Global Street Smarts.
Happy Friday.
Here’s today’s ITK Daily.
To be ITK, know this:
Hoping to avert nuclear crisis, US seeks informal agreement With Iran: NYT reports the talks reflect a resumption of diplomacy between the United States and Iran after the collapse of negotiations to restore the 2015 nuclear deal.
Reuters: Bill Gates in China: Microsoft co-founder to meet Xi Jinping
Big China needs Big (Multinational) Business
China's quantum leap — Made in Germany: Germany's oldest university hosts many scientists conducting groundbreaking work. Little did they know how they would become entangled in China's quantum military strategy. DW
China to embark on major stimulus to revive economy: Beijing’s plans to jump-start the flagging economy include the possibility of billions of dollars in new infrastructure spending on top of recent rate cuts. WSJ
+ Beijing is planning major steps to revive the country’s flagging economy, including the possibility of billions of dollars in new infrastructure spending, and looser rules to encourage property investors to buy more homes, people familiar with the discussions say.
+ The push follows a series of interest rate cuts by China’s central bank this week, including one on Thursday that cut a key policy rate for the first time since August, as fresh data showed the country’s economic recovery is flickering out.
+ The moves also signal that officials are still wedded to old ways of juicing growth by using borrowing to fire up investment, rather than taking more difficult steps to boost household incomes and consumption, some economists say.
China's e-commerce extravaganza loses its shine as consumption sags: Nikkei reports online sales suffer amid COVID hangover, property weakness and job losses.
EU vs CHN: Brussels is under pressure to impose restrictions on Chinese EVs, over fears that imports are flooding the European market at a speed and scale that threaten the Europe’s own production of such vehicles.
+ China’s system of state capitalism relies on gigantic subsidy programs for industries that the communist party wants to turn into global champions. But there’s a disagreement within the EU over how to deal with China’s booming car exports.
+ “We must not repeat in the electric car market the mistakes we made with photovoltaics, where we created a dependency on Chinese industry and made its manufacturers prosper.” -- French President Emmanuel Macron
+ German officials, meanwhile, warn Beijing’s potential retaliation could hurt exports to China, as well as make life harder for European companies that have big investments in the Asian powerhouse.
GER-CHN summit: German government meets Chinese counterparts June 20 in Berlin.
In advance of the Germany-China summit next week in Berlin...Germany ain't decoupling from China anytime soon.
I penned this opinion editorial for The Hill back in November 2022, exploring the focus of German Chancellor Olaf Scholz's trip to China.
Access the full opinion editorial here.
Countries push back against US’s anti-China tech policy: Politico reports officials at Global Tech Day summit say their countries will continue to build tech and trade ties with Beijing.
Pacific nation asks US to repel Chinese ‘spy boats’: The Times reports the president of Palau suggests Beijing is monitoring island’s communication links.
Diplomatic spat reveals South Korea's pivot to hard line on China: Nikkei reports Beijing envoy's criticism meets with fierce response from Seoul.
Bloomberg: Kissinger sees war over Taiwan likely unless US, China back down
+ Trajectory of US-China relations ‘must be altered,’ he says
+ Well-known statesman says he’s encouraged by US-China talks
Boris Johnson condemned for lying to parliament: FT reports the report by MPs on the House of Commons privileges committee slams former PM’s conduct and says he would have faced a 90-day suspension if he was still an MP.
+ Former leader and his suporters give angry response to the privileges committee
BoJo + Westminster: Monday will be a day of high drama where Conservative MPs vote on whether to censure Johnson — the former prime minister who won them an 80-seat majority — in his absence. It’s been a long three-and-a-half years.
Will Boris Johnson make a comeback? Partygate report could make it easier: Former PM lays out long-term strategy for return to frontline politics. The Times
Boris Johnson exits as he entered, with deceit and contempt: The former PM has only the martyr card left to play but his fan base is dwindling. Robert Shrimsley
+ There is no precedent for a prime minister, or a former one, having been found guilty of deliberately misleading the Commons.
+ Understanding that the game was up, Johnson resorted to his trusted playbook. Bluster, humour and faux outrage were deployed to distract attention from the charges.
+ The findings of the cross-party, but Conservative-dominated privileges committee are damning.
+ The committee of MPs decided his dishonesty was so grave that the only appropriate sanction had to be triggering the process that could force him to face a by-election. No sitting or former prime minister has ever faced such a serious punishment — the gravity of his offence, they concluded, was magnified by the fact he was in Downing Street at the time.
