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The World
Economists trim forecasts and investors feel jitters over Delta variant: Goldman Sachs cut its quarterly U.S. growth outlook to 5.5% as the data point to a slackening recovery. Meanwhile, investors in the $51tn US stock market are coming around to the view that the spread of the Delta variant will dampen the global economic recovery, threatening a record-breaking rally. The benchmark S&P 500 index on Wednesday fell by the most in a month before eking out a minor gain on Thursday. The big stock indices in Europe and Asia closed lower. “The impact of the Delta variant on growth and inflation is proving to be somewhat larger than we expected,” Goldman Sachs economists said. (Financial Times)
U.S. jobless claims fell to a pandemic low of 348,000 last week, as the data suggests the labor market continues to heal, with claims down for four straight weeks. (Wall Street Journal)
97% of small business owners won't pay more income taxes under President Biden's plan to tax the nation's highest earners to help fund a $3.5 trillion spending bill. (Reuters)
Russian President Vladimir Putin, during a June 16 summit meeting with President Biden, objected to any role for American forces in Central Asian countries, senior U.S. and Russian officials said, undercutting the U.S. military’s efforts to act against new terrorist dangers after its Afghanistan withdrawal. The previously unreported exchange between the U.S. and Russian leaders has complicated the U.S. military’s options for basing drones and other counterterrorism forces in countries bordering landlocked Afghanistan. The exchange also indicates that Moscow is more determined to try to maintain Central Asia as a sphere of influence than to expand cooperation with a new American president over the turmoil in Afghanistan. (Wall Street Journal)
An internal State Department memo last month warned top agency officials of the potential collapse of Kabul soon after the U.S.’s Aug. 31 troop withdrawal deadline in Afghanistan, according to a U.S. official and a person familiar with the document. The classified cable represents the clearest evidence yet that the administration had been warned by its own officials on the ground that the Taliban’s advance was imminent and Afghanistan’s military may be unable to stop it. (Wall Street Journal)
The chaos of Kabul is exposing fault lines in the UK-US special relationship, as Washington’s decision to withdraw from Afghanistan represents first major rift since Biden took office. (Financial Times)
Hospitalizations of people under the age of 50 with Covid-19 are now at the highest levels seen in the U.S. since the start of the pandemic. The largest increases in hospitalizations was among those in their 30s and the under-18s. (The Guardian)
For the first time in nearly six weeks, state officials said there were enough lawmakers present in the Texas House on Thursday for the chamber to conduct business — opening the door for the passage of the GOP priority elections bill that Democrats have been attempting to kill for the past several weeks by staying far away from the Capitol. (Texas Tribune)
48% of U.S. adults now say the government should take steps to restrict false information, even if it means losing some freedom to access and publish content, according to the survey of 11,178 adults conducted July 26-Aug. 8, 2021. That is up from 39% in 2018. At the same time, the share of adults who say freedom of information should be protected – even if it means some misinformation is published online – has decreased from 58% to 50%. (Pew Research Center)
Economy
Morrisons’ board switched its recommendation last night and backed a £7 billion takeover by Clayton Dubilier & Rice after the private equity firm trumped rival Fortress with a 285p-a-share cash bid and made pledges to support the grocer’s business model. The bid by CD&R values Morrisons at £9.7 billion including debt and has been funded by equity from the US firm’s latest fund and other alternative investors Ares and West Street Strategic Solutions, in addition to debt provided by Goldman Sachs, BNP Paribas, Bank of America and Mizuho Bank. Andy Higginson, Morrisons’ chairman, said that the offer “represents good value for shareholders while at the same time protecting the fundamental character of Morrisons for all stakeholders.” (The Times)
Toyota Motor said it will reduce global production for September by 40% from its previous plan, as the spread of the coronavirus in Southeast Asia adds to supply troubles for Japan's top automaker. Ford Motor Co. and General Motors Co. also said this week they are scheduling more downtime at several North American factories, in part because virus-related restrictions overseas are further adding to chip-supply constraints. (Nikkei Asian Review, Wall Street Journal)
After months of antitrust investigations against big tech firms, Beijing has furnished itself with one more regulatory tool. The powerful State Administration for Market Regulation released a draft regulation curbing "unfair competition in the internet sector." The rules are detailed, and if finalized as expected would ban a variety of anti-competitive practices in Chinese tech ranging from the pilfering of competitor data to paying cash for fake reviews. On the same day, ruler Xi Jinping chaired the first public meeting held since Party leaders' major (if secretive) annual conclave in Beidaihe. In what one knowledgeable observer called a "BFD," Xi pledged to "adjust excessively high income" and to "encourage high income individuals and businesses to do more to repay society." That's a strong signal to big tech to go above and beyond what the law requires and to make a show of giving back. (Protocol)
The CEO wants staff vaccinated. He also worries they will quit. An impasse over vaccinations is bedeviling the corporate world. On one side are employers and employees eager to see their co-workers be vaccinated. On the other are workers who see it as their right to decide when and if to get the shot. (Wall Street Journal)
