Pipeline official

MARKETS

• U.S. economy: After contracting again in November, the manufacturing sector is now hitless in its last four at-bats. “Global trade remains the most significant cross-industry issue,” said the chair of the Institute for Supply Management’s manufacturing business survey committee.
• Speaking of trade: President Trump announced he would put tariffs on steel and aluminum imports from Brazil and Argentina, accusing those countries of “massive devaluation of their currencies.” But there’s little evidence Brazil and Argentina have been manipulating their currencies.
• It keeps coming: The U.S. proposed tariffs on ~$2.4 billion in French products in retaliation for a French tax on Big Tech.
• Plz make it stop: All this news sent the S&P to its biggest one-day slide since early October.

ENERGY

China and Russia Pass Gas

Yesterday, China and Russia opened a monumental gas pipeline that further cements their economic and political relationship.

• The pipeline, known as the Power of Siberia, cost $55 billion and runs 1,800 miles from Siberian gas fields to China's northern border.
• By 2025, it will carry the equivalent of Brazil’s annual gas consumption—38 billion cubic meters, the WSJ notes.

Shivers up your spine

For the U.S., this pipeline launch is like seeing the Joker and Bane on a tandem bicycle. By opening the pipeline, China and Russia are pulling the geopolitical epicenter of the world ever so slowly to the East.

How this happened: Russia was hit with Western sanctions following its annexation of the Crimean Peninsula in 2014. Blockaded from many business dealings with the U.S. and Europe, Russia turned to other countries for an economic lifeline.

China: "Hey"

In 2014, the state-owned Russian gas company Gazprom inked a 30-year, $400 billion gas supply contract with China National Petroleum Corp.

• The partnership is a win-win. China’s got the demand (it’s expected to be the world’s largest gas importer next year) and Russia’s got the goods (it’s guarding the world’s largest proven gas reserves). And both want to rile up the U.S.

But the China-Russia embrace also extends to other sectors.

• Telecom: China’s Huawei is developing 5G networks in Russia through a deal with MTS, Russia’s largest mobile network provider. Huawei is the U.S. national security community’s public enemy No. 1.
• Currency: The Chinese yuan in March accounted for 14.2% of Russia’s foreign currency reserves, up from 5% last year.
• Trade: In 2018, trade between the two countries topped $100 billion, a record. Russian President Vladimir Putin wants bilateral trade turnover to reach $200 billion in 2024.

Bottom line: Now that Russia and China are pipeline official, it’ll be more important than ever for the U.S. to cooperate with its Western allies.

GEOPOLITICS

And...That Might Not Happen Right Away

As Russia cozies up to China, its rivals are meeting in London at the NATO summit.

• NATO, or the North Atlantic Treaty Organization, was created after World War II to counter Soviet aggression.
• It has 29 member states across North America and Europe.

But group projects are frustrating, especially when Albania didn't do any work but takes all the credit. Recently, members have been bickering over how much each is contributing to the military cause. In 2014, NATO members agreed to spend 2% of their respective GDPs on defense by 2024, but not all are on track to meet that target.

President Trump is not happy about that, while French President Emmanuel Macron said ahead of the summit that NATO is experiencing "brain death."

Here’s a chart from GZERO Media showing where NATO members stand in meeting the 2% defense spending target.

SOCIAL MEDIA

Laverne & Shirley, Bert and Ernie, Facebook and Google

You know what Google Photos needs? More pictures of you wearing popped-collar Abercrombie polos edited on Picnik. Thank goodness Facebook is starting to let users transfer their media directly to Google Photos.

The details: The new tool lays the rails for bulk export, meaning you don’t have to individually save and re-upload every brutal mirror selfie from 2008 on. It’s only available for testing in Ireland, but it’s set to roll out worldwide in 2020.

The collab is part of the open-source Data Transfer Project. What it means to be DTP:

• The project (est. 2018) includes FB and Google, plus Apple, Microsoft, Twitter, and more.
• It aims to “enable people to freely move their information across the web” in order to foster competition and consumer choice.

Big picture: Facebook has preached so-called data portability for some time, and this tool will grow beyond Google Photos to other services. Big Tech might have antitrust busters foaming at the mouth, but portability initiatives like this one could throw them off the scent.

PHILANTHROPY

Crunching the Numbers for Giving Tuesday

It’s #GivingTuesday, an annual day of philanthropy started in 2012 to combat the guilt that arrives with mountains of Amazon deliveries. Giving Tuesday brought in $400 million for nonprofits last year, but a new wave of entrepreneurs is conjuring up more economical ways to deploy the funds.

It’s called “effective altruism”

And it’s spawning a new industry dedicated to squeezing out the most juice possible from your donation.

• GiveWell rates charities based on criteria like “evidence of effectiveness” and “cost per total economic benefit to others, normalized by base income.” One of its top charities is a deworming initiative in developing countries.
• ImpactMatters rates charities by their ability to maximize donor dollars.

But boiling giving down to a cost-benefit analysis is tricky. Some donors want to help the most people possible, others the soup kitchen on their block.

Zoom out: Giving Tuesday sits squarely in charities’ playoff season—the holidays. A bad rating could mess up donations (and operations) for months or years and send donations elsewhere.

PODCAST

All Nerds Not Welcome: Why Tech’s Diversity Problem Matters

A few weeks ago, Apple came under fire for allegedly deploying biased algorithms to determine credit limits for its Apple Card. Some women were given lower spending limits than male counterparts who had worse credit.

In the aftermath, critics said Apple’s algorithmic issues were proof the humans who wrote them were inherently biased and these alleged biases had wiggled into their code.

It’s not a one-off episode. There is a persistent gender gap in tech, and that gender gap leads to worse products for everyone. So...

This week on Morning Brew’s weekly podcast Business Casual, we pick apart how that gender gap came to be, how it’s affecting the bottom line, and why you should care. To explain it all, we spoke with Reshma Saujani, founder and CEO of Girls Who Code.

WHAT ELSE IS BREWING

• Shoppers were on track to spend a record $9.4 billion on Cyber Monday, a 19% increase from last year.
• Roku stock fell 15% after it was downgraded by Morgan Stanley. No sweat, shares of the video streaming company are still up more than 300% this year.
• McDonald’s is testing a fried chicken sandwich. No love for the McChicken?
• The Trump campaign is banning Bloomberg News reporters from obtaining credentials to cover its events over allegations of preferential reporting for Democratic candidates.

DONATION STATION

Rank the following wealthy people by % of their wealth they gave away in 2018:

Jeff Bezos, Bill Gates, Warren Buffett, Mark Zuckerberg, Michael Bloomberg

DONATION STATION ANSWER