Finance

“I am gravely concerned that the rise of tariffs puts us on a slippery slope towards crony capitalism,” billionaire investor Ken Griffin said at the Economic Club of New York.
The Citadel founder said domestic companies could enjoy a short-term benefit of having their competitors taken away.
Longer term, however, it does more harm to corporate America and the economy as companies lose competitiveness and productivity, he said.

Ken Griffin, chief executive officer and founder of Citadel Advisors LLC, speaks during an Economic Club of New York event in New York, US, on Thursday, Nov. 21, 2024.
Yuki Iwamura | Bloomberg | Getty Images

Citadel CEO Ken Griffin issued a warning against the steep tariffs President-elect Donald Trump vowed to implement, saying crony capitalism could be a consequence.
“I am gravely concerned that the rise of tariffs puts us on a slippery slope towards crony capitalism,” the billionaire investor said Thursday at the Economic Club of New York.

The Citadel founder said domestic companies could enjoy a short-term benefit of having their competitors taken away. Longer term, however, it does more harm to corporate America and the economy as companies lose competitiveness and productivity, he said.
Crony capitalism is an economic system marked by close, mutually advantageous relationships between business leaders and government officials.
“Those same companies that enjoy that momentary sugar rush of having their competitors removed from the battlefield soon become complacent, soon take for granted their newfound economic superiority, and frankly, they become less competitive on both the world stage and less competitive at meeting the needs of the American consumer,” Griffin said at the event.
Trump made universal tariffs a core tenet of his economic campaign pitch, floating a 20% levy on all imports from all countries with a specifically harsh 60% rate for Chinese goods.
The protectionist trade policy could make production of goods more expensive and raise consumer prices, just as the world recovers from pandemic-era inflation spikes.

“Now you’re going to find the halls of Washington really filled with the special interest groups and the lobbyists as people look for continued higher and higher tariffs to keep away foreign competition, and to protect inefficient American businesses that have failed to meet the needs of the American consumer,” Griffin said.
At the same event, Griffin also said he’s not focused on taking Citadel Securities public in the foreseeable future. Citadel is a market maker founded by Griffin in 2002.
“We’re focused on building the business, on investing in our future. And we do believe that there are benefits to being private during this period of very, very rapid growth,” he said. More

Democrats spent much of the presidential-election campaign calling Donald Trump a fascist. Mr Trump is hardly known for his conciliatory nature. So few American politicos expect there to be much bipartisanship in his second term. Yet in one place there is already a flicker of cross-aisle agreement: a proposal to cap interest rates on credit-card repayments at 10% has won the support of both Mr Trump and Bernie Sanders, perhaps the most prominent left-wing Democrat. More

Almost two years have passed since OpenAI released GPT-3.5 to great fanfare. Bill Gates, co-founder of Microsoft, compared the technology’s arrival to his first encounter with the graphical user interface—a breakthrough that reshaped personal computing—in the 1980s. Others predicted that generative artificial intelligence (ai) would rapidly transform economies around the world, leaving many millions unemployed. Yet despite the hype and the worries, ai’s impact has been muted thus far. According to America’s Census Bureau, only 6% of businesses use AI to produce goods and services. Output and labour-productivity growth, meanwhile, remain far below the soaring heights of the computer age in the 1990s. More

Spare a thought for the analysts, bankers and fund managers who make a living from European shares. If your salary depends on talking up the stockmarkets of the continent that invented them, you have learned to live with disappointment. For much of the past two decades, you could have pointed out that European stocks were cheaper, relative to earnings, than American stocks. You could have reasonably argued that this portended better investment returns and less risk of crashes. And for all that time you would have been utterly, gloriously wrong. More

China is famous, even infamous, for hard graft. Prodigious amounts of toil and elbow grease helped the country become the workshop of the world. More than 175m migrant workers labour in cities far from home, often leaving their children in the care of relatives. And the sacrifices are not confined to the poor. Even some of China’s more sophisticated firms are known for their “996” office culture, encouraging unfortunate employees to work from 9am to 9pm, six days a week. More

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Chinese tech company Baidu on Thursday reported better-than-expected revenue and profit for the third quarter.
Baidu noted a 12% surge in its non-online marketing revenue to the equivalent of $1.1 billion, mainly driven by its artificial intelligence cloud business.

