Good morning. David Meyer here, filling in for Alan one more time this year before I take a few weeks off to enjoy the South African sunshine.
After yesterday’s tumultuous day on Wall Street—a 785-point drop in the Dow before a whiplash recovery that saw the day close a mere 79 points down—there could be more good news on the horizon.
The Labor Department will be issuing its latest monthly employment report, and a Reuters survey suggests the figures will be pleasing, with a likely increase of nonfarm payrolls by around 200,000 jobs. Asian indices today were flat to positive (the Nikkei 225 was up 0.8%) and Europe’s Stoxx 600 is up 1.3%. U.S. futures suggest a modest pop at the start of today’s trading.
Now, as it’s Friday, let’s look at some feedback.
In Wednesday’s newsletter I said a failure to establish cohesive new tax rules for digital giants on an international level could quickly make things “very complicated for the multinationals.” Here’s M.C.’s take on the matter: “Would that really be such a bad thing? These companies need to be slowed down. Growth Über Alles is the disease that’s killing Capitalism.”
As I noted in my piece, I believe individual countries are justified in wanting to get more tax out of the likes of Google and Amazon. However, I still think a coordinated international approach would be preferable to a patchwork of tax regimes complicated by mismatched ideas about jurisdiction. Complexity breeds loopholes.
And as for slowing the giants down, again I think the goal is probably a necessary one, in order to protect consumers and give smaller players a chance, but the means should be fair and appropriate. I am particularly intrigued by the approach being taken by EU antitrust regulators, who see sweetheart tax deals as a competition matter and are also starting to frame data hoards as a market-fairness issue.
On quite another subject, B.S. asks when I will “stop being the mouth piece of foreign countries,” while J.O. praises my inclusion in the newsletter of more news from outside the U.S., saying it is “very informative.”
Well, I’m a South African and British guy who lives in Germany, so I can’t help but provide more of an external perspective. I hope most of you appreciate it—and on that note, I slightly prematurely wish you all a wonderful festive season.
More news below.
Fiat Chrysler will build a new assembly plant in Detroit—the first time in at least a decade that a domestic automaker has established a new assembly plant in the U.S. The facility will put together new SUVs for the Jeep range (note that new Fiat Chrysler CEO Mike Manley used to run the Jeep line.) Wall Street Journal
Sears chair and former CEO Eddie Lampert has, via his ESL Investments hedge fund, bid $4.6 billion to buy around 500 Sears and Kmart stores from the bankrupt operation. The bid is also for the Diehard battery brand and Kenmore appliance brand. ESL says it would save 50,000 jobs. CNN
Tesla is replacing its top lawyer. Out goes Elon Musk confidant Todd Maron, and in comes seasoned trial lawyer Dane Butswinkas. The new general counsel said, quite grandly: “Tesla’s mission is bigger than Tesla—one that is critical to the future of our planet. It’s hard to identify a mission more timely, more essential, or more worth fighting for.” WSJ
The New York Times reports that President Trump’s Bedminster golf club employs and employed illegal immigrants—an embarrassing revelation given the president’s anti-immigrant rhetoric. The Trump Organization insists it has “very strict hiring practices” and will immediately fire anyone who came to it with fake documentation. The White House has not commented. NYT
Around the Water Cooler
National Security Advisor John Bolton knew of the impending arrest in Canada of Huawei CFO Sabrina Meng Wanzhou when he sat at the dinner/negotiating table with Presidents Trump and Xi last weekend, and the Trump administration was aware of the possibility that the arrest—at the U.S.’s request—would affect the trade truce between the U.S. and China. The White House claims Trump didn’t know about the matter, though. Bloomberg
Huawei has reportedly agreed to make improvements to its telecommunications equipment and software, to address security fears that were expressed by British intelligence agencies. Without doing so, Huawei would essentially be shut out of future 5G network buildouts in the U.K. Meanwhile, the Japanese government is reportedly about to shut out Huawei and ZTE from its procurement plans, due to concerns over the Chinese being able to spy through the firms’ equipment. Financial Times
Another day, another Bitcoin tumble. It’s 12% down over the last day and fell below the $3,400 mark. Other cryptocurrencies are joining it, as per usual—XRP down 12%, and Ether down 17%. But one new coin, Bitcoin SV, is doing rather well. Fortune
This week’s must-read is Laurie Penny’s account of a blockchain-focused Mediterranean cruise, replete with John McAfee and squadrons of young, Eastern European women who maybe aren’t part of the cryptocurrency world as such. It’s both an entertaining and depressing piece of gonzo journalism, and a superb primer on the scene. Breaker