By Michael Every of Rabobank

Happy Chinese New Year! Kung Hei Fat Choi/Gong Xi Fa Cai/Sing Zia Ju-i!

The Year of the Rabbit 2023 is associated with longevity, peace, prosperity, and fecundity. All would be welcome after the Year of the Tiger, which was correctly associated with competition, challenges, rebellion, short-temperedness, unpredictability, and an official decline in the Chinese population. Markets started 2023 off rabbit-like, and while the ‘buy stocks’ trade may be fading, the ‘buy bonds’ trade is still going strong, as is ‘sell US, buy anything else’, assuming there are now no tigers to sink their teeth into defenceless, fluffy things like Europe.

If only we could rely on astrology and Wall Street projections!

“Tanks for nothing”; parallel unparalleleds

A new Russian offensive in Ukraine looms but Berlin won’t send German tanks. However, it might finally allow others with German-made tanks to send them. Yet geopolitics experts agree that while Germany doesn’t want Russia to win, it doesn’t really want Ukraine to win either, as that would decouple from Russia permanently, create a new Poland/Balts/Scandies/Central Europe/Ukraine bloc, and EU gas would flow from the south via Italy, not from the east via Germany, shifting intra-EU power dynamics. The German press says its defence industry fears every Deutsche tank will be replaced by an American, entrenching US market position. In short, the risks are still of an extended war, not rabbit-like peace, and the damage to peaceful Germany’s reputation within the EU and US, not just as an arms dealer, is not to be taken lightly.

Bloomberg also reports ‘Germany and France Push for Huge Spending to Compete With US’, meaning its Inflation Reduction Act (IRA). The Franco-German view is that “European businesses will need to unleash investments on a nearly unparalleled scale to keep from falling behind US and Chinese firms as countries revamp their economies to make them more climate friendly.” Except smaller EU member states are vexed again because, as with unparalleled EU energy subsidies, it is the Big Two who can most afford to prop up their industries. (Even as the unparalleled German defence spending promised to keep smaller EU members, and industry, safe is not happening.) 

France and Germany insist the whole EU must get the same US trade treatment as Canada and Mexico under the IRA. However, they aren’t likely to get it when German tanks are “out” yet Berlin and Paris stress China must be “in” any trade loop just as the US Congress looks to introduce legislation to create an ‘inverse CFIUS’ to limit US private capital flows to China.

Rabbit lovers should also note that the unparalleled increase in the EU fiscal deficit now being floated to subsidize French and German businesses, on top of unparalleled energy subsidies (and maybe unparalleled defence spending), will mean a larger Eurozone current-account deficit and higher inflation. Doesn’t that imply unparalleled higher ECB rates? Or perhaps there won’t be any investment, or defense spending, or energy subsidies – but then we get the unparalleled sucking sound of investment moving from Europe to the US and/or China. Doesn’t that also imply a long-run current-account deficit and higher interest rates?

Rabbits’ legs

China’s new year holiday will show if ‘the Chinese consumer’ narrative has the hind legs of a rabbit or not. Recall that historically it doesn’t, despite rabbiting from Beijing about this topic, and that there were no Covid payments to households in China, so only a few of them are as cashed up as the charts show. Moreover, Robin Brooks of the IIF points out China’s electricity consumption plummeted to 2020 Covid lows in December, out of line with the strong data that so enthused the market, and the China Beige Book say a contraction was actually seen. So, yes, look for carrots, but also watch out for the data schtick.

However, let’s presume China is back and the worst fears for global growth are fading: why are central banks going to cut rates in 2023 or 2024, as Mr. Rabbit likes to see ahead? As someone noted on Friday, from recent lows we already saw iron ore +48%; silver +38%; Copper +35%; Uranium +32%; Aluminium +25%; Corn +20%; Gold +19%; Sugar +14%; Oil +16%; Coal +8%; and Wheat +2%. Now cut rates and see what happens. Indeed, notice headlines like ‘Summers Warns of 1970s Crisis If Central Banks Relent on Rates’, and the Financial Times reporting from Davos last week that ‘4% is the new 2%’, with everyone expecting inflation to come down, but nobody much outside central banks — and the long end of the bond market — expecting 2% to be where it finally settles.

Back in the US, perhaps rates will fall because unemployment rises? Yet @SteveMiran tweets outside of firings in tech’s cloistered circles (captured by TikTok’s ‘Day in the life of a Meta product manager’), US construction firms are not firing despite the collapse in home sales and prices. Perhaps labour data lag, which is the bond market’s argument; or perhaps its labour hoarding, which the bond market refuses to accept as a possible post-Covid structural trend; or, as Steve posits, perhaps it’s the infrastructure spending in the US IRA – if so, once again fiscal policy mattering more than monetary-policy obsessed market analysts expect.

