ITK Daily | November 5

Happy Saturday.

Here’s today’s ITK Daily.

To be ITK, know this:

Ukraine war gives Turkey’s Erdogan opportunity to extend his influence: Turkish leader playing pivotal role in Black Sea region as the conflict progresses. WSJ

+ Turkish President Recep Tayyip Erdogan is deepening his country’s military support for Ukraine while keeping an open line of communication to his Russian counterpart Vladimir Putin—a relationship that helped keep Ukrainian grain exports flowing this week—as he tries to expand Turkey’s role as a regional power broker.

+ Erdogan is burnishing Turkey’s credentials as an important regional player, a task made easier by one key element: his willingness to allow inflows of Russian money into Turkey after Western sanctions cut off Moscow from much of the global economy.

+ The Turkish president is now one of the few world leaders who regularly speak with Putin.

+ Turkish Bayraktar TB2 drones have played an important role in the Ukraine war.

3 Turkey data dumps from CIA World Factbook:

+ Modern Turkey was founded in 1923 from the remnants of the defeated Ottoman Empire by national hero Mustafa Kemal, who was later honored with the title Ataturk or "Father of the Turks."

+ Turkey's largely free-market economy is driven by its industry and, increasingly, service sectors, although its traditional agriculture sector still accounts for about 25% of employment.

+ Turkey remains highly dependent on imported oil and gas but is pursuing energy relationships with a broader set of international partners and taking steps to increase the use of domestic energy sources, including renewables, nuclear, and coal.

China to ‘unswervingly’ keep to COVID zero policy, dashing hopes: Bloomberg reports China will “unswervingly” adhere to its current Covid controls as the country faces an increasingly serious outbreaks, health officials said, damping hopes that Beijing will ease its stringent policies that have put cities and factories under prolonged lockdowns.

Xi vows greater access to Chinese market as trade slows: Nikkei reports that China's leader reiterates intention to join CPTPP at Shanghai trade expo opening.

+ In an address via video to open the China International Import Expo in Shanghai, Xi called on the world to commit to openness amid what he deemed "accelerated changes unseen in a century."

+ L'Oreal, Siemens, and Uniqlo are among the foreign brands from 127 countries peddling their latest wares at the expo.

Olaf Scholz’s meeting with Xi Jinping exposes bitter divisions in Berlin: The Times reports open infighting has broken out in the German government over concerns that Olaf Scholz may serve Beijing’s agenda with his controversial visit to China today.

+ Germany's Green party leadership is uncomfortable with Scholz’s readiness to allow Chinese firms to buy stakes in Germany’s strategic infrastructure.

+ Omid Nouripour, one of the Green party leaders, said it was time for Germany to “rethink” how it handled China as a “competitor and strategic rival.”

‘The big one is coming’ and the US military isn’t ready: A US flag officer talks candidly about the fading US deterrent. WSJ - Editorial

+ “This Ukraine crisis that we’re in right now, this is just the warmup,” Navy Admiral Charles Richard, commander of US Strategic Command, said this week at a conference. “The big one is coming. And it isn’t going to be very long before we’re going to get tested in ways that we haven’t been tested” for “a long time.”

+ Adm. Richard noted that America retains an advantage in submarines—“maybe the only true asymmetric advantage we still have”—but even that may erode unless America picks up the pace “getting our maintenance problems fixed, getting new construction going.”

America can contain China with an alliance of five: Conflict in the Indo-Pacific looks increasingly plausible, and the US is going to need lots of help from Australia, India, Japan, and the UK. Hal Brands

+ The US-China rivalry is a global affair, but the heart of the contest is in the Indo-Pacific. This is the world’s most populous, economically dynamic, and strategically important region.

+ Just two years ago, it was still a fringe opinion to suggest that China might invade Taiwan or otherwise touch off a major regional conflict in the 2020s. Now, in Washington at least, that view is becoming conventional wisdom.

+ If there is a US-China war, it won’t simply be a fight over Taiwan or some other hotspot. The war would be a fight for hegemony in a crucial region, and for all the global influence that follows.

+ Regardless of who wins, a US-China war would have cascading consequences. The conflict might expand geographically, as the Pentagon blockades China’s energy imports or targets its naval vessels wherever they can be found

+ War would precipitate an economic earthquake, tearing apart supply chains and disrupting some of the most lucrative trade routes on the planet.

+ The Chinese-American rivalry is a contest for Indo-Pacific hegemony. But in what they do and don’t do, an array of middle powers will have their say in who wins.

