Oliver Stone Goes Nuclear at Davos

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In the middle of the crowd gathered at the World Economic Forum, Oliver Stone – an unexpected participant – easily stood out. The filmmaker behind “Wall Street” and “Platoon” has a history of jabbing the political, business and social elite with projects that advance controversial ideas: Think about the film that focuses on Vladimir Putin, Edward Snowden, John F. Kennedy and others.

Mr. Stone comes to Davos with another provocative film, which advocates an issue that has long been whispered here, but rarely spoken aloud: nuclear power is a force for good. In “Nuclear Now!,” which premiered at the Venice Film Festival, he said nuclear has been unfairly blamed by oil companies and others to make the public fear its safety.

For Mr. Stone, nuclear is the only technology that can help reduce carbon emissions from energy, and the danger has been drastically overcome, despite disasters like the failure of the Fukushima power plant in 2011.

The people of Davos seemed eager to listen. The theatrical release of “Nuclear Now!” here is packed – for the point of attendance sitting on the floor. The film was financed in part by two Davos veterans: Roksana Ciurysek-Gedir, a financier, and Zachary Bogue, a venture capitalist and husband of former Yahoo CEO Marissa Mayer.

Appetite for the film may be due to people’s desire to find real solutions to climate change, according to Mr Stone. “Despite our investment in renewables, it does not improve our carbon emissions because we have not tackled the core problem – removing fossil fuels,” said DealBook. “Climate change has forced us to take a new look at nuclear power.”

Seen and heard in Davos: India’s energy minister, Raj Kumar Singh, defended his country’s imports of Russian oil and gas during a panel on the food and energy crisis, moderated by Andrew Ross Sorkin of The Times. And executives are debating the short-term impact of China’s reopening, including whether a burst of spending could boost inflation, or if supply chain easing will be enough to offset it, DealBook heard. Meanwhile, “going green” has become a hot topic, with one PR advisor telling DealBook he recommends companies stay out of politics and not talk about climate initiatives.

Elsewhere in Davos:

Microsoft prepares for another round of layoffs. The software giant will announce on Wednesday that it will cut more jobs, adding to layoffs it made last year. It is unclear how many positions will be affected, but Sky News reports that there could be thousands.

China could suffer a spike in Covid deaths during the Lunar New Year holiday. The country could see as many as 36,000 coronavirus-related deaths a day, according to forecasts by research firm Airfinity. The increase in infections will put pressure on China’s health system already under pressure in the next two weeks.

Albertsons can pay $4 billion in dividends. Washington State’s highest court refused to hear a lawsuit by the state attorney general seeking to block the move, which would have preceded the sale of the grocery chain to Kroger. It’s a victory for Albertsons because it faces more regulatory scrutiny than the sale.

Tesla engineers testified that a video promoting self-driving technology was made. In a deposition taken as part of a wrongful-death lawsuit, the head of the company’s Autopilot division said Tesla workers had planned the car’s route ahead of time and that the drivers had participated in the tests. Video 2016 has claimed no human input is required.

Twitter reportedly experienced a 40 percent drop in daily revenue. A senior engineering executive told employees that the year-over-year decline comes as more than 500 of the company’s top advertisers have paused spending on the platform, according to Information. It’s the latest sign of how cash-strapped Twitter is becoming; the other is an auction of goods from the company’s San Francisco headquarters.

Crypto bulls extended one of the most unlikely rallies of the year, pushing Bitcoin above $21,000 for a second day. It means that the digital currency has now recovered all the losses since the collapse of FTX in November.

The rising tide has lifted most crypto boats. Even some beaten-down tokens – including FTX’s internal token, FTT – have bounced back as investors bet the Fed will slowly raise interest rates, leading to a rally in riskier assets. Shares in Coinbase, a publicly traded crypto exchange, also jumped over the past week.

But crypto analysts are divided on whether the rally is sustainable. Skeptics argue that the foundation for long-term gains has been lost, making the new jump a risky bet for investors.

Meanwhile, there is good news for FTX creditors. Lawyers at Sullivan & Cromwell, the law firm that advised on the collapse of the crypto exchange, announced on Tuesday that the company’s assets are approximately $5.5 billion, including $1.7 billion in cash and $3.5 billion in assets. crypto. What makes this broader crypto rally important for FTX lenders – if it is eternal.

Sam Bankman-Fried sees cracks appearing in crypto empires before implosion, report David Yaffe-Bellany of The Times. Government documents obtained by The Times show that FTX’s founder was aware of ballooning losses at FTX’s sister trading arm, Alameda Research, and that he had borrowed $13 billion from FTX to get out of the hole.