Sur-charge

Brazil and Argentina have announced plans to develop a common currency, the ‘Sur’, aimed at bringing the entire continent under one monetary umbrella. Yet those fist-pumping and shouting ‘Bretton Woods 3!’ should note it took closely-aligned, developed European economies 35 years to get the Euro up and running… and it still doesn’t work properly if you ask its critics. Let’s see how Latin America fares in trying to build a base on the foundations of Brazil and Argentina.

‘Sur’-e, this sits with the dedollarisation meme regular readers know is something I *do* see being attempted as the world ‘geopoliticizes’. Yet dedollarisation is still something I *don’t* see actually happening beyond more barter and countertrade for some, because a ‘geopoliticizing’ world suits the US better than most others.

The Financial Times last week asked, ‘The Era of Markets ended in 2019: What comes next?’ Our report ‘The Age of Rage’ from January 2019 said, ‘politicized central banks and a return to mercantilism’. I had long argued the US would get more mercantile – and look at the fears in Europe and China over what it means for them. More recently, I argued all the Fed needs to do is raise rates and keep them there, as under Volcker, after the initial policy flap in the 70’s after Bretton Woods collapsed. That and/or weaponize the financial system more. On which, a FinTwit rumour going round Sunday was that SWIFT had announced a new policy that it would not transfer funds into crypto exchanges for amounts below $100,000. It seems it was only Signature Bank dealing with Binance…. for now. But see how easily things are upended?

In short, you might think the year of the rabbit is the holy grail of lowflation, no recession, rates pivots, a lower dollar, asset booms, and that new baby smell. Yet the fluffy white rabbit you are looking at is far more likely to be the deadly decapitating one from that Monty Python movie.

Authored by Paul Joseph Watson via Summit News,

Elon Musk’s father says he is afraid “something might happen” to his son, asserting that the billionaire is “a bit naïve about the enemies he’s making” in relation to the release of the Twitter files.

Over the past several weeks, Musk has spearheaded the release of innumerable internal communications proving the White House, the federal government and giant pharmaceutical corporations worked directly with the old guard at Twitter to censor information and ban prominent users.

Although the legacy media has done its best to ignore the bombshell revelations, the Twitter files have nonetheless embarrassed many powerful individuals.

Retired engineer Errol Musk told the Sun newspaper that he thinks his son is being rather blasé about the potential backlash he may receive for exposing the establishment.

“I’m really afraid that something might happen to Elon, even though he has about 100 security guards around him,” Errol warned, noting that his son was being “a bit naïve about the enemies he’s making, especially with the Twitter Files.”

It appears that the feeling is very much mutual, with Elon Musk fearing that someone may try to harm or kidnap his father as revenge for his political stances.

The younger Musk “decided, after the recent threats against him, that I need protection as well,” Errol told the Sun, revealing that his home has undergone a “first class” security system upgrade.

Having had his home broken into four times in the last year alone, the property is now “completely secure,” with an electric fence, nine security cameras rolling 24/7 that Musk can access from his phone, as well as “around-the-clock monitoring by guards who are armed to the teeth.”

“If they kidnap one of us, it will be the quickest $20 million anybody’s ever made in their life,” said the 76-year-old, who previously shot three armed home invaders in 1998.

“The risk of something bad happening or literally even being shot is quite significant,” said Errol, adding, “It’s not that hard to kill me if somebody wanted to, so hopefully they don’t.”

As we previously highlighted, last month Musk revealed that he has increased his personal security in response to concerns over his safety following the release of the first dump of ‘Twitter files’.

“The risk of something happening to me is quite significant,” said the billionaire.

*  *  *

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As markets brace for next week’s FOMC meeting and the relative peace of the preceding Fed blackout, we’ll get the latest health check on global growth momentum this week amid releases of Q4 US GDP (Thursday) and global PMI numbers (tomorrow). US leading indicators today will also be of note as we are around levels only previously associated with recessions. In addition, PCE, personal spending (both Friday) and durable goods orders (Thursday) will also be released. Key central bank events will include the BoC decision, and Summary of Opinions and minutes from the BoJ’s shock December meeting (all Wednesday). In earnings, all eyes will be on Microsoft (tomorrow), Tesla and ASML (both Wednesday), among others.

