Good morning from the Financial Times.
Today is Tuesday, March 11.
And this is your FT news briefing.
Bond funds are profiting off the turmoil at Thames Water.
And violence rocked the western part of Syria.
Plus, are U .S. stocks in a bubble that's about to burst.
I'm Sonya Hudson, and here's the news you need to start your day.
U .S. equities continued sliding down what could be a very slippery slope yesterday.
The S &P 500 fell 2 .7 % and it's now erased all of its post election day gains.
Now, we've talked before on this show about so -called magnificent 7 tech stocks propping up the whole U .S.
market. And we've also talked about the fear that could lead to a repeat of the 2000 .com bust.
your quest. So how do you know when a bubble starts to pop?
Here to attempt some markets predictions is the FT's Brook Masters.
Hi, Brook. Hi. So, take us back to March of 2000.
There are low rise jeans, frosted tips is the hairstyle of choice, and the stock market is just booming.
Did people know that they were living in a bubble?
There were certainly a bunch of bears all warning, like, this cannot continue.
You know, all of these crazy dot -com companies would come out and say, you know, we're selling pet food online, we're doing groceries online.
Things that we now take for granted, but at the time were really cool.
These companies would go public, their shares would pop 40 percent, and it just seemed insane because none of them had a business plan to ever get to profits.
And so at the time, there were definitely people saying, this can't continue.
But every time that had happened from basically 1995 to 2000 there would be a little pause.
People get a little anxious and then it would go back up again.
So if you had up till March 2000 continued to bet things would get better, you were right.
And what is it about this current economic moment that reminds you of that time?
Well I think as happened with .com where the advent of the internet made everybody think the economy was going to completely change and all of these new companies are going to do brilliantly.
This time, we have artificial intelligence.
And companies that can find ways to use it, or in fact, make money off it by selling it to other people, are positioned to do incredible growth.
And so, again, there's this belief that the world is about to change, and so the old rules don't apply.
Like, have we overinvested in AI?
Maybe it will eventually change the world, but will it change the world fast enough to keep these companies going as strongly?
So, how do you know when that kind of bubble has burst?
What clues should we be looking for?
I think at some point there's a loss of broader confidence, and things start to fall and then when they try to bounce back up again they don't keep going.
Often what happens, as happened in Dotcom, is the issue in the tech sector or in an overvalued sector is then exacerbated by stuff around it.
And so back then, there was concerns about inflation.
The US Federal Reserve had been raising rates, which had been making things more expensive.
This time, the sort of broader concerns are, is consumer confidence slowing?
It certainly looks like it.
There are concerns about Donald Trump's off again, on again tariffs.
It discourages investment if you don't know what the rules are.
And again, rates are higher and they've been high and nobody thinks they're gonna go down again really soon.
So there's a combination of pressures on a sector that's basically built on hopes and dreams.
And at some point, that pressure just starts to squash.
Okay, but a bull might say though, that AI is such a powerful technology that will unlock unprecedented economic growth.
Is there something to that argument?
That there absolutely is some real truth to that argument that AI probably will do some really cool things.
But there's always this field that we tend to overestimate the short -term impact of brand new technology and underestimate the long -term impact.
And so right now everyone's like, AI is going to change the world tomorrow, and that probably is not true.
AI is probably going to change the world a huge amount in maybe 10 years or five years.
But between here and there, not every company that's investing in AI is going to be a winner.
And if this really is like DotCom, a lot of them are actually going to be dogs and people are going to see a lot of money get just burnt.
Brooke Masters is the FT's US Managing Editor.
Thanks, Brooke. Thanks so much.
Lending to the troubled Thames Water is looking pretty profitable.
PIMCO has made a 17 % paper profit on its portion of an expected emergency loan to the utility.
Thames Water is drowning under 19 .5 billion pounds of debt.
PIMCO and other groups plan to lend Thameswater 3 billion pounds, if it survives a challenge in court.
Those proceedings are supposed to start today.
Violence erupted in Syria over the weekend.
Hundreds of civilians were killed as government -aligned forces and pro -Bashar al -Assad fighters clashed in the western part of the country.
The violence poses the biggest threat to Syrian security under the country's new government.
The rebel group, HTS, toppled Assad's regime in December.
The FT's Malaika Tapper joins me now to talk about these developments.
Hi, Malaika. Hi, how are you?
I'm doing all right.
So to start off, could you tell us about what happened this weekend?
Where did these attacks come from?
So, the violence began when armed groups loyal to the old Assad regime staged attacks on members of the security forces belonging to the new government in Syria's coastal region.
And they then spiraled into a series of sectarian revenge killings which saw the execution of Alawite civilians in the area, that is a sect to which the Assad family belongs, and Alawites formed a large part of the security and government apparatus under the old regime.
And the armed factions that were carrying out these killings are allied with the new government.
And this is what's posing a big threat to the legitimacy of Al -Shara and of his government now.
Now, remind listeners of some of the backstory here.
The Assad regime fell in December and you mentioned the new president, Ahmed al -Sharaa.
He promised to create a quote, inclusive administration, basically pledging to protect minorities.
What have we seen since he took power?
So, what we've seen is that al -Shara announced the dissolving of the various armed rebel factions which control different parts of Syria last month and announced that they would be incorporated under the Ministry of Defense.
But, in practice, they simply don't have the resources to actually bring those groups under the control of a unified and disciplined military force.
So what has occurred is that these rebel groups and these militias still essentially operate as they did before under their own leaders.
And that makes them very difficult to control, which is what many say led to the uncontrolled violence that we saw over the weekend.
And on that note, what has al -Sha 'ra said about the recent violence over the weekend?
So, al -Shadaa has formed a committee to investigate the events that took place and has said that perpetrators of crimes against civilians would be held accountable.
However, he did not come out and condemn or disavow any of the armed factions with which he's allied that are thought to have perpetrated some of these massacres.
So he's really walking a fine line here.
And And I think this gets at an important nuance which the country and his government is facing right now, which is that they have their own security forces grouped under a force called the general security, which are seen as more disciplined, better trained, better organized, and less prone to this kind of killing of civilians.
So there's this real tension between these different security groups that all technically fall under the same umbrella of the new government.
And Malayka, Western countries like the US and the UK have since condemned the violence.
Where does this leave Syria going forward?
Right now, the new government is facing a moment of reckoning.
It has lost a lot of the credibility.
It has worked very hard to build over the past three months, promising to protect minorities, to defy expectations of what many saw as a radical Islamist group, so the new government has to work very hard to regain some of that legitimacy and credibility among both Western and foreign observers, as well as its constituency and minorities across Syria.
How they can do this really remains to be seen, they will need to find a way to unify the security forces and bring these more unruly factions under their control.
But that requires money and funding, which they currently don't have.
Malaika Tapper covers Syria for the FT.
Thanks, Malaika. Thank you.
You can read more on all these stories for free when you click the links in our show notes.
This has been your daily FT News Briefing.
Check back tomorrow for the latest business news.
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