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It may not have been a pretty season but the New England Patriots are on the brink of making the playoffs behind a rock-solid defense and second-year quarterback Mac Jones.
Jones’ play has been far from outstanding.
He missed some games due to injury and has only managed to pass for 2,753 yards and 11 touchdowns in 13 games. He’s only thrown for more than 300 yards in a game twice this season.
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For former NFL star Boomer Esiason, Jones’ body language is an issue. The one-time NFL MVP appeared on “The Greg Hill Show” on WEEI radio Monday and ripped the former Alabama standout.
“Here’s the thing that I really dislike about Mac Jones if you want to get to the root of it,” Esiason said. “His body language, his facial expressions, his gyrations on the field p—s me off. There’s a d—–ness to them. I don’t know how to explain it.
Esiason then compared Jones to seven-time Super Bowl champion Tom Brady and how the Tampa Bay Buccaneers quarterback “could be d—chey too at times” but backs it all up with his performance on the field.
SAQUON BARKLEY HEAPS PRAISE ON DANIEL JONES AS GIANTS CLINCH PLAYOFF BERTH
“So, all I’m saying is that, I don’t necessarily know that he’s earned the right to act the way that he does at times, like frustrated, looking at the coaches and screaming and yelling, putting his hands to his head,” Esiason added. “Body language for a quarterback is so important. And I hate when quarterbacks sulk on the sideline; they have to be above all of that. They have to have the backbone. They have to have the leadership bone. They have to be able to look guys in the face and know what they’re doing. Don’t come off with your hands in the air.”
WARNING: EXPLICIT LANGUAGE
Jones guided the Patriots to the playoffs last season after winning the starting quarterback role from Cam Newton in 2021.
In 30 games, Jones has 6,554 yards, 33 touchdowns and 21 interceptions with a 66.5 completion rate. He was a Pro Bowler in 2021 – no other running back, wide receiver or tight end made it nor did they make it in 2022.
Esiason was a four-time Pro Bowler and had weapons around him like Ickey Woods, Cris Collinsworth and Eddie Brown along with Hall of Famer Anthony Munoz blocking for him. Jones doesn’t have that around him on offense yet.
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Where did 2022 go so wrong and how can 2023 go right? I am constantly trying to show you how money managers work because — unlike almost everyone in “the business” — you can cherry-pick the parts that best suit your investing strategy. My goal for the Club has been simple and true: to replicate what I did as a successful money manager so you can do the same. You may have joined the Club to augment your knowledge. Maybe you wanted to be liberated from the dogma that says amateurs can’t invest on their own and should instead direct their money to the pros on Wall Street. Of course, I don’t want your money — although I am compensated by a television network that helps many make trading decisions. What I do want is to improve the inclination for regular folks to own individual stocks in addition to S & P 500 index funds. (Those funds, by the way, are faux passive in that they control what gets in and out of the vaunted index. That, plus lower fees, is why these options almost always beat the performance of active money managers.) I mention all of this because I passionately believe that you can beat the averages and chose when you want to pay taxes. This is exactly what I try to do for my own Charitable Trust, a trust that does not allow me to keep any realized income or dividends. Hopefully, you aren’t similarly restricted as it severely hurts overall performance. When I was running my hedge fund, which beat the S & P 500 for 14 years with an annual average of 24% after fees, I always sent an internal memo to the team that explained what I saw coming in the year ahead. This is that memo — but for the Club. How we got here The seeds of 2022, the worst year since 2008, were planted in November 2021 when the Federal Reserve decided to end its easy monetary policy and become far more restrictive. This decision and the Fed’s message were muddled by two things. First, the burst of the Covid omicron variant prompted the central bank to offer a less-harsh message to the markets. Second, the endless chatter about whether the Fed did too little or was too late (or both). Those kinds of arguments predominated and all they do is throw you off the scent. If you are managing your money, this kind of second-guessing is a waste of time. You must deal with the hand the Fed has given you. Why do you hear the fatuous chatter so often? Because it’s easy. All you need is an opinion. I don’t care one way or the other. I’m trying to make money. Omicron was a different matter. Public health is much tougher to divine. So many people I talk to are so critical of Fed Chairman Jerome Powell on this issue. It does not seem to matter that he got it far more right than Europe and China. Two of the main things we learned during 2022 was that China is not invincible and its dictatorship is both erratic and idiotic. Who turns down vaccines that work and save lives? Who chooses to doom the elderly? It’s important to recognize as we come out of 2022, we come out on top in the world. Our stock market comes out of 2022 better than any other. That’s the most important takeaway of 2022. Sticking to our doctrine The second big takeaway from 2022: If a company doesn’t make things and do stuff profitably, has a reasonable price-to-earnings ratio and returns capital to you in the form of dividends or buyback, it won’t work. Shares will go lower. That doctrine, which we started applying in late 2021, severely limited what could be owned — way more than I thought. It cordoned off so many profitless entities, everything from enterprise software and electric vehicle accoutrements to SPACs (special purpose acquisition companies) and anything crypto. Each has its disadvantages. Before the Fed pivot we measured enterprise software companies by the Rule of 40 — a shorthand formula invented by Fred Wilson, an old friend and chief investor and chairman of my old firm thestreet.com. It held that if your company is growing at a combined revenue growth and profit margin of 40% or greater, it’s a good investment. It didn’t matter how you reached that level. The company could be growing at 50% with