Dec 8, 2017

Axios AM

By Mike Allen
Mike Allen

You're invited ... I hope you'll join me for breakfast in D.C. on Monday morning when Axios "Harder Line" energy columnist Amy Harder leads a conversation about energy under President Trump. Check out the lineup and RSVP here.

1 big thing: Capitol Hill in crisis

We have finally found something Republicans and Democrats have to common. Sadly, it's their shared culture of sexual harassment — and the worst form of abuse of power by old, perverted men:

  • Neil King, former Wall Street Journal deputy bureau chief, tweets that he's hearing the total number of congressmen with sexual-harassment skeletons "may top 40."
  • USA Today's banner: "Congress reels from resignations."
  • Many lawmakers are scared that Sen. Al Franken (D-Minn.) set a new threshold for resignation.
  • Last evening, Rep. Trent Franks, "the dean of Arizona's House Republicans, announced he is stepping down after learning the House Ethics Committee was investigating him for sexual harassment involving two 'previous female subordinates.'" (Resignation letter.)
  • Facing allegations of sexual harassment, Republican Rep. Blake Farenthold of Texas and Democratic Rep. Ruben Kihuen of Nevada have so far resisted calls to step down. Republican Rep. Joe Barton of Texas said he won't seek re-election next year.

Life lesson: Most men are good men. They treat women with respect and dignity. They work hard, set good examples, and do the right even when no one is looking.

Be smart: It's sad testament to our times that we need to be reminded of this. But I'm grateful to be surrounded by great role models — women and men.

2. Roy Moore Republicans

Nine women, on the record, have accused Alabama Republican Roy Moore of sexual misconduct, most when they were teenagers and he was a grown man. Moore's spokesman says the women, who Mitch McConnell unambiguously believes, are criminals.

  • At a rally in September, one of the few African Americans in the audience asked Moore when America was last "great." He responded: "I think it was great at the time when families were united — even though we had slavery — they cared for one another. ... Our families were strong, our country had a direction."
  • President Trump has endorsed Moore, the Republican National Committee is helping elect him, and most Senate Republicans — while uncomfortable with him — have fallen silent on the allegations.
  • GOP sources tell us if Moore wins, senators are highly unlikely to fight to boot him.
  • A Washington Post poll found that nearly 6 in 10 white women in Alabama are likely to vote for Moore.

Be smart: It's 2017. In America. Really.

3. Wall Street can't wait to short bitcoin

Wall Street Journal lead story: "Bitcoin's Wildest Rise Yet: 40% in 40 Hours."The price of bitcoin is up more than 1,500% percent this year. Next week traders will get a way to bet the price goes down, Axios' Chris Matthews writes:

  • CBOE, the Chicago Board Options Exchange, will begin issuing Bitcoin futures contracts on Sunday, letting sophisticated investors bet against the asset more easily than ever before.
  • Why it matters: This new instrument, along with similar upcoming offerings the CME and others, could pave the way for a serious bitcoin correction.

The average holder of bitcoin now are millennials, counterculture folks and "other amateurs who are interested in the technology," said Ihor Dusaniwsky of financial firm S3 Partners.

  • New futures trading in bitcoin will open the market to professional traders: "Current bitcoin holders are the gazelles in the plain, and the tigers and lions are about to get released."

But, but, but ... Short-selling bitcoin can be even riskier than owning it because when you buy an asset, the most you can lose is your initial investment. When you sell an asset short, your losses are potentially infinite, limited only by how high the price goes.

Bonus: Pic du jour

Pearl Harbor survivor Chuck Kohler, 94, salutes the audience after giving remarks during a remembrance ceremony aboard the USS Hornet yesterday in Alameda, Calif.

  • Kohler was 17 when he witnessed the first bomb dropped during the aerial attack as he manned a .50 caliber machine gun on Ford Island, in Pearl Harbor, Hawaii.
  • Kohler was injured by shrapnel, making him likely the first blood to have been shed at Pearl Harbor.
4. "Fiery tornadoes churned up the slopes"

"As the flames approached the elite San Luis Rey Downs training facility for thoroughbreds [in San Diego County], many of the more than 450 horses were cut loose to prevent them from being trapped in their stables if barns caught fire," AP reports:

  • "Herds of horses galloped past flaming palm trees in their chaotic escape of a normally idyllic place. Not all survived."