Baidu on Nov. 12, 2024, unveiled a pair of glasses with a built-in AI assistant, putting up a Chinese rival to the Meta Ray-Bans that have proven a rare success in AI-powered hardware. 
Bloomberg | Bloomberg | Getty Images

BEIJING — Chinese tech giant Baidu on Thursday posted a 3% annual drop in third-quarter revenue, nevertheless beating market expectations amid AI cloud growth.
The revenue print came in at $4.78 billion for the quarter ending on Sept. 30. Net income for the period rose by 14% to $1.09 billion.

Baidu noted a 12% surge in its non-online marketing revenue to the equivalent of $1.1 billion, mainly driven by its artificial intelligence cloud business.
The company’s U.S.-traded shares fell nearly 4% in premarket trading following the release of its results.
Here’s what analysts expected the company to report for the quarter, according to LSEG estimates:

Revenue: $4.63 billion
Net income: $857.17 million

Baidu had reported revenue of 34.45 billion yuan ($4.75 billion) and net income of 6.68 billion yuan for the third quarter of 2023.
Beijing-based Baidu operates one of the major web browser search engines in China, along with a frequently used maps app. The company also sells cloud computing services. Online marketing drives a significant portion of the firm’s revenue.

The growth in the AI cloud business offset “ongoing weakness” in Baidu’s online marketing stream, CEO Robin Li said in the earnings release, also commenting on the performance of the company’s Ernie generative AI model and chatbot.
“Our strong AI capabilities are gaining broader market recognition, as evidenced by increasing adoption of Ernie,” he said.
Baidu has promoted its Ernie chatbot as a local alternative to OpenAI’s ChatGPT, which isn’t available in China. Ernie bot now has 430 million users, and programs access its underlying AI model around 1.5 billion times a day, more than double the 600 million rate in August, Baidu said last week.
“Despite the near-term pressures, we remain steadfast in our AI-focused strategy and are confident in our long-term trajectory,” Li said Thursday. “As we further scale AI, we are emboldened to find how it can drive innovations and create value for consumers, enterprises and society at large.”
The company this month also announced that its Xiaodu AI Glasses will begin sales in the first half of next year. The wearable has at least one camera and uses Ernie’s AI capabilities and Baidu’s maps and search functions. While Baidu hasn’t revealed a price, the product is widely expected to be a Chinese alternative to Meta’s popular Ray-Ban smart glasses.
Baidu announced a management rotation last month, with Junjie He, previously head of the mobile ecosystem group, becoming the company’s interim Chief Financial Officer, while former CFO Rong Luo assumed leadership of the mobile division.
“AI Cloud continued to show healthy and sustainable development in the third quarter,” he said in the earnings release. “Meanwhile, Apollo Go continued to make operational strides, underpinning our confidence in the validity of the fully autonomous ride hailing business model.”
Apollo Go, which operates Baidu’s robotaxi business, reported a 20% year-on-year surge in rides in the third quarter. The average number of rides a month rose to 329,333 during the third quarter, up from 287,500 in the first half of the year, according to CNBC calculations. More

The big mac index was invented by The Economist in 1986 as a lighthearted guide to whether currencies are at their “correct” level. It is based on the theory of purchasing-power parity (PPP), the notion that in the long run exchange rates should move towards the rate that would equalise the prices of an identical basket of goods and services (in this case, a burger) in any two countries.Burgernomics was never intended as a precise gauge of currency misalignment, merely a tool to make exchange-rate theory more digestible. Yet the Big Mac index has become a global standard, included in several economic textbooks and the subject of dozens of academic studies. For those who take their fast food more seriously, we also calculate a gourmet version of the index.The GDP-adjusted index addresses the criticism that you would expect average burger prices to be cheaper in poor countries than in rich ones because labour costs are lower. PPP signals where exchange rates should be heading in the long run, as a country like China gets richer, but it says little about today’s equilibrium rate. The relationship between prices and GDP per person may be a better guide to the current fair value of a currency.In July 2022 we updated the Big Mac index to use a McDonalds-provided price for the United States. We also changed our methodology for how we calculate the GDP-adjusted index, the full history of which will now be adjusted whenever the IMF’s historical GDP series are updated. The previously published versions of both indices are available in our archive.Read more about the Big Mac index in “What Donald Trump can learn from the Big Mac index”. You can also download the data or read the methodology behind the Big Mac index here.Note: The GDP-adjusted index was updated in January 2021 to include more countries.Correction (January 26th 2023): An earlier version of the index had the wrong Big Mac price for China in January 2024. Sorry. More