a minus 10% profit margin, or at 30% with 10% profit margin. As long as it all added up to 40%, the company was golden. We used to do this stuff back in 1999, but we weren’t precise enough. The problem with that kind of analysis, which is really meant for venture capital investors and peaked before the dot-com bubble, is that there were too many companies that fit or almost fit the bill. The profitless companies today — like the dot-com stocks in 2000 — almost all disappointed and will continue to disappoint in 2023. That’s because they perform poorly in an inflationary environment and a tightening cycle that is ongoing. Our doctrine holds that money losers don’t belong in your portfolio. Our doctrine holds that the alternate version of greatness, the price-to-sales ratio, is of no value because we must now value companies by viability and growth. We can no longer assume that a company has time down the road to get to profitability. A shrinking universe of stocks What else does our doctrine eliminate? Many people asked me if the Trust would ever own crypto. The answer is no. Not only does it carry risk from being part of a fickle and (as we know now) rigged market, it also can’t be stored anywhere safe. There are hundreds of coins that have been made up, and they are all worthless and will be proven as such. SPACs are also ruled out. They have been revealed as a comical exercise in finding businesses that could never be bought public because they are so bad. The whole concept of the blank check is repugnant. You would never give anyone a blank check, would you? No, you’d never be that trusting or stupid. The doctrine also rules out any fad. Look at the stocks making new lows. I was walking through my town and saw an Amazon Rivian truck parked across the street. What a poster boy for the pivot: Rivian Automotive (RIVN) shares have fallen to $18 from $172. That’s simply 2000 all over again — the year of magical thinking and destruction. If you have anything like that in your portfolio, sell it. The markets are too disciplined now. I use Rivian as an example because Amazon is committed to buying anything they make, yet they are expected to lose money for a long time. This is not 2021, where the price-to-sales ratio seems cheap in the out years . It’s 2023 and who cares about the out years, we care about profit and Rivian can’t make it. Our discipline rules out pretty much every enterprise software company. There are just so many. It’s painful to look at them all. These were the darlings since 2010, which makes it harder to stop loving them. I am tempted to write that enterprise software is anything a regular person can’t understand. These companies are usually involved in making coding easy or obviating expensive workers. These can be good companies, but if they are profitless — and most are — I hate them. Mistakes made in 2022 Only enterprise software companies with CEOs that have actually bridged to profitability, not pledged to profitability already, are any good. That’s why we like cybersecurity company Palo Alto Networks (PANW) so much. CEO Nikesh Arora has gotten Palo Alto to that hallowed ground. We know this company can become extremely profitable on a generally accepted accounting principles (GAAP) basis, meaning how we judge companies in 2023, not non-GAAP adjusted nonsense as we did from 2010 to 2021. One of the mistakes we made was keeping Salesforce (CRM) in the portfolio. The market was unduly harsh to software companies with big cash flow but also high price-to-earnings ratios. We thought Salesforce would be immune from the stock dumpster because it is extremely profitable on a bunch of readings, especially operating cash flow. But its forward P/E of 27 was just too high for a market that appears to be favoring only stocks that are closer to the 17 P/E that the overall market clocks in for 2023 estimates. I was wedded to Salesforce when it was at $8 at the height of the Great Recession, only to be reminded that these are just pieces of paper and you can’t marry them. We also fell prey to the market’s newfound discipline with Nvidia (NVDA), a company with greatness but a stock with a high P/E of 44. It just didn’t matter how smart CEO Jensen Huang is, and he is the smartest CEO I have perhaps ever met. Like host Jeff Probst says to losers on the long-running “Survivor” reality show: “Sorry, I got nothing for you.” Brutal, just brutal. The odd thing, by the way, is that most venture capital companies are totally hung up on enterprise software, which is one of the real reasons they will find themselves in trouble in 2023. The market will not have an appetite for them. The venture capitalists, along with the private equity companies, have refused to recognize the pivot and would never adopt our doctrine. Unless they change their tune, it will cost them in 2023. The doctrine rules out all biotech companies — unless they make money. When the market lacked all discipline, the brokers flooded us with biotech. We just don’t seem to realize it because they are almost all going under. They don’t make things or do stuff at a profit, let alone all the other considerations. It rules out most Chinese stocks, which made up a big glob of initial public offerings in recent years. The Chinese government reserves the right to turn on or off profitability and even to buy stocks to get them higher. This is done mostly to suck in American capitalists, which deserve to be destroyed. Yet the brokers keep recommending them. That’s because, unknown to most, they pay the biggest fees and are the best source of IPO profit. Here’s what our discipline will wrestle with in 2023: financials. I am not talking about fintech, which will be overly regulated because of what happened to crypto. Also, because the traditional finance industry is trying so hard to destroy fintech — and will, by the way, succeed this year. Any way to untraditionally bank or give loans should fall by the wayside in 2023. But the “do stuff” part of our discipline will be challenged by the ability of banks to continue to thrive in a high-interest-rate environment where their own investments could be questioned. The Federal Deposit Insurance Corporation (FDIC) reports how much banks are underwater in unrealized investments and it is about $700 billion; way too high for my taste. We haven’t and don’t like any fintech and most banks, but have allowed ourselves to own Morgan Stanley (MS), which doesn’t have a problem, and Wells Fargo (WFC), which will benefit from reduced regulation. But we screwed up by not selling WFC much higher, thinking that its multiple was still too low. Something to watch this year. So all told, the bad news is our doctrine blocks more than half of the market. Maybe even more. 5 predictions for the first half of 2023 The good news is that we have a winning formula as demonstrated by our winners. So, with the admittedly detailed look at how we got here, what awaits us? Let’s talk about five factors. You might call them predictions, but I consider them our worldview that will inform us in the first six months of 2023. This is our usual timeframe for making stock decisions. 