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There is an inconvenient truth about Joseph Schumpeter, patron saint of this column. As an economist, his biggest contribution was to single out entrepreneurs as core to the business cycle. Early in his career he made champions of them, describing them as swashbuckling iconoclasts who overthrow the existing order motivated by sheer chutzpah. Yet later in life, when he coined his famous term “creative destruction”, he applied it not to such individuals but to industrial behemoths, even monopolies. They were compelled to innovate in order to “keep on their feet, on ground that is slipping away from under them”, he wrote. A far cry from the entrepreneurial heroes of his youth. Listen to this story. Enjoy more audio and podcasts on More

Brazilian businesspeople are not easily shocked. In the past decade they have seen two business empires collapse in ignominy. Eike Batista, for a time Brazil’s richest man, lost his ports-to-mines group amid charges of bribery and market manipulation (for which he was briefly jailed). Marcelo Odebrecht, the scion of a construction dynasty, went to prison over the “Big Oily” graft scheme centred on Petrobras, the state oil giant. Listen to this story. Enjoy more audio and podcasts on More

Lucid will offer buyers of certain trims of its Air luxury sedan a $7,500 “credit”, similar to the EV tax credits offered by the U.S. goverment.
The discounts apply to certain upscale trims of the Air purchased by March 31.
The move follows discounts by EV rivals Tesla and Ford.

Courtesy: Lucid Motors

Lucid Group said Thursday that buyers of certain versions of its pricey Air electric luxury sedan will be eligible for a $7,500 “credit.”
But that credit will be paid by Lucid, not the U.S. government.

Lucid said that customers who buy Air Touring and Air Grand Touring models in “certain configurations” before March 31 will be eligible for the $7,500 discount.
The novel twist on discounting follows price cuts by EV rivals Tesla and Ford Motor. Both cut prices to make more of their EVs eligible for new federal tax credits, which are available on certain U.S.-built electric cars under $55,000 and electric trucks and SUVs priced under $80,000. (Tesla slightly increased some of its prices last week after the government clarified the credit rules.)
Analyst have expressed concerns that an EV price war could be brewing in the wake of the moves by Tesla and Ford.
The Lucid Air is built in Arizona, but at a starting price of $87,400 it’s far too expensive to qualify for the federal tax credits. The trims that Lucid is discounting are even pricier: The Air Touring starts at $107,400; the Air Grand Touring at $138,000.
“We think our customers still deserve a $7,500 credit for choosing an EV,” said Zak Edson, Lucid’s sales chief.

But Lucid’s true motivation might be more about clearing out inventory. As of Thursday morning, company’s website listed 15 Air Grand Tourings and seven Air Tourings available for immediate delivery.
Lucid will report its fourth-quarter and full-year results after the U.S. markets close on Feb. 22. The company’s stock is up more than 68% so far this year, giving it a market value of about $19.38 billion.

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Southwest’s COO plans to apologize before the Senate panel and express confidence in technology improvements and its own schedule after the holiday meltdown.
The Southwest pilots union’s president will also testify and plans to say the carrier ignored warning signs about its operation.

Passengers check in for a Southwest Airlines Co. flight inside Terminal 1 at Los Angeles International Airport (LAX) in Los Angeles, California, on August 10, 2022.
Patrick T. Fallon | AFP | Getty Images

Southwest Airlines’ chief operations officer is scheduled to face questions from a Senate panel on Thursday over the carrier’s December meltdown that stranded thousands of passengers over the holidays.
Andrew Watterson plans to apologize for the travel chaos before the Senate Commerce Committee. The president of the Southwest Airlines Pilots Association, Casey Murray, will tell the panel that the carrier ignored warning signs about its operation, according to written testimony reviewed by CNBC.

Southwest has said it canceled more than 16,700 flights between Dec. 21 and Dec. 31. The issues started with severe winter weather around the U.S. but the carrier lacked the technology to keep pace with the numerous flight changes, prompting the airline to scrap most of its schedule for several days to reset its operation.
The chaos pushed Southwest to a loss in the last quarter, costing it $800 million in pretax earnings.
The incident capped a year of chaotic travel for many passengers as airlines struggled to ramp up to meet a rebound in demand. Pressure on the industry has grown over the last year while some lawmakers and the Biden administration are seeking stronger consumer protection.
The pilots union, which is in contract negotiations with the company, as well as the flight attendants’ union, have warned about scheduling problems for years.
“Warning signs were ignored. Poor performance was condoned. Excuses were made. Processes atrophied. Core values were forgotten,” Casey Murray said in written testimony ahead of Thursday’s hearing.

