Bloomberg - Evening Briefing - Upending elections

The US Supreme Court appeared split during oral arguments over a case that could fundamentally alter federal elections. The case, Moore v Harper, centers on a fringe legal theory that could give state legislatures almost unlimited power over how those elections are conducted, stripping state judges and other officials of longstanding roles in determining congressional districts, voter eligibility and mail-in ballot requirements. The case involves a North Carolina supreme court ruling invalidating a Republican-gerrymandered district map. Democratic-appointed justices were clear in rejecting a state GOP bid to reverse the ruling, and a few members of the court’s Republican-appointed supermajority also expressed some wariness of the so-called “independent state legislature” theory. Donald Trump-appointee Amy Coney Barrett said it could require the Supreme Court to draw “notoriously difficult lines” separating legitimate state supreme court decisions from those that supposedly usurp the power of state lawmakers. But Samuel Alito, author of the high court’s elimination of federal abortion rights, and two other GOP-appointed justices appeared to lean toward a robust adoption of the theory. At its most extreme, legal scholars warn it could lead to state legislatures ignoring the popular will in presidential elections and choosing their own winner. —Margaret Sutherlin

In a concession to protesters, China has loosened some of its most stringent Covid restrictions. By jettisoning key parts of the “Covid zero” strategy—including forcing infected people into centralized quarantine camps—China’s unexpected shift reflects pressure on Xi Jinping to chart a path out of crisis and address slowing economic growth. The abrupt change also underscores the newly discovered power of China’s populace, with some protesters calling for Xi’s resignation directly. The abrupt reopening could have economic implications, too—like keeping inflation running hotter than expected. Here are the rules that are changing. 

Peru descended into political chaos Wednesday after President Pedro Castillo dissolved Congress and called for new elections hours before facing a third impeachment vote in his roughly 18-months in office. A constitutional court called the move a coup and Congress voted to impeach him. Castillo went from being a virtually unknown former school teacher to president of Peru last year, in one of the quickest ascents in political history. A new president has just been sworn in.

German authorities carried out a nationwide raid targeting far right extremists, saying the operation thwarted a domestic terrorist group that was allegedly planning to violently overthrow the government. Twenty-five people were taken into custody. Members of the group were reportedly driven by the QAnon conspiracy theory in America.

Police during a raid Wednesday in Berlin, part of a nationwide roundup  of members of a far-right group suspected of planning to overthrow the German government. Photographer: Tobias Schwarz/AFP

Vladimir Putin once again stopped short of pledging not to be the first to use his nuclear arsenal in conflict. He called the weapons a “deterrent factor” and reiterated Russia could use them if it felt threatened. The televised comments came just days after the Kremlin blamed Ukraine for stunning drone attacks on three Russian airfields, two deep in Russian territory. The attacks have raised anxiety from US and European officials that Ukraine’s desire to hit back at an attacker that has killed potentially tens of thousands of Ukrainians could provoke Putin to use weapons of mass destruction in his war.

The UK will open its first deep coal mine in more than 30 years. The decision, made after two years of consideration by successive Tory governments, is a blow to environmental activists and comes after a United Nations climate assembly hosted in Scotland said a global agreement on “phasing down” the dirtiest fuel was a key step in fighting the climate crisis. The decision comes just a day after Prime Minister Rishi Sunak retreated from onshore wind in England, bowing to pressure from his fellow Conservatives.

Markets sank Wednesday with the S&P posting its fifth consecutive loss. Treasuries signaled growing concern about the prospects for a US economic downturn. Here’s your markets wrap.

How are the retail traders faring these days? If you look at their favorite investments: not great. Retail traders’ returns are down about 40% in 2022, according to one JPMorgan estimate. The cherry on the top of their bad year? FTX’s implosion.

Bloomberg continues to track the global coronavirus pandemic. Click here for daily updates.

• With Raphael Warnock’s election, Georgia is now a battleground state. 
• Big ESG funds are doing worse than the S&P 500.
• A strike promises chaos at UK airports this Christmas. 
• GOP Congressional leader calls Trump a “liability” for Republicans.
• Coinbase CEO says revenue will fall 50% because of the crypto rout.
• Indonesia banned extramarital sex and will enforce the law on tourists.
• Ready to travel? This passport is the most powerful in the world.

In the United Arab Emirates, where oil money flows freely, it’s no secret that the Al Nahyans are rich. But investments in everything from Rihanna’s lingerie line and big data to fast food and SpaceX have propelled the wealth of the family to new heights. The world’s richest family oversees a $300 billion fortune—even more than the Waltons of Walmart. And as the Al Nahyans’ wealth grows, so does their influence in the region and around the world. 

Get the Bloomberg Evening Briefing: If you were forwarded this newsletter, sign up here to receive it in your mailbox daily along with our Weekend Reading edition on Saturdays.

Bloomberg The Year Ahead at Davos: Join us for conversations with leading CEOs that map out a strategic blueprint for global business in 2023. Set against the backdrop of the World Economic Forum on Jan. 16-17, leaders from across the globe will dissect critical issues, from taming inflation and deepening geopolitical tensions to environmental priorities and the future of work. Learn more here.