The submarine that could change the world's balance of power

Plus: Meta layoffs, SVB fallout and more. [Bloomberg]( Follow Us [Get the newsletter]( This is Bloomberg Opinion Today, an apex predator of Bloomberg Opinion’s opinions. [Sign up here](. Today’s Agenda - Killer [submarines](. - Meta [layoffs](. - The next [SVB](. - Porsche [prices](. Not Your Father’s Submarine No NUBs Allowed Source: [BAE Systems]( Here are some fun things about [submarine culture]( you might not know: - Every new crew member starts out as a [NUB](, or a “[Non-Useful Body.](”[1](#footnote-1) Some people also joke that this stands for “Never Underwater Before.” - Apparently submarines are notorious for not having enough bunk beds to sleep on? So they do this thing called “[hot-racking](,” where three people will share two beds. Usually those people are NUBs. - Lastly, there is a thing called “midrats,” or midnight rations. These meals are never good and often consist of “[pillows of death](,” or “POD,” which is just a nickname for canned ravioli. Chef Boyardee must be rolling in his grave. Now, you might be wondering why we’re brushing up on submarine trivia. Well, the US, UK and Australia just announced [a historic defense accord]( to base and eventually build some nuclear subs in Australia, which has never had them before. These Virginia-class submarines aren’t your run-of-the-mill subs: James Stavridis describes the SSN Aukus as an “apex predator” that outmatches China and Russia “in stealth, range and offensive firepower.” Coordinating the advance of nuclear submarine technology is smart policy that will increase Western fighting capabilities along the South China Sea, James writes. Eventually NUBs will be hot-racking and getting midrats in a far more strategically important sub. [Read the whole thing](. Bonus China Reading: - The [China-brokered deal between Saudi Arabia and Iran]( is just the beginning, but that’s not a bad thing for the US. — Minxin Pei - China’s carbon footprint is shrinking, and [the emissions tipping point is in sight](, if not already in the rear-view mirror. — David Fickling Metamates, Abandon Ship Continuing with the nautical theme; In 2022 Mark Zuckerberg gave his employees an ill-fated nickname — [metamates](. Zuckerberg’s [expensive exploration into the metaverse]( isn’t going as planned. The reality is that shareholders just want [to make money]( — with or without the assistance of a virtual world. As ad revenue has tanked along with Meta’s share price, Zuckerberg attempted to save face and call 2023 Meta’s “Year of Efficiency,” which was just a nice way of warning a bunch of people he employed that they were about to lose their jobs. In November, the Meta CEO told [11,000 workers to abandon ship](, saying “I got this wrong.” Now he wants to lighten the load even more. Today, [10,000 additional mates got kicked off the boat](. So in a matter of months, Zuckerberg has shaved his workforce by about 25%, all in the name of efficiency: The above chart might please investors for a while, Parmy Olson writes, but [Meta is going to need to do more than lighten its load]( to stay afloat long-term. SVB Aftermath Are you impressed that I made it this far in the newsletter without mentioning those three letters? I refer, of course, to SVB. After a whirlwind weekend and a Monday full of superlatives — which John Authers [charts here]( —  it finally feels as though we can step back, take a breather and figure out where to go from here. There is one question on everyone’s mind: How can we stop the next SVB? My absolute favorite answer to this question comes from Adrian Wooldridge, who essentially argues that people in business should be more like me, a former English major at Indiana University. Now, I hate to make everything about myself, but I am LIVING for this level of validation: “Perhaps this week’s financial turmoil could have been avoided if Greg Becker, the CEO of the just-shuttered Silicon Valley Bank, had studied the humanities at Indiana University instead of majoring in business,” Adrian writes. If only!!! Adrian argues that [the business world could stand to brush up on its Shakespeare](, which “is better preparation for the practical demands of business leadership than studying accountancy.” He is correct, of course, that we humanities majors are a special breed of human. We know the classics. We understand history. We can spot a bank run from a mile away. Aside from more well-rounded CEOs, there are also some