As we noted earlier today, the Fed is now in the blackout period so the usual vol spikes around Fed speakers won’t be there this week. However, as DB’s Jim Reid notes in his Morning Reid note, there are quite a few growth signposts to engage markets. Let’s focus on some of the key upcoming events.

It’s not a top tier release but today’s US leading indicators (consensus -0.7% vs -1.0% last month and likely around -5.5% YoY) will likely remain at levels only previously associated with recessions. Last month the Conference Board, who publish this series, said the following: “Only stock prices contributed positively to the US LEI in November. Labor market, manufacturing, and housing indicators all weakened—reflecting serious headwinds to economic growth… The US LEI suggests the Federal Reserve’s monetary tightening cycle is curtailing aspects of economic activity, especially housing. As a result, we project a US recession is likely to start around the beginning of 2023 and last through mid-year.”

Reid says that this is interesting as he felt when he did his 2023 outlooks that he was the opposite way round to consensus. Reid expects a good start for risk assets this year but a very bad end to the year on his long-standing H2 23 recession call: “To be honest, the US data has generally been poorer than anticipated this year so far which is fascinating as markets are rallying hard”, he says.

Going down the list, we’ll also get a good read on global growth momentum with tomorrow’s global flash PMIs which will take into account China’s reopening and falling gas prices. Then we’ll see how growth was faring going into this year with Q4 US GDP on Thursday. Deutsche Bank economists expect +3.2% annualized (consensus +2.7%). They also expect +1.8% for Q1 with H2 being where the US recession hits. Consensus on Bloomberg is around 0% for Q1 so that’s a potential battle ground once actual hard data comes through.

Other notable data releases on Thursday include durable goods orders, new home sales, and the Chicago Fed national activity index. All will be closely watched for signs of weakness seen in the data so far this month.

Finally, Friday’s core PCE release will occupy the Fed’s minds on their blackout period ahead of next week’s FOMC. Most economists don’t expect the same declines as recently seen in CPI as some of the stronger components in PPI last week are better correlated to PCE components. Consensus expects a +0.3% monthly gain in the core PCE price index, up from 0.2% in November.

With that Fed blackout, ECB speakers will take center stage, especially today with Lagarde being the highlight. Dutch CB chief Knot continued his recent hawkish rhetoric over the weekend suggesting that “We made a step down in December from 75 to 50 basis points — that will be the pace for a multiple number of meetings… So that means at least the two in February and March.” So that will challenge the Euro rates bulls after the recent rally. We saw a big reversal from the yield lows (+20bps on 10yr Bunds) on Thursday (and into Friday) after Lagarde’s hawkish Davos commentary. Knot is also on the agenda again tomorrow. You’ll see the full list of speakers in the day-by-day week ahead at the end. Back across the pond, the BoC are expected to hike 25bps on Wednesday. A few weeks ago many were expecting a pause but a recent stretch of firm data has moved the consensus back in favour of a hike.

Over in Asia, key data releases for Japan will include the aforementioned PMIs and the Tokyo CPI (Thursday). Aside from the BoJ’s Summary of Opinions for the January meeting, the minutes of the December meeting will also be released and our economists highlight the importance of analysing how the decision to double the yield curve control range was reached. Elsewhere in the region, the Lunar holidays will curtail a lot of the week’s activity with many bourses shut until midweek with China shut all week.

In corporate earnings, Microsoft will kick off the reporting season for Big Tech tomorrow, with the rest of the group reporting next week. All eyes will be on Tesla post-market on Wednesday ahead of earnings from traditional automakers next week as investors try to grasp trends for EV demand. Other earnings highlights are in the calendar at the end.

Courtesy of DB, here is a day-by-day calendar of events

Monday January 23

• Data: US December leading index, Eurozone January consumer confidence
• Central banks: ECB’s Lagarde, Panetta, Visco and Holzmann speak
• Earnings: Baker Hughes

Tuesday January 24

• Data: US, UK, Japan, Germany, France and the Eurozone January PMIs, US January Richmond Fed manufacturing index, Philadelphia Fed activity, UK December public finances, Japan December Tokyo department store sales, nationwide department store sales, Germany February GfK consumer confidence, France January manufacturing and business confidence
• Central banks: ECB’s Knot speaks
• Earnings: Microsoft, Johnson & Johnson, Danaher, Verizon, Texas Instruments, Raytheon, Union Pacific, Lockheed Martin, General Electric, 3M, Halliburton

