Tag Archives: Business

Grieving Parents of Murdered Mexican Students on List of Suspected Targets of Military-Grade Israeli Spyware

When their children were killed or abducted, the parents of Ayotzinapa relentlessly petitioned their government for truth and justice. But even as they placed their hopes in the federal government, it may have targeted them for invasive surveillance.
By Lilia Saul, Pavla Holcova, and Marlen Castro – Cristina Bautista grew up working in the corn fields of a dusty village high in the mountains of Mexico’s Guerrero state. For most of her life she’s survived by selling whatever she can scrounge up: bread, pozole, little trinkets made of palm leaves.

She counts herself lucky that her house is made of concrete and not corrugated metal or wood planks, a feat she pulled off only after a stint working in Connecticut.

She’s not wealthy, powerful, or famous. Even within Mexico, she’s one of the poorest of the poor. But her own government may have spent hundreds of thousands of dollars putting her under one of the most intensive forms of surveillance in the world, targeting her cell phone for hacking with powerful Israeli spyware.

What was so threatening about Bautista?

Nothing but the fact that she’s a victim. She and several dozen other grief-stricken parents have spent years demanding to know what happened to their children, 43 students at a rural teacher’s college who were abducted in 2014 after a bloody encounter with police in Iguala, a town in Mexico’s southwest. more>

Pegasus scandal involves over 10 countries and targets thousands via smartphones

By Otmar Lahodynsky – EU Commission President Ursula von der Leyen has expressed ‘great concern; over reports that sophisticated spy software was used worldwide against journalists and politicians, most notably in the EU n Hungary.

“If this is the case, it is totally unacceptable and a violation of all the values and rules we have in the EU regarding media freedom,” she said at a press conference on July 19 in Prague, adding “Media freedom is a fundamental principle of the EU.”

An international research network of more than 18 media led by the French non-profit organization Forbidden Stories has uncovered a worldwide network of wiretaps targeting politicians, journalists and lawyers. According to the report, those who were victims of the hack were located in more than 10 countries, including – Hungary, Saudi Arabia, Kazakhstan, Azerbaijan, Mexico and India. They were spied on with the help of the Pegasus spyware that was designed by the Israeli company, NSO Group.

The spying was done via smartphones, whose vulnerabilities made it possible to listen in on telephone calls, as well as through SMS and chat messages. The most prominent victim in the EU was French President Emmanuel Macron, who was intercepted by Morocco’s secret service via at least one of his official mobile phones. This has already caused a veritable crisis in bilateral relations. Furthermore, the government of Saudi Arabia is believed to have wiretapped the entourage of journalist Jamal Khashoggi, who was murdered in Istanbul in 2018, both before and after the murder. In India, according to the British newspaper The Guardian, Prime Minister Narendra Modi’s rival Rahul Gandhi was also placed under Pegasus’ surveillance. more>

To Tackle Inequality, We Need to Start Talking About Where Wealth Comes From

Thatcherite narrative on wealth creation has gone unchallenged for decades.
By Laurie Macfarlane – Do people in Britain resent the rich? According to two new studies published this week, the answer to this question is: not really.

The studies, one commissioned by Trust for London and another by Tax Justice UK, explore public attitudes towards wealth based on focus groups held across England. Both found that most people are relatively content with people getting rich, and that attacks on the wealthy are often viewed negatively.

This presents a dilemma for progressives. In recent years left-wing leaders on both sides of the Atlantic have taken a more confrontational approach towards the super-rich. In Britain, the Labour Party’s war cry under the leadership of Jeremy Corbyn has been ‘For the many, not the few’, while in the US Bernie Sanders has made no secret of his contempt for billionaires.

But what if it turns out that ordinary people don’t agree? One response to this dilemma, as outlined by Sonia Sodha in the Observer, is to accept that “the belief that Britain is a meritocracy is ingrained in our collective psyche”, and adjust policies and narratives accordingly. This would mean ditching the class-war rhetoric and instead putting forward solutions designed to appeal to a meritocratic worldview. This might include, for example, closing tax loopholes and increasing particular taxes on grounds of fairness and efficiency.

