Talking Points
- Blue Origin released plans for a private space station
- Google parent Alphabet reported $65bn in Q3 revenue
- The FDA approved Pfizer's vaccine for children aged 5+
- Beijing urged Evergrande's Hui to cough up
- Pakistan (finally) beat arch-rival India at the T20 World Cup
- An unorthodox marriage highlighted Japan's lack of royals
- Shiba Inu soared to become the 9th largest cryptocurrency
- Meanwhile, the world's oldest bank in Italy verged on ruin
- A UK report excoriated the NHS 'Test and Trace' system
- Iran agreed to return to Vienna nuclear talks in November
Dive deeper
Virginia goes to the polls next week in a test case for Biden's America. Meanwhile, trench warfare on Capitol hill has stripped the federal economic plan of its lofty ambitions.
Virginia too close to call
On Tuesday, Virginians will elect their next governor. President Joe Biden won the state handily in 2020, and pundits crowed early that the governor's office would again be draped in blue. That would make five Democratic victories in six attempts since the turn of the century. But just three days out, polling shows a dead heat between the Democratic company man Terry McAuliffe and his Republican antagonist Glenn Youngkin. The former is an old-hand who has already served four years in the Executive Mansion in Richmond. The latter is a political novice who's borrowed heavily from the Trump style guide.
Youngkin is seeking votes from conservative suburbanites who swung against Trump in 2020. His campaign has made plenty of hay from an ongoing dispute over the school curriculum, parents' rights, and censorship. By diligently hewing to "Virginia issues", Youngkin has managed to nullify McAuliffe's early lead. The political neophyte has also whipped up angst over a school sexual assault that involved a transgender student. That case has become the focal point in a boiling culture war. Meanwhile, the former governor has riled many with his dismissal of parents' concerns. And his attacks on Youngkin's links to Trump have not landed. In fact, at this late stage, it appears as though the declining fortunes of the current president are as relevant to electoral success as the spent fortunes of the previous one.
We are just a year and a week away from America's 2022 midterm elections in which the entire lower house and one third of the US Senate will be up for reelection. Virginia's gubernatorial race is being touted as a bellwether. Will the Democrats regain momentum before the critical national elections, or is this the beginning of the Republican fightback?
Build Back Marginally Better
President Biden's signature Build Back Better tax and spending plan is slowly materialising from the ether of promises. The details of the $1.75tn economic agenda – just half of what was originally promised – were released this week. Biden is clear about what's at stake, "I don't think it's hyperbole to say that the House and Senate majorities and my presidency will be determined by what happens in the next week". Among the details are provisions for climate change amelioration, universal pre-school, and a raft of other new social security reforms. But what's not in the details could fill a barn.
Senator Joe Manchin has been, if not implacable, mulish. He is well aware that in a 50-50 upper house, a cross-bench senator wields great power. As the last Democrat standing in West Virginia's coal country, he demanded that the Democrats gut the renewables component of their plan – a move which ensures there will be no federal inducement for energy generators to move away from fossil fuels. This week he also shot down a plans to tax billionaires' unrealised assets, and to implement a national paid family and medical leave scheme. Manchin's colleague from Arizona, Senator Kyrsten Sinema, has also been flexing. She was instrumental in forestalling an unbelievably popular reform that would have forced America's pharmaceutical giants to negotiate with the government on drug pricing . The occasionally denim-clad iconoclast has stoutly resisted all revenue-raising suggestions within the plan.
Biden has long promised that consensus will be defining theme of his presidency. But winning party unity in the Senate has been a debasing and demoralising process. House Democrats too, particularly the Congressional Progressive Caucus, have been intransigent. They refused to countenance a vote on a separate infrastructure bill until 'Build Back Better' was ready to go to a vote. And they've proven resilient to both cajoling and coercion from the House whips.
For now at least, Biden's legacy remains in question.
Worldlywise
COP26 or cop out?
