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| Presented By Bank of America |
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| Axios AM |
| By Mike Allen ·Sep 21, 2021 |
| 🍂 Good Tuesday morning. Fall officially starts tomorrow. - Smart Brevity™ count: 1,193 words ... 4½ minutes. Edited by Zachary Basu.
📱 Breaking: Apple is building iPhone features to help diagnose depression and cognitive decline, The Wall Street Journal scoops (subscription). The tools use sensor data that includes mobility, sleep patterns and typing behavior. |
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| 1 big thing: Dems' dwindling map |
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| Illustration: Sarah Grillo/Axios |
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| Democrats have an ever-narrower path to keeping their thin House majority: - They're targeting only about half as many House Republicans next year as they did in 2020 (21 vs. 39), leaving little room for error, Axios' Alexi McCammond and Sarah Mucha report.
Why it matters: The narrowing map — which reflects where Democrats see their best chance of flipping seats — is fresh evidence of how rough a road Democrats face in 2022. - Republicans would only need to flip 5 seats to win the majority — and feel confident they will.
- That would likely mean Speaker Pelosi passing the gavel to her fellow Californian, House Republican Leader Kevin McCarthy.
DNC Chair Jaime Harrison told Axios that if President Biden's infrastructure and spending bills pass, the party's two-word message will be: "Democrats deliver." |
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| 2. Catch up quick: Global contagion risk |
 Data: FactSet. Chart: Axios Visuals Chinese construction giant Evergrande looks set to default on its $300 billion of liabilities, in a move that has already had global market repercussions, Axios Capital author Felix Salmon writes. - Why it matters: Evergrande, the world's most indebted developer, is the first big test of the global financial system since the pandemic-induced chaos of March 2020.
By any measure, an Evergrande debt default would be one of the largest in world history. - S&P said yesterday "default is likely": "We believe Beijing would only be compelled to step in if there is a far-reaching contagion." (CNBC)
Context: To put Evergrande's $305 billion debt load in perspective, Argentina's massive foreign-debt default in 2001 was about $93 billion. Greece's restructuring in 2012 was about $200 billion. Lehman Brothers had about $600 billion in debts when it filed for bankruptcy. - Those defaults shook entire economies. Evergrande seems to be causing little more than some medium-sized market jitters.
The big picture: The Chinese government has been worried about the amount of debt in the domestic property sector for years, and has tried to force the large players, including Evergrande, to deleverage. - Evergrande's failure — along with that of other highly indebted companies — can be seen as a price that the Chinese government is willing to pay to make the country's financial system less risky.
- Economist Adam Tooze calls it "controlled demolition."
What's next: A full-scale crisis is still possible. But consensus among China watchers is that Beijing has financial firefighters waiting. |
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| 3. Two stats |
 Data: Our World In Data/Johns Hopkins. Chart: Kavya Beheraj/Axios - COVID deaths in the U.S. (676,000) yesterday passed the known fatalities from the 1918 flu pandemic (675,000). Go deeper.
- The pandemic slashed U.S. life expectancy by more than 9 million years — with Black and Hispanic Americans losing more than twice as many years per capita compared to white Americans, Axios' Marisa Fernandez writes from a study in Annals of Internal Medicine.
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| A message from Bank of America |
| A $1 trillion investment supporting environmental transition by 2030 |
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| Bank of America's Environmental Business Initiative is accelerating the transition to a low-carbon, sustainable economy. Get more details on how this initiative will drive innovation to address climate change and advance the UN SDGs. |
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| 4. Pic du jour: What could go wrong? |
Photo: Gilson Machado Neto/ Instagram via Reuters Brazilian President Jair Bolsonaro, who brags about not being COVID-vaccinated, eats pizza with other officials in New York on Sunday, ahead of President Biden's speech today to the UN General Assembly. |
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| 5. Women rule editing |
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| Photo: Roy Rochlin/Getty Images |
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| Fortune announced this morning that Alyson Shontell, the current co-editor-in-chief of Insider's business division, will become the magazine's next editor-in-chief effective Oct. 6, Axios Media Trends expert Sara Fischer writes. - Why it matters: Shontell will be Fortune's first female editor-in-chief in its 92-year history.
