Complicated and expensive: Elon Musk takes over Twitter

Good morning dear readers,

For months, Elon Musk had blocked himself from taking over Twitter himself. Well it happened: According to media reports, the tech billionaire is behind the wheel of the short message service – and fires the previous CEO Parag Agrawal and CFO Ned Segal when they take office. The top manager responsible for the fight against hate speech and false information, Vijaya Gadde, was among those laid off, according to the US television channel CNBC and the British newspaper “Financial Times”.

Musk has had until today to complete the acquisition or fight the company in court. He had already visited the Twitter headquarters on Wednesday and spoken to employees. Wedbusch analyst Dan Ives concludes: “Twitter’s $44 billion price tag will go down in history as one of the most overpaid tech acquisitions.”

If the US government wants something to move forward in terms of Ukraine support, then it invites the defense ministers and army commanders of its allies to the Palatinate – to the US military base Ramstein, which is why diplomatic jargon calls it the “Ramstein format”. The fact that the federal government in Germany is not inviting people to these meetings shows more vividly than any geopolitical analysis how undisputed and irreplaceable American leadership is – not only in the Ukraine war.

Especially since US President Joe Biden and his people apparently manage not only to spur on the allies, but also to involve them. Even in those German government circles in which one otherwise likes to gossip about “arrogant Americans”, only good things are said about Team Biden. And economically, the USA, with its cheap energy and its lavish economic stimulus programs, has long been something of the last hope for the world economy – and a magnet for German companies willing to invest.

superpower USA. If only there weren’t the uncertainty about how things will continue in domestic politics: In the November 8 election, Biden’s Democrats could lose their majority in one or even both houses of parliament. Namely to the stray Republicans, for whom Donald Trump may start the presidential race again in 2024 – or a similarly unpleasant alternative candidate.

The fact that Biden turns 80 on November 20 and doesn’t look a day younger doesn’t help build confidence either. And then there’s the conservative-dominated Supreme Court, which is about to rule on a case that could turn the entire US electoral system upside down. At the Handelsblatt, we are dedicating our big weekend theme package to these two faces of the USA – strong on the outside, fragile on the inside.

Do you have the feeling that things are not going well with your investment? Then we have prepared a small consolation graphic for you. It shows the course of a hundred-year Austrian government bond, bearing interest at 0.0 percent and due on June 10, 2120. In times of low inflation expectations and negative interest rates, i.e. until a few months ago, this may have seemed like good business. But it wasn’t: Anyone who bought the bond in the summer of 2021 at a high of EUR 68.44 now has EUR 6.16 left.

The fall in the price of such long-dated bonds clearly shows the full force of the turnaround in interest rates. As expected, the European Central Bank (ECB) raised the key interest rate again yesterday by 0.75 percentage points. At the same time, the central bank made it clear that it was preparing for further rate hikes.

ECB President Christine Lagarde said: “Inflation is far too high and will remain above target for an extended period of time.” German inflation data for October is due today. On average, experts expect a further increase from 9.9 to 10.1 percent.

The British “Economist” has an unusual idea for combating inflation. He proposes raising the inflation target from two to four percent so that the central banks don’t stall the economy with overly strict monetary policy. The day before yesterday I discussed this over dinner with Handelsblatt chief economist Bert Rürup, and let’s put it this way: I was surprised by his position.

Somewhere in the Hall of Fame of German economic history there is probably a special cabinet for the entrepreneur category “knocky warhorses”. And this much is certain: The entrepreneur Heinz Hermann Thiele, who died in March 2021, deserves a place of honor in it.

As befits warhorse entrepreneurs – after all, by definition they are irreplaceable until their last breath – Thiele’s successor plan was somewhat unclear. In principle, the heirs want to transfer the multi-billion dollar holdings in Vossloh and Knorr- Bremse to a foundation. Contrary to what was announced by the family shortly after Thiele’s death, the entire block of shares held by the family, amounting to 59 percent, is now not to be absorbed by the foundation. That’s what my colleagues Martin Buchenau and Markus Fasse found out.

Thiele’s daughter Julia Thiele-Schürhoff does not want to contribute her private share package of around 17 percent to the foundation. A pool contract that regulates the relationship between the foundation and the subsidiary is not planned for the time being. Apparently daughter Julia and Thiele’s second wife Nadia are playing poker for power and influence in the Bremser clan.

Amazon shares fell sharply in after-hours trading in the US last night, she lost more than 20 percent at times. The reason: In the traditional mail order business, Amazon also lost money in its home market of the USA in the third quarter. The bottom line was an operating loss of $412 million, where a year ago there was a profit of $880 million. The fact that the group result is still positive is once again due to AWS’s cloud business. But there, too, the analysts had expected more in terms of sales.

And then there is an unveiling story in the “Spiegel”, according to which large parts of German art history may have to be rewritten: An important work by Piet Mondrian has apparently been hanging upside down for decades in the art collection of North Rhine-Westphalia in Düsseldorf. A small service note for everyone who voted out art after the ninth: Mondrian is the artist whose pictures mostly look like city maps in extreme enlargement.

The curator Susanne Meyer-Büser made the mistake public. In a photo taken in Mondrian’s studio a few days after his death in 1944, the painting in question “New York City 1” can be seen in the correct orientation on the easel. Another indication: the picture consists of colored adhesive strips. Meyer-Büser believes that Mondrian glued from top to bottom. At the top of the picture he still had control over the stripes and applied them precisely, the “Spiegel” quotes the curator, but: “It babbles off at the bottom”. In Düsseldorf, the unclean edges hang up, presumably upside down.

I wish you a day when nothing babbles down.
Best regards
Her

Christian Rickens
Editor-in-Chief Handelsblatt