Economic Shifts: Visa faces antitrust lawsuits over high fees, while China launches extensive stimulus to revive its struggling economy and meet growth targets.
Visa is facing serious antitrust allegations from the U.S. Department of Justice for supposedly undermining competition in the debit card market. The DOJ claims that Visa's practices, like charging high fees, burden both merchants and consumers. Meanwhile, China is implementing significant government stimulus to revive its struggling economy, which has not been performing well and may miss its growth target this year. These unprecedented measures include cutting interest rates and reserve requirements, aiming to bolster the stock and real estate markets. The hope is to address long-term economic issues and stimulate growth in the world's second-largest economy.
China's Economic Dilemma: China's economic slowdown is deepening due to declining consumer confidence and deflation. The government's measures fail to directly support consumer spending, leading to a downward spiral. Strong fiscal spending is needed to revive the economy, but this approach is inconsistent with China's political culture.
China is facing a severe downturn in its property market, leading to decreased consumer and household confidence. As people are hesitant to spend, deflation is becoming a significant concern, despite the government implementing measures like cutting mortgage rates and supporting the stock market. However, these strategies don't directly help consumers or encourage spending, as they fail to address the fundamental issue of households lacking money. This lack of spending is causing a cycle where declining company profits lead to job cuts and further reduce overall spending power. Economists argue that the most effective way to revive the economy is through strong fiscal spending that gives money directly to people, a departure from the traditional Chinese approach, which avoids borrowing for consumer spending. This means the recent stimulus efforts may not effectively tackle the root challenges of the economy.
Economic Transitions: Economic interventions may provide temporary relief, but substantial fiscal changes are needed for real recovery. New leadership in Trafigura and Sri Lanka signals a shift towards innovative and stabilizing solutions in their respective markets.
Recent discussions reveal concerns about the effectiveness of financial interventions in stabilizing economies. While there may be some positive impacts, such as increased liquidity and minimal boosts in the property market, experts believe that substantial fiscal stimulus is necessary for a true economic turnaround. Meanwhile, Trafigura has appointed a new CEO, Richard Holton, who aims to innovate in the energy trading sector. In Sri Lanka, the election of a new left-wing president, Anura Kumara Desanayaka, brings hope for economic recovery after two challenging years marked by a severe debt crisis. These developments highlight a period of transition and the need for comprehensive strategies to address ongoing economic challenges.
Sri Lanka's Political Shift: Sri Lanka is recovering from a major economic crisis, with new president Dissoniaca promising to fight corruption and support the poor, as austerity measures heavily impact vulnerable citizens while the wealthy escape less impacted.
Sri Lanka experienced a significant economic crisis due to rising import costs triggered by the Ukraine war, leading to a sovereign debt default. After a $3 billion IMF bailout, the new president, Dissoniaca, aims to combat corruption and support the poor, who have been severely affected by austerity measures. His coalition, previously considered fringe, gained unexpected political traction, promising to hold the wealthy accountable for their roles in the economic struggles faced by many citizens. This shift signals potential changes in governance and priorities, as the country navigates through its complex recovery process while trying to ensure that the burden of economic reforms does not disproportionately fall on the lower classes.
Dysonaika's Challenges: Dysonaika's presidency begins with challenges, including lack of experience in his coalition, the need for a new IMF debt deal, and potential instability in parliament. Success depends on his ability to secure financial support and navigate coalition politics effectively.
In his new presidency, Dysonaika faces significant challenges despite leading the National People's Party (NPP) to victory. His coalition lacks administrative experience, making it crucial for him to form a stable government. A key priority is to renegotiate Sri Lanka's debt, especially a new deal with the IMF, which is vital for securing finances for imports. His statement suggests he aims for a more favorable debt repayment plan, which could involve lowering interest payments and persuading creditors to agree to larger reductions. However, the NPP may struggle to maintain a majority in parliament and could need to find a coalition partner. Overall, Dysonaika’s ability to navigate these economic challenges and coalition politics will greatly impact his early presidency.
China unleashes stimulus blitz
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Strikes threaten Boeing’s bottom line
Big bank bosses join a growing list of prominent financiers expected to skip COP29 next month, and Spain proposes a new mechanism to help harmonise the EU’s capital and credit markets. Plus, activist investor Starboard Value has built a $1bn position in struggling drugmaker Pfizer, and tens of thousands of striking machinists are threatening Boeing’s recovery.
Mentioned in this podcast:
“You only go to the party if everyone is going”: finance bosses shun COP29
Spain to propose mini-coalitions to break EU capital markets stalemate
Activist investor Starboard builds $1bn stake in drugmaker Pfizer
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The FT News Briefing is produced by Niamh Rowe, Fiona Symon, Sonja Hutson, Kasia Broussalian and Marc Filippino. Additional help from Breen Turner, Sam Giovinco, Peter Barber, Michael Lello, David da Silva and Gavin Kallmann. Our engineer is Joseph Salcedo. Topher Forhecz is the FT’s executive producer. The FT’s global head of audio is Cheryl Brumley. The show’s theme song is by Metaphor Music.