Wednesday January 25

• Data: UK November PPI, Japan December PPI services, Germany January ifo survey, France Q4 total jobseekers
• Central banks: BoC decision, BoJ Summary of Opinions (January meeting)
• Earnings: Tesla, ASML, Abbott, NextEra, AT&T, IBM, Boeing, CSX, Crown Castle, Lam Research, Freeport-McMoRan, Hess, Las Vegas Sands

Thursday January 26

• Data: US Q4 GDP, January Kansas City Fed manufacturing activity, December wholesale, retail inventories, new home sales, durable goods orders, Chicago Fed national activity index, advance goods trade balance, initial jobless claims, Japan January Tokyo CPI, Italy January manufacturing confidence, economic sentiment and consumer confidence index
• Earnings: Visa, LVMH, Mastercard, Comcast, SAP, Intel, Blackstone, Volvo, Northrop Grumman, Valero Energy, ADM, Dow Inc, Nucor, STMictoelectronics, Nokia

Friday January 27

• Data: US January Kansas City Fed services activity, December PCE, personal spending, income, pending home sales, Italy November industrial sales, France January consumer confidence, Eurozone December M3
• Earnings: Chevron, H&M, American Express, HCA Healthcare, Colgate-Palmolive, LyondellBasell

* * *

Finally, looking at just the US, Goldman writes that the key economic data releases this week are the S&P Global US manufacturing and services PMI reports on Tuesday, the durable goods and Q4 advance GDP reports on Thursday, and the core PCE inflation report on Friday. There are no major speaking engagements from Fed officials this week, reflecting the FOMC blackout period

Monday, January 23

• There are no major economic data releases scheduled.

Tuesday, January 24

• 09:45 AM S&P Global US manufacturing PMI, January preliminary (consensus 46.5, last 46.2): S&P Global US services PMI, January preliminary (consensus 45.0, last 44.7)
• 10:00 AM Richmond Fed manufacturing index, January (consensus -5, last +1)

Wednesday, January 25

• There are no major economic data releases scheduled.

Thursday, January 26

• 08:30 AM GDP, Q4 advance (GS +2.2%, consensus +2.7%, last +3.2%); Personal consumption, Q4 advance (GS +3.3%, consensus +2.8%, last +2.3%): We estimate that GDP rose +2.2% annualized in the advance reading for Q4, following +3.2% annualized in Q3. Our forecast reflects strength in consumption growth (+3.3%) despite a weak holiday season and another large decline in residential investment (-25%). We expect a positive contribution to GDP growth from inventories (+0.3pp) and net exports (+0.3pp). We estimate domestic final sales rose 1.8% annualized.
• 08:30 AM Advance goods trade balance, December (GS -$87.0bn, consensus -$88.5bn, last -$83.3bn): We estimate that the goods trade deficit widened by $3.7bn to $87.0bn in December compared to the final November report.
• 08:30 AM Wholesale inventories, December preliminary (consensus +0.5%, last +1.0%); 08:30 AM Initial jobless claims, week ended January 21 (GS 195k, consensus 205k, last 190k); Continuing jobless claims, week ended January 14 (consensus 1,658k, last 1,647k): We estimate initial jobless claims increased to 195k in the week ended January 21.
• 08:30 AM Durable goods orders, December preliminary (GS +3.5%, consensus +2.5%, last -2.1%): Durable goods orders ex-transportation, December preliminary (GS -0.75%, consensus -0.2%, last +0.1%); Core capital goods orders, December preliminary (GS -0.75%, consensus -0.2%, last +0.1%); Core capital goods shipments, December preliminary (GS -0.75%, consensus -0.4%, last -0.4%): We estimate that durable goods orders rebounded 3.5% in the preliminary December
• report, reflecting a surge in commercial aircraft orders. However, we forecast declines in core capital goods orders (-0.75%) and shipments (-0.75%), reflecting weak foreign demand and the softening in domestic industrial data.
• 10:00 AM New home sales, December (GS -4.0%, consensus -4.7%, last +5.8%) We estimate that new home sales declined 4.0% in December, following a 5.8% increase in November.
• 11:00 AM Kansas City Fed manufacturing index, January (consensus -6, last -9)