Reuters: Former US military pilot arrested in Australia listed same Beijing address as Chinese hacker

Japan government sounds alarm over US EV tax credits: Restrictions could deter Japanese investment in auto industry, officials warn. Nikkei

+ In a comment submitted to the US Treasury Department, the Japanese government raised a number of concerns about the tax credits in the Inflation Reduction Act (IRA), which is designed to build more resilient supply chains as the United States aims to reduce exposure to China.

+ The requirements to be eligible for the tax credit are "not consistent" with the shared policy between the Japanese and the US governments to build resilient supply chains by working with allies and partners, the Japanese government said.

+ The Japan Automobile Manufacturers Association, a major Japanese auto lobby, said in August it was concerned about the law and would keep a close watch on developments.

+ Ford Motor on Thursday the US Treasury Department should limit the definition of a "foreign entity of concern" to ensure more electric vehicles can qualify for up to $7,500 in consumer tax credits.

Bloomberg: Argentina’s Kirchner stokes speculation on presidential run

+ Kirchner says she’ll do what’s needed to make people happy

+ Kirchner’s first rally event since assassination attempt

Until this week, I had no idea Argentina was a G20 nation.

3 Argentina data dumps from CIA World Factbook:

+ In 1816, the United Provinces of the Rio Plata declared their independence from Spain. After Bolivia, Paraguay, and Uruguay went their separate ways, the area that remained became Argentina.

+ Argentina benefits from rich natural resources, a highly literate population, an export-oriented agricultural sector, and a diversified industrial base.

+ Although one of the world's wealthiest countries 100 years ago, Argentina suffered during most of the 20th century from recurring economic crises, persistent fiscal and current account deficits, high inflation, mounting external debt, and capital flight.

Bloomberg: France’s far right picks 27-year-old to succeed Marine Le Pen

+ Jordan Bardella, a 27-year-old of Italian descent from the Parisian suburbs, won an internal National Rally online ballot, beating Louis Aliot, mayor of the southern city of Perpignan, by a large margin.

+ National Rally had its best result in this year’s elections

Fast Fashion waste is choking developing countries with mountains of trash: Less than 1% of used clothing gets recycled into new garments, overwhelming countries like Ghana with discards. Bloomberg

+ Each year, the fashion industry produces more than 100 billion apparel items, roughly 14 for every person on Earth and more than double the amount in 2000.

+ In early 2013, H&M became the first major retailer to start a global used-clothing collection program, setting up bins at thousands of stores in more than 40 countries.

+ Globally, less than 1% of used clothing is actually remade into new garments, according to the Ellen MacArthur Foundation, a UK nonprofit. (In contrast, 9% of plastic and about half of paper gets recycled.)

+ Everyone wants baby clothes; no one wants men’s polyester pants.

+ DuPont de Nemours Inc. and Monsanto Co. developed petroleum-based fabrics such as nylon, acrylic, and polyester that were cheap, robust, and versatile, allowing for the mass production of affordable clothing.

+ Fast fashion’s pleasure-inducing compulsiveness has accelerated churn.

+ Over the past two decades, the average number of times a garment is worn before it’s discarded has plummeted by 36%, according to the Ellen MacArthur Foundation.

+ Americans wear their garments the least: fewer than 50 times on average. But the biggest decline came in China, where the average number of wears plummeted from more than 200 to 62 between 2000 and 2016.

+ There’s a reason waste experts warn that we can’t consume our way to sustainability: Recycling will always use more energy and resources and produce more waste than reusing something or not consuming it in the first place.

COP27: November 6-18 in the Egyptian coastal city of Sharm el-Sheikh.

Soup, roadblocks, and superglue: Understanding Europe's disruptive climate activism: As COP27 nears, some activists are upping the ante to bring attention to the climate emergency. CBC

+ Colin Davis is a professor of psychology at the University of Bristol. He studies how people respond to different kinds of climate protests. He also happens to be a climate activist.

+ "We are very constrained in what we do, not just by the law, but also by social norms, boundaries."

El Salvador’s $300 million Bitcoin ‘revolution’ is failing miserably: President Nayib Bukele tied his country’s fortunes to the digital token, but there isn’t much sign of it. Easier to find: Mass arrests and soldiers with machine guns. Bloomberg

+ El Salvador’s Bitcoin project is centered on a smartphone app the government runs called Chivo, slang for “cool.” It allows users to send each other dollars or Bitcoin and convert funds from one to the other.

+ Even though Chivo allows for free transfers from abroad, few people are using the app for them. It accounted for only 2% of remittances in the first five months of 2022, according to El Salvador’s central bank.

