Democrats' Shutdown Drama & OpenAI's Revenue Problem

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Hi readers, happy Veterans’ Day! Today we’re covering the Democrats’ shutdown drama, COP30, an interesting White House visit, problems at the BBC, the U.S. jobs market, Trump’s $2,000 check plan, and OpenAI’s revenue issues.

“It was never the right time or it was always the right time, depending on how you looked at it.” ― Ann Patchett, Bel Canto

A Shutdown Schism In The Senate

On Sunday night, eight Senate Democrats broke party lines to pass the first stage of a temporary spending bill that will end the government shutdown. Last night, that bill passed the Senate 60-40, and it will likely pass the House tomorrow, as today’s a federal holiday. Democratic Senators Dick Durbin (IL), Jacky Rosen (NV), John Fetterman (PA), Catherine Cortez Masto (NV), Jeanne Shaheen (NH), Maggie Hassan (NH) and Tim Kaine (VA) – as well as Angus King (ME), who caucuses with Senate Democrats, are the individuals who split with their party. 

Prior to Sunday’s surprise, Democrats were holding out against the GOP’s temporary funding bill, saying they would only pass a bill that includes a permanent extension to Affordable Care Act (ACA) tax credits, which make healthcare affordable for millions of Americans. Many analysts have stated that last week’s electoral sweep for Democrats was a direct result of their willingness to fight for Americans’ access to healthcare, but thanks to the eight Democratic Senators, that image of defiance is now gone.

Technically, the Democrats did trade their votes for something, though it’s likely to amount to nothing. Senate Republicans agreed to hold a Senate vote on the ACA subsidies by mid-December, but there’s no guarantee that a subsidy extension would pass the Senate or even reach the floor of the House. Meanwhile, Senate Minority Leader Chuck Schumer is under heavy fire from his entire party for his inability to hold the party line. 

A Climate Summit As Temperatures Peak

The COP30 climate summit kicked off in Brazil yesterday, attracting flocks of diplomats to the Amazon rainforest city of Belem. Normally, COP summits come with lofty goals attached, but this year’s event is more grounded – the host country and other nations have called on participants to focus on smaller issues that require less of an international consensus for progress, such as fighting deforestation. Notably absent from the conference is the U.S., which declined to send an official delegation (although Gavin Newsom is in attendance). Over the next two weeks, countries will hold a wide variety of meetings in order to hammer out climate agreements for the next year in order to address the growing problem of global warming.

Which, by the way, isn’t getting any better. Late in October, U.N. Secretary-General António Guterres stated that it’s “inevitable” that global heating will breach the 1.5°C goal set out in the Paris Climate Agreement. “The truth is that we have failed to avoid an overshooting above 1.5C in the next few years,” he said. “And that going above 1.5C has devastating consequences. Some of these devastating consequences are tipping points, be it in the Amazon, be it in Greenland, or western Antarctica or the coral reefs.”

Because humanity has failed to limit global warming, various parts of the planet are now actually making climate change even worse. Melting permafrost in the Arctic tundra is releasing trapped carbon dioxide and methane; the Amazon is struggling to absorb carbon dioxide at normal levels; and peatlands (marshes that make up roughly 3% of the Earth’s surface) are expected to soon start releasing massive amounts of carbon dioxide if warming continues.

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Al-Qaeda Comes To Washington (Kind Of)

• Yesterday, a former deputy leader of al-Qaeda in Iraq (according to Iraqi intelligence) shook hands with the president of the U.S. at the White House. That’s not a typo – Syrian President Ahmed al-Sharaa paid a visit to Washington on Monday, meeting with President Trump and posing for pictures with his newfound ally. During their meeting, Trump announced that he would be suspending U.S. sanctions on Syria, while al-Sharaa reportedly committed to joining the Global Coalition to Defeat ISIS.

• Al-Sharaa played a pivotal role in the collapse of Syria’s Assad regime last December. His Hay'at Tahrir al-Sham (HTS) rebel group – which developed out of a Syrian al-Qaeda affiliate that al-Sharaa had founded in 2011 – spearheaded the lightning offensive that pushed Assad out of Damascus, earning himself the backing of the U.S. government. 

• “We want to see Syria become a country that’s very successful, and I think this leader can do it,” Trump said yesterday. “People say he’s had a rough past? We’ve all had rough pasts. But he has had a rough past, and I think frankly if he didn’t have a rough past, you wouldn’t have a chance.” al-Sharaa is now tasked with rebuilding Syria following years of civil war – according to the World Bank, this could cost up to $216 billion.

London Media Is Falling Down

• Two BBC executives – Director-General Tim Davie and news CEO Deborah Turness – resigned on Sunday after the broadcaster came under fire for running an edited version of a speech Trump delivered before his supporters stormed the Capitol on January 6. The BBC’s edits removed portions of the speech in which Trump told his supporters to march towards the Capital “peacefully and patriotically,” but spliced in a part where he told them to “fight like hell,” making it sound like he was directly telling them to storm the Capitol.

• The edited speech was actually part of a documentary that aired last year, but the story gained traction recently after The Daily Telegraph published an internal BBC memo that criticized the documentary’s editing. Yesterday, Trump shoveled coals on the fire in London, threatening to sue the broadcaster for $1 billion. The BBC, according to Trump’s lawyers, needs to fully retract the documentary, apologize for the editing, and “appropriately compensate President Trump for the harm caused” if it wants to avoid the lawsuit. “The BBC is on notice,” Trump’s attorneys wrote, adding, “PLEASE GOVERN YOURSELF ACCORDINGLY.”

