The News Memo
Stories this week:
Partial Government Shutdown Continues
What’s going on?
The government shutdown, which started just before Christmas on December 22, is likely to continue, as both President Trump and Democratic leaders, Nancy Pelosi and Chuck Schumer, hold their differing positions on how government money should be allocated. Nancy Pelosi was elected as the new Speaker of the House this week, and controls power in the House, while Senate Majority leader Mitch McConnell (KY., R) holds control in the Senate. President Trump wants $5 billion for his wall and the Democrats are willing to give $1.3 billion to border security and securing ports of entry. While the new Democratic majority in the House passed a short-term budget bill on Thursday, it did not include funds for the wall. Because it lacks the border wall funds, Senator McConnell and President Trump have already indicated they would not approve such a measure.
Building a wall was a primary campaign promise for Trump in the 2016 election, and he is feeling the pressure to fulfill that promise as 2020 looms. Democrats, who have supported building a wall in the past, feel a lot of pressure from their base to not concede to Trump’s demands. To the Democrats, Trump’s wall has become a symbol of Trump himself, making it impossible for them and their base to support it.
What are the effects of the government shutdown?
Some 800,000 government employees will not receive their paychecks until the budget is resolved. “They have to realize that this affects everyday people,” Ray Coleman Jr. told The New York Times. Ray teaches G.E.D classes at a federal prison in Florida. “It affects the boots on the ground. To me, it’s like a political chess game that they’re playing, and we seem to be pawns.”
One party will need to give in to the other’s demands or a compromise must be met. Usually, government shutdowns are resolved by the argument that bodes well with the American public opinion. It comes down to leverage. Is the wall necessary or not?
Apple Cuts Revenue Projections, Blames Slow Sales in China
In a letter to investors on Wednesday, Apple CEO, Tim Cook, said they were lowering revenue projections for the last quarter of 2018, which ended in December. This is the first investor guidance revision in over 15 years for Apple. The slowdown in revenue was attributed to slowing iPhone sales in China. China is the world’s largest smartphone market and accounts for roughly 20% of Apple’s total revenue.
Many analysts have been concerned that slowing growth in China, as well as rising iPhone prices, would negatively affect Apple’s bottom line. After peaking in October with a market valuation of over $1 trillion, Apple has lost over $400 billion since then. Tim Cook responded to the announcement, saying, “While it's disappointing to revise our guidance, our performance in many areas showed remarkable strength in spite of these challenges.”
Furthermore, on Thursday, new economic data were released which showed manufacturing activity has declined recently in the U.S. and China, which further concerned investors. Stock markets reacted negatively to these announcements on Thursday, with major U.S. stock indices declining between 2.5% and 3%, and shares of Apple declining 10%.
Why is the move by Apple significant?
The revenue revision is seen as an indication that the trade battle between the U.S. and China has weakened economic growth in China, the world’s second largest economy. While economic growth in the U.S. has continued to increase steadily, the outlook is not as great in China, as it is beginning to experience lessening domestic demand. Kevin Hassett, chairman of the Council of Economic Advisors for President Trump, commented on Apple’s announcement, saying, “There are a heck of a lot of U.S. companies that have sales in China that are going to be watching their earnings being downgraded next year until we get a deal with China.”
Elizabeth Warren Announces 2020 Presidential Run
On Monday, Massachusetts Democratic Senator, Elizabeth Warren, announced that she will be running for President. She is the first contender to announce her run in 2020. The Democratic nomination is poised to be one of the most contentious, crowded, and divided in a long time, as the party seeks to define their positions and ideology against President Trump. Currently, the party is divided between the progressive left-wing of the party, with leaders such as Elizabeth Warren, Bernie Sanders, and Alexandria-Ocasio Cortez, and the more moderate wing of the party. Cortez, for example, recently earned a landslide election victory in New York's 8th Congressional District, on promises of free health care and college. The moderate wing of the Democratic Party consists of politicians such as Nancy Pelosi and Joe Biden.
What to watch moving forward
Warren, 69, drew controversy when she claimed to be a Native American. President Trump, who often calls her “Pocahontas” in reference to the claim, has slammed her for what he believes to be a false story. Warren released a DNA test that backfired in 2018, proving she had roughly the same amount of Indian Heritage as the average American. The results can be found here.
NASA Probe Reaches Distant Ice World; China Lands on Far-Side of Moon
NASA Probe Wanderer Reaches Ultima Thule
Space exploration continues in earnest as a NASA spacecraft named New Horizons completed a flyby of a distant ice world named Ultima Thule (the name means “beyond the borders of the known world), located roughly 4 billion miles away from Earth. It is the most distant object ever explored in history. The New Horizons craft, which is the first space mission designed to explore the outer edge of the Solar System, was launched from Cape Canaveral, Florida, in 2006. It took photos of Pluto in 2015 before reaching Ultima Thule.
Although New Horizons has begun to transmit data and images back to Earth, because of the immense distance between Thule and Earth, it will take approximately 20 months to send all of the information. Preliminary images received this week show Ultima Thule to be a “contact binary,” which simply means two separate objects that have been fused together (see image above).
The flyby maneuver was quite impressive. The New Horizons probe was moving at a speed of 32,000 mph and had to be oriented just right to take photos of the icy world. Additionally, the probe had to be four times closer to Ultima Thule compared to when it photographed Pluto, due to Thule’s small size.
Why is it significant?
The exploration potentially offers groundbreaking discoveries for a number of reasons. Ultima Thule is located in the Kuiper belt, a band of frozen space material on the outer edge of the Solar System. The Kuiper belt retains temperatures near absolute zero, which means it has largely remained preserved in a deep-freeze state since its formation. Because it has been largely in a static state, and due to its relatively small size, it may give scientists the chance to learn more about the origin and formation of the Solar System some 4.5 billion years ago.
China Lands on Far-Side of Moon
In further space exploration feats, a Chinese probe named Chang’e-4 landed on the far-side of the Moon this week. While the Earth-facing side of the Moon has been explored extensively over the past few decades, this is the first attempt and successful landing of a spacecraft on the far-side of the Moon. Due to a concept known as “tidal locking,” only one side of the Moon is ever visible to the Earth. This is because the Moon rotates on its own axis at the same speed at which it makes one orbit of the Earth. The purpose of the mission is to explore the topology, as well as various craters and materials on the Moon.
Why is it significant?
The landing marks an important moment for Chinese space exploration. While China has lagged behind the U.S. and Russia in space exploration for decades, they have been ambitiously working to become a world leader in this arena and are making consistent progress. Additionally, the crater where the Chang’e-4 probe landed is one of the oldest and deepest craters on the Moon, meaning it may offer clues and insights into the origin and history of the Moon. Last, the area around the crater is thought to be rich in minerals and resources. Resource extraction from the Moon is a goal for some countries in the future, and this may give China a leg up in this work in the future.
Sources for this week’s Memo:
The New York Times
What We’ve Learned About Ultima Thule from NASA’s New Horizons Mission
‘New Chapter’ in Space Exploration as China Reaches Far-Side of the Moon
The Washington Post
Apple’s slowdown in China ripples through global financial markets
NASA’s New Horizon spacecraft is about to explore Ultima Thule
The Wall Street Journal
U.S. Stocks Close Sharply After Weak Economic Data, Apple Warning
NASA Spacecraft Zooms Past Ultima Thule
Apple Shares close nearly 10% lower after sales warning
New Horizons: Nasa probe survives flyby of Ultima Thule