Southwest’s COO plans to defend technology improvements since the debacle in December and others in the works. Its executives have said its crew rescheduling software wasn’t designed to handle so many cancellations that occurred in the past, but its provider, General Electric said it has delivered updates to Southwest that the airline is testing.
The hearing is scheduled to begin at 10 a.m. ET, but a Senate briefing on the Chinese balloon that the U.S. shot down last weekend will likely delay questioning.

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Nine hours apart and with magnitudes of 7.8 and 7.5 on the Richter scale, the quakes rocked Turkey and Syria and were the region’s strongest in nearly a century.
This year is a critical inflection point for Turkey, as it approaches its presidential election on May 14.
Turkish President Recep Tayyip Erdogan’s response to the disaster — and potential calls for accountability as to why so many Turkish buildings collapsed so quickly — will play a major role in his political future.

Civilians look for survivors under the rubble of collapsed buildings in Kahramanmaras, close to the quake’s epicentre, the day after a 7.8-magnitude earthquake struck the country’s southeast, on February 7, 2023.
Adem Altan | AFP | Getty Images

Life for millions across Turkey and Syria changed forever on Monday, as two consecutive earthquakes sent shockwaves across hundreds of miles.
Nine hours apart and with magnitudes of 7.8 and 7.5 on the Richter scale, the quakes rocked Turkey and Syria and were the region’s strongest in nearly a century.

At the time of writing, the death toll from the quakes is more than 12,000, with many still missing and critically injured. The World Health Organization put the number of people affected by the disaster at 23 million. At least 6,000 buildings collapsed, many with residents still inside them. Rescue efforts continue to be the top priority, with some 25,000 deployed in Turkey and thousands more sent in from overseas — but a bitter winter storm now threatens the lives of the survivors and of those still trapped under rubble.
Syria, ravaged by 12 years of war and terrorism, is the least prepared to deal with such a crisis. Its infrastructure is heavily depleted, and the country remains under Western sanctions. Thousands of those in the affected areas are already refugees or internally displaced people.
With the dust of the catastrophe still settling, regional analysts are zoning in on the longer-term rippling effect that the catastrophe could have on Turkey, a country whose 85 million-strong population was already mired in economic problems — and whose military, economy, and politics have a major impact far beyond its borders.

A crucial year for Turkey

This year will serve as a critical inflection point for Turkey, as it approaches a presidential election on May 14. The result of that election — whether current President Recep Tayyip Erdogan stays in power or not — has massive consequences for Turkey’s population, economy, currency, and democracy.
Erdogan’s response to the disaster — and potential calls for accountability as to why so many buildings were insufficiently designed to withstand such tremors — will now play a major role in his political future.

“If the rescue effort is mishandled and people get frustrated, there’s backlash,” Mike Harris, founder of Cribstone Strategic Macro, told CNBC on Tuesday. “And the other issue of course, is the buildings and which ones have gone down. To the extent these were built under the new codes and the authorities didn’t impose regulations, there could be some serious blowback for Erdogan. So Erdogan’s lost control of the narrative.”

Erdogan called for the early May election amid a national cost of living crisis, with local inflation above 57% — down from more than 80% between August and November. Several analysts say that the move reveals Erdogan’s urgency to secure another term in power before his controversial economic policies backfire.
Harris described the president created “this weird situation where inflation is running at 80%, but he needs to keep the currency stable between now and the election.”
Through very unorthodox policies, Erdogan has “found a very creative way, a very costly way, to de-dollarize the economy, basically,” he said, giving examples like allowing Turks to keep their bank deposits at a 13% interest rate, then promising to cover their losses, if the currency drops further.

Harris boldly predicted: “Actually, the currency has to collapse if he wins, because there will be no confidence and he’s created this artificial scenario that can’t be sustained for a prolonged period of time.”
Additionally, Erdogan’s earlier fiscal pre-election promises — populist moves like increasing salaries and lowering the pension age — may be impossible now, as more public funds will need to be directed toward rebuilding entire cities and towns.

Economic anxiety

Turkey’s economic decline has been fueled by a combination of high global energy prices, the Covid-19 pandemic and war in Ukraine, and, predominantly, by economic policies directed by Erdogan that have suppressed interest rates despite soaring inflation, sending the Turkish lira to a record low against the dollar. Turkey’s FX reserves have dropped sharply in recent years, and Ankara’s current account deficit has ballooned.
The Turkish lira lost nearly 30% of its value against the dollar in the last year, severely damaging Turks’ purchasing power and hurting Erdogan’s popularity.
Turkey’s opposition parties have not yet put forth their candidate. The strongest potential challenger, Istanbul Mayor Ekrem Imamoglu, was arrested and slapped with a political ban in December over charges his allies say are politically motivated and used solely to prevent him from running for president.

