The Financial Times is reporting this morning that the White House may slap sanctions on Chinese companies connected to the cyber theft of U.S. intellectual property as early as next week. The story says the State Department argued for delaying sanctions until after Xi Jinping makes his state visit to the U.S. later this month, but has lost the argument.
Interestingly, this report, as well as earlier ones in the New York Times and The Washington Post, suggest sanctions won’t be in retaliation for the unprecedented hack into the personal and financial data of more than 22 million government employees and their families. That hack was considered a more traditional act of spying and therefore is not subject to the economic retaliation.
You can expect the Chinese to retaliate in kind. But the basic problem remains unsolved. When the nuclear age dawned, we developed policies of deterrence that have, to date, prevented nuclear war. The cyber age has no such policies, and the risks of conflagration are rising with each passing day.
Meanwhile, in the reality TV show known as the Republican presidential primary, Donald Trump pledged his fealty to the GOP.
Enjoy the long weekend. More news below.
| Alan Murray | |
| @alansmurray | |
| alan.murray@fortune.com |
Top News
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Economists are forecasting a jobs report due later today will show the U.S. economy likely added jobs at a steady pace in August and the unemployment rate is expected to dip to 5.2%. If job growth stays steady, it is a strong indicator that the U.S. economy is still performing well despite volatile financial markets across the globe and worries about China's slowdown. "Despite the stock market volatility this month and the growing cracks in China's economy... we don't see any signs of slowing in the labor market yet," said Glassdoor's chief economist. Reuters
• Buffett lost $11 billion in market selloff
Warren Buffett’s Berkshire Hathaway, the insurance company turned investment conglomerate, appears to have lost $11.2 billion in value from its stock market investments, on paper at least, during the worst of the downturn from mid-July to the end of August. Though that represents a roughly 10% drop there is some good news for Buffett and Berkshire: the S&P 500 fell by a similar amount over the same period. Shares of Berkshire have performed a bit better, down just 8.5%. Fortune
• Biden still uncertain about 2016
Vice President Joe Biden is still uncertain about his plans for a potential Democratic presidential run, expressing doubts about whether he and his family have the "emotional energy" to campaign for the nomination. It would be a third bid from Biden, who has scored high polling numbers as vice president. But if he were to jump in, he would lag his top rival Hillary Clinton by tens of millions of dollars due to a late start. Time
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Around the Water Cooler
• Star Wars: A force to be reckoned with
Star Wars parent Walt Disney Co. is celebrating the launch of the latest sci-fi film in the series, Star Wars: The Force Awakens, with a global live toy unboxing event today. And there's a good reason Disney is putting so much marketing heft behind the hot property: it paid $4 billion for Lucasfilm, so it certainly wants to reap profits from the investment. Analysts expect gear tied to the film could ring up $3 billion to $5 billion globally. Fortune
• Sony's next big hit? Image sensors
Sony has a lot of good reasons to invest heavily in the image sensor market. The Japanese company already controls about 40% of the $8.7 billion market, which is forecast to climb to about $12 billion by 2019. Sony expects its sales will climb as much as 62% in three years. The high-speed sensors Sony is in the process of developing could make driverless cars more effective or speed up manufacturing. Investments in the space are part of Sony's push to become a bigger components supplier. Bloomberg
• Should Twitter ditch the 140-character limit?
Some are calling for the demise of what made Twitter so unique in the first place: the 140-character limit that is perhaps the social media website's most distinctive feature. Those arguing for that artificial limit to expire contend that it no longer serves any real purpose, as it was originally conceptualized to mirror the text messaging services used on mobile at a time when such messages were limited to 160 characters. Some believe that the limit drives users to other social sites, like Facebook, where users can post long-winded notes. Fortune