1. The Fed won’t make small rate hikes until it sees wage declines. Not wage stabilization, it’s too high, but actual declines. That can’t happen until there are meaningful layoffs. I have talked about this before. Understand, though, the depth of this criteria. We have all sorts of indicators for inflation like the producer price index and the consumer price index. In 2023, they will be distractions. We care about unemployment going higher, toward 4% or above, and aggressive, permanent layoffs, like the ones that stem from large-scale bankruptcies. Other than fraudulent ventures, such as Sam Bankman-Fried’s crypto firm FTX, we simply haven’t had any. Lots of people talk about the larger number of new cars and the lowering of car prices, or the glut of apartments and the potential collapse of rents, or even the year-over-year decline of housing prices. I have come to believe that those are of zero interest to the Fed. They are all creatures of a tight labor market and the tremendous savings of Americans — roughly $1 trillion today from about $2 trillion two years ago. Credit card debt and defaults are indeed rising, and that’s something that’s worrying the worrying class. But that’s not a factor beyond the usual borrowing woes. It won’t impact the banking system in 2023, which is too strong to be strung by those defaults. Friday’s jobs number can tell the tale. Once again, I emphasize that it’s not wage stabilization we are looking at, but wage declines. We have just lost so many workers at once, particularly the over 60 class, to Covid or a reassessment of life post-pandemic that we just don’t have enough to fill jobs. I had thought these people would come back to work when they realized that savings from the stock market and Social Security aren’t enough of a safety net. But I no longer believe that will change. We also have a paucity of lower-end workers, the result of tougher immigration laws, something I don’t see changing either. That leaves large-scale bankruptcies. Just decisions to freeze hiring aren’t enough. There are still not enough workers (white collar or blue collar) out there to reduce wages. And until there are, we will see more Fed tightenings, not at the same pace simply because that would take us to 6% in the blink of an eye. The federal funds rate can get to 5%, from current target range of 4.25 to 4.5%, on the low end after we see the closures and bankruptcies. The 2-year Treasury at 4.4% influences my thinking of a rate not much higher, or that predictive gauge would be at 5% now. Until we get to that level of joblessness, we will be chary with our capital. We will hold a higher rate of cash of roughly 10%, which means selling something to buy something, our usual defensive posture. 2. We don’t need new stock. Unlike so many in the industry who lament the lack of issuance of common stock, I think it’s fantastic. There are so few good private companies that haven’t already come public that we don’t need new shares. It just makes stock-picking harder. We want a limited and better selection, and the IPOs just get in the way. Plus the Federal Trade Commission and Justice Department are both inclined to block mergers. If you read the ruling that blocked Penguin Random House from buying Simon & Schuster, it’s clear the Justice Department has a winning hand in blocking even the least potent combination. And forget the FTC. Lina Khan, the head of the FTC, is an old-fashioned redistributionist who wants to block everything because she thinks all combinations are bad. Her thinking may not survive any rigorous view of antitrust if a company like Kroger (KR) wants to go to court. But that’s not the way of most corporate America, despite the endless pushing by greedy bankers and lawyers who don’t have enough work to do to maintain their admittedly lavish lifestyles versus pretty much the rest of the country’s work force. That’s factual, not judgmental and is important because we don’t want to lose money speculating on the closure of a Microsoft-ActivisionBlizzard deal. Despite the small tax on buybacks, companies will remain aggressive buyers of their own shares because they think they are cheap. The good news here is two-fold: We will have better earnings per share than most prognosticators think, even if we have a pretty bad slowdown; and the discipline of the market — our doctrine — makes it easier to ferret out winners from losers. The “don’t own” part of our mantra make things easy for us as it usually includes companies that endlessly issue stock because of compensation. They got away with that too long. It’s over. 3. Bonds are more attractive than stocks. This is distinctively negative: The Fed will keep taking rates up to where CDs or Treasurys are more compelling than most stocks. Money will be exiting the stock market all year into the safer and somewhat greener pastures. I can blame no one reading this who doubts the ownership of a large chunk of stock. I don’t think you can go wrong with owning a 2-year piece of paper that will allow you to make the current federal funds rate without risk versus owning stocks that may be weighed down by our rigorous criteria of picking winners. There are a lot more losers out there, including expensive companies in the S & P 500 — expensive on earnings estimates in a slowdown, which is the likely scenario. Trust me, the Fed will win, but at a cost that most will find less than compelling for most stocks in the 2000 some odd equities that define a broader class than the S & P 500. That trust has heavily influenced our decision to stay invested in oils that will most likely continue to pay high dividends as long as oil remains above $70, even as their earnings may not be high enough to avoid estimate cuts. That’s what their P/Es of 6 to 9 tell us. We’ve never had any oil companies with discipline before, so we