The plot against PM Sunak Katy Balls
+ At first glance, it’s hard to understand why this war has broken out. Tories normally fight each other to advance an agenda or to supplant one leader with another. Johnson’s motivation seems to be more personal.
+ The trouble for the Johnson camp is that, as one disappointed supporter says, ‘there’s not much of a cause to rally round, just a row about peerages.’
+ One of the few saving graces for Sunak is that there is no serious threat to the right of the Tories. Reform – led by Richard Tice – has struggled to make ground without a Farage-like figure.
+ Many in government see the departure of Johnson from the Commons as the welcome loss of dead weight. There are some in the party who view themselves as now on a more righteous path to what came before, But Sunak would be wrong to celebrate too soon.
+ Johnson offered MPs something to rally around, even in dislike. Without him, the Prime Minister will find himself under even greater pressure to find a vision – and vote-winning strategy – of his own.
Balkans - a situation to watch:
+ Almost 25 years after the bitter war in the Balkans that ended with the NATO bombardment of Serbia, ethnic conflict has again erupted in Kosovo.
+ The US canceled Kosovo's participation in a NATO exercise last month.
Reuters: Australia cancels lease for new Russian embassy citing national security
Russia moves to seize ‘naughty’ western companies: FT reports Vladimir Putin’s confidential decree aims to give the Kremlin power to retaliate against European and US sanctions.
Russia’s big economic problem: Not enough workers: Labor force loses hundreds of thousands to war front and emigration, in ‘a disaster for the economy.’ WSJ
Marina Berlusconi: The discreet Italian heiress running her family empire FT
+ Every Monday for the past 30 years, Marina Berlusconi and her brother Pier Silvio discussed business and politics over supper with their father and his closest entourage at his residence outside Milan.
Trump’s bag man: Walt Nauta went to work for Trump as a valet, and ended up his co-defendant. David A. Graham
+ He is both a co-defendant with and servant to the former president.
+ Trump’s PAC may be paying for Nauta’s representation, but that doesn’t mean he’s getting the best help.
+ In court, both men had stood equal as citizens and defendants in a criminal scheme. At the restaurant, the huge gap between their statuses snapped back into view.
+ For the nation, just as for Nauta, Trump’s indictment is a terrible predicament with no easy way out.
North Carolina may be the hottest political battleground of 2024: Political maneuvering and changing demography are making it the most interesting state to watch. Economist
+ Whereas a Democrat has a plausible path to victory without North Carolina’s 16 electoral votes, a Republican does not.
National Airport changes spell disaster for our constituents Tim Kaine, Mark R. Warner, Chris Van Hollen + Ben Cardin
I live five miles from DCA and in the flight path, so this is a real "all politics is local" issue.
+ Tim Kaine and Mark R. Warner, both Democrats, represent Virginia in the US Senate. Chris Van Hollen and Ben Cardin, both Democrats, represent Maryland in the US Senate.
"Blame advance!" - This is gold from the former NYC mayor:
Bill de Blasio blamed the advance team for his now-infamous “groundhog incident.”
"I’m like, 'Don’t make me hold a fucking groundhog.' I mean, what the hell?"
"I go there, and it’s seven in the morning, which means my motor skills are not at their best."
"Why would you want an elected official to hold a groundhog? I don’t know anything about holding groundhogs. So the whole thing is just insane. There’s an original sin here. Don’t hand someone a groundhog, right?"
West Coast dockworkers reach contract deal with port operators: NYT reports after a year of prolonged negotiations that have led to delays and declines in cargo, the two sides agreed to a new contract with help from the Biden administration.
How the EU plans to regulate AI: The European Parliament wants to divide content generated by artificial intelligence into different risk categories. While some systems could be banned, services like the popular ChatGPT would hardly be affected. DW
FT: BlackRock delves deeper into crypto with push for bitcoin ETF
The seven companies driving the US stock market rally FT
+ Top-heaviness, particularly in US markets, is not new. “The big tech stocks in the S&P now are the same situation as oil companies were in the past, or the Nifty 50 in the 1960s,” says Frédéric Leroux, head of the cross-asset team at Carmignac in Paris.
+ Apple is worth more than the entire Russell 2000 of smaller US companies.
+ The OECD is watching with interest, saying in recent research that the vast scale of a few companies, combined with the widespread use of investable indices in passive investment products, has increased the tendency for stocks to move together — a phenomenon that can amplify both positive and negative shocks.