Sodha is right to point out that this strategy is more likely to chime with people’s existing attitudes towards wealth. As the authors of the Tax Justice UK report note: “The participants in our focus groups largely believe in meritocracy. Those with wealth were seen as having acquired it through hard work.” Participants in the Trust for London research expressed similar views.

But does this mean that progressives should accept the way things are and move on? Not necessarily. As a well-known philosopher once said: “The philosophers have only interpreted the world in various ways; the point, however, is to change it.”

People’s views aren’t formed in a vacuum: they are shaped by social and political forces that evolve over time. Margaret Thatcher’s neoliberal revolution wasn’t just successful because it reorganized the economy – it was successful because it embedded a particular narrative about how wealth is created and distributed in society. This is a world where, so long as there is sufficient competition and free markets, every individual will receive their just rewards in relation to their true contribution to society. There is, in Milton Friedman’s famous terms, “no such thing as a free lunch”. It’s a world where businesses are the “wealth creators” who create jobs and drive innovation, and business owners are entitled to the financial rewards of success – regardless of how enormous they are.

The problem, of course, is that it bears little resemblance to how the economy actually works. While it is true that working hard will generally help you earn more money, this causality doesn’t hold in reverse: not all wealth has been attained through hard work. In practice, the distribution of wealth has little to do with contribution, and everything to do with politics and power. more>

Disinformation and the efforts to counter its effects can undermine human rights

By Miroslava Sawiris – Disinformation is a phenomenon often thought of in relation to electoral interference, subversion of democratic processes or foreign state influence operations. While all of these examples receive deserved attention, the spread of disinformation also negatively impacts another hard-won pillar of the post-World War II era, that of human rights.

When the concept of universal humanity does not apply

It is no coincidence that with the rapid spread of disinformation as a tool of information warfare, both the concept of human rights itself, as well as its application, have come increasingly under attack.

This is because ‘disinformation’ – deliberate and systematic spread of lies that are aimed at confusing the recipient – undermines the very foundations of the idea that objective reality exists, a necessary condition upon which the notion of universal humanity is founded.

Such undermining opens up the possibility to claim, for example, that universal human rights do not exist, and are nothing but a form of ‘aggressive colonialism’ attempting to ‘impose Western values’ on different cultures, precisely the argument chief Kremlin ideologists, such as Vladislav Surkov, have developed. Dismissing human rights as a Western concept is very convenient when needing to suppress political opposition, as in the case of Alexey Navalny, who was recently sent to a Russian penal colony for violating a 2014 suspended sentence for embezzlement as he missed check-ins with Russia’s prison service due to his near-fatal poisoning.

Disinformation meets hate speech

Another way in which disinformation impacts human rights is its deployment in propaganda hate campaigns. These form a part of the 10 stages of genocide, which starts with portraying the target group as the ‘other’, demonizes it through de-humanizing labels and leads to persecution and even extermination.

While our modern history is filled with notorious examples such as the Holocaust or the genocide in Rwanda, Facebook-fueled hate campaign against Rohingya Muslims based on lies disseminated by the Myanmar military triggered ethnic cleansing and ‘the largest forced human migration in recent history’ as recently as 2016. more>

Rising Rates May Signal Significant Market Shifts Ahead

Some investors may be tempted to buy amid the moderate dips in stock prices, but we lay out the rationale for a more nuanced approach.
By Lisa Shalett – The second half of February brought not just a market selloff, but also indications of a more serious potential shift in market outlook. Just two weeks after hitting a high of 3948 on Feb 16, the S&P 500, the benchmark index of the broader U.S. market, has fallen 3.5%, while the tech-and-growth-stock-heavy Nasdaq index is down about 6.4%. For some, that may seem like the kind of moderate dip that could be a buying opportunity, but we don’t believe that’s the case right now.

