Baltic Cable Sabotage: Chinese vessel Yi Peng destroyed telecom cables between Finland-Germany and Sweden-Lithuania, following previous year's pipeline damage.
Chrome Divestiture: DOJ plans to ask judge to force Google to sell Chrome browser, potentially worth $20B.
Brazil Assassination Plot: Police arrested ex-Bolsonaro aide and others in alleged plot to kill President Lula and stage coup.
EU Tech Policy: EU plans to require Chinese companies to build factories and share tech knowledge in exchange for subsidies.
Ukraine Military Action: Ukraine fired US-made ATACMS missiles into Russia's Bryansk region for first time after restrictions lifted.
Hong Kong Crackdown: 45 pro-democracy leaders, including Joshua Wong, sentenced to up to 10 years in prison.
NOT NEWS NEWS
Immigration Data: Trump administration released more noncitizens with criminal charges/convictions than previous administrations.
Student Loan Costs: Government losing money on all student loans except Parent PLUS, with $340B cost increase over decade.
Ukraine War Poll: Gallup finds majority of Ukrainians now favor quick, negotiated end to war for first time.
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1.) Monday, the Chinese vessel Yi Peng destroyed 2 telecom cables connecting Finland-Germany & Sweden-Lithuania.
Last year, the Chinese vessel NewNew Polar Bear destroyed the undersea gas pipeline Balticconnector between Finland & Estonia last year. And now Monday, the Chinese vessel Yi Peng destroyed 2 telecom cables connecting Finland-Germany & Sweden-Lithuania.
[RELATED] AP: Damage to Baltic undersea cables appears to be sabotage, Germany’s defense minister says
Germany’s Defense Minister Boris Pistorius stated that damage to two undersea data cables in the Baltic Sea — one connecting Finland to Germany and another between Lithuania and Sweden — is likely sabotage, although no conclusive proof has been found. He dismissed the possibility of accidental damage, calling it a “hybrid action” and highlighting Russia as a potential threat amid ongoing European security concerns. Finland, Germany, and Sweden have launched investigations, with Swedish police treating the incidents as suspected sabotage. European leaders emphasize the need to protect critical infrastructure as threats from hybrid warfare grow.
[TS] Trying to wrap my head around the motivation here. I’ve seen some say China is setting up for a Taiwan invasion, but I don’t see how this furthers that goal.
2.) BLOOMBERG: DOJ Will Push Google to Sell off Chrome to Break Search Monopoly.
Top Justice Department antitrust officials have decided to ask a judge to force Google to sell off its Chrome browser.
Alphabet Inc.’s Chrome browser could go for as much as $20 billion if a judge agrees to a Justice Department proposal to sell the business, in what would be a historic crackdown on one of the world’s biggest tech companies.
[TS] I am a little torn on this. For one, I think breaking up these massive companies would actually be a net positive for consumers as it would increase competition, drive innovation etc. On the other hand, the DOJ’s resources and time is finite. Every minute they spend on X, they can’t spend on Y. So, what are the alternatives?
Why spend time going after Google (who spends billions on important R&D with massive positive externalities) when you could go after the AMA who restricts the doctor supply via:
Medical School Seats: The AMA has supported accreditation standards that ensure quality but have also limited the expansion of medical schools and residency programs, indirectly capping the number of new doctors.
Residency Programs: The number of residency slots in the U.S. is largely dictated by Medicare funding, which caps how many residents hospitals can train. The AMA advocates for increased funding but has faced criticism for not addressing bottlenecks fast enough.
What about the FAA limiting pilots? What about licensing for electricians or contractors? What about government imposed production quotas for agriculture? What about labor unions shutting down ports?
Port unions have a half century history of opposing automation that has left our ports far less productive and automated than competitors around the world. The union demand for less automation is not just a bargaining tactic — It’s how we got here! [TS] Don’t get me started on the ports!
What about the Jones Act that mandates that goods transported between U.S. ports must be carried on ships that are:
Owned by U.S. citizens
Built in the United States
Registered in the U.S.
Crewed by U.S. citizens or permanent residents
[TS] I know I know, by this point I’m well outside of the scope of the DOJ. But c’mon! There are some low hanging fruit to be picked out there. Also, I think it’s a hard case. It’s a “free” product that has several competitors which are near costless to switch to. I think Chrome is a different beast than search (ie Google.com).
3.) NBC: Police arrest ex-Bolsonaro aide, four others in alleged plot to kill Brazil’s Lula in coup
The arrests were the first time in the investigation that federal police mentioned a plot to kill Lula and Geraldo Alckmin, his vice president, and stage a coup to stop him from returning to power.
4.) FT: EU to demand technology transfers from Chinese companies
Brussels is planning to require Chinese businesses to have factories in Europe and share technological knowhow in return for EU subsidies.
[TS] How the tables have turned…China has long used this strategy of pushing for tech transfer in exchange for market access. If you’re looking for a good article on tech transfer, Kyle Chan wrote one in ‘High Capacity’ HERE.
[SEMI-RELATED] BLOOMBERG: China’s Chip Advances Stall as US Curbs Hit Huawei AI Product
[TS] Good to see that export controls actually work. Will Trump cancel them?
