The US is not seeking regime change in Russia, secretary of state Antony Blinken said on Sunday, a day after president Joe Biden apparently called for his Russian counterpart’s ousting.
Biden on Saturday condemned Russia’s president Vladimir Putin, saying “For God’s sake, this man cannot remain in power”, in remarks that drew condemnation from Moscow.
Speaking in Jerusalem on Sunday, Blinken told reporters that “the president, the White House, made the point last night that, quite simply, President Putin cannot be empowered to wage war or engage in aggression against Ukraine or anyone else”.
Blinken said: “As you know, and as you have heard us say repeatedly, we do not have a strategy of regime change in Russia — or anywhere else, for that matter.”
His comments were the second US attempt to walk back what appeared to be a call to oust Putin from power during a speech in Poland in which Biden warned transatlantic democracies to steel themselves for a “long fight ahead” to protect freedom in Europe.
The White House later said that “the president’s point was that Putin cannot be allowed to exercise power over his neighbours or the region”, rather than a plan for regime change.
On Sunday, European countries emphasised the importance of avoiding an escalation of the geopolitical situation.
French president Emmanuel Macron said he would not echo Biden’s words and that efforts should be made not to worsen the situation, adding that he aimed to continue to talk to Putin in an attempt to bring about a ceasefire.
“I think we need to be factual and do everything not to allow the situation to spiral,” Macron told France 3 TV. “I will not make those kind of comments . . . We shouldn’t be in an escalation of words or actions.”
The UK said it was not pushing for regime change and believed Putin should be offered an “off ramp” from the war. “It’s good in principle to incentivise good behaviour, not encourage worse behaviour by suggesting there is nothing left to lose,” said one senior British official.
Liz Truss, UK foreign secretary, said sanctions could be lifted if Putin withdrew from Ukraine and committed to “no further aggression”.
In the event of a “full ceasefire and withdrawal”, sanctions against Russian banks and individuals could be relaxed but, she told the Sunday Telegraph, “snapback sanctions” could be reimposed if Putin reneged on any agreement. It is the first time a senior British figure has talked so openly about the scenario for lifting sanctions.
A senior Turkish official said that “burning bridges” with Russia would not help to end the conflict, adding that it was important to try to understand Moscow’s position. Ankara, which has strived to maintain its close ties with both Moscow and Kyiv since the invasion last month, has sought to act as a mediator.
“Ukrainians need to be supported by every means possible so they can defend themselves . . . but the Russian case must be heard, one way or the other,” Ibrahim Kalin, a top aide to president Recep Tayyip Erdogan, told a conference in Doha, Qatar. “If everybody burns bridges with Russia then who is going to talk to them, at the end of the day?”
Wolfgang Ischinger, a former top German diplomat and former head of the Munich Security Conference, warned that Biden’s speech threatened to further inflame tensions with Moscow.
“The Russian interpretation will be that this confirms that US priority is not the rescue of Ukraine, but the destruction of Russia,” he wrote on Twitter. “Emotionally, Biden statement is understandable, but quite unwise, strategically.”
Dmitry Peskov, Putin’s spokesman, told the state-run Tass agency that “these personal insults narrow the window of opportunity for our bilateral relations [to improve] under the current [US] administration”.
Russia’s military is pursuing its threat to encircle Ukrainian forces in the country’s east while stepping up attacks on fuel and food depots across the country according to western military assessments.
“Russian forces appear to be concentrating their effort to attempt the encirclement of Ukrainian forces directly facing the separatist regions in the east of the country, advancing from the direction of Kharkiv in the north and Mariupol in the south,” the UK ministry of defence said on Sunday.
The governor of Sumy, a region on the northern border with Russia, said Ukraine’s forces had retaken two towns on the supply route to the regional capital.
Vadym Denysenko, an adviser to Ukraine’s interior ministry, said Russia had begun targeting food and fuel storage facilities and had started to build up new groups of forces near the border, suggesting it was planning new assaults on Ukraine, according to Reuters.
Also on Sunday, the leader of the Luhansk People’s Republic, one of two Moscow-backed separatist groups in Donbas, said the group could soon hold a referendum on joining Russia — a possible precursor to the formal annexation of more Ukrainian territory by Moscow.
Additional reporting by Andres Schipani in Lviv, Sarah White in Paris, Martin Arnold in Frankfurt, George Parker in London and Laura Pitel in Ankara
Goldman Sachs CEO David Solomon gets 29% pay cut to $25 million
David Solomon, Chairman & CEO of Goldman Sachs, speaking on Squawk Box at the WEF in Davos, Switzerland on Jan. 23rd, 2023.
Adam Galica | CNBC
The package includes a $2 million base salary and variable compensation of $23 million, New York-based Goldman said in the filing. Most of Solomon’s bonus— 70%, or $16.1 million, is in the form of restricted shares tied to performance metrics, while the rest is paid in cash, the bank said.
Solomon’s pay, while large by most any measure, is about 29% lower than the $35 million he was granted for his 2021 performance. Meanwhile, Goldman’s full year earnings fell by 48% to $11.3 billion, thanks to sharp declines in investment banking and asset management revenue, the company said last week.
While the bank was primarily hit by industrywide slowdowns in capital markets activity as the Federal Reserve raised interest rates, Solomon also faced his own set of issues last year. Goldman was forced to scale back its ambitions in consumer finance and lay off nearly 4,000 workers in two rounds of terminations in recent months.
Fiji fires police commissioner and end security deal with China
Police operate a security check point in the Fijian capital of Suva in December following general elections. The Pacific island nation has played an important regional role amid competition between China on the one side and Australia, New Zealand and the United States on the other.
