2023. However, “unlike last year, when the perk was introduced, employees are on edge over CEO Jane Fraser’s sweeping corporate reorganization, and some expressed concern over whether their jobs will still exist next year.” (CNBC)
Technology
Deloitte is using AI to evaluate its staff's skills and map out plans to shift employees into more in-demand roles, as a part of plans to moderate hiring growth. (Bloomberg)
Apple announces new ‘contingent pricing’ feature for App Store subscriptions: Apple has announced a new “contingent pricing” feature for subscriptions in the App Store. According to the company, this gives developers a new way to “attract and retain subscribers” by offering “a discounted subscription price as long as they’re actively subscribed to a different subscription.” One of the more interesting aspects of this new contingent pricing feature is that it can be used for subscriptions from one developer or two different developers. For example, Apple explains that one developer could entice new users to join by offering a discounted rate if they’re actively subscribed to a subscription from a different developer. (9to5Mac.com)
The Association of Southeast Asian Nations and Japan “will work together to create a competitive and green automotive industry, their leaders agreed at a summit in Tokyo on Sunday.” The new ASEAN-Japan Co-Creation Initiative for the Next-Generation Automotive Industry will develop “a ‘master plan’ for the industry, coordinating policies to ‘decarbonize the entire value chain’ and building ‘resilient and reliable supply chains.’” (Nikkei Asia)
TikTok parent ByteDance “is now so behind in the generative AI race that it has been secretly using OpenAI’s technology to develop its own competing large language model.” The practice “is generally considered a faux pas in the AI world. It’s also in direct violation of OpenAI’s terms of service, which state that its model output can’t be used ‘to develop any artificial intelligence models that compete with our products and services.’” (The Verge)
CMG Local Solutions, a marketing company that is part of the Cox Media Group, “claims it has the capability to listen to ambient conversations of consumers through embedded microphones in smartphones, smart TVs, and other devices to gather data and use it to target ads.” CMS claims its “Active Listening” capability can “identify potential customers ‘based on casual conversations in real time.’” (404 Media)
Smart Links
Mary Barra Spent a Decade Transforming GM. It Hasn’t Been Enough. (Wall Street Journal)
A-Rod’s Slam SPAC Is Said to Plan Merger With Lynk Global. (Bloomberg)
Environmentalists investing in Big Oil? Inside the surprising stock portfolios of California lawmakers. (Los Angeles Times)
Japan to reduce stake that triggers tender offer to 30%. (Nikkei Asia)
How Microsoft’s cybercrime unit has evolved to combat increased threats. (Ars Technica)
Eric Schmidt has a 6-point plan for fighting election misinformation. (MIT Technology Review)