L.A. Times lead: "Flames roar through wide swaths of land: Thomas fire could burn for weeks in Ventura County."

  • AP: "[F]irefighters in Ventura tried to corral the largest and most destructive fire in the state, which has destroyed 430 buildings. The so-called Thomas Fire has grown to 180 square miles."
  • "Fire crews made enough progress against large fires around Los Angeles to lift most evacuation orders."
5. The new same-sex marriage fight

In the latest episode of our video series, Axios Sourced, Sam Baker describes the Supreme Court arguments in the case of the Christian baker who refused to bake a wedding cake for a same-sex couple.

6. New superpower race

China is in the midst of an artificial intelligence frenzy. It's spurred in part by the "Next Generation Artificial Intelligence Development Plan" that Beijing released in July, promising huge policy and financial support in pursuit of expansive goals between now and 2030, Sinocism's Bill Bishop writes for Axios:

  • Why it matters: AI is sharpening competition between the U.S. and China.

A white paper by Kai-Fu Lee, founder of Sinovation Ventures and a world-renowned AI researcher, and Paul Triolo, head of Eurasia Group's Geo-technology practice, argues that China and the U.S. are already in a global AI duopoly. China has several structural advantages for AI development:

  • Huge data sets generated by nearly a billion Internet users and few privacy restrictions.
  • A rapidly growing pool of talented Chinese AI engineers.
  • Some of the best and most aggressive entrepreneurs in the world.
  • A very supportive government policy, including significant financial support.

The big picture: China's AI plan is part of the Chinese government's blueprint for becoming a superpower and achieving "the great rejuvenation of the Chinese nation," while maintaining Communist Party control.

Sign up here for Bill Bishop's weekly newsletter, Axios China.

7. Axios World

From the Eurasia Group's Leon Levy, here's a list of world leaders who have had the some of the biggest swings in sentiment from the start of their current terms until now.

8. Dynasty dysfunction

"The choice that could save South Africa, or wreck it" — The Economist cover editorial:

  • "South Africa has fallen [far] from the ideals it embraced when it was reborn after apartheid. Under President Jacob Zuma, the state is failing. Contracts are awarded through bribes and connections; ruling-party members murder each other over lucrative government jobs; crooks operate with impunity."
  • What to watch next week: "[A] moment that may determine whether South Africa slides further into this mire or starts to recover. At a conference that starts on December 16th [a week from tomorrow] the ruling African National Congress (ANC) is due to choose the successor to Mr Zuma as its leader, and thus its candidate for presidency of the country. The front-runners are Mr Zuma's ex-wife and preferred candidate, Nkosazana Dlamini-Zuma, and the deputy president, Cyril Ramaphosa."
  • Why it matters: "For South Africa and for the whole African continent, Mr. Ramaphosa needs to win."
9. An epic year: 6 of 30

Remembering 2017 in 30 images ... Russian President Vladimir Putin, whose meddling in the 2016 election kept him in the news throughout 2017, locks a collar with a satellite tracker on a tranquilized 5-year-old Ussuri tiger, in a Russian Academy of Sciences reserve in Russia's Far East.

  • On Dec. 6, Putin declared his intention to seek re-election next March, a vote he's certain to win.
10. 1 bro thing: Real-life "Silicon Valley"

At holiday parties in Silicon Valley this year, there'll be a surprising influx of attractive women — and a few pretty men — mingling with the engineers. They're being paid to.

"Ambiance and atmosphere models," contractually obligated to pretend they're party guests, are in record demand from local agencies, Bloomberg's Sarah Frier reports:

  • "Along with ... harassment and discrimination scandals, Silicon Valley's homogeneity has a more trivial side effect: boring holiday parties. A fete meant to retain all your talented engineers is almost certain to wind up with a rather same-y crowd, made up mostly of guys."
  • "Local modeling agencies, which work with Facebook- and Google-size companies as well as much smaller businesses and the occasional wealthy individual, say a record number of tech companies are quietly paying $50 to $200 an hour for each model hired solely to chat up attendees."
  • "For a typical party, ... Cre8 Agency LLC is sending 25 women and 5 men, all good-looking, to hang out with 'pretty much all men' who work for a large gaming company in San Francisco."
Mike Allen