Bloomberg - Evening Briefing - Two years of carnage

It’s been two years since Russia invaded Ukraine, with tens of thousands having perished in a war that’s ushered in the most geopolitically dangerous era in decades. More violence has erupted, including the disastrous conflict between Israel and Hamas. Tensions everywhere seem to be rising. The Kremlin could deploy a nuclear weapon into space as early as this year, the US told allies, just before the Biden administration unveiled a far-reaching sanctions package against Russia. US President Joe Biden, in the aftermath of Russian opposition leader Alexey Navalny’s death, blamed Vladimir Putin and called him a “crazy SOB.” Brazilian President Luiz Inacio Lula da Silva meanwhile compared the destruction of Gaza to the Holocaust. The once-unthinkable comment made an already strained meeting of the G-20’s top diplomats this week, under Brazil’s s presidency, even more uncomfortable for the attendees.

Rafah after an Israeli airstrike this month. The Hamas-run Gaza Health Ministry says at least 29,000 Palestinians have died in the war since the militant group’s Oct. 7 attack on Israel, in which it killed 1,200 Israelis. Photographer: Ahmad Hasaballah/Getty Images Europe

Israel says it’s still planning to attack the southern Gaza city of Rafah despite having no precise plan for the one million war refugees there. Fears are growing that many could be pushed into Egypt, something which Cairo has said would jeopardize the 45-year old peace accord that helped bring stability to the Middle East. But the US and European Union say they are working to use the war to create a fairer deal for Palestinians, and possibly their own state. Diplomatically, the US could find common ground with China against nuclear weapons in space, Andreas Kluth writes in Bloomberg Opinion. “Putin’s assault on decency, order, humanity and indeed sanity has gone far enough,” Kluth writes. “It’s now up to the US and China together to ensure that Putin won’t go astral.”

Plentiful jobs, confident consumers, sustained wage gains and resilient spending have marked the US economy’s recovery from its pandemic-pummeling. While forecasters largely expect the economy to lose some steam after a blockbuster 2023, economists have largely avoided any recession forecasts given two years of incorrect downturn predictions. Expectations a firm job market and consumer spending will support strong growth in the near-term is the consensus. But with global stocks reaching record highs, analysts are eyeing possible pitfalls—including sticky inflation, a fraught US presidential election, China’s slowing growth and potential policy missteps by the Federal Reserve. Another thing to watch: The US is in danger of a fiscal crisis erupting after a ballooning in deficits under Biden, and before him Donald Trump, according to Olivier Blanchard, a senior fellow at the Peterson Institute for International Economics.  

Nikki Haley faces an uphill battle against Trump when it comes to the GOP nomination, including the Republican primary in her home state of South Carolina on Saturday, but she says she’s staying in. She’s stepped up her attacks on the twice-impeached Trump, who polls show is up by 25 percentage points or more despite facing four felony prosecutions in the coming months. Haley says primary voters will see her as a viable alternative as Trump, who also faces hundreds of millions of dollars in civil penalties tied to his business and a defamation case, becomes increasingly mired in court cases. But Haley risked her appeal to moderate women voters as she sided with the Alabama Supreme Court by saying she too considers frozen embryos created through in-vitro fertilization “babies.” 

An American-made lunar lander touched down on the moon for the first time since the Apollo era, ending a string of failures and making the Intuitive Machines’s Odysseus spacecraft the first private craft to ever reach the lunar surface intact. Vaccines that protect against severe illness, death and lingering long-Covid symptoms were linked to small increases in neurological, blood and heart-related conditions in the largest global vaccine safety study to date. Chronic fatigue syndrome—now affecting scores of long Covid sufferers—may begin with an infection that never goes away. 

The private Nova-C lander named Odysseus. It’s carrying NASA and commercial science payloads. Source: Intuitive Machines

Nvidia delivered another eye-popping sales forecast, thanks to insatiable demand for its artificial intelligence accelerators—highly prized chips that crunch data for AI models. The technology has helped power a proliferation of chatbots and other generative AI services, which can create text and graphics based on simple prompts. Alphabet’s Google said it will pause the image generation of people for Gemini, a powerful artificial intelligence model, after criticism about how it was handling race. Disney chose three companies working on AI to be among the five picked for its annual business incubator program.

Nature’s ability to regenerate existed long before humans inhabited the Earth. In the fight to slow global warming and even clean up plastic waste, can we leverage the natural world to help fix the damage we’ve done? On this week’s episode of An Optimist’s Guide to the Planet, host Nikolaj Coster-Waldau shows how Earth has its own solutions for global warming.

Nikolaj Coster-Waldau, left, and John Auckland, chief executive of Seafields, on the island of St. Vincent where sargassum seaweed is being used to capture and contain carbon dioxide.

• The WTO holds a ministerial conference in Abu Dhabi.
• US economic data;  Core PCE prices and revised fourth quarter GDP.
• Europe inflation reading as the ECB ponders rate reduction timing.
• Aviation Festival Asia in Singapore, with leaders of airlines, airports.
• Hong Kong’s budget plan unveiled amid a stagnant economy.

Years of very low interest rates, ushered in after the Great Recession, sent money pouring into real estate, transforming cities around the world. But pandemic lockdowns emptied out business districts and tenants have been slow to return. In the week’s Bloomberg Originals mini-documentary, The Time Bomb in Empty Office Buildings, we explore the troubles of commercial real estate and how the consequences may extend across the global economy.

The contagion from the real estate sector has already moved into banking. Where will it go next? Photographer: Angela Weiss/AFP

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