We’re a day out from COP26 — the biggest international climate summit since the landmark Paris Agreement in 2015. World leaders are gathering in Glasgow to debate climate mitigation strategies and (hopefully) set new commitments. In the lead up to the conference, many countries have upped their emission reduction targets.
Climate laggard Australia finally announced a net zero target for 2050 this week. But the Prime Minister, Scott Morrison, attracted scorn from the opposition and from climate activists. Morrison claims his government will invest $20 billion in low-emissions technology including low-cost solar, clean hydrogen, low emissions aluminium and steel, and carbon capture and storage (CCS). But CCS has been derided as a sop to keep Australia coal-fired power plants in operation longer. In fact, former leader Malcolm Turnbull has labelled Morrison’s plan a “con”. Furthermore, Morrison's plan only goes 85% of the way to achieving its goal — the remainder will have to be achieved through future “technology breakthroughs”. That is, technologies that don’t exist yet.
Across the Indian Ocean, Saudi Arabia is another country making the news for its climate moves this week. The world’s biggest oil exporter said it would hit net zero by 2060 and plant 50 billion trees in the middle east, but critics swiftly denounced the plan for not including a commitment to phase out fossil fuels. Like Australia, the Kingdom aims to offset emissions through technologies like carbon capture and storage. Meanwhile, Saudi Arabia plans to increase its oil production.
So will these paltry moves, along with the countless others recently announced, be enough? The UN released a report this week which stated that despite 120 countries strengthening their emissions targets since the end of September, the world is on track for a nasty shock. Average global temperatures are still set to rise by 2.7 degrees Celsius by 2100. The Paris Agreement stated that the world must keep warming to 2 degrees to prevent catastrophic damage. 1.5 degrees was the preferred target. Now, the UN study says that to keep warming to between 1.5 and 2 degrees, the world will need to cut an additional 28 gigatonnes of greenhouse gases per year - beyond current commitments, and by 2030.
The time to avert climate devastation is running out. And so far, that's the only profound change taking place.
If Tesla runs flat, who gets Hertz?
Fresh out of pandemic-induced bankruptcy, car-hire giant Hertz has announced a $4.2 billion order for 100,000 Teslas to be delivered over 18 months. The order further buoyed optimism in Tesla and acted as yet another multiplier for its stock price. Tesla's valuation soared past $1 trillion — more than the next nine wealthiest automakers combined. The electric vehicle giant is currently the fifth most-valuable company on the S&P 500 despite coming in at 89 when ranked by last year’s revenue . So what is it about Tesla that has people so hot for their stock?
Here is a totally sane business case for Tesla. First: EVs now mainstream, as denoted by the Hertz deal . Second: Tesla’s sales abroad are ludicrous. On the same day as the Hertz announcement, Tesla’s Model 3 became the first EV to become the top-selling car in Europe . That's what economists would refer to as an inflection point. Tesla’s are also an increasing presence on China’s roads — 49 per cent of Tesla’s annual revenue came from China in 2020. Finally, battery technology is getting cheaper and more efficient — many more of us will have some form of battery in our cars or houses within the decade.
And here is the meme version of the business case. Tesla is red hot right now, and Elon Musk’s Twitter followers will do anything he says. The tech billionaire can move the price of cryptocurrencies like Dogecoin and Bitcoin with a tweet. Musk says ‘Use Signal’, referring to the messaging app, and shares in an unrelated biotech company, Signal Inc. , are sent through the roof. Likewise for Sandstorm Gold Ltd. — solid investment or not, but certainly unrelated to Darude’s ‘masterpiece’ . ‘Retail’ investors are jumping on these ‘meme stocks’ not because of underlying fundamentals like profit but rather because of the buzz created by Musk. And because it's fun. Social media and trading apps have democratised finance — giving the commoner access to financial opportunities previously enjoyed by the high-flying, hedge-funding elite. But they have also democratised risk . More importantly, they have arguably transformed retail investing into a form of entertainment.