Friday, January 27

• 08:30 AM Personal income, December (GS +0.4%, consensus +0.2%, last +0.4%); Personal spending, December (GS -0.2%, consensus -0.1%, last +0.1%); PCE price index, December (GS +0.03%, consensus +0.0%, last +0.1%); Core PCE price index, December (GS +0.27%, consensus +0.3%, last +0.2%); Based on details in the PPI, CPI, and import price reports, we forecast that the core PCE price index edged up by 0.27% month-over-month in December, corresponding to a 4.40% increase from a year earlier. Additionally, we expect that the headline PCE price index increased by 0.03% in December, corresponding to a 5.01% increase from a year earlier. We expect that personal income increased by 0.4% and personal spending decreased by 0.2% in December.
• 10:00 AM Pending home sales, December (GS +3.0%, consensus -1.0%, last -4.0%) We estimate pending home sales increased 3.0% in December, following a 4.0% decline in November
• 10:00 AM University of Michigan consumer sentiment, January final (GS 64.0, consensus 64.6, last 64.6); University of Michigan 5–10-year inflation expectations, January final (GS 3.0%, consensus 3.0%, last 3.0%): We expect the University of Michigan consumer sentiment index to decline by 0.6pt to 64.0 in the final January reading. We expect that inflation expectations remained at 3.0% in the final January reading

Source: DB, Goldman,BofA

Add Spotify Technology SA to the growing list of tech companies laying off because they hired too many employees during the virus pandemic. We’ve read countless letters and memos from tech executives to employees over the last several quarters explaining how they made a colossal mistake by rapidly expanding operations because they thought pandemic demand would continue but were entirely blindsided by the incoming slowdown and forced to reduce headcount and other cost-cutting measures. 

“Like many other leaders, I hoped to sustain the strong tailwinds from the pandemic and believed that our broad global business and lower risk to the impact of a slowdown in ads would insulate us,” Spotify CEO Daniel Ek told employees in a letter. 

As a result of poor business planning, Ek said Spotify is planning to slash 6% of its headcount.

“In hindsight, I was too ambitious in investing ahead of our revenue growth. And for this reason, today, we are reducing our employee base by about 6% across the company. I take full accountability for the moves that got us here today,” the exec said. 

The latest filings show the music-streaming giant has approximately 9,800 employees. The cut would be equivalent to about 600 workers. 

Shares rose more than 6% in premarket trading to the $104-handle on the news. The stock lost more than 73% since peaking at $364 in early 2021. 

Ek added that Dawn Ostroff, chief content and advertising business officer, will leave the company as part of a broader reorganization.

He noted:

To start, we are fundamentally changing how we operate at the top. To do this, I will be centralizing the majority of our engineering and product work under Gustav as Chief Product Officer and the business areas under Alex as Chief Business Officer.

Spotify’s announcement is yet more hemorrhaging of talent from tech companies as the economic outlook sours. Amazon, Meta, Microsoft Corp, and Google have been some of the largest companies to announce cuts. 

Layoff tracking website Layoffs.fyi shows that 173 tech companies so far this year have reduced headcount by 56,000. Last year, 1,035 tech companies fired 159,000 employees.

Authored by Ben Sellers via Headline USA (emphasis ours),

In a video posted to his YouTube account Saturday, “Dilbert” creator Scott Adams admitted that those who refused to submit to the deadly coronavirus vaccine “appear to be right” based on the latest evidence.

Instead of getting the gene-altering jabs, so-called anti-vaxxers held out for a less virulent strain of the virus to arrive and deliver natural immunity, mimicking the way all earlier vaccines worked prior to the mRNA breakthroughs by Moderna and Pfizer in late 2020.

“Now you’ve got natural immunity and you have no vaccination in you,” Adams noted.

“Can we all agree that that was the winning path?” he continued. “The smartest, happiest people are the ones who didn’t get the vaccination, and they’re still alive.”

As is often the case with comedians, Adams’ tone makes it difficult to discern the extent to which his video may be tonge-in-cheek.

He has developed a sizable following on Twitter, where he largely supports conservative causes and positions, but controversially broke rank with many of his followers in coming out strongly in favor of the vaccines.

The dilemma is a familiar one within MAGA’s anti-vax subculture, where even once-sacred cows like former President Donald Trump and Fox News host Sean Hannity, both of whom crowed about the importance of the vaccine, have been left tarnished, to an extent, by the science.

Adams’s sarcastic intonation seemed to suggest that the recent video was a nod to his many online critics, more a genuflection than a sincere admission of error.

Indeed, since being proven wrong by the data, he has regularly pushed the idea that both sides in the debate use faulty reasoning and information to reach their conclusions.

After saying that he didn’t want to “put any shade … whatsoever” on his acceptance that the vaccines were a mistake, Adams them proceeded in the video to reiterate his defense that drinking the vax Kool-Aid seemed like the right thing to do at the time.

He also downplayed the fact that warning signs about the vaccine’s risks were present almost immediately, along with strong evidence suggesting they had no efficacy in preventing the transmission or contraction of the virus.