don’t know what it will be like. It is entirely possible that the world will slow to the point that oil goes down to $60 but that would include no resurgence in China in 2023, unlikely because of enforced herd immunity and an end to the war in Ukraine, which is a total wild card. Suffice it to say I think oil remains high enough to maintain these dividends. But our conviction is being tested pretty regularly, especially with natural gas in essential free fall. 4. Companies with pricing power will win. In a deflationary environment that the Fed is furiously engineering, does a company have the ability to pass some of its costs on to consumers. Optimal situation: drug stocks, which have no economic sensitivity and can keep raising prices with impunity as our current president and his regime seem not focused on this activity. Nadir situation: the entire class of 2020-2021, which were companies based on low interest rates and initially a lack of competition until competition became endless and first-mover advantage became nil. 5. Look for benefactors of Washington’s spending. Who benefits from the federal infrastructure money coming, the result of a total lack of discipline by both Congress and the Biden administration? In the work I have done, I recognize that virtually none of this money has gone anywhere as Washington is still writing criteria. But the stock market is going to anticipate that this money is going to go to the states this year and they will refine their rules and begin to reward contractors by the end of the year. I can’t see anything started, let alone built, in 2023. But the companies in the chain that will be building need equipment to meet infrastructure demand. These are reasons why I remain attracted to companies like Nucor (NUE), Deere (DE) and Caterpillar (CAT), which are all winners in an infrastructure-driven economy. The spending in Congress has made it difficult for the Fed to rein in growth, but its bond selling and fed-rate increases are more than up to do the job. Some trimming left to do Now, the tough part. We know what went wrong in 2022. We know what to look for in 2023. Where does that leave us? Unfortunately, we still have culling to do. Can we justify owning Amazon (AMZN), Apple (AAPL), Alphabet (GOOGL), Meta (META), Microsoft (MSFT) and Nvidia (NVDA)? No. I think Apple could pre-announce disappointing earnings, something I have stressed to you endlessly. But the stock has come down to $129 from $182 and that decline is in line with probably three-quarters of the losses that Apple’s stock could have. Own it, don’t trade it as demand is greater than supply. Alphabet trades at 18 times earnings and the earnings are real, but based on a stabilization of advertising. That can’t happen until the slowdown ends. Call me concerned, as this must be the year that Alphabet has discipline over earnings and hiring, something it didn’t care enough about in 2022 despite its protestations. Amazon is a mess and defines a stock we would normally sell. But I have faith that CEO Andy Jassy will take the tough action that rationalizes its workforce and cuts spending. We have been basing an awful lot on that happening. If they aren’t disciplined, we will have to be. Meta is telling. The P/E is expected to increase this year because of a decline in earnings. So far, the metaverse has been a bust, no economic value whatsoever. It’s a small position, but one kept because I struggle to believe that founder and CEO Mark Zuckerberg could be this oblivious to what’s happening. His inability to buy anything — the Feds are even blocking a tiny exercise option for Meta users — is trapping him into growing by shrinking. Take WhatsApp public for a valuation of $100 billion. Or stopping Meta bleeding or allow us to work without headsets. It’s difficult to sell if something doesn’t happen in the next five months. Oddly, Microsoft is the most comfortable of the list simply because it is the best run and most likely to beat estimates. That’s what allows us to keep it. You might see some profitless young companies beat sales estimates or reach small Non-GAAP profitability, but that won’t mean much in 2023. Managers will be drawn to the one large-cap stock that can fulfill old goals. That said, it’s a scale-out as it gets closer to $300, given the fact it defies our doctrine. Nvidia is the one I am most concerned about. What if the federal government decides its most complex chips can’t be sold anywhere outside the U.S. because they could end up in the hands of the Chinese? This one keeps me up at night and I sleep so little I can’t have that happen. Most of the rest of the portfolio fits the doctrinal analysis laid out earlier. Yes, Bausch (BHC) must be dealt with. I know it has options, but I am still waiting for a call back, something that better happen in 2023 although I think the ability to continue to bill for Xifaxin, it’s most important drug, may make it a mistake to sell down here. I don’t think we have enough aerospace, which is in secular growth mode because of a lack of new aircraft. I fear Boeing (BA) and its management team and prefer Raytheon Technologies (RTX), which also has a great defense portfolio. I don’t think we have enough agricultural names, which is still too in bull market mode as 13% of the world’s grain has been taken off the market because of the Russians. Deere, which also has infrastructure, can change that. In light of what I said, we need more infrastructure, which draws me to the 4 times earnings Nucor. I’m confident that’s a pretty ridiculous P/E. How do we get there, how do we buy these new stocks if we don’t want to put that much more money to work? By selling tech, which is still too big in the portfolio. Lots of people ask me where the markets will finish at the end of the year. That’s a parlor game not worth playing. Suffice it to say, we just don’t know until we see the whites of the Fed’s eyes. That involves the layoffs I described as commodity inflation is already going in the right direction. If we know when wages would fall then we know that we can be more aggressive now. We don’t, so why do so? I will save commentary about individual stocks for our next Club meeting this month. Sorry for going on too long, but I always used to go long for my hedge fund — at least when I had my best performances. Let’s hope the same for the new year! (See here for a full list of the stocks in Jim Cramer’s Charitable Trust is long.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.
