Andrew here. For the last eight years, I’ve been working on a book about 1929. I sought to write an in-the-room, character-driven narrative about that remarkable period in history, similar to my chronicle of the financial crisis of 2008, “Too Big to Fail.” Along the way, as I combed through transcripts and diaries in the archives, the parallels between the economics and politics of the 1920s and of today became almost eerie.
As “1929” publishes on Tuesday, I’ve written an essay for The New York Times Magazine, which will be in print this weekend, about some of those connections. This isn’t to say we will see a repeat of 1929. But there are some important lessons from that period that we shouldn’t forget to keep that from happening.
Peace, and deals, in the Middle East?
President Trump on Monday declared the war in Gaza over, even as big questions lingered over whether the cease-fire between Israel and Hamas would lead to a lasting peace.
The obstacles are many. Regional powers remain far apart on Gaza’s future. Security on the ground is precarious, with no clear idea of how to disarm fighters. And then there are the questions of what it will cost to rebuild, and who will pay.
But optimists hope that if the war ends, peace in Gaza could usher in a new wave of deal-making, including for mega-projects that had been frozen during the war, Vivienne Walt writes.
Some big deals were affected by the fighting. BP and the Abu Dhabi-based ADNOC were closing in on an agreement to acquire a 50 percent stake in the Israeli company NewMed Energy, which oversees some of the mammoth natural gas fields in the eastern Mediterranean. But the $2 billion deal was suspended last year as Israeli bombs pummeled Gaza.
“It was just too toxic for the U.A.E. to deepen economic relations with Israel at the time,” Jamie Ingram, a Middle East analyst and managing editor of the economic newsletter MEES, told DealBook. “This peace agreement could start to unlock investments,” he added.
The war did not stifle all business in the region. Despite the global outrage over the war in Gaza, trade continued among countries that signed the 2020 Abraham Accords.
Israel did $3.2 billion in trade with the United Arab Emirates last year, up 11 percent year over year, according to The Times of Israel, citing government statistics. (That excluded software and government-to-government deals.)
Among the big focuses of trade:
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The U.A.E. has invested billions in new data centers to power its artificial intelligence ambitions — infrastructure that could see business from Israel’s tech industry. “You could see some real concrete tie-ups,” Ingram said.
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Morocco agreed this year to buy $120 million worth of military drones from Israel Aerospace Industries, as Israel was seeking to turn its defense-tech expertise into a booming export.
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Chevron and Israeli energy companies signed a $35 billion deal with Egypt in August, agreeing to double natural gas exports from the eastern Mediterranean by 2029 and positioning Israel to be a regional energy power.
Rebuilding a shattered Gaza will be costly. That effort — including the construction of water and sanitation networks, hospitals, schools and thousands of homes — could cost $53 billion, the World Bank estimated in February.
The first projects could start within months, with financial support from Brussels, according to news reports.
That may set off a scramble for lucrative contracts, with big potential investors eyeing a huge opportunity. “My concern is you end up with backroom deals with private investment funds, Egypt, the Palestinian Authority and Israel,” Hugh Lovatt, an expert on Israeli and Palestinian issues for the European Council on Foreign Relations, told DealBook.
HERE’S WHAT’S HAPPENING
Wall Street giants report solid results. Just in: JPMorgan Chase easily beat analysts’ expectations on the strength of robust trading revenues and higher investment banking fees last quarter. Shares in Goldman Sachs fell in premarket trading despite the company’s results surpassing Wall Street forecasts. With a blackout on official government data during the shutdown, investors are turning to the banks for clues about the economy.
Silver soars while cryptocurrency slides. The precious metal set a record on Monday, hitting $50.13 a troy ounce, as its annual performance outstrips even gold’s. It’s another sign that investors are seeking safe-haven assets amid renewed economic turbulence. Falling on the wrong side of the move is crypto, with Bitcoin sliding 12 percent over the past week and other tokens dropping even more sharply.
The C.E.O. of First Brands resigns. Patrick James stepped down from the bankrupt auto-parts maker as the fallout from its collapse continued to spread across the financial industry. James will be replaced on an interim basis by Charles Moore.
The spat grows
Investors are again weighing the possibility that the Trump administration’s efforts to reach a trade pact with China will come up short.
Rhetoric from Washington and Beijing, which has run hot and cold over the past week, has just gotten scalding with the latest comments by Treasury Secretary Scott Bessent.
Concerns about those tensions are showing in the markets on Tuesday: Global stocks, S&P 500 futures and crude oil prices are in the red.
The latest: Bessent lashed out at China in an interview with The Financial Times, warning that new restrictions on exports of rare-earth and other critical minerals could backfire. “Maybe there is some Leninist business model where hurting your customers is a good idea, but they are the largest supplier to the world,” he told The FT. “If they want to slow down the global economy, they will be hurt the most.”
Hours earlier, Bessent had suggested that relations were fine, even expressing confidence that President Trump and President Xi Jinping of China were still set to meet this month to smooth over some of their differences.
Beijing isn’t backing down. “China’s position is consistent,” a spokesperson for the country’s Commerce Ministry said on Tuesday. “If there’s a fight, we’ll fight to the end; if there’s a talk, the door is open.”
The Commerce Ministry is seen as a hard-liner influence within Beijing, seeking more say on the economy and trade talks, according to The FT, which adds that the ministry’s positions are beginning to alarm some close to Trump’s negotiators.
Both sides are continuing to escalate as well:
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The Trump administration on Tuesday began charging a fee on Chinese ships that dock at American ports, which is meant to weaken China’s global dominance in commercial shipping and shipbuilding.