Investors in recent years have been pulling their money out of Turkey in droves. One major emerging markets guru, Mark Mobius of Mobius Capital Partners LLP, remains bullish despite the earthquake disaster and economic problems.
“When it comes to investing in Turkey, we still believe it’s a viable place to invest,” Mobius said. “In fact, we do have investments there. The reason is the Turks are so flexible, so able to adjust to all these disasters and problems … even with high inflation that with a very weak Turkish Lira … So it doesn’t scare us at all to invest in Turkey.”
Mobius did note the glaring issue of Turkey’s earthquake preparation, which may soon come to haunt Erdogan’s election chances.
“This is one of the big problems, the building codes in some of these areas are not up to par,” he said.

NATO and Turkey’s powerful role on the global stage

Internationally, Turkey’s future affects the war in Ukraine, given Erdogan’s role as a mediator between Ukraine and Russia. Turkey is the main NATO member still standing in the way of Sweden and Finland’s accession to the powerful defense alliance.
Ankara is also brokering the Black Sea Grain Initiative between Ukraine and Russia, which allows vital supplies of grain to be exported from Ukraine to the rest of the world despite a Russian naval blockade on Ukraine’s Black Sea ports.
Erdogan’s response to the earthquakes — and subsequent election performance — will have an impact on all of these.

Russian President Vladimir Putin is expected to meet Turkey’s President Recep Tayyip Erdogan on Thursday.
Anadolu Agency | Anadolu Agency | Getty Images

Turkey will get some relief from Western pressure on its NATO stance in the wake of the earthquakes, but not for long, says Sinan Ulgen, chairman of the Istanbul-based Center for Economics and Foreign Policy.
“It’s going to be temporary,” Ulgen said. “Turkey will look at a few weeks of reprieve, but after that it will be more back to business on the foreign policy side.”
For now, Western allies and countries from around the world are sending aid and rescue teams to help with Turkey’s disaster relief efforts. Ankara will need to roll out massive public spending to support those in need and rebuild all the areas affected by the quakes.
“The positive side is that Turkey has fiscal space,” Ulgen said. Turkey has a public debt-to-GDP ratio of around 34%, which is very low compared to the U.S. and Europe. According to him, this “means that Turkey has room for fiscal spending, even if that means a sizeable increase in the public debt ratio.”
As a large country, Turkey has significant capacity to handle natural emergencies. Still, Ulgen added, “no matter what the capacity at hand, it was going to be insufficient to respond to this type of disaster unfortunately.”

Correction: This story has been updated to correctly state the epicenters of the two earthquakes that impacted Turkey and Syria.

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PepsiCo’s fourth-quarter earnings and revenue topped Wall Street’s estimates.
The food and beverage giant’s price hikes to mitigate inflation buoyed sales for snacks and drink, but the strategy has also hurt demand.
Frito-Lay North America reported flat volume for the quarter, despite double-digit revenue growth for Doritos, Cheetos and many other brands.

Pepsi sodas are displayed on shelves at a Walmart Supercenter on December 06, 2022 in Austin, Texas. PepsiCo, the maker of Pepsi soda, plans to cut hundreds of corporate jobs at its North American division according to a news report from The Wall Street Journal.
Brandon Bell | Getty Images

PepsiCo on Thursday reported quarterly earnings and revenue that beat analysts’ expectations, fueled by higher prices for its snacks and drinks.
But the company saw volume fall 2% across its food business worldwide as those price hikes hurt consumer demand. Still, Pepsi plans to sharpen its “revenue management,” which typically means raising prices, based on projections that inflationary pressure will persist in 2023.

Shares of the company rose more than 1% in premarket trading.
Here’s what the company reported compared with what Wall Street was expecting, based on a survey of analysts by Refinitiv:

Earnings per share: $1.67 adjusted vs. $1.65 expected
Revenue: $28 billion vs. $26.84 billion expected

The food and beverage giant reported fourth-quarter net income of $518 million, or 37 cents per share, down from $1.32 billion, or 95 cents per share, a year earlier.
Excluding gains from selling its juice business, write-downs of its Russian assets and other items, Pepsi earned $1.67 per share.
Net sales rose 10.9% to $28 billion. The company’s organic revenue, which strips out the impact of acquisitions and divestitures, climbed 14.6% in the quarter.