Where did 2022 go so wrong and how can 2023 go right?
I am constantly trying to show you how money managers work because — unlike almost everyone in “the business” — you can cherry-pick the parts that best suit your investing strategy. My goal for the Club has been simple and true: to replicate what I did as a successful money manager so you can do the same.
BBC News world
Image caption,
North Korea had a record-busting 2022.
It fired more missiles than ever before in a single year. In fact, a quarter of all missiles North Korea has ever launched hit the skies in 2022. It was also the year that Kim Jong-un declared that North Korea had become a nuclear weapons state and that its weapons were here to stay.
This has raised tensions on the Korean peninsula to their highest since 2017, when then US President Donald Trump threatened North Korea with “fire and fury”.
So, what comes next?
In 2022, North Korea made significant progress on its weapons. It began the year by testing short-range missiles designed to hit South Korea, followed by mid-range ones that can target Japan.
By the end of the year it had successfully tested its most powerful intercontinental ballistic missile to date – the Hwasong 17, which in theory is capable of reaching anywhere on the US mainland.
Mr Kim also lowered his threshold for using nuclear weapons. After announcing in September that North Korea had become an irreversible nuclear weapons state, he revealed that these weapons were no longer designed just to prevent war, but that they could be used pre-emptively and offensively, to win a war.
As the year drew to a close, he gathered the members of his ruling Workers’ Party, to set out his goals for 2023.
Top of his list is to “exponentially increase” the production of nuclear weapons. This must include, he said, the mass production of smaller, tactical nuclear weapons, which could be used to fight a war against South Korea.
This is the most serious development, according to Ankit Panda, a nuclear weapons expert at the Carnegie Endowment for International Peace.
Image caption,
To make tactical nuclear weapons, North Korea first must produce a miniaturised nuclear bomb, which can be loaded onto a small missile. The world is yet to see proof that Pyongyang has been able to do this. The intelligence community spent most of 2022 waiting for it to test such a device, but the test never came – 2023 may well be the year.
Other items on Mr Kim’s new year list are a spy satellite, which he claims will be launched into orbit this spring, and a sturdier solid-fuelled ICBM, which could be fired at the US with less warning than his current model.
We can therefore assume 2023 will have a distinctly 2022 feel, with Pyongyang continuing to aggressively test, refine and expand its nuclear arsenal, in defiance of UN sanctions.
Indeed, less than three hours into the new year it had already conducted its first missile test.
But, Mr Panda says, “most missile launches in the coming year may not be tests, but training exercises, as North Korea now prepares to use its missiles in a possible conflict”.
With such an extensive list of goals to work through, it is unlikely the North Korean leader will choose this year to return to talks with the US. The last round of denuclearisation negotiations collapsed in 2019, and ever since Mr Kim has shown no sign of wanting to talk.
One line of thinking is that he is waiting until he has maximum leverage. Not until he has proven beyond doubt that North Korea is capable of inflicting destruction on the US and South Korea, will he return to the table, to negotiate on his terms.
Instead, over the past year, North Korea has drawn closer to China and Russia. It could well be in the process of fundamentally changing its foreign policy, said Rachel Minyoung Lee, who worked as a North Korea analyst for the US government for 20 years, and is now with the Open Nuclear Network.
“If North Korea no longer views the US as necessary for its security and survival, it will profoundly impact the shape and form of future nuclear negotiations,” she said.
In the meantime, a volatile situation is developing on the Korean peninsula.
For every perceived “provocation” by the North, South Korea – and sometimes the United States – retaliates.
This began in May 2022, with the arrival of a new South Korean president, who promised to be tougher on North Korea. President Yoon Suk-yeol is guided by the belief that the best way to stop the North is to respond with military strength.
He re-started large-scale joint military exercises with the United States, against which the North protested and launched more missiles. This set off a tit-for-tat cycle of military action, which has involved both sides flying warplanes near to their border, and firing artillery into the sea.
Image caption,
Last week, the situation escalated, when the North unexpectedly flew five drones into South Korean airspace. The South failed to shoot them down, exposing a weak spot in its defences and triggering concern among ordinary South Koreans, who are usually unfazed by the North’s activities.
The president vowed the South would retaliate and punish the North for every provocation.
Chad O’Carroll, CEO of Korea Risk Group, an analysis service which monitors North Korea, predicts that in 2023, this could likely lead to a direct confrontation between the two Koreas, which could even result in deaths.
“Responses by either the North or South could escalate to the point where we see the exchange of actual fire, intentional or otherwise,” he said.