Saeed Khan | Afp | Getty Images
Fiji’s president on Friday suspended the commissioner of police following a general election saw the first change in government in the Pacific island nation in 16 years, after the military earlier warned against “sweeping changes.”
President Ratu Wiliame Katonivere said Commissioner of Police Sitiveni Qiliho had been suspended on the advice of the Constitutional Offices Commission, “pending investigation and referral to and appointment of, a tribunal.”
The Supervisor of Elections Mohammed Saneem was also suspended by the commission, the statement said.
Qiliho declined to comment to local media because he said he will face a tribunal over his conduct. He was seen as being close to former prime minister Frank Bainimarama, who led Fiji for 16 years before a coalition of parties narrowly won December’s election and installed Sitiveni Rabuka as leader of the strategically important Pacific nation.
The day before a coalition agreement was struck, Qiliho and Bainimarama called on the military to maintain law and order because they said the hung election result had sparked ethnic tensions, a claim disputed by the coalition parties.
The Pacific island nation, which has a history of military coups, has been pivotal to the region’s response to competition between China and the United States, and struck a deal with Australia in October for greater defence cooperation.
On Thursday, Fiji Times reported that Rabuka said his government would end a police training and exchange agreement with China.
“Our system of democracy and justice systems are different so we will go back to those that have similar systems with us,” the prime minister was quoted as saying, referring to Australia and New Zealand.
The prime minister’s office did not immediately respond to a request for comment.
Republic of Fiji Military Forces Commander Major General Jone Kalouniwai earlier this month warned Rabuka’s government against making “sweeping changes,” and has insisted it abide by a 2013 constitution which gives the military a key role.
Inventory glut and underused factories
Intel CEO Pat Gelsinger, with U.S. President Joe Biden (not pictured), announces the tech firm’s plan to build a $20 billion plant in Ohio, from the South Court Auditorium on the White House campus in Washington, January 21, 2022.
Jonathan Ernst | Reuters
Investors hated it, sending the stock over 9% lower in extended trading, despite the fact that Intel did not cut its dividend.
The earnings report, which was the eighth under CEO Pat Gelsinger’s leadership, shows a legendary technology company struggling with many factors outside of its control, including a deeply slumping PC market. It also highlights some of Intel’s current issues with weak demand for its current products and inefficient internal performance, and underscores how precarious the company’s financial health has become.
“Clearly, the financials aren’t what we would hoped,” Gelsinger told analysts.
In short: Intel had a difficult 2022, and 2023 is shaping up to be tough as well.
Here are some of the most concerning bits from Intel’s earnings report and analyst call:
Intel didn’t give full-year guidance for 2023, citing economic uncertainty.
But the data points for the current quarter suggest tough times. Intel guided for about $11 billion in sales in the March quarter, which would be a 40% year-over-year decline. Gross margin will be 34.1%, a huge decrease from the 55.2% in the same quarter in 2021, Gelsinger’s first at the helm.
But the biggest issue for investors is that Intel guided to a 15 cent non-GAAP loss per share, a big decline for a company that a year ago was reporting $1.13 in profit per share. It would be the first loss per share since last summer, which was the first loss for the company in decades.
Management gave several reasons for the tough upcoming quarter, but one theme that came through was that its customers simply have too many chips and need to work through inventory, so they won’t be buying many new chips.
Both the PC and server markets have slowed after a two-year boom spurred by remote work and school during the pandemic. Now, PC sales have slowed and the computer makers have too many chips. Gelsinger is predicting PC sales during the year to be around 270 million to 295 million — a far cry from the “million units-a-day” he predicted in 2021.
Now, Intel’s customers have to “digest” the chips they already have, or “correct” their inventories, and the company doesn’t know when this dynamic will shift back.
“While we know this dynamic will reverse, predicting when is difficult,” Gelsinger told analysts.
Underpinning all of this is that Intel’s gross margin continues to decline, hurting the company’s profitability. One issue is “factory load,” or how efficiently factories run around the clock. Intel said that its gross margin would be hit by 400 basis points, or 4 percentage points, because of factories running under load because of soft demand.
Ultimately, Intel forecasts a 34.1% gross margin in the current quarter — a far cry from the 51% to 53% goal the company set at last year’s investor day. The company says it’s working on it, and the margin could get back to Intel’s goal “in the medium-term” if demand recovers.
“We have a number of initiatives under way to improve gross margins and we’re well under way. When you look at the $3 billion reduction [in costs] that we talked about for 2023, 1 billion of that is in cost of sales and we’re well on our way to getting that billion dollars,” Gelsinger said.
Long-term investors have always closely watched how the company balances the near-term need to placate shareholders with the massive capital spending needed to stay competitive in the semiconductor manufacturing business.
If Intel is cutting costs and still needing to invest in chip factories to power its turnaround, analysts say it may want to reconsider its dividend. Intel spent $6 billion on dividends in 2022, but did not cut its dividend on Thursday.
Meanwhile, the company said it wants to cut $3 billion in costs for 2023 and analysts believe it wants to spend around $20 billion in capital expenditures to build out its factories.
Gelsinger was asked about this dynamic on Thursday.
“I’d just say the board, management, we take a very disciplined approach to the capital allocation strategy and we’re going to remain committed to being very prudent around how we allocate capital for the owners and we are committed to maintaining a competitive dividend,” Gelsinger replied.
There was at least one bright spot for Intel on Thursday.
Mobileye, its self-driving subsidiary that went public during the December quarter, reported earlier in the day, showing adjusted earnings per share of 27 cents and revenue growth of 59%, to $656 million. It also forecast strong 2023 revenue of between $2.19 billion and $2.28 billion. Shares rose nearly 6% during regular trading hours Thursday.
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