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Beijing is imposing sanctions on the American business entities of Hanwha Ocean, a South Korean shipping giant. Shares in Hanwha Ocean fell 6 percent Tuesday in Seoul.
Wall Street sees trouble ahead. The S&P 500 could sink by as much as 12 percent (from Monday’s close) if the U.S. and China don’t reach a truce by next month’s deadline, when retaliatory tariffs announced by Trump would kick in, Michael Wilson, Morgan Stanley’s chief U.S. equity strategist, warned on Monday.
OpenAI’s tightrope act
Another day, another mega-deal by OpenAI, creator of ChatGPT: It signed a partnership with Broadcom — its third with a major chipmaker in a month.
But the more transactions that OpenAI strikes, the more complicated the increasingly vast business network around the artificial intelligence giant gets.
Monday’s deal further underscores OpenAI’s data center ambitions. The start-up will design chips with Broadcom and plans to start deploying them around the second half of next year. The goal: putting in play about 10 gigawatts’ worth of chips — enough to power millions of households. (Also involved in the project is Arm, the chip designer controlled by SoftBank, according to The Information. Shares in Broadcom and Arm soared on Monday.)
The deal came after OpenAI struck agreements to use several gigawatts’ worth of chips from Nvidia and AMD. Unlike those transactions, no equity is changing hands with Broadcom.
OpenAI’s deal-making is setting up a tricky tightrope act:
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The start-up is building a team of rivals to build out its data centers, leading to some unusual circumstances. For instance, money from the Nvidia investments could arguably be directed toward purchases of AMD chips — and in designing chips with Broadcom, OpenAI is reducing its reliance on Nvidia and AMD.
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The Nvidia deal will dilute OpenAI’s existing investors, including Microsoft, SoftBank and venture capital firms like Thrive Capital, The Financial Times notes. But OpenAI argues that everyone benefits if the agreement expands business: “Most people would prefer to have a smaller piece of a bigger pie,” an unnamed executive told The FT.
Expect more deals from OpenAI. Among them will be ways to further support its data center initiatives, including $25 billion in financing for a 500-megawatt facility in Argentina. There will also be transactions to keep funding OpenAI’s huge running costs, something that skeptics worry about given the company’s enormous losses.
But one of the start-up’s big business partners isn’t worried: “Of course” OpenAI can afford to pay $60 billion a year for cloud computing, Clay Magouyrk, a C.E.O. of Oracle, told CNBC.
The Nobel Prize that explains how we got rich
This year’s Nobel Prize in Economics was awarded to Joel Mokyr, Philippe Aghion and Peter Howitt for work that explains how the world has sustained — for the first time in history — two centuries of economic growth.
In other words, they answer the question: How did humans get so rich?
Mokyr explained that sustained economic growth requires two types of knowledge. The first type is propositional knowledge, which is about knowing why things work, through fields like physics, mathematics and biology. The second is procedural knowledge, which is about knowing how to do things, like cook or operate a loom. At the start of the Industrial Revolution, Mokyr, an economic historian, argued that the two forms of knowledge were applied in a sustained and symbiotic way that led to two centuries of growth.
“What Mokyr taught economists is that it’s not knowledge per se that makes the difference, but the way it is organized,” Anton Hughes, a historian, wrote for the Substack “Works in Progress.” Mokyr received one half of the Nobel.
Aghion and Howitt explained the role of “creative destruction,” an endless process in which new products displace older products. Aghion and Howitt, who split the second half of the award, argue that “competition for profit is what causes you to put in the effort to make a better product,” Brian Albrecht, the chief economist for the International Center for Law & Economics, told DealBook.
“That in turn drives economic growth,” he added. For example, the release of the iPhone decimated BlackBerry’s market share.
The laureates warned that growth is not inevitable. Immigration and openness to trade are key components for growth, the winners told The Times. Aghion expressed optimism that A.I. could be a large growth driver, but favored policies that promoted competition and did not consolidate power to just a few winners.
THE SPEED READ
Deals
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Rayonier agreed to buy PotlatchDeltic, a rival owner of timberland, for about $3.4 billion in stock. (Joint press release)
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“Most U.S. I.P.O.s Remain Stuck In Limbo Despite S.E.C.’s Shutdown Fix” (Bloomberg)
Politics, policy and regulation
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“Trump Allies Sold Sponsorships to What Appeared to Be a Treasury Event. It Wasn’t.” (WSJ)
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Democrats’ warnings about the costs of the government shutdown aren’t helping them win points with voters about the broader economy, a new poll found. (Politico)
Best of the rest
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“How Ticketmaster Made It Impossible To Sue Them” (The Lever)
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Speaking of music: Taylor Swift set another record with the debut of her latest album, “The Life of a Showgirl.” (Variety)
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After interviewing Robin Williams, Lorne Michaels, Barack Obama and hundreds of other guests, the comedian Marc Maron explains why he’s walking away from his podcast. (NYT)
We’d like your feedback! Please email thoughts and suggestions to [email protected].
Andrew Ross Sorkin is a columnist and the founder of DealBook, the flagship business and policy newsletter at The Times and an annual conference.
Bernhard Warner is a senior editor for DealBook, a newsletter from The Times, covering business trends, the economy and the markets.
Sarah Kessler is the weekend edition editor of the DealBook newsletter and writes features on business.
Michael J. de la Merced has covered global business and finance news for The Times since 2006.
Niko Gallogly is a Times reporter, covering business for the DealBook newsletter.
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