[SEMI-RELATED 2] FT: China is quickly outstripping the US in research spending.
[TS] One wonders what a Government Efficiency panel would find in China’s research!
5.) AP: Ukraine fires several US-made longer-range missiles into Russia for the first time
Russia's military says Ukraine fired 6 US-made ATACMS missiles at Russia's Bryansk region overnight. The announcement comes shortly after Washington lifted restrictions on Ukraine using U.S.-made longer-range missiles to strike Russia.
[TS] Seems the reporting on this being limited to Kursk was incorrect.
[RELATED]
CNBC reported that “Moscow signaled to the West that it’s ready for a nuclear confrontation after Ukraine was given permission to attack Russian territory — and appeared to quickly act on that greenlight — using U.S.-made long-range missiles.”
Most experts agree that the risk of Russia using such weapons is low, but it’s not negligible.
US officials speaking to the Associated Press said they had anticipated a response from Russia, but that Russian officials’ warnings were viewed as inflammatory rhetoric, and would not provoke any change in US action.
[TS] Another “red line” from Russia. No different than the previous “If Ukraine gets XYZ…” This is basically why people are shouting “WW3!” However, plenty of of “world” conflicts already on the map. Consider:
Russia (and North Korea) are fighting Ukraine
Israel is fighting Iran
What happens if China invades Taiwan? Speaking of China…
6.) NYT: Dozens of Hong Kong Pro-Democracy Leaders Are Jailed Up to 10 Years
The 45 defendants, including Joshua Wong, were at the forefront of the opposition movement crushed by Beijing. Many had already been in jail for years.
[TS] If the U.S. withdraws from the world, it creates a vacuum for human rights and dignity to erode.
QUICK BITES:
Trump taps Dr. Mehmet Oz to serve as the Centers for Medicare and Medicaid Services Administrator.
[TS] Another fairly ridiculous potential appointment. A notable line in his presser:
“He will also cut waste and fraud within our Country’s most expensive Government Agency, which is a third of our Nation’s Healthcare spend, and a quarter of our entire National Budget.”
Hard for me to interpret that as anything other than possible cuts to Medicare. Gotta pay for those tax cuts somehow! Tariffs certainly don’t get you the whole way there.
Trump expected to name Lutnick as Commerce Chief. [TS] He’s a big tariffs guy.
ABC’s Katherine Folders: “Trump's team is vetting Russ Vought - a Project 2025 architect - for a top administration post, sources tell me.”
President-elect Donald Trump is nominating the billionaire professional wrestling mogul Linda McMahon to be secretary of the Education Department, tasked with overseeing an agency Trump has promised to dismantle.
[RELATED] Per Gabe Fleisher: “No president has had a Cabinet nominee rejected by a Senate controlled by their own party since 1925, when a Republican-led Senate twice rejected Calvin Coolidge’s attempts to nominate Charles B. Warren as Attorney General.”
Pew: Republicans are more likely than Democrats to identify as working class:
[TS] A little humorous that the poorest third and the richest third both say they’re working class.
ISRAEL/HAMAS: The head of the Mossad and IDF representative to hostage talks Nitzan Allon have requested a wider mandate in hostage negotiations. They told Netanyahu without it, there was no chance of a deal. Netanyahu said no. The hostages have been forsaken.
Per Reuters: Walmart spokesperson on Trump’s tariffs: “We’re concerned that significantly increased tariffs could lead to increased costs for our customers.”
[TS] But I was assured that foreign countries pay the tariffs and not the customers…
[TS] Big NYT story on SpaceX raises concerns about the sonic boom from Starship. However, the quotes the FAA basically saying that the sonic boom won’t cause damage to physical structures in nearby towns.
In short: Starship sonic boom created an overpressure event exceeding 11 pounds per square foot. FAA said damage unlikely “until the level hits about 20 pounds per square foot.”
“I've dug into Apple's operations in China for almost a decade.
The company is in trouble there. As Apple races to roll out Apple Intelligence globally, it faces a stark choice in China. The country’s strict AI regulations require companies to hand over their algorithms for government review and ensure their AI systems “adhere to the correct political direction.”
For Apple, this means either walking away from its largest overseas market or creating a separate, censored version of its AI assistant that advances the Chinese Communist Party’s surveillance and control objectives.”
7.) Cato Institute: Trump released more noncitizens charged or convicted of crimes.
[TS] This surprised me, and I was curious how that could be the case. The reason: Under President Obama, immigration enforcement prioritized removing recent border crossers and serious criminals, focusing on public safety threats. President Trump’s 2017 executive order removed these prioritizations, directing agencies to target all individuals eligible for deportation regardless of criminal history.
Per Cato:
Trump wrote in the order that it would be wrong to “exempt classes or categories of removable aliens from potential enforcement” and that, “I hereby direct agencies to employ all lawful means to ensure the faithful execution of the immigration laws of the United States against all removable aliens.”
8.) [TS] The government is terrible at being a bank.
A remarkable stat coming from the CRFB: All loans except Parent PLUS now cost the government money.
Some additional color on student loans, specifically:
A decade ago, the student loan program was projected to make $15 billion a year. Those same loans are now projected to cost $20 billion per year.