Instead, Adams suggested that opponents were simply invested emotionally in a contrarian worldview.

“The anti-vaxxers, I think, were really just distrustful of big companies and big government,” he said. “That’s never wrong.”

Adams then suggested he was the victim for going out on a limb and having the courage to make himself a vaccine guinea pig based on his informed decision-making.

“All of my fancy analytics got me to a bad place,” he said, beckoning back toward a white board that showed a graph of his cost–benefit analysis. “All of your heuristics—‘Don’t trust these guys, it’s obvious’—totally work.”

Naturally, he was met with more backlash online after posting the video.

You will be missed. https://t.co/BZ7S2WKfX7

— Scott Adams (@ScottAdamsSays) January 22, 2023

While invoking the psychological concept of heuristics—essentially, the idea that vaccine skeptics relied on their preconceived beliefs and opinions to form a snap judgment,  Adams’s fallacy lies in another clinical concept—the idea of Type I versus Type II errors in hypothesis testing.

The term comes from statistical analyses, in which there exists both a control/null hypothesis and a treatment/alternative hypothesis of some kind, with researchers calculating the probability, based on a given sample, that one’s assumptions are true.

Since there is always a degree of uncertainty, a Type I error results in the rejection of a hypothesis that is, in fact, true. A Type II error result from acceptance of a false hypothesis.

While it seems needlessly complicated due to the use of variables and other jargon, humans instinctively calculate these sorts of risk assessments with every decision we make: Is it better to try something experimental that might offer some unknown benefit or to follow the status quo and risk missing out on something better?

For Adams and his pro-jab cabal, however, there was no such dichotomy. Instead, the vaccine was an all-or-none proposition, and any who reached a different conclusion were not only wrong by default, but evil, selfish, ignorant rubes who rightfully deserved to be punished.

By contrast, vaccine skeptics never demanded that anyone follow their decisions, recognizing the chance of error that existed on either side of the bell curve.

But in reality, another variable was added into the mix—the possibility that the vaccine not only had no effect, but that it had an actively adverse effect on different segments of the population, including healthy young adults and children.

All scientific experiments need a control group, and had everyone agreed to take the jab, we might never know if it worked or not relative to natural immunity. Millions of people would still be getting boosted mindlessly, assuming that the decline in COVID cases was proof positive that Big Pharma had saved the day.

Sadly, the scientific reality is that, as a so-called anti-vax movement, those who adopted the live-and-let-live mentality of staying out of other people’s medical decisions also failed.

Since, as Adams readily acknowledged, the null hypothesis proved true in the end, a truly equivalent situation would have seen anti-vaxxers aggressively attacking those who chose the vaccine and threatening to curtail their rights on the basis that vaccination was a social menace that put pure-bloods at a greater risk.

And let’s not forget the collateral damage to various sectors of the economy after vaccine mandates led to shutdowns and supply-chain failures that led to inflation—which we’re all still paying for.

But as Adams will surely agree, hindsight is 20–20, and all we can do is to take the lessons learned and apply them when the next scandemic comes along. Right?

Ben Sellers is the editor of Headline USA. Follow him at twitter.com/realbensellers.

Salesforce Inc shares are up 5% in premarket trading after WSJ reported activist investor Elliott Management had made a multi-billion dollar investment in the cloud-based software firm. 

The activist investor has taken a stake as the business software giant slashed about 10% of its headcount, or about 8,000 employees, and reduced back office space over mounting macroeconomic headwinds. 

“Salesforce is one of the pre-eminent software companies in the world, and having followed the company for nearly two decades, we have developed a deep respect for [Co-Chief Executive] Marc Benioff and what he has built,” Jesse Cohn, managing partner at Elliott, said.

“We look forward to working constructively with Salesforce to realize the value befitting a company of its stature,” Cohn continued. He has previously served on the boards of Twitter, eBay, and Citrix. 

As of Friday’s close, the San Francisco company had a market capitalization of $151 billion, down from $303 billion in November of 2021. 

The activist stake will pressure Salesforce and Marc Benioff, the company’s co-chief executive, to achieve greater profitability. In October, Starboard Value LP bought a stake in Salesforce. The activist investor is very successful at helping companies achieve operational efficiency and margin improvement.

Perhaps one of Salesforce’s overhangs is the massive influx of hiring it has done over the last several years. The latest filings show the company had about 80,000 employees globally, up from 49,000 as of Jan. 31, 2020. 

When Benioff laid off employees earlier this month, he told them in a letter, “… hired too many people leading into this economic downturn we’re now facing, and I take responsibility for that.”