One mistake or miscalculation and the situation could spiral.
Just as pressing a question is what does 2023 hold for the people of North Korea?
They have been subjected to three years of strict pandemic-related border closures. Even trade was suspended in an attempt to keep the coronavirus out, which humanitarian organisations believe has led to severe shortages of food and medicine. Last year, in a rare admission, Mr Kim spoke of a “food crisis”.
Then in May 2022, North Korea admitted its first outbreak of the virus, but mere months later claimed to have defeated it.
So will 2023 be the year it finally reopens its border with China, and allows people and supplies back in?
Image caption,
China’s reopening brings hope. North Korea is reportedly vaccinating people living along the border in preparation, but given its precarious healthcare, Ms Lee is cautious.
“Barring an emergency, such as its economy on the brink of collapse, it is unlikely North Korea will fully reopen its borders until the pandemic can be considered over globally, particularly in neighbouring China,” she said.
One more development to watch for is clues about who will lead North Korea after Mr Kim. His succession plan is unknown, but last year he publicly revealed one of his children for the first time – a girl, thought to be his daughter Kim Chu-ae.
She has been pictured now at three military events, with more photos released on New Year’s Day, leading some to speculate whether she is the chosen one.
Of course, North Korea is anything but predictable, and 2023 looks set to be as unpredictable and unstable a year as the last.
Latest & Breaking News on Fox News
Bryan Kohberger was on the tail end of his first semester as a PhD student in Washington State University’s criminal justice program when he allegedly broke into a house in Moscow, Idaho, and stabbed four college students to death on Nov. 13.
The brutal slayings reportedly didn’t stop Kohberger from attending class at WSU’s Pullman campus, where he worked as a TA and was described as a tough grader whose disposition and teaching style changed in recent weeks.
“Definitely around then, he started grading everybody just 100s. Pretty much if you turned something in, you were getting high marks. He stopped leaving notes. He seemed preoccupied,” Hayden Stinchfield, a student in one of Kohberger’s classes, told CNN.
“The couple times that he did come after, or around that time period, he had a little more facial hair, stubble, less well-kept. He was a little quieter.”
UNIVERSITY OF IDAHO MURDERS TIMELINE: WHAT WE KNOW ABOUT THE SLAUGHTER OF FOUR STUDENTS
Another criminology student in one of Kohberger’s classes, Joey Famularo, told the Spokesman-Review that Kohberger “always seemed a little bit on edge.”
“We just assumed he was kind of shy,” Famularo told the local newspaper.
Kohberger received a bachelor’s degree in 2020 and a Master of Arts in Criminal Justice in 2022 from DeSales University, which is located in eastern Pennsylvania.
The FBI and local police arrested him around 1:30 a.m. on Friday at his parents’ home in Albrightsville, Pennsylvania. He had driven home with his dad in mid-December and was pulled over twice along the way, according to his public defender.
Kohberger’s office and home are on WSU’s campus in Pullman, which is about eight miles away from the home in Moscow, Idaho, where Kaylee Goncalves, 21, Madison Mogen, 21, Ethan Chapin, 20, and Xana Kernodle, 20, were stabbed to death between 3 a.m. and 4 a.m. on Nov. 13.
Authorities in Idaho charged him with four counts of first-degree murder and felony burglary. He is expected to waive extradition during a court hearing on Tuesday afternoon.
Fox News’ Michael Ruiz contributed to this report.
Carscoops
Interest in the Lexus LFA has only increased as time has gone on, and now, well-kept examples are becoming more and more valuable. That’s why a fascinating, unique example, such as this one, might be a golden opportunity for collectors.
To begin with, it has just 7,400 miles (11,909 km) on the odometer, making it minty fresh, indeed. When it went in for its most recent maintenance call, in May, it needed just an oil change and one new spark plug, to replace one with a cracked insulator.
Just the latest in a long line of regular maintenance visits the car has done, it was always kept in tip-top shape by its original owner, a dealer principal who bought it from Woodfield Lexus of Schaumburg, Illinois and took it to Texas.
Read: The Classiest Lexus LFA Nürburgring Edition Can Be Yours For $1.1 Million
There, it was displayed on the showroom floor and driven sparingly before being bought in 2018 by its current owner, this time a former dealer principal, who moved it to Ohio. In the years since then, the second owner has put just 400 miles (644 km) on the car.
Just the 75th of 436 LFAs (not counting special edition models) ever to leave the Lexus factory, it is one of only 22 that were sold in America finished in Absolutely Red paint. Uniquely, that paint is matched by the car’s front seats that are trimmed in red leather, and contrasted by black leather on the door cards, the instrument panel, the center console, the steering wheel, and the dash. The cabin headliner, meanwhile, is finished in black Alcantara.
As with all standard LFAs, this example is powered by a 553 hp (412 kW/561 PS) 4.0-liter V10 engine that can rev all the way up to 9,000 rpm. Made out of aluminum, magnesium, and titanium, the engine is smaller than a V8 and lighter than a V6.
This example was also equipped with the speed-sensing rear wing and presents exceedingly well thanks to its pampered life, reports RM Sotheby‘s, the auction house that is handling the sale. They estimate that this beautiful example of the car will sell for between $700,000 and $800,000.