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Israel marks one year after October 7
A new report forecasts that Donald Trump would raise the US debt by twice as much as Kamala Harris, and Elon Musk’s SpaceX is quietly opening up a new front in a global battle over a scarce and precious resource: radio spectrum. Plus, US partners at accounting firm EY have been told their pay for 2024 will be deferred, and a year after the October 7 attacks, international criticism of the Gaza war has led many Israelis to retreat inwards.
Mentioned in this podcast:
Donald Trump would raise the US debt by twice as much as Kamala Harris, report finds
EY to hold back some pay from US partners after tough year
The satellite spectrum battle that could shape the new space economy
The FT News Briefing is produced by Niamh Rowe, Fiona Symon, Sonja Hutson, Kasia Broussalian and Marc Filippino. Additional help from Breen Turner, Sam Giovinco, Peter Barber, Michael Lello, David da Silva and Gavin Kallmann. Our engineer is Joseph Salcedo. Topher Forhecz is the FT’s executive producer. The FT’s global head of audio is Cheryl Brumley. The show’s theme song is by Metaphor Music.
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Swamp Notes: How the Middle East conflict is shaping the election
The Biden administration has tried and failed to contain fighting in the Middle East over the past year - and now, the conflict is close to spiralling into all-out war. The FT’s US foreign affairs and defence correspondent Felicia Schwartz and US political news editor Derek Brower join this week’s Swamp Notes to explain what Kamala Harris and Donald Trump are telling voters they’ll do to end the conflict. Credit: USA Today
Mentioned in this podcast:
Israel and Iran have just delivered the US election’s ‘October surprise’
Benjamin Netanyahu’s ‘rope-a-dope’ war strategy with White House
Oil surges after Joe Biden’s comments on Israeli retaliation
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Swamp Notes is produced by Ethan Plotkin, Sonja Hutson, Lauren Fedor and Marc Filippino. Topher Forhecz is the FT’s executive producer. The FT’s global head of audio is Cheryl Brumley. Special thanks to Pierre Nicholson.
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Markets keep calm despite global tensions
A strike that closed US east and Gulf coast ports will be suspended, and market reaction to escalations in the Middle East remains minimal. Plus, Italy’s government will raise more taxes from companies earning windfall profits, and luxury group LVMH will become a top sponsor of car-racing franchise Formula One.
Mentioned in this podcast:
US dockworkers suspend strike that threatened to cripple ports
Italy seeks to raise more windfall taxes from companies
The market reaction to global tensions might not follow the old script
LVMH strikes sponsorship deal with Formula 1
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Credit: CNBC, LVMH
The FT News Briefing is produced by Niamh Rowe, Fiona Symon, Sonja Hutson, Kasia Broussalian and Marc Filippino. Additional help from Breen Turner, Sam Giovinco, Peter Barber, Michael Lello, David da Silva and Gavin Kallmann. Our engineer is Joseph Salcedo. Topher Forhecz is the FT’s executive producer. The FT’s global head of audio is Cheryl Brumley. The show’s theme song is by Metaphor Music.
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Displacement pushes Lebanon to the brink
UK house sales rise at the fastest rate in three years, mass displacement in Lebanon risks overwhelming a country battered by economic crises, and Brussels intends to postpone a controversial EU anti-deforestation law for a year following a backlash. Plus, two-thirds of all new solar and wind power projects are based in China.
Mentioned in this podcast:
UK house sales rise at fastest pace in three years, data shows
China’s accelerating green transition
EU moves to delay anti-deforestation rules
Lebanon’s broken state struggles with 1mn displaced
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The FT News Briefing is produced by Niamh Rowe, Fiona Symon, Sonja Hutson, Kasia Broussalian and Marc Filippino. Additional help from Breen Turner, Sam Giovinco, Peter Barber, Michael Lello, David da Silva and Gavin Kallmann. Our engineer is Joseph Salcedo. Topher Forhecz is the FT’s executive producer. The FT’s global head of audio is Cheryl Brumley. The show’s theme song is by Metaphor Music.
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A day of escalation in the Middle East
Iran fires missiles at Israel, hours after the IDF launches a ground offensive in Lebanon. France’s new Prime Minister Michel Barnier announced tax rises on large companies and the wealthy, and US business groups warned of economic ‘paralysis’ after tens of thousands of dockworkers went on strike. Plus, investors are seeking to profit from the uncertainty over the outcome of the US presidential race.
