🐂 The Great Gloom

Markets

Stocks experienced a rise yesterday; however, it's worth noting that all three major indexes concluded the week with declines. This decline was largely attributed to investor apprehension surrounding Jerome Powell.

Kroger saw a modest increase in its stock price following an announcement that the grocery chain had reached a $1.2 billion settlement regarding opioid sales claims. Concurrently, Kroger also entered into an agreement to sell 400 stores for $1.9 billion, a move aimed at obtaining approval for its merger with Albertsons.

IRS, With AI Help, Readies Audits of Large Hedge Funds, Real Estate Firms

In the coming month, the Internal Revenue Service (IRS) is set to commence audits on 75 large partnerships, including hedge funds and real-estate firms. The IRS is pursuing these audits as part of its efforts to bolster its financial resources, which Congress allocated to the agency last year.

IRS Commissioner Danny Werfel revealed that artificial intelligence was employed to identify these companies, though their names cannot be disclosed publicly. On average, these partnerships have approximately $10 billion in assets, and they will be formally notified of the impending audits in the upcoming weeks.

Historically, the IRS has faced significant challenges when auditing complex, multi-tiered partnerships. The additional funding from Congress is aimed at reversing this trend.

According to Werfel, "We’ve been overwhelmed in this area for years. These new tools are helping us see patterns and trends that we couldn’t see before."

The backdrop to this IRS initiative involves political wrangling over the agency's budget. Last year, when Democrats held full control of the government, Congress allocated $80 billion to the IRS to enhance enforcement capabilities, modernize technology, and improve taxpayer service. However, House Republicans opposed this expansion and successfully negotiated with President Biden to reclaim over $20 billion of those funds as part of a deal to raise the debt ceiling.

GOP lawmakers are pushing for further reductions in IRS funding during upcoming federal spending discussions, asserting that increased IRS enforcement would ultimately negatively impact small businesses and American taxpayers.

In response, the IRS has been working to demonstrate that the additional funding is being put to effective use. Although the majority of the allocated funds were intended for enforcement purposes, the IRS initially focused on improving taxpayer service, where it could achieve more immediate and bipartisan results. This effort involved hiring thousands of new employees, addressing tax refund backlogs, reducing telephone waiting times, and enhancing in-person assistance centers.

World

More than 600 killed in an earthquake in Morocco

Last night, a powerful earthquake with a magnitude of 6.8 struck in the High Atlas Mountains, located southwest of Marrakesh. The earthquake occurred at approximately 11:00 pm local time, causing significant damage to buildings in the old city area and prompting residents to evacuate onto the streets. This seismic event is believed to be the most formidable earthquake to impact the region in over 120 years.

As of the early hours of this morning, state media reported a tragic toll, with at least 632 individuals confirmed to have lost their lives. Many of these casualties occurred in remote mountainous areas, posing challenges for rescue teams attempting to reach affected individuals. Additionally, another 329 people were receiving medical treatment in hospitals for various injuries sustained during the earthquake.

Sports

At the 142nd US Open, equal pay turns 50

As Coco Gauff and Aryna Sabalenka face each other in the US Open Final today, they are aware that regardless of the outcome, they will receive the same prize money as the men's champion, which amounts to $3 million. This equality in prize money can be attributed to a historic change brought about by Billie Jean King, which reshaped the landscape of women's sports.

The transformation began in 1972 when Billie Jean King won her third US Open, earning $10,000 in prize money. In contrast, Ilie Năstase, the men's champion, received $25,000 for his victory. Recognizing the inherent inequality, King took action.

She founded the Women's Tennis Association and secured sponsorship from Ban deodorant, ensuring equal funding for both men's and women's prizes at the US Open. Although this was a significant victory for King, it took 28 more years before another Grand Slam, the Australian Open, committed to equal prize money for men and women. The French Open and Wimbledon followed suit in 2007 after Venus Williams held discussions with the Grand Slam committee.

Despite these strides, disparities in payouts between men and women persist in some tournaments even in 2023:

• For instance, at the Italian Open, men's prize money totaled around $8.4 million, while women's prize money was only $3.9 million.

• In last month's Cincinnati Open, Coco Gauff received $455,000 as the women's champion, while Novak Djokovic, the men's champion, received over $1 million.

Nevertheless, thanks to Billie Jean King's pioneering efforts through the WTA, change may be on the horizon. The WTA introduced new regulations in June aimed at achieving equal pay in all professional tennis tournaments by 2033. These regulations include requiring players to participate in more tournaments to secure larger broadcasting rights deals and sponsorship packages.

Geopolitics

Tension at G20 Summit

The tension at this weekend's G20 summit is palpable, rivaling the anxiety of a theater club sleepover on the night the Anything Goes cast list is posted. World leaders have converged in New Delhi, India, for the next two days with the aim of finding common ground on significant economic and political issues while tactfully sidestepping discussions about leaders who opted not to attend.

The annual G20 summit serves as more than just an opportunity for awkwardly posed group photos; it's a gathering where 19 countries and the European Union, together representing roughly 85% of global GDP, work together to formulate international policy recommendations.

The primary objective for attendees is to reach a consensus on a vague, joint statement by the summit's conclusion. However, this task may prove challenging, particularly due to the absence of key figures this year, including Chinese President Xi Jinping (missing for the first time since taking office in 2013) and Russian President Vladimir Putin (skipping the event for a second consecutive year), adding an extra layer of drama despite their physical absence.

One significant unknown factor is whether the leaders will endorse a statement condemning Russia's war in Ukraine, a move favored by the United States. Last year's statement acknowledged the adverse impact of the conflict on the global economy. However, despite the growing relationship between the United States and India, Prime Minister Narendra Modi, the host of the summit, aims to maintain a neutral stance and continue purchasing Russia's affordable oil.

On less tense topics, the anticipated statement is likely to include calls for measures to curb global temperature rise and provide financial support to low-income nations for implementing environmentally friendly initiatives.

Government

This room just got a makeover

In this edition of Extreme Makeover, the spotlight is on a property located at 1600 Pennsylvania Ave in Washington, DC.

The Situation Room, an ultra-secure complex situated beneath the West Wing of the White House, has just completed an extensive $50 million renovation. This year-long transformation involved a complete overhaul of the revered meeting spaces where presidents have conducted top-secret discussions and managed high-stakes crises.

The newly revamped Situation Room seamlessly blends cutting-edge technology necessary to address evolving security threats with the timeless interior design associated with the Executive Branch. It now comprises three conference rooms, two phone rooms designated for top officials, and the Watch Floor, where 24/7 national security monitoring takes place.

Among the notable features are sleek screens, advanced anti-espionage equipment, and clocks that display the time in locations like Kyiv, Tehran, and wherever the President of the United States happens to be at any given moment.

The renovation also incorporates mahogany walls, luxurious leather chairs, and a reception area that exudes the ambiance of a high-end hotel. It boasts a White House seal intricately etched into marble sourced from a quarry in Virginia, as revealed by a New York Times reporter who was granted a tour.

For history enthusiasts, there's no need to fret. Furnishings from the corner of the old Situation Room where President Obama was famously photographed while monitoring the bin Laden raid have been preserved and are set to be transported to his presidential center in Chicago.