WSJ noted, “Elliott is known for taking on tech companies and others and forcing changes that also include sales and executive shake-ups.”

With two major activists in Salesforce, it wouldn’t shock us if more layoffs were ahead — and it has been the season of tech layoffs as a slowdown in the industry has led tech giants like Amazon and Google to reduce headcount. 

The exodus from Seattle looks like it’s officially on. 

No sooner did we prep a report indicating that Amazon is going to be letting an office lease in Seattle expire for only the second time ever, we also come across news that the Nike Store – which has been open for 26 years on Sixth Avenue and Pike Street in Seattle – has shut down. 

The Nike store has “shut its doors for good”, according to the Daily Mail, right after its neighbor down the street, Regal Cinemas, also announced they would be rejecting the lease to the Meridian 16 multiplex one block away. 

“I’m heartbroken,” one resident told the Seattle Times. “Pretty bummed,” added another customer, who said he shopped at the store on a weekly basis and that it would take him “over an hour” to get to Nike’s new location. 

Business writer Paul Roberts for the Seattle Times noted about the closure: “Its exit sounds an ominous note for a downtown that hasn’t been able to catch its stride since the pandemic.”

For the rest of us, it’s confirmation of what we have all seen with our own two eyes over the last half-decade: U.S. cities are crumbling under the weight of high taxes, combative stances with law enforcement and far left liberal policies. 

Jeffrey Rosen, a commercial real estate broker at Seattle Pacific Realty who specializes in retail, told The Times: “Downtown is a mixed bag. There’s some recovery going on — and there’s some folding up and going away going on as well.”

Nike, meanwhile, hasn’t shared precisely why it was closing its location. It’s befuddling to some customers who noted that the store “always has a line outside of it”. 

We can take a guess. As the Mail noted, “2022 mark[ed] the deadliest year for the homeless population in King County”, with 310 deaths in the homeless community, up 65% from 2021, including 18 homicides and 160 fentanyl-related overdoses.

General crime in the city has also stayed high, with 285 rapes, 1,654 robberies and 3,258 aggravated assaults being reported in 2022 through November. Those numbers were on a par to match the year prior. 

Retail vacancy in Seattle sits at 13.5%, the report says, up from 2% in 2019. 

Authored by Toby Young via DailySceptic.org,

If you haven’t signed the Free Speech Union’s petition urging the CEO of ITV not to fire Jeremy Clarkson, please do so now.

Meanwhile, Clarkson has written a blistering attack on the woke takeover of Britain in yesterday’s Sunday Times.

Here’s how it begins:

My son came over for a father-and-son pre-football supper the other day, and as he fussed over the Aga, making a particularly fine stir fry, we laughed about what innocuous word had been banned that day and who’d been cancelled. And then, after a pause, he said with a solemn face, “You do know there’s a war going on, don’t you?”

He wasn’t talking about Ukraine. He was talking about a full-on left-wing campaign to unstitch and burn the fabric of Britain. And the genius is that no one really knows that what they’re doing is serious. We laugh as they change the name of the Sir Francis Drake Primary School to something less slavey. We think it’s all a big joke. But it isn’t.

Think about what typically happens in a military operation and then look what the woke left has done here. It’s seized control of our television and radio stations to such an extent that last week Sophie Raworth said, on the BBC News at Six, with a straight face, “And over now to our LGBT and diversity correspondent …”

And TV drama? Unaffected? Right, and when was the last time you saw a fictional police force hunting a gang of Muslim extremists? It’s always the far right. And it’s the same story in comedy. Say anything you like about Boris or Rishi and the laughter track is turned up to 11. Make a joke about she/him pronouns or Greta Thunberg and they’ll blow a piece of tumbleweed across the stage.

In sport we sometimes have three women doing the punditry at a men’s football match, and if anyone remarks on this on Twitter, they are immediately singled out for the india-rubber treatment. And who’s doing the erasing? Who’s making the rules? That’s just it. We don’t have a clue. What we do know is that, having taken control of the television stations, without a shot being fired, they turned their attention, like any conquering army, to the schools. Here they went fully Pol Pot, doing a comprehensive year-zero job on the curriculum so that kids would know their parents were all racists. Apart from those with “unconscious bias”. Who were racists as well.

You probably think, because you don’t know this war is going on, that when you drop little Johnny off at the school gates he’s going to learn the nine times table that day. No, he isn’t. He’s learning that he might actually be a girl, which is why there are probably tampon dispensers in the boys’ lavatories.