Mentioned in this podcast:
Iran launches missile attack against Israel
French premier Michel Barnier announces tax rises and spending cuts
US economy faces ‘paralysis’ before election as dockworkers go on strike
Investors turn to volatility trades to profit from tight US election
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The FT News Briefing is produced by Niamh Rowe, Fiona Symon, Sonja Hutson, Kasia Broussalian and Marc Filippino. Additional help from Breen Turner, Sam Giovinco, Peter Barber, Michael Lello, David da Silva and Gavin Kallmann. Our engineer is Joseph Salcedo. Topher Forhecz is the FT’s executive producer. The FT’s global head of audio is Cheryl Brumley. The show’s theme song is by Metaphor Music.
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AI start-ups generate revenue at record pace
SoftBank will invest $500mn into OpenAI as part of a fundraising round that will give the start-up a $150bn valuation, and Chinese equities post their best day since the 2008 global financial crisis. Plus, new data suggests artificial intelligence start-ups are bringing in revenues at an unprecedented rate, and South Korean exporters are struggling to compete with a glut of goods from Chinese rivals.
Mentioned in this podcast:
SoftBank to invest $500mn in OpenAI
AI start-ups generate money faster than past hyped tech companies
Chinese stocks surge 8.5% in best day since 2008
From steel to kimchi, South Korean exporters face flood of Chinese rivals
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The FT News Briefing is produced by Niamh Rowe, Fiona Symon, Sonja Hutson, Kasia Broussalian and Marc Filippino. Additional help from Breen Turner, Sam Giovinco, Peter Barber, Michael Lello, David da Silva and Gavin Kallmann. Our engineer is Joseph Salcedo. Topher Forhecz is the FT’s executive producer. The FT’s global head of audio is Cheryl Brumley. The show’s theme song is by Metaphor Music.
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Hizbollah reels after the death of its leader
In the wake of Hassan Nasrallah’s death, Hizbollah looks for a way forward, and French far-right leader Marine Le Pen goes on trial for allegedly embezzling EU funds. Peter Thiel’s venture capital firm is backing a nuclear start-up aimed at fueling artificial intelligence, and a handful of high frequency trading firms have seized market share from traditional investment banks.
Mentioned in this podcast:
Marine Le Pen goes on trial over EU expenses scandal
Peter Thiel’s Founders Fund backs nuclear fuel start-up
New titans of Wall Street: How trading firms stole a march on big banks
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The FT News Briefing is produced by Niamh Rowe, Fiona Symon, Sonja Hutson, Kasia Broussalian and Marc Filippino. Additional help from Breen Turner, Sam Giovinco, Peter Barber, Michael Lello, David da Silva and Gavin Kallmann. Our engineer is Joseph Salcedo. Topher Forhecz is the FT’s executive producer. The FT’s global head of audio is Cheryl Brumley. The show’s theme song is by Metaphor Music.
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Swamp Notes: Harris and Trump pitch their economic visions
Voters consistently tell pollsters that economic issues are their top electoral concern. Kamala Harris and Donald Trump have spent the past few weeks honing their economic messages — and they couldn’t be more different. The FT’s US managing editor, Peter Spiegel, and Washington bureau chief, James Politi, join to explore how each candidates’ plan would impact the country.
Mentioned in this podcast:
Trumponomics: the radical plan that would reshape America’s economy
Kamala Harris sets out pro-business economic philosophy in swing-state speech
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Swamp Notes is produced by Ethan Plotkin, Sonja Hutson, Lauren Fedor and Marc Filippino. Topher Forhecz is the FT’s executive producer. The FT’s global head of audio is Cheryl Brumley. Special thanks to Pierre Nicholson.
CREDIT: MSNBC, Fox News
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How extremist settlers in the West Bank became the law
UK chancellor Rachel Reeves may backtrack on a key tax plan, Saudi Arabia is ready to abandon its unofficial price target of $100 a barrel for crude, and Citigroup announced a $25bn deal with Apollo to lend to private equity groups and low-rated US companies. Plus, Palestinian villagers in the West Bank are experiencing heightened violence after Hamas’s devastating October 7 assault on Israel.
Mentioned in this podcast:
UK chancellor ready to water down planned tax raid on wealthy foreigners
Saudi Arabia ready to abandon $100 crude target to take back market share
Citi turns to Apollo for $25bn private credit push
How extremist settlers in the West Bank became the law
The FT News Briefing is produced by Niamh Rowe, Fiona Symon, Sonja Hutson, Kasia Broussalian and Marc Filippino. Additional help from Breen Turner, Sam Giovinco, Peter Barber, Michael Lello, David da Silva and Gavin Kallmann. Our engineer is Joseph Salcedo. Topher Forhecz is the FT’s executive producer. The FT’s global head of audio is Cheryl Brumley. The show’s theme song is by Metaphor Music.
Read a transcript of this episode on FT.com
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