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The World
Congressional leaders have reached an agreement “on overall spending levels for the current fiscal year that could help avoid a partial government shutdown later this month.” While the $1.7 trillion agreement “largely hews to spending caps for defense and domestic programs that Congress set as part of a bill to suspend the debt limit until 2025,” it does provide “some concessions to House Republicans who viewed the spending restrictions in that agreement as insufficient.” (Associated Press)
The agreement stands the risk of “further enraging Speaker Mike Johnson’s right flank,” and contains “a big win for Democrats” on overall non-defense spending levels. (Politico)
Both the House and Senate “return from a holiday break this week ahead of a two-tiered government funding deadline, with the first batch of funding expiring on Jan. 19 and the rest expiring on Feb. 2.” (The Hill)
Kim Yo Jong, “the powerful sister” of Kim Jong Un, said that North Korea “will immediately launch a military strike in response to any provocation.” Her remarks came after South Korea said the North “had fired more than 60 artillery rounds on Saturday near their disputed maritime border, following a similar volley of more than 200 the previous day.” (Reuters)
“Sheikh Hasina is set to extend her two-decade rule over Bangladesh after a crackdown on her rivals left the result of Sunday’s election all but guaranteed.” Her Awami League party “went into the vote practically unchallenged after authorities arrested thousands of members of the main opposition Bangladesh Nationalist Party” in the weeks leading up to the election. The BNP boycotted the vote. (Financial Times)
European Council President Charles Michel “has announced he will run for his Belgian party in EU-wide elections in June, prompting liberal fears that his early resignation could open the door for Hungary’s Prime Minister Viktor Orbán to exercise greater influence over EU policymaking.” If elected, he would have to resign his EC post, and if EU governments found no replacement quickly, “member states might vote to allow Hungary, which will then already be holding the rotating chair of the EU Council meetings, to have the presidency until a replacement was found.” (Financial Times)
Such a scenario would “leave Orbán, who has repeatedly been accused of holding European backing for Ukraine hostage over billions of euros of EU funding for Hungary frozen by Brussels over a range of rule-of-law disputes, effectively running the council.” (The Guardian)
Italian Foreign Minister Antonio Tajani says the European Union “should form its own combined army that could play a role in peacekeeping and preventing conflict.” In an interview with an Italian newspaper, Tajani said, “If we want to be peacekeepers in the world, we need a European military. And this is a fundamental precondition to be able to have an effective European foreign policy.” (Reuters)
“Pressured by the record levels of migrant crossings reported in December, the Biden administration is weighing whether to restrict a key presidential immigration authority to convince Republican lawmakers to approve more aid to Ukraine and border funding.” (CBS News)
“A new low of 28% of U.S. adults are satisfied with the way democracy is working in the country. The current figure is down from the prior low — 35% measured shortly after the Jan. 6, 2021, attack on the U.S. Capitol.” (Gallup)
The Atlantic Coast “is dropping by several millimeters annually, with some areas, like Delaware, notching figures several times that rate. So just as the seas are rising, the land along the eastern seaboard is sinking, greatly compounding the hazard for coastal communities.” More than 3,700 square kilometers along the coast are sinking more than five millimeters annually — “an even faster change than sea-level rise.” (Wired)
Economy
Largest US banks set to log sharp rise in bad loans: A pile-up of bad debt threatens to sour investors’ growing optimism about the prospects for the US’s largest banks when they report fourth-quarter earnings this week. Non-performing loans — debt tied to borrowers who have not made a payment in at least the past 90 days — are expected to have risen to a combined $24.4bn in the last three months of 2023 at the four largest US lenders — JPMorgan Chase, Bank of America, Wells Fargo and Citigroup, according to a Bloomberg analysts’ consensus. That is up nearly $6bn since the end of 2022. The analysts estimate bank earnings shrunk in the final three months of 2023, dragged down by those unpaid loans as well as the lingering impact of higher interest rates, which has raised the cost of deposits. (Financial Times)
“After a recent pullback in stocks, investors are looking to the coming earnings season for clarity on companies’ growth prospects.” Analysts expect S&P 500 companies to report a second straight quarter of earnings growth. Fourth-quarter profits are projected to have risen 1.3% from the same period a year earlier, down from the eight percent growth analysts had projected at the end of September. (Wall Street Journal)
Fed Pivot Will Dominate Year of Rate Cuts in Turn of Global Cycle. (Bloomberg)
National Transportation Safety Board investigators “were on the ground in Oregon trying to figure out what caused a door panel to blow out of a brand new” Alaska Airlines Boeing Max 9 aircraft just minutes after takeoff on Friday. Investigators “said that initial findings do not suggest a widespread flaw” with the Boeing aircraft. (The Guardian)
“In just months, Boeing Co. has suffered a series of quality lapses that threaten to erode trust in the manufacturing prowess of the biggest US exporter — notably its 737 Max aircraft, a crucial cash cow.” (Bloomberg)
Technology
Apple’s Biggest Challenges in 2024 Have Little to Do With the iPhone. Here are the challenges I see for Apple as we start 2024: (Bloomberg)
The company remains years behind the competition in generative artificial intelligence and risks missing out as Microsoft Corp., Amazon[dot]com Inc., Samsung Electronics Co. and Alphabet Inc.’s Google actually ship new AI-centric hardware, software and services.
Its first new product category in nearly a decade, the Vision Pro headset, will show no signs of being a real revenue driver for at least the next year and more.
The iPad and Mac, two categories that have underperformed in recent quarters, must be revitalized.
Antitrust regulators will continue their scrutiny of the App Store, which will be forced to open up due to the Digital Markets Act in the European Union and possibly elsewhere.
Honda is considering spending as much as $14 billion to build an electric vehicle plant in Canada. It would be “one of the Japanese automaker's largest investments as it hopes to catch U.S. and European rivals in EV production.” (Nikkei Asia)
“There's currently a surge in cryptocurrency and phishing scams proliferating on X (formerly Twitter) — hiding under the guise of gold and gray checkmarks intended to mark ‘Verified Organizations.’” X scammers appear to be “growing more sophisticated at a time when X has launched an effort to sell even more gold checks at lower prices through a basic tier announced this week.” (Ars Technica)
Code within the latest version of the ChatGPT Android app suggests users will soon “able to set it as the default assistant app” instead of Google Assistant. Right now, “if you want to ask ChatGPT a question from your Android phone, you either need to navigate to OpenAI’s website or open their app. In contrast, you can easily access Google Assistant from any screen through a gesture or by voice command.” (Android Authority)
AI’s Biggest Challenges Are Still Unsolved (Scientific American)
What’s next for AI regulation in 2024? (MIT Technology Review)
Some medical experts and professionals are worried about Eli Lilly’s new LillyDirect platform, “which connects people with an independent telehealth company that prescribes obesity medications, as well as third-party services that can fill prescriptions and send them directly to a patient’s home.” They fear that offering medications straight through a drugmaker may make it easier than ever for pharmaceutical companies to target patients with their products — regardless of whether that medication is the right treatment for a particular individual.” (New York Times)
Smart Links
Nation’s Top Economists Are Short-Term Happy, Long-Term Glum (Wall Street Journal)
World’s biggest mining project to start after 27 years of setbacks and scandals (Financial Times)
Quantum computing is taking on its biggest challenge: noise (MIT Technology Review)
Apple revives old fight with Hey after rejecting new calendar app (The Verge)
The Woman Shaking Up the $50 Billion Instant-Ramen Industry (Wall Street Journal)