With all this in place, they set about the police, and here they’ve done a tremendous job. Because, so far as I can tell, almost all the officers in the Met — apart from the terrifying number of sexual perverts — are now more wide awake than a frightened fox.

When some young people with green hair glue themselves to the road, large numbers of officers are dispatched to stand around looking at them. And they are only ever removed from the tarmac if they promise to go immediately to the nearest art gallery and throw some soup at a painting.

Has Clarkson been red-pilled by his recent punishment beating at the hands of the progressive thought police?

Worth reading in full.

Here’s Paul Joseph Watson’s take…

And don’t forget to sign the petition!

Days after widespread reports that Russia had erected Pantsir-S1 anti-air defense systems on top of some key buildings in Moscow, which triggered speculation that Russia is expecting more attacks from Ukraine on its soil, the Kremlin ramped up anti-air exercises outside Moscow.

The defense ministry confirmed in a Saturday statement, “In the Moscow region, a training session was held with the personnel of the anti-aircraft missile brigade of the Western Military District on repelling air attacks on important military industrial and administrative facilities.”

The combat exercise was centered on operation of a S-300 anti-aircraft missile system. “As they marched, soldiers repelled an attack by a mock enemy sabotage group on a military convoy,” the statement continued.

“Under the cover of a smoke screen, the air defense convoy was able to get out of the attack and continue fulfilling its tasks,” the defense ministry said in reference to the 150 soldiers that participated. 

Russia has suffered several drone attacks on its soil coming from Ukraine, including multiple strikes in past months on Engels military airfield in the Saratov region, which lies 600km deep inside Russia.

While Moscow itself hasn’t seen any such ariel strikes, there has been speculation that key facilities in the region have been hit with sabotage attacks – but this has remained unconfirmed from the Russian side, which is unlikely to admit such attacks when they do occur.

⚡️Another “Pantsir-S1” was placed on the roof of the Ministry of Internal Affairs in Moscow. pic.twitter.com/8mKzNF8CJY

— War Monitor (@WarMonitors) January 21, 2023

As Russian forces make gains this month in the east and south of Ukraine, particularly in the southern Zaporizhzhia region as well as near city of Bakhmut in Donetsk, it appears the Kremlin could be making preparations for possible counter-attacks directly on its soil, and as NATO countries deepen their involvement in the conflict.

Via The Cradle,

A Kurdish delegation representing the Syrian Democratic Forces (SDF) concluded a visit to Damascus on Friday after meeting with several representatives of the Syrian government over the prior few days, Lebanese newspaper Al-Akhbar reported.

The delegation was headed by the foreign relations chief of the Autonomous Administration of North and East Syria (AANES), Badran Jia Kurd, and arrived in the capital on January 17. According to the report, the last few meetings did not result in anything significant, but the “prevailing impression” is that both sides are willing to continue along the path of dialogue, despite US warnings.

“These are preliminary understandings between the two sides, on things such as Syrian territorial integrity, the national flag, and the presidency of Bashar al-Assad,” it states.

It adds that Washington has repeatedly warned the SDF “not to engage in bilateral dialogue with the Syrian government [and not to] think of any military solutions with it,” even if the reconciliation process fails. This is based on the “realization that any military solution [between the two] may turn into a war of a civil and ethnic nature,” it adds, which could be referring to a potential outbreak of direct clashes between Turkish and Kurdish ground forces, or even Syrian and Turkish ground forces.

Nonetheless, sources have told the newspaper that the overall atmosphere of the visit to Damascus and the Kurdish-Syrian talks were “positive,” particularly for the SDF, which reportedly appreciated Syria’s firm position not to go forward with reconciliation until there is a clear and official Turkish intent to withdraw its military forces from the country.

“There is a consensus between the two sides on the need to maintain the course of dialogue while searching for points of convergence to take advanced steps in the future,” the sources were quoted to have said.

In the aftermath of the 18 January meeting between US Secretary of State Anthony Blinken and Turkish Foreign Minister Mevlut Cavusoglu, the SDF has expressed renewed fear over Turkey’s long-promised ground offensive.

These fears were reinforced by the joint US-Turkish statement released shortly after the meeting, vowing the continuation of Washington and Ankara’s fight against “Daesh, PKK, Al Qaeda, and all other terrorist organizations and their extensions.”

The Kurdish fears have also been exacerbated by the Turkish military bombardment and a significant escalation of tensions in Ain al-Arab and other areas across northern Syria, beginning on January 13 and persisting onwards. As a result, the SDF bombarded a Turkish base and the positions of Turkish-backed militants on January 20.