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Citadel booked a record $16 billion in profit for clients last year, Spotify becomes the latest tech giant to be linked with job cuts and th [View in browser]( [Bloomberg]( Citadel booked a record $16 billion in profit for clients last year, Spotify becomes the latest tech giant to be linked with job cuts and the ECB increasingly looks like a hawkish outlier.  — [David Goodman]( Citadel blockbuster Citadel [churned out]( a record $16 billion in profit for clients last year, outperforming the rest of the industry and one of history’s most successful financial plays. The top 20 hedge fund firms collectively generated $22.4 billion in profit after fees, according to estimates by LCH Investments, a fund of hedge funds. But it’s a [different story]( outside the industry giants, with hedge funds overall losing $208 billion last year as many managers found themselves on the [wrong side]( of global market turmoil. Spotify Layoffs Spotify is reported to be [the latest among tech companies laying off staff](. The music-streaming giant is planning to cut positions as soon as this week, according to people familiar with the plans, who did not specify the number of jobs set to be eliminated. The move comes after a 66% slide in Spotify shares last year, as investors questioned the company's big push into podcasts. If it pushes through with layoffs, Spotify will join peers Amazon, Meta and Google parent Alphabet in recently cutting jobs. ECB Hawks The ECB is starting to stand out as a hawkish outlier in a global move toward a downshift in tightening. Governing Council member Klaas Knot said this weekend that the bank should continue with [half-point]( interest-rate increases at the next two meetings, and the time to slow the pace of hikes is “still far away.” He isn’t alone in his pushback against taking the foot off the gas too quickly. ECB President [Christine Lagarde]( told the World Economic Forum in Davos that policy makers would “stay the course.” That’s in particular contrast to the rhetoric of some Federal Reserve officials, who suggested the central bank may be on the verge of slowing the pace of its rate hikes. Dollar Slips That dynamic is playing out in markets, where the US dollar is verging on a [fresh low]( for the year. Meanwhile European stocks started the week on [a solid footing](, with the Stoxx Europe 600 rising, led by tech and automakers. To catch up on the trading day in the UK and Europe, [check out today’s edition of City Latest.Â]( Coming up… It’s a fairly quiet day in the US, with no Fed speakers or top-tier data. It’s a different story in Europe though, with four more ECB officials, including President Christine Lagarde, due make appearances before the day is out. Tomorrow, the focus turns back to data, as countries around the world report the latest PMI numbers. What we’ve been reading Here’s what caught our eye over the past 24 hours: - UK asks consumers to turn down power as [London freezes.]( - The world needs a growth engine. [India is stepping up](. - JPMorgan model shows recession odds fall sharply [ across markets]( - How Europe needs freight trains to cross Russia [from China]( - New Zealand PM-elect signals policy overhaul as [recession looms]( - Finance workers in London are putting their [job hunts on hold.]( - Here’s what went down in the NFL [Divisional Round last night](. And finally, here’s what Joe’s interested in this morning The conventional wisdom with how the Debt Ceiling will go is something like this: There won't be any negotiation or movement for a long time. Then as we start to get very close, and a default becomes a possibility, some last second agreement will get struck, maybe after a bout of market volatility and furious phone calls from lobbyists. The debt ceiling gets lifted at the last second, just like it did in 2011 and every other time Congress has had to raise it in its history. Maybe. But 2023 is no 2011 and here's why. In 2011 the GOP had just won a massive midterm victory, sweeping to dominance of both houses of Congress on a Tea Party wave that made fiscal issues (debt, taxes, etc.) the centerpiece of the campaign. Putting up a fight over spending was what the party was all about. Obama spent months of 2011 negotiating with then House Speaker Boehner, his deputy Eric Cantor, alongside then Senate Majority Leader Mitch McConnell. There was a lot of talk but for months there was basically no progress, except up at the very end. Ultimately Republicans agreed to raise the debt ceiling in exchange for constraints to spending growth for both defense and discretionary outlays. Fast forward to today. The GOP didn't do very well in the midterms. And fiscal issues aren't so big for the party anymore. [Last week]( former President Trump told Republicans not to cut Medicare or Social Security in the debt ceiling fight. What's more, fiscal politics just aren't in the air like they were 12 years ago. In 2011, there was a widespread, bipartisan view that debt and spending had to be constrained. This view went well beyond the Tea Party. And there were a lot of liberals and centrists in Washington who more or less accepted that the Tea Party had a point about fiscal restraint. [Even Obama unilaterally froze Federal employee pay]( in 2010 over deficit concerns. It's also worth remembering that by the time the debt ceiling fight really got going in 2011, we were a year and a half into the Greek fiscal crisis already. Debt anxiety was in the air and pundits had a country to point to as a cautionary tale. These days that's all gone. There's no equivalent in the media of [Simpson & Bowles](, talking up the need to reform entitlements. There's no [Paul Ryan Path to Prosperity](. There's no Reinhart and Rogoff equivalent, talking about how bad it is when a [country's debt/GDP hits 90%](. There's no Greece crisis. In fact these days, Germany and France are talking about how their countries [need to spend more]( in order to keep up with the US on industrial technology and capacity. The vibes couldn't be more different. Anything is possible in terms of how this all plays out, of course. But nobody who remembers 2011 is experiencing deja vu so far. All that being said, the big irony is that the actual economic case for spending constraint is far greater today. Core CPI at the start of 2011 was just 1%. Today it's 5.7%. The unemployment rate at the start of that year was 9.3%. Today it's just 3.5%. Basically any normal way of thinking about macro would suggest that 2023 makes more sense as a time to be talking about austerity than 2011. Such is the disconnect or loose correlation between economics and the politics of economics. 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