A close look at interest-rate dynamics suggests that fundamental market conditions may be changing. In the past two weeks, we’ve seen the benchmark 10-year Treasury yield surge as high as 1.6% from 1.3%—compared with its historic low of 0.5% last August. The recent surge may indicate a reassessment of the speed of the U.S. economic recovery and the likely Federal Reserve policy response.

Investor faith that interest rates would remain stable at very low levels has helped support sky-high price-to-earnings multiples this year. Growth stocks are often valued against the yield on a low-risk Treasury bond—the wider the spread, the larger premium that an investor is expected to pay for the added risk of growth. As rates move higher, stock prices often adjust to reflect that narrowing gap. That may be a big reason why tech stocks, in particular, got hit so hard last week.

Also, survey-based indicators from primary dealers and investors suggest that market participants believe that a tapering of the Fed’s bond-buying program will begin in the first quarter of 2022. For that timeline, the Fed would have to start signaling a shift later this year to avoid major market upset, similar to what we saw with the 2018 “taper tantrum.”

This shift in policy expectations has material implications for portfolio construction, suggesting not only shifts in sector and regional positioning, but fresh approaches to diversification, as rising rates produce potential headwinds for both stocks and bonds simultaneously.

Investors should consider adding economically cyclical sectors that can take advantage of global reflation. We also suggest maintaining positions in defensive sectors that would likely do well if the faster-growth, rising-rate scenario takes longer to materialize than indicators now suggest. more>

Stock Market Outlook 2021: Bull Market, But Buckle Up

In what may become the second year of a bull market, where can investors look for returns, amid the appearance of historically high valuations?
By Andrew Slimmon – Stock market returns in 2020 eerily resembled the trend in 2009—that is, the strength of the first year emerging from a deep stock market recession. While past performance does not necessarily predict future results, being an active equity investor does require understanding historical moves.

Last year, as the market recovered from its drop in March, many investors were way too bearish in retrospect, keeping too much cash on the sidelines. Once the rally began, volatility dropped, and the bull market climbed significantly before the bears eventually capitulated late in the year.

Now in 2021, amid hope and excitement that the pandemic might soon be behind us as vaccines are distributed, investors may actually find it tougher to generate the kind of stock market returns we saw last year in the midst of COVID-19. Strange I know, but as we saw last year, equity returns need not align with what is the current state of the economy. Instead, stocks this year may resemble their performance in 2010, i.e., year two of the bull market that started in 2009. After the S&P 500 Index’s stunning 68% return from the March 2020 low to the end of the year, stocks likely need to take a breather, much as they did in the second quarter of 2010. Importantly, however, overall returns of a second year of a bull market are historically positive, like in 2010.

We should therefore brace ourselves for a lot more stock market volatility in 2021. This will likely shake out the reluctant bulls, those who only recently put their cash to work in equities, at the exact wrong time. Based on history, investors should hold tight and keep eyes on the longer term. The second year of a new bull market historically performs quite well overall, though it tends to be more gut-wrenching along the way. more>

2021 Bond Market Outlook: Finding Yield in a Recovery

As global economic growth strengthens this year, bonds investors may find opportunities in high quality bonds, higher-yielding debt and assets that hedge against a declining U.S. dollar.
By Jim Caron – As fixed income investors, we expect 2021 to be a year of recovery. Many economic forecasts show U.S. GDP increasing by as much as 5%, or even 6%, and it begs the question: Won’t bond market yields rise in this environment? Rising yields of course mean falling bond prices—at least on paper for investors who own the debt. But yields will be rising for good reasons, based on economic growth and cash flow returning to markets.

Bond market movements will act as key indicators of the health of the recovery, as well as corporate performance and consumer confidence in 2021 and beyond. Compared to 2020, when global monetary and fiscal policies were focused on supporting solvency and bond investors benefited from flocking to safe-haven assets, such as U.S. Treasuries, this year may entail a more idiosyncratic environment for credit, which will make active portfolio management paramount.