Hundreds of workers at the personal styling service Stitch Fix have quit their jobs after incoming CEO Elizabeth Spaulding announced earlier this month that employees would no longer be allowed to work any hours they choose, according to interviews with half a dozen former and current employees. The changes to the company’s scheduling policies led to an exodus of around a third of its stylists, part- and full-time employees who work from home selecting clothing items for customers. “It was a gut punch,” said one employee. (BuzzFeed News)
VCs have invested $1B+ in cryptosecurity so far in 2021, up 10x YoY, as technologies for securing crypto wallets and transactions become more popular. (Crunchbase)
Crypto exchange Coinbase is entering the Japanese market through its partnership with Japanese financial giant Mitsubishi UFJ Financial Group (MUFG). Coinbase is launching Coinbase Japan as part of its global strategy in one of the largest markets by crypto trading volumes. (The Block)
Technology
The FTC filed a new antitrust complaint against Facebook, continuing its fight in federal court after a judge threw out its initial claims. Facebook has until Oct. 4 to respond to the amended complaint. FTC Chair Lina Khan notably did not recuse herself from the vote on the complaint after Facebook petitioned her to do so based on her past critical statements of the industry. The commission voted 3-2 to bring the complaint, meaning that Khan’s participation was crucial to continue the case in federal court. (CNBC)
Complaint: “Facebook has today, and has maintained since 2011, a dominant share of the relevant market for US personal social networking services,” the complaint alleges, citing time spent and active-user metrics on the daily and monthly scale. “Individually and collectively, these metrics provide significant evidence of Facebook’s durable monopoly power in social networking services.” (The Verge)
Inside Facebook’s metaverse for work: Facebook announces Horizon Workrooms, a virtual meeting space with avatars, spatial audio, a whiteboard, and more, in beta on Oculus Quest 2. Instead of attending in person or dialing in via Zoom, reporters donned headsets and used digital avatars of themselves to attend the company’s first media event exclusively in virtual reality. The gimmick marked the new free Facebook app designed to allow employees to work together in a shared, imaginary office. The app can project a user’s real-life computer into this world, viewed through Facebook’s own Oculus virtual reality headsets, allowing workers to sit with colleagues, chat and collaborate using virtual whiteboards. (The Verge, Financial Times)
An overview of the most interesting internal emails from the Apple v. Epic trial, including discussions about an “iPhone nano” and lowering App Store fees: After sifting through over 800 documents spanning 4.5 gigabytes, here are the roughly 100 things I learned. (The Verge)
Tesla CEO Elon Musk unveiled a humanoid robot called the Tesla Bot that runs on the same AI used by Tesla's autonomous vehicles. A functioning version of the robot didn't make an appearance during Musk's reveal, though a slightly bizarre dance by a performer dressed like a Tesla Bot was. The unexpected reveal came at the end of Tesla's AI Day presentation, with Musk providing few details about the Slenderman-like Tesla Bot outside of a few PowerPoint slides. The 5-foot-8 robot will weigh in at 125 pounds and be built from "lightweight materials," he said. (Cnet)
Weekend Reads
Why China’s crypto cowboys are fleeing to Texas. Tracking the Bitcoin bros seeking cheap power, lax regulation, and Austin’s best brisket. Poolin’s executive team has been on the move, restless, for nearly three months. The Hong Kong–headquartered company is one of the world’s largest Bitcoin mining pools, groups that combine resources to mine cryptocurrency more effectively. Poolin holds the second-largest share of the global Bitcoin hashrate — a measure of the computing power it takes to mine new Bitcoin — with a network of operations across Berlin, Beijing, Chengdu, Changsha, and Singapore. They were thrown into chaos in May, when China’s State Council banned cryptocurrency mining and trading in the country. Poolin’s team went to Texas. The cowboy hats, target practice, and barbecue brisket were just a bonus. They were really there for the deregulated electrical grid. Ousted from the provinces where they’d spent years building a footprint, China’s fleeing Bitcoin miners are now looking for stability. They want plentiful, cheap electricity to power their tens of thousands of computers — but they also want the certainty that politics won’t interfere with their operations. Before they can begin displacing the global financial system with a decentralized, peer-to-peer system of exchange, their needs are suddenly much more prosaic: predictable regulation, stable relations with governments, and affordable power. It’s harder than it sounds. (Rest of the World)
Having a mentally stimulating job in the second half of a career may help to stave off dementia, a study has found. Doctors and chief executives could be 23% less likely than those who have roles such as farm laborers to develop the condition. (The Times)
Smart Links
Microsoft will raise Office 365 business subscription prices in 2022 — first major price change since 2011 launch. (CNBC)
Amazon reportedly plans to open department stores, starting in California and Ohio. (The Verge)
U.S. department stores get sales boost from back-to-school wardrobe refresh. (Reuters)
Apple reportedly scales back ambitious ‘HealthHabit’ project for transforming healthcare. (9to5Mac)
Joaquin Duato to take over as J&J boss from Alex Gorsky in January. (Financial Times)
MLB set to give exclusive trading card license to Fanatics, ending 70-year run for Topps. (Action Network)
Electric cars and batteries: how will the world produce enough? Reducing use of scarce metals — and recycling them — will be key to the world’s transition to electric vehicles. (Nature)