But demand for Pepsi products actually shrank during the quarter. Volume, which excludes pricing and currency fluctuations, fell 7% at Quaker Foods North America and 2% at its North American beverage division.
Frito-Lay North America reported flat volume for the quarter, despite double-digit revenue growth for Doritos, Cheetos, Smartfood and many of its other brands.
Looking to 2023, Pepsi is projecting a 6% increase in organic revenue and 8% growth in its core constant currency earnings per share. Wall Street is anticipating net sales growth of 3.5% and earnings per share growth of 7.3%.
Executives said in prepared remarks that the company is projecting its North American divisions will stay resilient and its international markets will perform well in 2023.
Read the full PepsiCo earnings report here.

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Environmental law firm ClientEarth, in its capacity as a shareholder, filed the lawsuit against the British oil major’s board at the high court of England and Wales on Thursday.
It alleges 11 members of Shell’s board are mismanaging climate risk, breaching company law by failing to implement an energy transition strategy that aligns with the landmark 2015 Paris Agreement.
“We do not accept ClientEarth’s allegations,” a Shell spokesperson said.

Shell recently reported its highest-ever annual profit of nearly $40 billion.
Paul Ellis | Afp | Getty Images

Shell’s directors are being personally sued for allegedly failing to adequately manage the risks associated with the climate emergency in a first-of-its-kind lawsuit that could have widespread implications for how other companies plan to cut emissions.
Environmental law firm ClientEarth, in its capacity as a shareholder, filed the lawsuit against the British oil major’s board at the high court of England and Wales on Thursday.

It alleges 11 members of Shell’s board are mismanaging climate risk, breaching company law by failing to implement an energy transition strategy that aligns with the landmark 2015 Paris Agreement.
The claim, which has the backing of institutional investors with over 12 million shares in the company, is said to be the first case in the world seeking to hold a board of directors liable for failure to properly prepare for the energy transition.
“Shell may be making record profits now due to the turmoil of the global energy market, but the writing is on the wall for fossil fuels long term,” Paul Benson, senior lawyer at ClientEarth, said in a statement.
“The shift to a low-carbon economy is not just inevitable, it’s already happening. Yet the Board is persisting with a transition strategy that is fundamentally flawed, leaving the company seriously exposed to the risks that climate change poses to Shell’s future success — despite the Board’s legal duty to manage those risks,” Benson said.

We hope the whole energy industry sits up and take notice.

Mark Fawcett
Chief Investment Officer at Nest

The group of investors supporting the claim include U.K. pension funds Nest and London CIV, Swedish national pension fund AP3, French asset manager Sanso IS and Danske Bank Asset Management, among others. Altogether, the institutional investors hold more than half a trillion U.S. dollars in total assets under management.

“We do not accept ClientEarth’s allegations,” a Shell spokesperson said. “Our directors have complied with their legal duties and have, at all times, acted in the best interests of the company.”
“ClientEarth’s attempt, by means of a derivative claim, to overturn the board’s policy as approved by our shareholders has no merit. We will oppose their application to obtain the court’s permission to pursue this claim,” they added.
Shell, which is aiming to become a net-zero emissions business by 2050, said it believes its climate targets are Paris-aligned.
ClientEarth said leading third-party assessments have suggested this is not the case, however, noting Shell’s strategy excludes short to medium-term targets to cut the emissions from the products it sells, known as Scope 3 emissions, despite this accounting for over 90% of the firm’s overall emissions.
The aspirational goal of the Paris Agreement is to pursue efforts to limit global heating to 1.5 degrees Celsius above pre-industrial levels by slashing greenhouse gas emissions. The fight to keep global heating under 1.5 degrees Celsius is widely regarded as critically important because so-called tipping points become more likely beyond this level. These are thresholds at which small changes can lead to dramatic shifts in the Earth’s entire support system.
To be sure, the burning of fossil fuels, such as oil and gas, is the chief driver of the climate emergency.

Big Oil profit bonanza

The case comes shortly after Shell reported its highest-ever annual profit of nearly $40 billion.
The energy giant’s 2022 earnings smashed its previous annual profit record of $28.4 billion in 2008 and were more than double the firm’s full-year 2021 profit of $19.3 billion.
Shell CEO Wael Sawan described 2022 as a “huge year” for the company, saying he felt privileged to be stepping into the role he started on Jan. 1.
“As we look ahead, I think we have a unique opportunity to be able to succeed as the winner in the energy transition. We have a portfolio that I think is second to none,” Sawan said.
Shell’s results came as part of a Big Oil profit bonanza last year, bolstered by soaring fossil fuel prices and robust demand since Russia’s full-scale invasion of Ukraine.