When Hertz declared bankruptcy last year, people jumped on its rock-bottom share price, hoping to jump off before the carousel burned down. In that particular case they happened to be right. But in a lot of others, someone gets stuck holding a worthless stock at the end . Tesla is unlikely to go that way, and some are predicting its market value will double in the next year. But if it doesn't – it's not just a hire car company that's going to go flat.
The best of times
More Benin Bronzes returned
This week, two British universities and a French museum repatriated antiquities stolen from West Africa during the era of colonial pillage. Particularly egregious thefts were conducted from the Kingdom of Benin (which corresponds to modern-day Nigeria). Elaborate bronze sculptures were among the thousands of priceless objects stolen. The sculpture above is the likeness of an Oba, or king.
Merck goes generic
The US pharmaceutical giant Merck has signed a voluntary license agreement to massively broaden access to its lifesaving covid pill. Generic drug manufacturers in the developing world will have the opportunity to reproduce molnupiravir without paying royalties to the patent-holder for the duration of the pandemic.
The worst of times
A rogue by any other name
There comes a point when a company's product is so toxic, its reputation so tarnished, and its leadership so distrusted that only a makeover will do. Philip Morris emerged from a puff of smoke as Altria. British Petroleum cast its eyes to the future as Beyond Petroleum. And now that Facebook has well and truly destroyed every iota of social and political capital it ever accumulated, it's rebranded as Meta . The name captures CEO Mark Zuckerberg's desire to be the world leader in immersive augmented reality software. Expect all the usual hate-speech, incitement to violence, cyber-bullying, and fake news – just in funky animated rooms.
Sovereignty suffocated by concrete
In contravention of its obligations under international law, Israel rubber-stamped the construction of another 3,000 settler homes on forcibly seized Palestinian territory in the West Bank. This is not a hot news story, and coverage has been sparing. Consider this a reminder that while your attention is captured elsewhere by quotidian crises, this indignity continues.
Weekend Reading
The image
The quote
"From today's standpoint, it could have – yes, maybe should have – been done differently."
– Luxembourg Prime Minister Xavier Bettel shows a deep understanding of how the inexorable passage of time refashions society and thought anew with every passing generation . Each of us hopes that we won't be made a fool by history. Here, Bettel is responding to a news report which found that his university thesis was, with the exception of a few paragraphs in the introduction and conclusion, wholly plagiarised. A full 20 pages - copied verbatim from a Greek politician's report. The more things change, the more they stay the same.
The numbers
999 copies
- The art collective MSCHF (remember the Lil Nas X sneakers made with a drop of human blood?) has once more grabbed headlines - this time with their effort to 'destroy' an Andy Warhol sketch . The group purchased his 1954 ballpoint pen sketch Fairies for $20,000 with the sole purpose of obliterating its value. Sort of. MSCHF made 999 identical copies of Fairies and then added the original to the pile. Each was sold for $250 this week with the title Possibly Real Copy Of 'Fairies' By Andy Warhol . It's both funny and a pretty neat way to make nearly a quarter of a million bucks.
A $344bn faux pas
- It's been a year since Jack Ma expended the last of his social capital with a misguided shot at China's financial regulators. His words have cost him dearly: a $344bn decline in the market capitalisation of his Alibaba Group Holding to be precise.
The headlines
"'After 30 Years of Breeding Condors, a Secret Comes Out" – The Atlantic . Perfect headline, perfect article.
"Woman sues Kellogg for $5m arguing that Pop-Tarts doesn't have enough strawberries"
– The Independent . Justice in our time!
The special mention
No point beating around the bush: this British sailor has a unique inner monologue – their deepest thoughts are voiced by caricatures of a bickering old Italian couple . What does your inner voice sound like?
A few choice long-reads
- It's.
- Novel.
- Tehran.
Tom Wharton @trwinwriting