A practical way to make sense of all the shocks hammering the global economy: Brexit, the US-China trade war, Russia’s invasion of Ukraine—more such geopolitical surprises will continue the economic upheaval. Bloomberg

+ For those with a short memory, it’s tempting to blame the world’s problems on surging populism.

+ The trouble with that version of recent history is that though they’re responsible for some real doozies, populists don’t have a monopoly on policy failure.

+ Perhaps it makes more sense to say both populist and mainstream politicians are grasping for a response to seismic shifts in the way the world works.

+ The rise of China in the past three decades has seen the balance of global power shift away from democratic free-market countries. Bloomberg Economics’ projections suggest the trend will continue, with the share of global gross domestic product from Europe, the US and Canada sliding from 59% in 1989 to 41% in 2022, on a path to 24% in 2050.

+ Politics are even harder to forecast than economics.

+ The lesson of the past few years, though, is that anyone waiting for a return to geopolitical stability may be waiting a long time. History is back, and that’s bad news for prosperity.

I predicted the 2008 crash – these are the global ‘megathreats’ I can see now: Life as we know it is under threat, as short-term-thinking politicians ignore the signs that point to a dystopian future. Nouriel Roubini

+ In the coming decades, the world faces megathreats that would imperil not just our global economy and financial assets, but also put at risk peace and prosperity.

+ Some of these megathreats are economic: the specter of inflation and recession at the same time; the mother-of-all debt crises as private and public debt ratios hit historic highs; an aging population that will crash our pension and healthcare systems, to name just three.

+ Here is one possible path for our future world: these threats materialize and feed on each other in a destructive loop, leading to economic chaos, instability, meltdowns, and conflict worse than we already know.

+ So long as dysfunctional, polarised politics and warring geopolitical rivalries prevent a much-needed global collaboration, the dystopian path looks a more likely bet.

Grand...

Kevin McCarthy: Republican political operator poised to become House Speaker: The wrangler of his party’s many factions is adept at playing all sides, but his support for Trump has attracted controversy. FT

+ Like other Speakers before him, McCarthy will need to wrangle a raucous band of lawmakers; former Speaker John Boehner once likened the job to keeping “218 frogs in a wheelbarrow long enough to get a bill passed.”

+ A prolific fundraiser with a knack for recruiting congressional candidates, McCarthy has raised more than $100mn to elect other Republicans since the start of the 2016 election cycle, according to non-partisan group OpenSecrets.

Trump friend found not guilty of lying to FBI, illegal foreign lobbying: Tom Barrack, a longtime ally of former President Trump, has been found not guilty of illegal foreign lobbying charges, the Associated Press reports.

Most interesting.

The innoficiency problem: There is a fundamental but poorly understood principle of business that has deep implications for all creative firms, their clients and the often tense relationships between them. It is a problem of innovation, efficiency and their relationship to each other. I’ve coined a word to describe the principle and the problem: innoficiency. Blair Enns

The innoficiency problem: Why innovation + efficiency are opposable objectives: Recorded in September 2021, a Brigadoon Monthly Call with Blair Enns. Access here.

Nice message discipline here...

The Times: The British are not too lazy to learn foreign languages, app entrepreneur says

"Luis von Ahn, creator of Duolingo, dismissed claims that the British cannot be bothered to learn foreign languages"

Blame comms: "The communications team, which was almost entirely laid off, did not respond to a request for comment."

🔥🔥🔥

+ @nytimes: The layoffs at Twitter have been so haphazard that at least one worker was locked out of company systems during a late-night meeting about Twitter Blue. The communications team, which was almost entirely laid off, did not respond to a request for comment.

HBD: Bryan Adams is 63 years old today.

SOTD: Summer Of '69 - Bryan Adams YTM

Bloomberg: Apple’s next step in ads will be built around new soccer deal

+ Company prepares to expand live TV advertising with MLS pact

+ Apple also has been working to bring ads to apps, such as maps

+ Apple is holding discussions with advertising partners and MLS sponsors in advance of the launch next February about airing advertisements during soccer games and related shows.

+ Apple recently struck a 10-year deal to air MLS games in a new subscription service, as well as Apple TV+ streaming platform. The company will also stream a portion of games for free to users of the Apple TV app.

Today: MLS Cup 2022 - LAFC v Philadelphia Union @ 4:00 pm ET from Banc of California Stadium.

+ The Philadelphia Union have the second-lowest payroll ($10.36m) in MLS.

Today: Tennessee Volunteers v Georgia Bulldogs @ 3:30 pm ET from Sanford Stadium.

Today we're all Tennessee fans, right?

CBC: Ottawa Senators officially for sale

+ Team says it will require new owners keep it in Ottawa.

Enjoy the ride + plan accordingly.

-Marc

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