+ Mutual funds are also stumbling over this dynamic. Analysis from Goldman Sachs last month, looking at more than 500 such funds with a combined $2.6tn in assets, found that the “extreme concentration” in the Russell 1000 growth index was clashing with rules that required funds to maintain diversified portfolios or limit exposure to individual companies.
+ “Capital markets have become a champions league,” says Carmine Di Noia, director for financial and enterprise affairs at the OECD, referring to the elite European football championship. “They are not only dominated by large issuers but also by large asset managers, asset owners, index providers and audit firms. There is concentration in all parts of the market.”
FT: Virgin Galactic set to start commercial space flights this month
Restaurant chain Cava almost doubles after $318 million IPO: Bloomberg reports it is the sixth-largest US IPO of the year so far.
Workers resisting the office grind are suddenly lonely at home: Bloomberg reports staffers are increasingly unsure about working at home — but don’t share their bosses’ love of offices.
Meghan Markle’s ‘Archetypes’ podcast at Spotify won’t be renewed: WSJ reports the Duchess of Sussex’s show is a casualty of the audio company’s revamped approach.
Rembrandt’s Standard Bearer goes home to join his greatest painting: The work was followed six years later by The Night Watch and is a potent national symbol. The Times
+ It is billed as “inextricably linked to the history of the Netherlands” and is a work portraying Rembrandt “himself looking rebellious and full of bravado” in a 1636 work seen as laying the groundwork for his greatest painting, The Night Watch, six years later.
+ Standard bearers led militia troops into battle during the 80 Years War of independence which led to the birth of the Netherlands in 1648 and a flowering of civic engagement, the arts and trade.
+ The acquisition of the painting for €175 million is seen by Dibbits as his greatest triumph even above the museum’s successful and acclaimed Vermeer exhibition which closed earlier this month.
+ It was bought after the Dutch government won a diplomatic tussle with France in 2021, two years after Paris classed the painting as national treasure.
+ It was put on the market by the Rothschilds who bought it in 1844 from a French art dealer who had bought it from the private collection of King George IV.
+ Dutch taxpayers, renowned for the frugality of their governments, chipped in €150 million on top of €25 million raised by the Rijksmusuem from private donations.
+ Rembrandt made 340 paintings, most of these are in foreign museums and private collections. There are 44 hanging in Dutch galleries, of which 22 are in the Rijksmuseum.
WP: Cash-strapped Taliban selling tickets to ruins of Buddhas it blew up
Paris tourism close to pre-pandemic levels: Le Monde reports the city council says it wants to encourage restraint on hotel prices ahead of the 2024 Olympic Games. Between January and April, average rates rose by almost 30%.
PGA Tour’s deal with LIV’s Saudi backers to be investigated by the Justice Department: The probe introduces uncertainty to the agreement between warring bodies that stunned the golf industry, which was already facing scrutiny under federal antitrust law. WSJ
+ Makes it probable that any transaction that is hammered out between the rivals won’t take effect for some time.
+ One senior Tour executive told employees this week that the outcome of the blockbuster proposal, announced last week, likely won’t be known for at least a year, a person familiar with the remarks said.
+ Regulatory review could extend even longer than that.
+ “We are confident that once all stakeholders learn more about how the PGA Tour will lead this new venture, they will understand how it benefits our players, fans, and sport while protecting the American institution of golf,” the PGA Tour said in a statement issued late Thursday.
+ It could be awkward for both parties if the Justice Department were to nix the deal. The Saudis have committed billions to LIV Golf, but it has garnered little interest from fans, media partners or sponsors.
+ It is unclear if LIV events will even continue if the merger succeeds. At the same time, the Tour had largely fought back against LIV over moral grounds that would be difficult to argue after agreeing to partner with PIF.
+ This isn’t the PGA Tour’s first time facing a federal antitrust inquiry. But, unlike the last time, the politics are working against the Tour instead of for it.
+ While the Tour counted Capitol Hill as a powerful ally when it was battling LIV, fanning the flames of Saudi Arabia’s troubled record on human rights and how its golf enterprise was merely an exercise in sportswashing, those same politicians have pivoted to assail the Tour now that it has parked with its former enemy.
Enjoy the ride + plan accordingly.
-Marc
Marc A. Ross | Chief Communications Strategist @ Caracal
Caracal produces ITK Daily.
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