As economic growth strengthens (most likely in inverse proportion to the severity of the pandemic this year) and variation in the fixed-income market broadens, so will the opportunities for bond allocators. For investors searching for higher yields and portfolio diversification to hedge against equities and U.S. dollar weakness, we see fixed income opportunities in five key areas.

We see value in taking a tactical barbell investing approach, which involves owning high quality and interest-rate sensitive fixed income to balance more risky credit. During the first half of 2021, investors can consider adding U.S. Treasuries and Australian and New Zealand government bonds amid an expected increase in yields. When it comes to investment grade corporate credit, we have some aversion to highly-rated bonds, including A-rated corporates with high cash balances because there’s risk that M&A activity in this cohort could weigh on valuations. We prefer a combination of triple-B corporate bonds with solid company fundamentals and U.S. Treasuries as a preferred risk allocation, as an example. more>

2021 Global Economic Outlook: The Next Phase of the V

Morgan Stanley projects strong global GDP growth of 6.4% for 2021—led first by emerging markets, followed by reopening economies in the U.S. and Europe—in a macro outlook that diverges from the consensus.
Morgan Stanley – Rising COVID-19 case numbers in the U.S. and Europe make it difficult right now to envision a return to normal. Yet, even as the pandemic drags on, the global economy has proven remarkably resilient.

Following a steep decline in early 2020, the world economy rode a rebound that began in May and remains on track to surpass prepandemic GDP levels by the end of this year—setting the stage for strong post-recovery growth in 2021.

In their 2021 outlook, the economics team at Morgan Stanley Research says the V-shaped recovery that the team forecast in their 2020 midyear outlook is now entering a new self-sustaining phase and is on track to deliver 6.4% GDP growth in the coming year.

“This projection stands in stark contrast to the consensus, which forecasts 5.4% global growth and worries that the pandemic will have a bigger impact on private-sector risk appetite and, hence, global growth,” says Chetan Ahya, Morgan Stanley’s Chief Economist. “We maintain that consumers have driven the recovery, and investment growth—a reflection of the private corporate sector’s risk tolerance and a key feature of any self-sustaining recovery—is bouncing back as well.”

Three key factors will characterize the next stage of the V-shaped recovery, says Ahya: synchronized global growth, an emerging-market rebound and the return of inflation. Against this macro outlook, Morgan Stanley strategists urge investors to trust the recovery and overweight equities and credit vs. government bonds and cash (see the 2021 Strategy Outlook for more). more>

China after November

By Basil A. Coronakis – The war between the US and China that started shortly after the election of Donald Trump in 2016 and has since continue at relatively low intensity w

There is no doubt, of course, that it will continue at even stronger pace after the election, regardless of who the winner is, whether it is the remains of the Democratic party or of the Republicans. Indeed, Trump has brought the US’ relations with China to a point of no return. And regardless whether he will or not win a second term, the Sino-American war will not stop.

American society has been intelligently brain-washed by the Trump Administration into holding China responsible for the Wuhan Virus pandemic, and the more lives it costs in the United States, the more Americans will hold China responsible. As this is, for ordinary Americans, a matter of life or death, their anger and hatred for China will continue to grow in parallel with the pandemic effects.

It would be far fetched to speculate that Trump has handled the pandemic in the way to have exactly this effect, but there is no doubt that he maximized it as an excellent detergent for brain-washing the people of Main Street.

Americans are convinced that China is responsible for the pandemic, which is true, but to communicate this sort of truth efficiently, and to engage the entire population of the United States, was a victorious tactical maneuver in the New Cold War against China.

Now all Americans are psychologically engaged against China and this is the bond that the next president will be forced to continue the war against China. If he does not, he will certainly be accused for high treason, an accusation which regardless of what the impact is on his presidency, will carry on in the historical record.