The revelations could be the cornerstone of the prosecutor’s fraud case against Bankman-Fried, which will go to trial in October.

Elsewhere in crypto:

  • Silvergate, a Californian bank that pivoted to crypto lending, reported a $1 billion loss in its most recent quarter due to the collapse of FTX and the decline of its broader crypto assets.

  • News site Semafor plans to buy Bankman-Fried’s own ownership stake, which is worth almost $10 million, The Times reports. (Vox Media and ProPublica previously said they would reproduce Bankman-Fried’s contributions.)

  • Barry Silbert, the founder of crypto conglomerate Digital Currency Group, which is currently under investigation by the SEC, is trying to keep the company from going bankrupt but remains optimistic about the year ahead. “There is no question about our survival,” he told The Wall Street Journal.

The Bank of Japan maintained its policy of aggressively buying government bonds and keeping interest rates in negative territory this morning, after weeks of market speculation it would change tactics. The decision, which followed a two-day meeting, sent the yen to its lowest level against the dollar in nearly three years and pushed Japanese stocks higher, as the country remains in stimulus mode.

Japan stands out among the G7 countries. The BOJ has maintained its monetary policy, in stark contrast to its central bank peers, who have moved in the opposite direction: raising borrowing costs and lifting trillions of securities from their balance sheets while trying to reduce decade-high inflation.

Japan’s economic problems are very different. The country has endured a prolonged cycle of stagflation – the BOJ estimates inflation at 1.6 percent this year – and has been trying to boost investment. In December, the BOJ changed its policy on buying government bonds – known as “yield curve control” – to lure Japanese investors back into the market for treasury notes. That causes government bond yields to rise.

The policy is expensive. The BOJ said it has spent $265 billion on government bonds since December 20 to try and keep bond yields in the target range – “6 percent of annual GDP!”, Deutsche Bank pointed out in a note to clients this morning. But Haruhiko Kuroda, the bank’s governor, defended the policy as “sustainable,” saying it would take time for the yield curve to decide.

Investors looking for a pivot may have to wait for the next BOJ governor. Mr. Kuroda, the longest serving governor of the BOJ, will step down in April, and the last meeting will be in March. Analysts expect little change in policy until a successor is named.

— Wendy Edelbergsenior fellow in economic studies at the Brookings Institution, in the debate in Washington about whether Congress should raise the debt ceiling to allow the country to pay its obligations, including for Social Security recipients and federal contractors.

After years of decline, business is shaking up companies to return to profitability with a vengeance in 2022, according to Lazard’s latest annual report on shareholder activism. Data collected by investment banks shows that the strategy is gaining popularity worldwide, and in the industrial sector.

And 2023 looks set to continue, as evidenced by recent campaigns like Nelson Peltz against Disney.

Last year was the biggest activism since 2018. According to Lazard, 235 campaigns were implemented last year. Non-traditional activists — including institutional firms, private equity shops and individual investors — are responsible for 23 percent of campaigns, nearly double the historical average.

That has a big impact on the corporate board, which has to worry about the growing number of potential activists. “The activist funds that are getting the big headlines, they’re not driving the biggest level of activity anymore,” Rich Thomas, Lazard’s managing director, told DealBook. “It’s really a broader group of hedge funds that are involved in activism and institutional investors that are occasionally involved in this or have not been involved in this.”

The company does not get reprieve for external events. Investors are willing to give the company a break in 2020 and 2021, due to system shocks like the pandemic and supply chain crisis. But the turnaround as the stock’s poor performance unnerved investors. The S&P 500 fell more than 19 percent in 2022, its worst year since 2008 during the global financial crisis.

To boost the lagging stock, activists have focused this year on pushing companies to sell themselves or shed divisions, rather than overhaul operations. (M. & A. focused claims represented 41 percent of all campaigns last year, according to Lazard.) “Where the real money is around the thesis of strategic and transactional activism, rather than operational ones,” Thomas said.

No company is too big to avoid activism. It’s not just Disney that faces weak shareholders: In the past year, investors have taken on giants like BlackRock, Danone and Salesforce. But even relatively small or unknown activists can still shake up corporate titans, due to the growing trend of activists “swarming” on companies once they have been targeted.

“When a branch breaks, it affects a lot of others,” Thomas said.

Offer

Wisdom

  • More than a third of Congress gets campaign funding from FTX executives. (CoinDesk)

  • Global oil demand is set to hit a record high this year as China reopens, according to the International Energy Agency. (FT)

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