basic nuts-and-bolts things that can help stop the next SVB. US President Joe Biden is already taking preventative steps to strengthen banking rules, but Paul J. Davies says [we already have some of the tools at our disposal]( — we just failed to use them properly. In 2018, the threshold for banks that pose a systemic threat was raised. “Had this limit not been increased, both SVB and Signature Bank, closed by New York regulators over the weekend, would have been subject to mandatory stress testing and rules designed to help banks survive sudden deposit outflows,” Paul writes, arguing that we ought to reverse the change. But that legislation also gave the Fed more discretion to determine which banks pose a threat. So why wasn’t the central bank keeping a closer eye on SVB’s balance sheet to begin with? Maybe we need more humanities majors at the Federal Reserve, too. Bonus SVB Reading: - [The UK’s “facilitated” sale of SVB UK to HSBC]( indicates a strong aversion to moral hazard. — Mohamed A. El-Erian - It’s easy to say SVB took some bad risks, so it failed. But [defining those risks]( is a more difficult thing. — Matt Levine Telltale Charts If you’re reading this, there’s a nonzero chance that you would like to have a Porsche 911 in your driveway. You and me both, girlypop! Demand for the sports car is relentless (recession, who?), which is why the automaker, fresh off its blockbuster IPO, is ready to implement [“significant” price increases in the coming months](. This will allow Porsche to juice even more revenue per vehicle — something it’s pretty good at, Chris Bryant writes. Demand for electricity in the UK is set to increase by as much as 50% in the coming decades — and that’s not only because people are going to be binging season 79 of Love Island in 2050. As heat pumps and EV usage becomes more widespread, Lara Williams says reliance on the grid will grow. [A net-zero electricity grid is achievable](, but only if the British government can accelerate the transition to renewables. Bonus Listening Tens of millions of businesses around the world shut their doors in the face of Covid-19 lockdowns. Although life has returned to a normal-ish pace, the scars of the pandemic are still visible in most shops, whether it’s a sign about wearing masks or a bottle of crusty hand sanitizer on the counter. Timothy L. O'Brien has followed Rachel Wyman, the New Jersey-based owner of Montclair Bread, since the early days of the pandemic. He caught up with her this week on Crash Course to discuss [how Covid-19 collided with small businesses](. Listen to their conversation [here](. Further Reading The chances of [Biden’s new budget]( getting passed? Zero. And that’s precisely the problem. — Bloomberg’s editorial board [“Smart” shopping carts]( are here. Do we really want or need them? — Leticia Miranda Pfizer’s purchase of Seagen is a bet on [the future of cancer drugs](. — Lisa Jarvis Latin America’s [stance on Ukraine]( is stuck in the ancient past. — Eduardo Porter Crypto is in [a losing a battle]( against authorities. — Lionel Laurent People with disabilities [are being left on the table]( in the fight to fill 10 million US jobs. — Claudia Sahm ICYMI Apple is [delaying bonuses](. Argentina hit [triple-digit inflation](. [Atmospheric rivers]( are the new hurricanes. George Santos wants [to run for re-election](. Kickers Beer-flavored [popsicles](. A hockey game [recreated virtually]( in real time. Very cool [climate-proof house]( ideas. (h/t Mark Gongloff) Darien, Connecticut, [bought an island](. Source: Leigh Claire La Berge Notes:  Please send midrats and feedback to Jessica Karl at jkarl9@bloomberg.net. [Sign up here]( and follow us on [Instagram](, [TikTok](, [Twitter]( and [Facebook](. [1] I absolutely love this and will be stealing it to use in a non-submarine context. “You’re such a NUB for that,” I’ll tell my sister the next time she isn’t nice to me. Like getting this newsletter? [Subscribe to Bloomberg.com]( for unlimited access to trusted, data-driven journalism and subscriber-only insights. Before it’s here, it’s on the Bloomberg Terminal. Find out more about how the Terminal delivers information and analysis that financial professionals can’t find anywhere else. [Learn more](. You received this message because you are subscribed to Bloomberg's Bloomberg Opinion Today newsletter. [Unsubscribe]( | [Bloomberg.com]( | [Contact Us]( [Ads Powered By Liveintent]( | [Ad Choices]( Bloomberg L.P. 731 Lexington, New York, NY, 10022