RIOTs in LA
Tuesday, June 10th, 2025
World Events — Riots in LA
Economists
The unrest in Los Angeles, though so far smaller in scale than the city’s historic riots, raises urgent questions about whether it marks the start of a summer of protest and federal crackdowns under President Donald Trump, who has shown little tolerance for demonstrations in Democratic cities. While the current LA protests have resulted in only about 60 arrests—far fewer than the thousands detained during the 1992 Rodney King riots—the situation remains volatile, with ongoing clashes, property damage, and a heavy police and military presence, including the deployment of National Guard and even active-duty Marines. Trump’s decision to federalize the California National Guard, citing federal law allowing intervention in cases of rebellion or lawlessness, has sparked a legal battle with Governor Gavin Newsom, who insists the move is unconstitutional and unnecessary. The administration’s aggressive posture, including threats to deploy troops elsewhere, suggests a deliberate strategy to provoke and polarize, using immigration enforcement as a political wedge. With America deeply divided and the courts reluctant to overrule presidential authority in matters of perceived threat, the risk of escalating confrontation looms large, as both sides brace for a possible cycle of unrest and repression that could reverberate far beyond Los Angeles.
Tech — Apple Is Getting Desperate
Bloomberg
Apple’s recent Worldwide Developers Conference (WWDC) unveiled a suite of new AI-powered features, highlighted by an expanded partnership with OpenAI that integrates ChatGPT more deeply into Apple’s ecosystem, enabling live translation in Messages, Phone, and FaceTime, on-screen content analysis that lets users ask ChatGPT about anything on their screen—mirroring Google’s “Circle to Search” functionality—and creative tools like Genmoji and Image Playground, which allow for unique emoji combinations and AI-generated art using OpenAI’s technology. The updates, including a Workout Buddy for Apple Watch and enhanced AI-driven actions in the Shortcuts app, signal Apple’s intent to catch up with rivals Samsung and Google in the AI space, even as the event’s primary focus remained on broader design and operating system changes; these new capabilities, powered by Apple Intelligence and accessible to developers via on-device foundation models, promise to make Apple’s devices more intelligent, intuitive, and competitive in the rapidly evolving AI landscape.
Trade — Trump Eyes Easing Export Restriction to Secure China’s Rare Earth Metals
FT
As the United States and China engage in high-stakes trade negotiations in London, top White House officials have signaled that President Donald Trump is prepared to ease certain US chip export restrictions in exchange for China accelerating shipments of rare earth minerals, a move that would mark a notable shift from the previous administration’s strict controls on advanced semiconductor technology. Kevin Hassett, director of the National Economic Council, suggested that an immediate easing of US export controls could follow a successful agreement, with China expected to release rare earths in greater volume—though he clarified that restrictions on high-end chips, such as those sold by Nvidia, would remain in place. The talks, led by US Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng, come after both sides agreed in Geneva to slash tariffs for 90 days, but the deal has since been strained by accusations that Beijing has been slow to lift rare earth export limits, a tactic Chinese officials are now leveraging more assertively as a bargaining chip in trade discussions.
Culture — American Degrees are Now Less Appealing Among Chinese Students
Economists
For Chinese students, America is no longer the obvious destination it once was: recent US visa crackdowns—including aggressive revocation of visas for students in “critical fields” or with unspecified Communist Party links—have made American education seem too risky and expensive, with many families now opting for cheaper or more welcoming alternatives in Britain, Hong Kong, Singapore, or elsewhere in Asia. The number of Chinese students in the US has steadily declined from its 2019-20 peak of 372,000 to about 277,000 in 2023-24, as middle-class parents weigh the uncertain returns of a costly foreign degree against China’s own increasingly competitive universities and a challenging domestic job market, where employers are sometimes wary of graduates with overseas experience. Meanwhile, China’s shrinking youth population and shifting parental preferences toward domestic education are creating a “time-bomb” for international schools and universities that have relied heavily on Chinese students’ tuition; as a result, the allure of an American education continues to fade, with many students and families now seeing greater opportunity and security in staying closer to home.
The Daily Spark
Measures of M&A activity are approaching the lowest levels in decades, driven by the double whammy of high uncertainty for business planning and interest rates staying higher for longer.
The weak M&A environment will continue.
Why? Because unsustainable fiscal policy is putting upward pressure on long-end rates, while inflation is putting upward pressure on front-end rates, driven by tariffs, reduced immigration, and housing affordability boosting rental inflation.
The bottom line is that fixed income will continue to pay higher all-in yields to asset owners of credit.
Song Recommendation — Save my love (Ellie Goulding x Marshmello)
Quote of the Day
“The reasonable person succeeds in adapting himself to the world. The unreasonable person persists in adapting the world to him…all progress comes from adapting the world to him.” — Scott Farquhar (Co-founder of Atlassian)