Musk Clashes with Brazil, Amazon Checkout Crashes, Fed’s Preferred Inflation Gauge Stays Cool

Musk Clashes with Brazil, Amazon Checkout Crashes, Fed’s Preferred Inflation Gauge Stays Cool

Musk’s Clash With Brazil Deepens, Threatening X and Starlink - Bloomberg

• A top court justice in Brazil has blocked SpaceX's Starlink bank accounts to force Elon Musk to pay fines.

• Musk has lashed out at the justice, threatening to block X in Brazil if it doesn't appoint a legal representative.

Brazil Judge Bans X as Musk Challenges Top Court’s Orders - Bloomberg

• Elon Musk's social media platform X has been suspended in Brazil after refusing to name a legal representative for the country.

• The ban was imposed by Supreme Court Justice Alexandre de Moraes after a months-long feud between Musk and the court over the spread of fake news and hate speech.

• X is accused of contributing to an environment of total impunity and lawlessness in Brazilian social networks, including during the 2024 local elections. The court also accuses X of disseminating Nazi, racist, fascist, hateful, and anti-democratic speeches by using VPNs to allow extremist groups and digital militias to access the platform.

• Brazil has historically been a key market for X, with tens of millions of active users in the country, and it has been one of its largest hubs outside of the US and Japan. The ban takes some time to take effect, with 24 hours for Brazil's telecommunications watchdog to implement it. (

• Musk lashed out at the ban on his platform, stating that free speech is the bedrock of democracy and an unelected pseudo-judge is destroying it for political purposes.

SpaceX’s Falcon 9 Cleared to Return to Space Amid FAA probe - Bloomberg

• SpaceX can return to spaceflight while the FAA investigates a landing failure.

• The return to flight request was made on August 29.

Amazon Checkout Crashes; Shoppers Get Error Page With Dogs - Bloomberg

• Amazon.com experienced an issue that prevented some shoppers from purchasing items.

• Users reported encountering error pages on the e-commerce website and mobile app.

Televisa Says US Probe May Result in Material Financial Impact - Bloomberg

• Grupo Televisa SAB warns that a US Justice Department probe may impact its financial results.

• The company has previously denied wrongdoing in a US corruption trial.

The Fed’s Preferred Inflation Gauge Stays Cool, Keeping a Rate Cut Imminent - New York Times

• Inflation remained cool in July, with yearly inflation at 2.5% and a core index up 2.6% from a year earlier.

• The Federal Reserve is expected to begin lowering interest rates at its September meeting, but the timing and pace of rate cuts will depend on incoming data and the evolving outlook.

• Rapid price increases have been bedeviling consumers and chipping away at economic sentiment for over three years, but inflation is gradually moderating. The release of the Federal Reserve's favorite inflation number, the Personal Consumption Expenditures index, showed that inflation climbed slightly in July but is down substantially from last year's peak of over 7%.

• Personal spending climbed slightly more than economists had expected in July after adjusting for inflation, indicating that the American consumer has been resilient in the face of a gradually cooling economy and higher interest rates. The increase in consumer spending may come partly due to a temporary jump in motor vehicle sales. The Fed is likely to closely watch August hiring numbers to determine how aggressively it will cut rates if the job market is cracking and the unemployment rate is high.

Gaza Debate Reopens Divisions Between Left-Wing Workers and Union Leaders - New York Times

• Last week's Democratic National Convention saw differences over the war in Gaza that could widen fissures between labor activists and union officials.

• Many rank-and-file union members have been outspoken in their criticism of Israel's response to the Oct. 7 attacks, in which Hamas-led militants killed more than 1,000 people and took about 250 hostages.

• The divide over Gaza reflects a deeper, more existential debate: Is the future of organized labor with its left-leaning activists or is it with establishment leaders whose politics are more pragmatic?

• Radical labor activists have been at odds with more moderate leaders for generations, but the current divide first reared its head during the 2016 Democratic presidential primaries.

Silicon Valley Wants to Fight Fires With Fire - New York Times

• High-tech entrepreneurs are using new forms of technology to solve the problem of mega-wildfires caused by climate change.

• Skidders, or 10-foot-tall vehicles, are used to clear out woods vulnerable to fast-moving fires in the Stanislaus National Forest

• Kodama Systems, a forest management company, has hacked into a skidder built by Caterpillar and plugged it into the internet to create a remote-controlled machine that does scut work for timber crews

• The machine uses LiDar to map the forest and teach itself to operate semiautonomously

• Dozens of start-ups, backed by climate-minded investors with more than $200 million in capital, are developing technology to tackle the challenge of wildfires

• Firefighters and foresters and firefighters have realized that battling wildfires requires treating their fuel in advance, such as thinning forests and underbrush with mechanical tools and controlled burns

• However, there is a shortage of resources in the forest, leading to the need for more technology solutions

• Some high-tech solutions to combat wildfires are being developed by entrepreneurs and investors.