BBC News world
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For decades, Ukraine’s super-rich businessmen have wielded enormous economic and political power within their home country. However, since the Russian invasion, Ukraine’s most infamous oligarchs have lost billions in revenue.
Has the reign of the Ukrainian oligarchs finally come to an end?
Ukraine’s richest man – 56-year-old Rinat Akhmetov – is for many the epitome of an oligarch.
The son of a coal miner turned self-made billionaire, he is known across Ukraine as “the King of Donbas.”
As well as owning huge swathes of the steel and coal industry in the east, including the Azovstal steelworks which now lies in ruins, he also owns Shakhtar Donetsk FC, one of the country’s best football teams, and until recently one of the country’s main TV channels.
But beyond their extraordinary wealth, Ukraine’s oligarchs are also renowned for wielding political power.
In 2017, London-based think tank Chatham House said they posed “the greatest danger to Ukraine”.
Through a vast network of allies and loyal MPs, Ukraine’s oligarchs have repeatedly influenced the passing of laws for the benefit of their own business empires.
President Volodymyr Zelensky called them “a group of people who think they are more important than lawmakers, government officials or judges”.
But like so many ordinary civilians, since the beginning of the Russian invasion in the east of Ukraine back in 2014, they have had their businesses blown apart by missiles and their properties lost to the Russian occupation.
Many felt that as Ukraine’s richest man Mr Akhmetov should have done more from the very beginning to stamp out separatism fuelled by Russia in his home region.
As Russia’s influence backed by military power spread in Donbas, he told his factories to sound their sirens in protest. He also issued statements critical of the separatists.
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But as far as funding and supporting the resistance, he was criticised for taking too little action. Especially when compared to another Ukrainian tycoon, billionaire Ihor Kolomoisky.
In March 2014, he was appointed governor of Dnipropetrovsk Region, south-east Ukraine.
As the conflict escalated, Mr Kolomoisky pumped millions into Ukraine’s volunteer battalions. He offered bounties for capturing Russian-backed militants and supplied the Ukrainian army with fuel.
But then, in 2019, he found himself at loggerheads with President Zelensky’s predecessor, Petro Poroshenko.
Parliament had recently passed a law which resulted in Mr Kolomoisky losing control over an oil company. His response? Turning up at the oil company’s headquarters with men allegedly wielding machine guns.
But as the war ground on in the east, and with the loss of yet more factories, mines and fertile farmland, the demise of Ukraine’s oligarchs was well under way.
The next blow came in late 2021, when Ukraine passed what was known as the “de-oligarchisation bill”.
President Zelensky’s new law defined an oligarch as someone who met three of the following four conditions:
All those who qualified were exposed to extra checks and banned from funding political parties.
To avoid being put on the Zelensky list, Rinat Akhmetov immediately sold all his media assets.
But then came Russia’s dramatic escalation of the conflict – the invasion of Ukraine in February 2022.
The war has only intensified the loss of earnings for Ukraine’s super-rich. But will their demise strengthen Ukraine’s democracy?
“Absolutely,” says Sevgil Musayeva, editor-in-chief of popular news website Ukrainska Pravda. “This war is the beginning of the end for oligarchs in Ukraine.”
“The de-oligarchisation law was one of the first major triggers of their demise,” says Serhiy Leshchenko, formerly one of Ukraine’s most prominent investigative journalists and now adviser to President Zelensky’s chief-of-staff.
“But as the war escalated, it made the oligarchs’ life even more difficult,” he tells the BBC. “They have been forced to focus on survival rather than domestic politics.”
Now, says Ms Musayeva, it is up to Ukraine’s civil society and anti-corruption institutions to prevent the emergence of new oligarchs. And, of course, the very survival of democracy in Ukraine depends on the outcome of the war with Russia.
Produced by Claire Jude Press.
Rome
CNN
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The lying-in-state of former Pope Benedict XVI, who died Saturday at the age of 95, began Monday in St. Peter’s Basilica in Vatican City ahead of his funeral later this week.
Benedict, who was the first pontiff in almost 600 years to resign his position, rather than hold office for life, passed away on December 31 at a monastery in Vatican City, according to a statement from the Vatican.
He was elected Pope in April 2005, following John Paul II’s death.
The former Pope’s body was moved from the monastery to St. Peter’s Basilica on Monday morning, where it was laid out for the faithful to bid farewell, the Vatican said. Nearly 40,000 people have paid homage to former pontiff as of 2 p.m. local time (8 a.m. ET) Monday, according to Vatican police.
Italian Prime Minister Giorgia Meloni and President Sergio Mattarella were among those to pay their respects as Benedict lay in state.
Watch Pope Benedict’s most memorable moments
Mourners waiting in line in St. Peter’s Square told CNN they wanted to pay tribute to the former Pope.
“We’re just here to pray, to give thanks to God for the life of Pope Benedict,” said Paul, a student from Scotland.
“Apart from his theology, which was very important for the Church, I think all the time that he spent in his retirement praying for the Church has been a very big testimony for all of us.”