Additional World News

• China’s CO2 emissions have been flat or falling for past 18 months, analysis finds (Guardian)

• At least eight killed after car explodes near Delhi's Red Fort (BBC) 

• Former French president Sarkozy released from prison after three weeks (BBC)

• Yemen's Houthi rebels signal that they've stopped attacks on Israel and ships in the Red Sea (AP)

• Iran says US sending contradictory messages on nuclear talks (Reuters)

• Thailand Suspends Trump-Backed Peace Talks With Cambodia (NYT, $)

The Job Market Ain’t Working

• According to economists at UBS, the world’s largest private bank, America’s labor market is in dire straits. In last week’s “US Economics Weekly” report, the bank stated that “unemployment insurance claims, layoff announcements and WARN notices have all been running ahead of the pre-pandemic pace. Even the lagged Business Employment Dynamics data, the gold standard of data on job creation and job destruction dynamics, has been showing the pace of job loss at or above the pre-pandemic pace through the latest data.”

• While markets are waiting for official jobs data from the Bureau of Labor Statistics (which is “flying blind” due to the government shutdown), other economic reports seem to suggest that Americans are struggling to find work. A report published by Challenger, Gray & Christmas stated that U.S. corporations laid off 157,000 people in October, the highest number of monthly layoffs seen since July 2020. Opportunities, meanwhile, are scarce – Indeed has reported that job listings are at their lowest level since 2021, retailers like Target and Walmart are hiring significantly fewer seasonal workers for the holidays, and the University of Michigan’s consumer confidence index recently reached 50.3, a hair above an all-time low set in 2019.

Trump Wants To Make It Rain

• While people are struggling to find work, the president is looking to help. Or buy their votes, depending on who you ask. Over the weekend, Trump posted on TruthSocial that “A dividend of at least $2000 a person (not including high income people!) will be paid to everyone.” The money, according to the president, would come from revenues raised from his controversial tariff policies, which Americans have cited as their second-biggest economic concern.

• The $2,000 checks would require Congressional approval to go out, and it’s not clear that White House officials are even in agreement with Trump’s plan. U.S. Treasury Secretary Scott Bessent has stated that tariff revenues will be used to pay down the government’s $38.12 trillion debt, and calculations show that mailing $2,000 checks to all U.S. adults making below $100,000 would cost the government roughly $300 billion. The tariffs have only brought in $90 billion in net revenues, meaning Trump’s plan would add about $210 billion to the national debt.

Additional USA News

• Democrats Were Winning the Shutdown. Why Did They Fold? (NYT, $)

• Air travelers face frustration as FAA's further drop in flights takes effect (AP)  

• Supreme Court declines to revisit gay marriage decision (NPR)

• Canada loses measles elimination status, with US on track to follow (BBC)

• Trump says Marjorie Taylor Greene has 'lost her way' by criticizing him and Republicans (Reuters)

• Recessions have become ultra-rare. That is storing up trouble (Economist, $) 

His AI Is Open, But His Revenue Is A Secret

• If you ever see billionaire OpenAI CEO Sam Altman on the street, do not under any circumstances ask him about his company’s revenue. He’s very sensitive about his revenue. In a podcast episode released earlier this month, Brad Gerstner (an investor in OpenAI) asked Altman about the company’s massive spending commitments. “How can a company with $13 billion in revenues make $1.4 trillion of spend commitments?” Gerstner asked. “You’ve heard the criticism, Sam.”

• “If you want to sell your shares, I’ll find you a buyer,” Altman replied. “Enough.” Presumably, these two men have some sort of professional relationship – Gerstner’s Altimeter Capital has invested in OpenAI across multiple funding rounds, meaning Altman at some point wanted access to his money, business acumen, or connections. But now it looks like that bridge has been at least partially burned.

• While Altman eventually answered Gerstner's question by saying that his revenue numbers were wrong and that OpenAI’s cashflow was growing “growing steeply,” the investor’s concerns are more than just a hallucination. Late last week, OpenAI CFO Sarah Friar floated the idea that the U.S. government could use taxpayer dollars to “backstop” the company’s plans to purchase trillions of dollars in datacenter capacity. Adding to concerns over the company’s cashflow, OpenAI has been essentially paying for new datacenters with shares – not really a sign that the AI startup is flush with cash. If the company isn’t able to pay for its $1.4 trillion in datacenter commitments, the entire market – including your retirement portfolio – will likely feel the crash.

Additional Reads

• New data: Early peanut feeding is cutting kids’ food allergies (Vox)

• MLB pitchers Emmanuel Clase and Luis Ortiz charged with taking bribes to rig pitches (NPR) 

• Alex Karp Goes to War (Wired, $)

• The algorithm failed music (Verge)

• Dundee and US surgeons achieve world-first stroke surgery using robot (BBC)

• How Inventors Find Inspiration in Evolution (NYT, $)

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Peanut For Your Thoughts

Sam Altman apparently met his husband “in Peter Thiel's hot tub at 3 a.m.” Talk about bonding over shared trauma.

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