The Report Card on Guaranteed Income Is Still Incomplete - New York Times

• Tech entrepreneurs and anti-poverty activists have been promoting direct cash transfers to low-income Americans as a way to cushion them from job losses caused by artificial intelligence.

• Unconditional cash stipends, also known as unconditional cash or universal basic income, have been tested in pilot projects across the US

• A three-year analysis of the initiative found that the initiative has had some success but not the transformational impact its proponents hoped for

• People gained flexibility to spend on basic needs but did not transform their net worth or mental/physical health

• The OpenResearch pilot enrolled 3,000 people in Texas and Illinois with annual incomes under $30,000, with one-third receiving $1,000 a month over three years

• Recipients increased monthly spending by $310 on average, with top categories being food, rent, and transportation

• Cash transfers did not lead to persistent improvements in measures of health like blood pressure, cholesterol, or obesity

Do Borrowers Still Have to Make Student Loan Payments Under SAVE? - New York Times

• The Supreme Court has kept a temporary freeze on the Biden administration's student loan repayment plan, which means monthly bills for millions of borrowers will remain on hold.

• The SAVE program, which ties loan payments to income and household size, is more affordable than income-driven repayment plans that came before it

• Two separate groups of Republican-led states filed legal challenges in the spring seeking to upend the program

• Borrowers enrolled in SAVE will continue to have their payments frozen until the legal situation changes

• SAVE participants have been placed in an interest-free forbearance, meaning they aren't required to make any payments and interest will not accrue

• If borrowers want to continue to make payments, employers can make payments on their behalf, but those will be applied to future bills after the forbearance period ends

• Enrollments are no longer being accepted for the Pay as You Earn plan, known as PAYE, or Income-Contingent Repayment plan.

Brazil’s top court orders suspension of Musk’s X amid fight over accounts - Financial Times

• Elon Musk's X expects to be banned in Brazil after refusing to meet a 24-hour deadline to name a legal representative in the country.

• The social media platform closed its Brazil office last week after receiving a secret order from justice Alexandre de Moraes insisting it take down certain accounts or its legal representative would face fines or arrest.

• X's legal representative resigned, leading to the freezing of her bank accounts, and the platform plans to publish all related court filings related to her illegal demands. b

• Musk, a self-declared free speech absolutist, has repeatedly clashed with de Maraes over censorship requests to remove or suspend some accounts. b- The ban is likely to hurt X at a time when the company has been struggling to maintain financial health. - Musk has increasingly weighed in on foreign politics through the platform he bought for $44bn, championing rightwing politicians globally while attacking leftwing leaders.

S&P’s tilt at record high held back by US tech giants - Financial Times

• US tech giants are holding back the S&P 500 from hitting a record high

• Silicon Valley tech groups were in highest demand in the first half of the year

• Tech and communication services account for around 40% of the total and their sluggish returns since July are turning into an anchor

• The Magnificent Seven index has fallen 10% from its early July peak, but the decline has been even steeper on a price-to-earnings basis

• Investors have been holding big tech groups to a high standard during the latest quarterly earnings season

• Smaller companies and more cyclical sectors have been boosted by reassuring economic data, positive earnings reports and encouraging comments from Federal Reserve chair Jay Powell

• A broadening of the market is expected over the next year.

OpenAI weighs changes to corporate structure amid latest funding talks - Financial Times

• OpenAI is considering restructuring its corporate structure to become more investor-friendly

• The company is in talks to raise $100bn in a fundraising round led by Thrive Capital

• Apple and Nvidia are expected to participate in the round alongside Microsoft

• If successful, the round would make OpenAI one of the most valuable technology start-ups in Silicon Valley history

• Investors are currently issued equity by OpenAI's for-profit subsidiary, which is governed by its non-profit board

• There has not been a final decision on whether to change the structure, but one option under consideration is to remove the profit cap for investors in the subsidiary

Why a cooling of the Nvidia party might be no bad thing for US stocks - Financial Times

• Markets are still in summertime silly season

• August is traditionally a month when markets go bump in the night due to slimmed-down trading desks in the northern hemisphere summer

• Bond and currency markets continue to exaggerate the scale of the impending US economic slowdown

• Nvidia's earnings results are an important macro event in their own right and expose the weight of investor expectations

• Shares fell in after-market trading by some 6% largely because some investors had been looking for a slightly higher forecast for the third quarter

• 80% of US companies beat earnings-per-share expectations over the quarter and the proportion of companies delivering positive surprises is growing

• Stripping tech-focused Nasdaq 100 companies out of the bigger S&P 500 index delivers encouraging news, analyst Manish Kabra at the bank said

• The biggest theme rotation from the tech sector that has grabbed so much attention in late late last year is now the busiest week of the year.