Benedict’s funeral will be held at 9:30 a.m. local time on Thursday in St. Peter’s Square in Vatican City, according to the director of the press office of the Holy See, Matteo Bruni. The funeral will be led by Pope Francis. In line with Benedict’s wishes, his funeral will be “simple,” Bruni said.
Francis paid tribute to his predecessor while leading the Angelus prayer on Sunday.
“In particular, this salute is to the Pope Emeritus Benedict XVI, who yesterday morning passed away. We salute him as a faithful servant of the gospel,” he said.
Benedict was known to be more conservative than his successor, Pope Francis, who has made moves to soften the Vatican’s position on abortion and homosexuality, as well as doing more to deal with the sexual abuse crisis that has engulfed the church in recent years and clouded Benedict’s legacy.
He stunned the Catholic faithful and religious experts around the world in 2013 when he announced plans to step down from his position as Pope, citing his “advanced age.”
In his farewell address, the outgoing Pope promised to stay “hidden” from the world, but he continued to speak out on religious matters in the years following his retirement, contributing to tensions within the Catholic Church.
His death prompted tributes from political and religious leaders including US President Joe Biden, British Prime Minister Rishi Sunak and the Dalai Lama.
Pope Benedict XVI did something no Pope had done in 600 years
CNN
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Free condoms are now available to young people under the age of 26 at French pharmacies as part of what French President Emmanuel Macron has called “a small revolution in preventative healthcare.”
The new health strategy, which aims to curb the spread of sexually transmitted diseases (STDs) among young people in France, came into place on New Year’s Day and was announced by Macron in December. It was initially aimed at those aged 18-25, but was later extended to minors.
Emergency contraception will also be available for free to all women without a prescription as of January 1, according to a tweet from government spokesperson Olivier Veran on Monday.
Since January 1, 2022, French women under the age of 26 already had access to free contraception. This included consultations with doctors or midwives and medical procedures associated with their chosen contraceptive.
The latest measures come as health authorities estimate that the rate of STDs in France increased by about 30% in 2020 and 2021, Reuters news agency reported.
“It’s a small revolution in preventative healthcare. It’s essential so that our young people protect themselves during sexual intercourse,” Macron said in December.
US Top News and Analysis
Markets have bottomed and things are looking up for stocks and bonds, which could rally more than 10% in 2023, according to one portfolio manager. Jay Hatfield, CEO and portfolio manager at Infrastructure Capital Advisors, told CNBC Pro that his bullish case hinges on his expectation that inflation will be “declining rapidly.” “We expect 2023 to be a good year for both stocks as bonds with double digit returns in both asset classes likely as inflation and interest rates recede,” he said. Hatfield said he’s more bullish than other market strategists who project the S & P 500 will go to 3,000 as they “believe that inflation is ‘entrenched’ and will take a long time to go away.” The S & P 500 is currently at around 3,839. However, he said that expectation suggests the “wrong lesson” was learned from the 1970s when inflation stayed high in light of the huge energy shocks in those years. “The 70% energy shock that occurred in Q1 2022 has now completely reversed itself,” he added. “In addition, housing prices are now dropping indicating shelter cost will follow.” Hatfield expects the U.S. will avoid a “major recession” in 2023, thanks to its economy’s relative resilience and reopening tailwinds in the services sector. Hatfield predicts S & P 500 will rise to 4,300 if 10-year Treasury yields return to 3%. Based on the current yield of 3.75%, the S & P 500 is “fairly valued” at 3,800 — implying no upside. Treasury yields have shot up this year as investors continue to fret over the possibility of a recession and what that could mean for monetary policy. ‘Conviction themes’ in 2023 Hatfield highlighted the “conviction investment themes” he expects to be very attractive in 2023. One asset class he highlighted was preferred stocks, which have the characteristics of both stocks and bonds . In other words, they trade on exchanges like stocks but, like bonds, they’re issued at face value and pay dividends. They are also like bonds in that when the value of the preferred stock goes down, yields go up. However, they typically offer a higher yield than other fixed income products and can have more risk. “We believe that preferred stocks are extremely attractive now as most are trading at more than a 20% discount to par. If we are correct about rates declining next year as inflation abates, preferred stocks are likely to outperform most other fixed income asset classes,” Hatfield said. The ICE BofA Fixed Rate Preferred Securities index, which tracks the performance of fixed-rate preferred securities, was down around 14% in 2022. Its yield was last around 7.3%. While Hatfield did not give any names, his firm manages the Virtus InfraCap U.S. Preferred Stock ETF. Top holdings include Necessity Retail REIT, master limited partnership NuStar Energy , and DigitalBridge , which operates digital infrastructure such as data centers and cell towers. Hatfield is also optimistic about real estate investment trusts. “REITs are also very attractive as the sector has underperformed the S & P this year due to rising rates and many pandemic recovery beneficiaries have been unfairly punished during the sell off including retail, entertainment and office REITs,” he said. His firm manages the InfraCap REIT Preferred ETF, which offers preferred securities issued by Real Estate Investment Trusts. It includes names such as Digital Realty Trust , which invests in data centers, and Hersha Hospitality Trust, a REIT that invests in hotels.