Activists from Greenpeace set up a mock-petrol station price board displaying the Shell’s net profit for 2022 as they demonstrate outside the company’s headquarters in London on Feb. 2, 2023.
Daniel Leal | Afp | Getty Images

Nest Chief Investment Officer Mark Fawcett said the case against Shell’s board of directors showed investors were prepared to challenge those who aren’t deemed to be doing enough to transition their business.
“We hope the whole energy industry sits up and takes notice,” Fawcett said.
Separately, London CIV’s Head of Responsible Investment Jacqueline Amy Jackson said, “In our view, a Board of Directors of a high-emitting company has a fiduciary duty to manage climate risk, and in so doing, consider the impacts of its decisions on climate change, and to reduce its contribution to it.”
“We consider that ClientEarth’s claim is in our client funds’ interests as a shareholder of Shell, and we support it,” Jackson added. More

The U.S. News & World Report released its 13th annual ranking of the best hotels for travelers this week.
The rankings, published Tuesday, are based on three factors: the number of awards received from the travel industry, a hotel’s star rating, and guest reviews from the travel website Tripadvisor.

More weight was given to recipients of “highly selective” awards, as well as those with more traveler reviews, according to the press release. That makes it harder for new hotels to break into the upper ranks of the annual list.
The report ranks only “luxury” hotels and resorts, which U.S. News defines as those that consistently average from 4- to 5-star ratings, though it now includes select hotels with 3.5 stars too, the company said.
To be considered, hotels must also have at least 20 rooms, according to the release.

Best hotels in the U.S.

These are the top ranked hotels in the U.S.:

Acqualina Resort & Residences — Miami, Florida
The Canyon Suites at The Phoenician, a Luxury Collection Resort — Scottsdale, Arizona
Pendry West Hollywood — Los Angeles, California
The Sanctuary at Kiawah Island Golf Resort — Kiawah Island, South Carolina
The Inn & Club at Harbour Town, Sea Pines Resort — Hilton Head Island, South Carolina

Miami’s Acqualina Resort & Residences took the top spot in the United States for the first time. It has three pools, ocean views and an award-winning spa.
U.S. News also published additional hotel rankings that can be searched by state or by city.
For example, travelers can search for the best hotels in California, or explore hotel rankings in 46 different towns and locations there, such as La Jolla, Disneyland and Napa Valley.
They can then filter hotels based on star ratings, price and amenities.
Best hotels in Europe
These are the top ranked hotels in Europe:

Waldorf Astoria Amsterdam — Amsterdam, Netherlands
Grand Hotel Tremezzo — Tremezzo, Italy
La Reserve Paris Hotel and Spa — Paris, France
The Goring — London, U.K.
The Connaught — London, U.K.

Last year’s No. 1 hotel, Le Bristol Paris, came in at No. 6 this year.
Waldorf Astoria Amsterdam clinched the top spot in Europe for the first time. It comprises six canal-side mansions and houses a two-starred Michelin restaurant that specializes in vegetarian cuisine.

The Waldorf Astoria Hotel in Amsterdam, comprises six connecting houses beside the Herengracht Canal.
Sebastiaan Kroes | Moment Open | Getty Images

Europe’s No. 2 hotel, the Grand Hotel Tremezzo, overlooks Italy’s famous Lake Como.
The U.S. News & World Ranking also ranks hotels in 39 European countries, from Albania to Wales.
Similar to the U.S. rankings, visitors can core into these rankings by “popular regions,” such as Capri, Cinque Terre and Venice in Italy.
Best hotels in the Caribbean
These are the top ranked hotels in the Caribbean:

Cap Juluca, A Belmond Hotel, Anguilla — Maundays Bay, Anguilla
Jumby Bay Island, Oetker Collection — Jumby Bay Island, Antigua
Jade Mountain Resort — Soufriere, St. Lucia
Cheval Blanc St-Barth Isle de France — Saint Barthelemy
Tortuga Bay Puntacana Resort & Club — Punta Cana, Dominican Republic

The Caribbean’s best hotel, Cap Juluca, has dome-shaped villas with views of the ocean and direct access to the beach.

A view of St. Lucia’s Pitons mountains from the Jade Mountain Resort, which was ranked the third best hotel in the Caribbean in 2023 by the U.S. News & World Report.
Thomasfluegge | E+ | Getty Images

The No. 2 hotel, Antigua’s Jumby Bay Island, provides snorkeling expeditions and kayak tours for guests.

Other rankings

The U.S. News & World Report also published new rankings for in Canada, Mexico and Bermuda.
Separately, it also ranks all-inclusive resorts in the Caribbean and Mexico, which were topped by Jumby Bay Island, Oetker Collection and Grand Velas Los Cabos, respectively. More