Good morning readers. In a stark wake-up call, Matthew Perry's accidental death highlights the dangers of the unregulated use of ketamine for mental health. Despite being a proven treatment under strict clinical watch, Perry's demise, linked to high ketamine levels, underscores the risks associated with its unsupervised use, especially from online providers. His death sheds light on the drug's growing, yet risky, off-label use for depression and anxiety, raising serious concerns among regulators and medical professionals about the safety and monitoring of this powerful anesthetic in non-clinical settings.

Let’s jump into today’s storylines.

In today’s digest:

• Rich countries lean on larger tax revenues amid interest rate hikes

• Headline Hustle: Apple halts smartwatch sales amid patent dispute, Marvel drops Jonathan Majors, Amazon in talks to invest in Diamond Sports

• Houthi attacks and their global trade disruption

• Pulse Points: What’s Trending

ECONOMY

We're entering an era of higher taxes

In a world where certainty often eludes us, one trend has emerged as clear as day: wealthy nations are increasingly leaning on heftier tax revenues to bankroll state expenditures amid escalating interest rates. This shift, reminiscent of economic strategies from bygone eras, marks a significant departure from the market-driven dogma that has dominated since the 1980s.

Taxing times

An unprecedented rise in tax revenues relative to Gross Domestic Product (GDP) is being seen across rich countries, including France, Japan, South Korea, the U.S., and Germany.

• Notably, U.S. tax receipts have soared to nearly 28% of GDP, a peak not seen since the 1960s.

• Contrary to expectations, this increase is not a direct result of hiked tax rates but stems from high inflation causing fiscal drag—pushing taxpayers into higher tax brackets.

The infusion of these additional revenues is pivotal for governments grappling with diverse and pressing needs. These include ramping up military spending, implementing new industrial policies, supporting aging populations, and intensifying efforts to combat climate change. This trend suggests a shift towards a more pronounced governmental role in economies, a stark contrast to the market-oriented consensus that has prevailed since the 1980s. Currently, governments in advanced economies are spending about 41% of their GDP, up from 39% before the pandemic.

What does this mean for us? Despite the current reliance on fiscal drag, experts anticipate actual tax increases in these economies, driven by rising borrowing costs and the need for increased state spending. This comes at a time when government debt has escalated, with interest payments on this debt expected to rise sharply, thereby making borrowing and refinancing more burdensome.

Looking ahead…this shift in economic policy among rich nations reflects a new approach to addressing modern challenges but comes with its own set of complexities and potential risks. It indicates a significant rethinking of the role of government in the economy, with implications for both domestic and global economic landscapes.

Headline Hustle

⌚️ Apple halts smartwatch sales amid patent dispute. Apple's gearing up for a frosty holiday season as it braces for a U.S. import ban on its latest smartwatch models, the Apple Watch Series 9 and Ultra 2. This ban, kicking in right before Christmas, is a response to a patent infringement ruling favoring medical tech firm Masimo. Amidst crucial holiday sales, Apple's facing a decline in overall sales for the first time since 2019. The tech giant isn't taking this lying down, though. They're appealing the decision, considering legal and technical tweaks to keep the watches on wrists. The ban, a small blip in Apple's vast business empire, spotlights broader challenges, like Europe's new tech regulations and China's shift away from foreign tech.

🦸‍♂️ Marvel drops Jonathan Majors from MCU after assault charges. Jonathan Majors' tenure in the Marvel Cinematic Universe has come to an abrupt end. Convicted of misdemeanor assault and harassment, Majors faces a potential year in jail, with sentencing set for February. His departure throws a wrench into Marvel's grand plans, where he was pegged as the next major villain, Kang, in the sprawling superhero saga. This shake-up adds to Disney's current challenges, as the studio navigates post-"Endgame" hurdles, including fluctuating box office returns and a need for fresh narratives as emphasized by Disney CEO Bob Iger. While Disney's stock is up, the MCU faces a pivotal moment: to recast Kang or alter its storyline, decisions needed urgently amidst a landscape where even the mightiest heroes and villains aren't immune to real-world consequences.

⚾️ Amazon in talks to invest in Diamond Sports. Amazon is eyeing a strategic move into regional sports broadcasting, with talks to invest in Diamond Sports Group, a major player holding local rights to numerous MLB, NBA, and NHL teams. Despite Diamond's bankruptcy filing earlier this year, this potential deal could mark a significant expansion of Amazon's sports content, positioning Prime Video as a streaming hub for Diamond's games. This negotiation follows Amazon's existing sports ventures, including NFL streaming rights and partial ownership of the YES Network. With traditional cable TV losing ground to streaming services, Amazon's possible investment could revitalize Diamond, entangled in a bid to restructure its hefty $8 billion debt and pivot towards a more digital-focused strategy.

TRADE

Trade on the brink due to Red Sea attacks

The Red Sea, a crucial artery for global commerce, has become the stage for a series of high-stakes attacks that are sending shockwaves through global trade. Backed by Iran, Houthi militants, entangled in the Israel-Hamas conflict, have unleashed a barrage of assaults on key shipping routes, plunging one of the world's busiest maritime passages into chaos. This crisis is not just a regional concern; it has far-reaching consequences that are reshaping the international stage.

The impact of these attacks is nothing short of seismic. Major shipping lines and oil giants, including industry titans like MSC, Maersk, Hapag Lloyd, Evergreen, and BP, have been forced to make a sobering decision: either halt operations or reroute their services. The attacks have not only disrupted trade but have also stoked fears of rising prices for essential goods and fuel.

A global commitment. Responding to the escalating threat, U.S. Defense Secretary Lloyd Austin has orchestrated a collaborative international security initiative. This coalition of nations is working to establish a dedicated force to protect ships navigating these treacherous waters. The formation of this task force highlights the critical importance of the Red Sea shipping routes and the collective commitment of the global community to safeguard maritime security.

Big picture: The disruption in global maritime routes has led to soaring ocean freight costs and shipping delays, impacting countries like Israel and Egypt heavily reliant on these routes. Additionally, the expansion of the high-risk zone could increase insurance premiums for shippers, affecting consumers and highlighting the vulnerability of global trade to geopolitical unrest.

SNIPPETS

Pulse Points

• OpenAI is enhancing its safety measures against harmful AI by establishing a new "safety advisory group" to oversee technical teams and granting veto power to the board.

• The U.S. SEC has postponed its decision on the Grayscale Ethereum Futures Trust ETF listing, adding Grayscale to the list of firms with delayed or denied petitions by the regulator.

• Italian Cardinal Giovanni Angelo Becciu was sentenced to 5½ years in prison by a Vatican court for embezzlement and fraud, a significant downfall for the former influential adviser to the pope.

• A Russian court is seeking information from the prison service on the whereabouts of opposition politician Alexei Navalny, who has been reportedly missing for nearly two weeks from the penal colony where he is serving 30-year sentences.

• The Vatican issued guidelines allowing priests to bless same-sex relationships, clarifying that these ceremonies should not equate to heterosexual marriage.

• The crypto industry has amassed a $78 million political war chest through PACs like Fairshake to support pro-crypto candidates in the upcoming presidential election year.

Was this email forwarded to you? Feel free to sign up using the following link: https://www.pulseofprogress.info/