🐂 Stay out of Maui

Markets

Despite a higher number of companies surpassing earnings forecasts than usual, as reported by the WSJ, the market's strong performance in the first half of the year has lost momentum this summer. Notably, UPS, Apple, and PayPal all exceeded Wall Street's expectations, yet their stock prices declined following their respective earnings announcements. Investors attribute this shift to a return to reality, following a period of market enthusiasm during the first half of the year.

The Economic Losers in the New World Order

In a fierce competition to secure dominance in emerging industries, the world's largest economies are providing substantial subsidies, leaving countries unable to afford such measures at a significant disadvantage.

The United States is attracting substantial investment with fresh tax incentives aimed at bolstering the production of batteries, solar technology, and other eco-friendly innovations. Meanwhile, the European Union is formulating its own package of support for green energy initiatives. Japan, too, has disclosed intentions to borrow $150 billion to fund a surge of investments in green technology. These efforts are primarily driven by a desire to reduce reliance on China, which currently holds a considerable lead in crucial areas like battery manufacturing and essential minerals.

Conversely, several smaller economies are finding themselves marginalized in this scenario. These nimble economies previously thrived during an era of liberal trade policies, but they now face a disadvantage as the global landscape shifts towards more assertive industrial strategies. Industrialized nations such as the United Kingdom and Singapore lack the size and resources to effectively compete against the larger economic blocs that can offer substantial subsidies. Similarly, emerging markets like Indonesia, which had aspirations of leveraging its natural resources for economic advancement, are now confronted with the challenges posed by this paradigm shift.

Environment

Frustration grows in Maui after wildfires

The residents of West Maui are increasingly expressing their dissatisfaction with the government's response to the catastrophic wildfires that have wreaked havoc on the town of Lahaina, resulting in the tragic loss of at least 93 lives. This has marked the deadliest wildfire in the United States in over a century.

According to locals who spoke with The New York Times, community-operated volunteer groups have proven to be far more effective in providing essential resources for evacuees compared to the government, which they accuse of being unresponsive and obstructing access to roads leading to Lahaina. These roadblocks have hindered aid to the city that was ravaged by the fire.

Government officials, however, defended their actions, attributing the challenges in relief efforts to the remote location of Maui. As of the most recent update on Saturday, only 3% of the affected area had been searched, indicating that the death toll could see a significant increase, as noted by Hawaii Governor Josh Green.

A noteworthy figure in Hawaii, Jason Momoa, a Native Hawaiian and well-known actor, took to Instagram to echo the sentiments of local authorities, urging individuals to cancel their upcoming vacations to Maui. He emphasized the deep suffering of the island and discouraged unnecessary visits.

This plea underscores the complex dynamic between tourists and the local population, who heavily rely on tourism, accounting for 80% of the island's income. The response to the wildfire has exacerbated this division, with a resident expressing frustration to the BBC about witnessing tourists swimming in waters where local lives were recently lost. Additionally, concerns are raised among locals that the process of rebuilding Lahaina might lead to further displacement of families due to increased housing costs driven by outside real estate developers.

The task of rebuilding Lahaina is anticipated to be a monumental endeavor. Federal officials have projected wildfire-related losses to potentially exceed $5.5 billion.

Regarding the fire's origin, official sources are yet to determine its cause. Lawyers are currently investigating Hawaiian Electric's power lines as a potential ignition source, with Bloomberg reporting that three law firms filed a class-action lawsuit against the utility. The lawsuit claims that de-energizing the power lines before the windy conditions could have prevented the widespread destruction.

Politics

Ecuador on high alert after assassination of presidential candidate.

A vast contingent comprising thousands of soldiers and police personnel orchestrated the transfer of a lone figure, identified as a prominent gang leader nicknamed "Fito," to a high-security penitentiary. Simultaneously, the FBI joined efforts to probe the circumstances surrounding the assassination of presidential contender Fernando Villavicencio, an event that transpired last Wednesday. Villavicencio had gained notoriety for his outspoken stance against corruption and organized criminal activities. These illicit pursuits have witnessed a surge in the nation over recent years, a noteworthy departure for a country that had, until recently, remained relatively insulated from the drug-related violence prevalent in its neighboring states. This surge in criminal activity is attributed to the escalating cocaine trade within Ecuador.

Tech

The creepy second life of a Tesla

Last Friday, Jay Yarow, CNBC's Executive Editor, shared a tweet detailing an intriguing incident involving his Tesla, which he had been involved in an accident with and declared totaled last year. The surprising twist occurred when Yarow discovered that his former Tesla had ended up in southern Ukraine, and its new owner was actively using his Spotify account, playing music by Drake.

This story quickly gained widespread attention, shedding light on the security vulnerabilities inherent in modern cars that have transformed into complex computers on wheels.

So, how did this Tesla journey to Ukraine? CNBC journalists embarked on an investigation to unravel the journey of their editor's car. The online auction platform Copart, in collaboration with salvage yards, acquired the Tesla after it was deemed totaled and then listed it for sale. An individual in Ukraine emerged as the winning bidder, and the car was subsequently transported from New Jersey to Europe. The new owner, in an unexpected turn, gained access to Yarow's personal Spotify playlists.

Yarow sought assistance from Tesla to understand how he could disassociate his previous car from his account. The company advised him to disconnect the vehicle from his account, but accomplishing certain steps, like inputting new owner information, proved to be impossible. Furthermore, merely disconnecting an account from the car did not prevent the extraction of personal data, according to experts cited by CNBC. These experts argued that Tesla should have implemented a feature enabling users to completely erase their data from the car, a capability notably absent thus far.

In a broader context, as automobiles become increasingly interconnected with the internet, consumers may need to exercise caution when synchronizing data from their mobile devices with car applications. The incident serves as a reminder that it's crucial to consider who might assume control of the vehicle next, given its potential access to personal information and preferences.

Looking Ahead

Retailers take the earnings stage

Walmart, Home Depot, and Target are poised to provide insights into consumer spending, a significant force propelling two-thirds of the US economy. The consistent activity of American consumers in making purchases (even as interest rates reach a 22-year peak) stands as a key factor that has prevented the anticipated recession from coming to fruition thus far.