Google gets sneaky
MARKETS
- Shutdown: Remember when President Trump declared a national emergency to get more money for a southern border wall? Now, lawmakers could force a vote to block it in Congress.
- Treasury: After “progress” in U.S.-China trade talks last week, Treasury yields snagged their biggest weekly gain in about a month.
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AUTO
Auto Tariffs in Mirror Might Be Closer Than They Appear
The last time foreign cars made this much buzz around the West Wing, Warren G. Harding woke up in that new Bugatti.
The Commerce Department was widely expected to submit a report to President Trump yesterday giving the U.S. authority to impose tariffs on foreign cars and car parts.
- The justification: National security concerns, because what else?
Now, the president has options. And they run the gamut from doing nothing...to imposing tariffs or even quotas on foreign car imports, experts have said.
What do automakers think?
Here in the States, they’ve been adamantly anti-tariff. Domestic firms like GM have told the president that tariffs on foreign cars would hamstring them, too, and raise prices for consumers.
- The Center for Automotive Research reported a worst case scenario 25% tariff would cost the U.S. 366,900 jobs in auto and auto-adjacent industries.
- And U.S. light duty vehicle prices would increase by $2,750 on average (U.S.-built vehicles included), preceding an annual sales drop in the U.S. of about 1.3 million units.
Soundbite: “We’re not always united on public policy issues, but we’re united on this...every auto manufacturer and parts manufacturer that I am aware of thinks this would be a mistake,” said the president of the American Automotive Policy Council.
Does anyone think this is a good idea? Trump administration officials have suggested tariffs on autos are a point of leverage to use in trade talks with partners like Japan and the EU.
What happens next?
We’re still pretty much in the dark. The Commerce Department’s deadline to submit the report was yesterday. Most think it did, but the report isn’t expected to be made public right away.
After snagging the report, President Trump will have 90 days to make a decision on auto tariffs. Mark your calendars for May 19.
ENERGY
Climate Policy Throwdown
In one corner, former Fed Chair Janet Yellen, backed by 3,300 professional economists. In the other, Rep. Alexandria Ocasio-Cortez, supported by a growing roster of lawmakers (and 2.4 million Instagram followers).
Let’s have a good, clean fight, okay?
Yellen’s cause? Her Climate Leadership Council advocates for a tax on carbon emissions. The money collected would then get rerouted to the public through dividend payments.
AOC: The Green New Deal she and Sen. Ed Markey introduced earlier this month (essentially a massive federal investment program) calls for a “national mobilization” to shift the U.S. to 100% “clean, renewable, and zero-emission energy sources.”
- Fossil fuels accounted for 80% of U.S. energy consumption in 2017.
Yellen’s fighting words: She told the FT her plan “is much more efficient and less costly than methods proposed by the proponents of the Green New Deal.”
Looking ahead...climate change is already a major talking point for 2020. Place your bets on more back-and-forth over the best path forward.
TECH
What the Heck Is Sharka LLC?
That’s what residents of Midlothian, TX, were asking after the mysterious developer received more than $10 million in tax incentives for a new project in town. Turns out, it was Google building a data center, news that didn’t reach the community until after the project was finalized.
This fits a pattern, a WaPo report found. As Google constructed data centers around the country, it set up subsidiaries to handle the nitty-gritty negotiations...and keep its intentions out of the public's view.
What should we think about this in the aftermath of Amazon’s NYC debacle? It’s nuanced.
- Confidentiality agreements are par for the course in economic development, but experts say Google’s arrangements are...pretty one-sided.
- Data centers are especially thorny. Even something as basic as water and energy use is considered a trade secret, a Google spokeswoman told The Post, because it could reveal sensitive tech info.
Looking ahead: Google said last week it’s investing $13 billion in real estate projects around the country this year.
SPORTS
Qatar Wants to Host Your New Spikeball League
The small Gulf state said it wants to develop a $20 billion sports sector before it hosts the 2022 World Cup. Maybe that’s where Machado and Harper will end up...
Qatar is riding high after winning its first ever Asian Cup in soccer. Now, it’s hoping to capitalize on its (highly controversial) hosting duties for one of the most watched sporting events in the world. In all, the Qatar Financial Center is hoping to license about 150 sports companies before the tournament.
Sports is just one part of a broader economic reshuffling
Qatar is the biggest liquified natural gas exporter in the world, but it’s looking to attract businesses in other sectors like fintech and media to better compete in a regional economy that includes the likes of Saudi Arabia and the U.A.E.
- Remember: In 2017, Saudi Arabia, the U.A.E., Bahrain, and Egypt cut economic and diplomatic ties with Qatar, which they’ve accused of financing terrorism. Qatar denies the charges.
CALENDAR
The Week Ahead
Late February is weird...not a whole lot going on in the business world except a few earnings stragglers and U.S.-China trade talks. Anyone else itching to fill out a March Madness bracket?
Monday: Presidents’ Day
Tuesday: Earnings (Walmart); housing market index
Wednesday: Earnings (HSBC, CVS, Wix.com); FOMC minutes
Thursday: Durable goods orders; existing home sales; earnings (Baidu, HPE, Intuit, Kraft Heinz, Domino’s, Dropbox, Zillow, Roku)
Friday: National Girl Scout Cookie Weekend kicks off; earnings (RBC, Wayfair, Cinemark)
Saturday: Including this day only because Warren Buffett releases his annual shareholder letter
WHAT ELSE IS BREWING
- Flybmi, a British regional airline, folded over the weekend. Hundreds of travelers were stranded.
- Southwest Airlines declared an “operational emergency” due to an uncharacteristically high number of grounded jets. Must be something in the airwaves…
- Uber is suing New York City over its temporary cap on new vehicle licenses for ride-hailing firms.
- Sci-fi film Alita: Battle Angel unexpectedly toppled The Lego Movie 2 in box offices this weekend with $27.8 million in U.S. and Canada ticket sales.
BREAKROOM
Science Trivia
Due to rapid growth of data storage, some scientists are proposing new metric prefixes for really big and really small numbers (e.g. “quecca” for 1030 and “quecto” for 10-30). They would be the first new prefixes since 1991.
Can you name the metric prefixes for the following powers?
10^9, 10^6, 10^3, 10^-3, 10^-9, 10^-21
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Breakroom Answers
Science Trivia
109 (giga), 106 (mega), 103 (kilo), 10-3 (milli), 10-9 (nano), 10-21 (zepto)
Quis vero aut et vero id omnis perspiciatis ullam. Sit voluptates quisquam rerum harum consequatur quod voluptatibus enim. Temporibus sed veniam iusto est provident quo facilis. Est vitae saepe molestiae omnis et quis.
Sit ut et dicta enim quos corrupti culpa. Quo adipisci nam similique reprehenderit distinctio suscipit similique.
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