The big picture: Dozens of newsrooms have been appointing women to top roles in the wake of the #MeToo and Black Lives Matter movements — both of which addressed issues around inequality and empowering overlooked communities. - AP earlier this month announced that its D.C. bureau chief, Julie Pace, would be its new executive editor.
- The Washington Post named Pace's predecessor at AP, Sally Buzbee, as the first female top editor in its 144-year history earlier this year.
- Axios last week announced Sara Kehaulani Goo, an alumnus of The Washington Post and NPR, as editor-in-chief, and Aja Whitaker-Moore as executive editor. Sara Goo succeeds Nicholas Johnston, who was promoted to publisher. Aja Whitaker-Moore moves up to Goo's post.
Other major newsrooms — including Vox, ABC News and MSNBC — announced new female leaders in the past year, joining companies including USA Today with women leading their newsrooms. Share this story. |
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| 6. North Korea "full steam ahead" on nukes |
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| This satellite image from Saturday shows an expanding uranium enrichment plant at North Korea's Yongbyon nuclear complex. Photo: Planet Labs Inc. via AP |
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| The director general of the UN's nuclear watchdog warned North Korea is moving "full steam ahead" on its nuclear program, just days after the country claimed to have successfully tested long-range cruise missiles. - The IAEA said last month that North Korea had restarted a key nuclear reactor for the first time since December 2018, after denuclearization talks stalled under President Trump.
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| 7. WeWork resurrection |
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| Illustration: Annelise Capossela/Axios |
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| WeWork will finally become publicly traded next month — two years after its epic IPO flameout — as it completes a SPAC merger announced in March, writes Kia Kokalitcheva, weekend author of Axios Pro Rata. - WeWork Cos. plans to begin trading on the NYSE around Oct. 21. (Bloomberg)
Go deeper: "The $10 trillion mirage," my August interview with the authors of "The Cult of We," a juicy book about former WeWork CEO Adam Neumann. |
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| 8. The great holiday shortage of '21 |
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| Illustration: Aïda Amer/Axios |
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| It'll be hard to find everything for the holidays this year — even staples like coffee and footwear — because of supply chain woes likely to persist at least through spring, Jennifer Kingson writes for Axios What's Next. - Why it matters: Scarce inventory means more scuffles among shoppers in brick-and-mortar stores, fewer deals for Black Friday — and online price wars that could threaten some retailers' livelihoods.
What's happening: Stores of all sizes and specialties are already trying to hoard things in warehouses — from turkeys, stuffing and cranberry sauce to Halloween decorations, video game consoles and those chic fleecy sweaters that everyone seems to want. - Record numbers of cargo ships are bobbing off key ports like Long Beach and L.A. — waiting to be unloaded, due to pandemic restrictions, labor shortages and record prices for Chinese shipping containers.
Big-box retailers are taking matters into their own hands: - Walmart is chartering its own vessels so it won't be at the mercy of overstrapped vendors. Some of those charters are deliberately small enough to be able to unload at secondary ports where there aren't such big backups.
- For the first time, Home Depot "has reserved its own ship, bought merchandise on the spot market and flown in power tools as it copes with supply chain headaches," CNBC reports.
- Lululemon is adding extra air shipments to try to sidestep ports.
State of play: MGA Entertainment and Basic Fun — the distributors behind LOL Surprise! dolls, Little Tikes, Bratz, Tonka and Fisher-Price — say those toys will be scarcer and more expensive, CNN reports. - "The [shipping] container that cost $3,200 last year is now $22,000," MGA Entertainment CEO Isaac Larian said.
The twist: Consulting firms are pumping out rosy spending projections for the coming holiday season. |
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| A message from Bank of America |
| A low-carbon, sustainable future |
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| "The private sector is well-positioned to ensure that the capital needed – at the scale it is needed – can drive the transition to a low-carbon, sustainable economy," said Bank of America vice chairman Anne Finucane. Bank of America is investing $1 trillion by 2030 to accelerate the transition. |
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