Telegram: a crypto firm with a sideline in messaging - Financial Times

• Telegram CEO Pavel Durov has been arrested in France for allegedly failing to control criminal content on the messaging app.

• Cryptocurrency revenue accounts for over 40% of Telegram's revenues

• Telegram booked $342.5mn of revenue last year on an operating loss of $108mn

• The company has a new business line called Integrated Wallet, which allows users to store, send, receive, and trade crypto assets

• Toncoins (digital assets) are accounted for under IAS 38 and measured under the revaluation model at fair value less any accumulated impairment losses

• Gains and losses on disposals are determined by comparing proceeds with the carrying amount and are recognized in profit or loss for the year when the asset is derecognised

• Revenue from the sale of collectibles is also a significant source of revenue for Telegram

• Digital assets are held for investment purposes for capital appreciation over extended periods of time.

China's AI Engineers Are Secretly Accessing Banned Nvidia Chips - Wall Street Journal

• Chinese AI developers are using American chips like Nvidia H100 chips without importing them to China due to US export controls

• They are working with brokers to access computing power overseas, sometimes using techniques from the cryptocurrency world to mask their identity

• The tactic comes in response to U.S. export controls that have prevented Chinese companies from directly importing sought-after AI chips developed by US-based Nvidia

• Chinese users can still bring Nvidia's chips to China by tapping a network of gray-market sellers, but the process is cumbersome and can't supply all the needs of big users

• Decentralized platforms like Aw have emerged in the past two years to take advantage of slower activity in the cryptocurrency field and rent out computing power to AI developers

• Buyers and sellers of computing power use a smart contract to extend the anonymity of cryptocurrency to the contract itself, with both parties using blockchain technology

• Lawyers familiar with US sanctions say the middlemen connecting buyers and sellers aren't breaking any laws

• Nvidia complies with export controls and expects its partners to do the same.

Nestlé Has the Right Recipe - Wall Street Journal

• Nestlé has announced the departure of its CEO due to a share slump and management turmoil.

• Laurent Freixe will succeed Mark Schneider as CEO effective Sept. 1, amid concerns about his cultural fit and the company's recent execution issues

• The stock has fallen nearly 15% in the past 12 months and trades at around 18 times forward earnings compared with a 10-year average of 21.6

• However, Nestlé's fundamental direction is positive, with positive internal growth and a focus on innovation and brand building to expand sales and market share

• Productivity improvements and cost savings would be needed to fund new investment, but it is unclear whether this will result in lower margins

• Stepped-up investment is the correct formula for growth over the long term, as demonstrated by the pandemic and previous failures in the packaged-food industry

• Installing an executive who understands this could serve Nestlé well.

'Nvidia Day' Inspires Watch Parties and Memes, but Fanfare Doesn't Last - Wall Street Journal

• Dozens of people gathered at a bar in Manhattan to celebrate Nvidia's earnings, which exceeded Wall Street's expectations.

• Nvidia reported second-quarter earnings and revenue that more than doubled from a year earlier, but shares slumped about 7% in after-hours trading

• The company is the best-performing stock in the S&P 500 this year and has an outsize impact on the direction of the market benchmarks

• Market watchers questioned whether Nvidia CEO Jensen Huang's comments on his quarterly earnings call would be more important for the market than Federal Reserve Chair Jerome Powell's address

• Traders were betting on a swing of around $300 billion in Nvidia shares after the report, but a reaction to that degree hasn't materialized yet

• Memes and predictions about the earnings flooded social media ahead of the report

• Some attendees thought the party itself was a signal of a market top.

Credit Scores Without Debt? Fintech Cards Baffle Credit Industry - Wall Street Journal

-Fintechs are offering credit-builder cards that allow customers to boost their credit scores without borrowing or paying back any money. These cards are popular among millions of Americans who deposit money into them to pay bills or make purchases. Transactions are reported to credit-reporting companies as credit activity, even though no credit is ever extended to the customer. The cards are designed to mainly report positive data and make it difficult or impossible for customers to become delinquent. The traditional credit-scoring system, based on credit scores, is under scrutiny for locking out people with limited credit histories and being unfairly opaque. Banks are becoming more skeptical of the usefulness of traditional credit scores and are incorporating more of their own internal data and models into credit decisions. Experian and Experian have both seen the cards as a win-win scenario, with consumers getting a more comprehensive and enhanced credit profile and lenders getting access to a broader swath of eligible consumers. Only a handful of cards meet requirements to be included in TransUnion credit scores.