For China, this war is a win-win situation because if Beijing loses, it will be completely isolated from the rest of the world and will have no external influences, which means no dangers, thus leaving the Communist regime with eternal power. For China’s Communists, isolation is the best-case scenario as they will maintain power and extend their totalitarian rule to all aspects of life by eliminating any potential threat to their grip on power, all of which will be done pretty easily as the Chinese people have never sensed freedom or democracy, and they are trained to work for a handful of rice under the shadow of the Great Helmsman. more>

How to Disguise Racism and Oligarchy: Use Economics

By Lynn Parramore – James McGill Buchanan is a name you will rarely hear unless you’ve taken several classes in economics. And if the Tennessee-born Nobel laureate were alive today, it would suit him just fine that most well-informed journalists, liberal politicians, and even many economics students have little understanding of his work.

The reason? Duke historian Nancy MacLean contends that his philosophy is so stark that even young libertarian acolytes are only introduced to it after they have accepted the relatively sunny perspective of Ayn Rand. (Yes, you read that correctly). If Americans really knew what Buchanan thought and promoted, and how destructively his vision is manifesting under their noses, it would dawn on them how close the country is to a transformation most would not even want to imagine, much less accept.

That is a dangerous blind spot, MacLean argues in a meticulously researched book, Democracy in Chains, a finalist for the National Book Award in Nonfiction. While Americans grapple with Donald Trump’s chaotic presidency, we may be missing the key to changes that are taking place far beyond the level of mere politics. Once these changes are locked into place, there may be no going back.

MacLean’s book reads like an intellectual detective story. In 2010, she moved to North Carolina, where a Tea Party-dominated Republican Party got control of both houses of the state legislature and began pushing through a radical program to suppress voter rights, decimate public services, and slash taxes on the wealthy that shocked a state long a beacon of southern moderation. Up to this point, the figure of James Buchanan flickered in her peripheral vision, but as she began to study his work closely, the events in North Carolina and also Wisconsin, where Governor Scott Walker was leading assaults on collective bargaining rights, shifted her focus.

Could it be that this relatively obscure economist’s distinctive thought was being put forcefully into action in real time?

MacLean could not gain access to Buchanan’s papers to test her hypothesis until after his death in January 2013. That year, just as the government was being shut down by Ted Cruz & Co., she traveled to George Mason University in Virginia, where the economist’s papers lay willy-nilly across the offices of a building now abandoned by the Koch-funded faculty to a new, fancier center in Arlington.

MacLean was stunned. The archive of the man who had sought to stay under the radar had been left totally unsorted and unguarded. The historian plunged in, and she read through boxes and drawers full of papers that included personal correspondence between Buchanan and billionaire industrialist Charles Koch. That’s when she had an amazing realization: here was the intellectual linchpin of a stealth revolution currently in progress.

Buchanan, a 1940 graduate of Middle Tennessee State University who later attended the University of Chicago for graduate study, started out as a conventional public finance economist. But he grew frustrated by the way in which economic theorists ignored the political process.

Buchanan began working on a description of power that started out as a critique of how institutions functioned in the relatively liberal 1950s and ‘60s, a time when economist John Maynard Keynes’s ideas about the need for government intervention in markets to protect people from flaws so clearly demonstrated in the Great Depression held sway. Buchanan, MacLean notes, was incensed at what he saw as a move toward socialism and deeply suspicious of any form of state action that channels resources to the public. Why should the increasingly powerful federal government be able to force the wealthy to pay for goods and programs that served ordinary citizens and the poor?

In thinking about how people make political decisions and choices, Buchanan concluded that you could only understand them as individuals seeking personal advantage. In an interview cited by MacLean, the economist observed that in the 1950s Americans commonly assumed that elected officials wanted to act in the public interest. Buchanan vehemently disagreed — that was a belief he wanted, as he put it, to “tear down.” His ideas developed into a theory that came to be known as “public choice.”

Buchanan’s view of human nature was distinctly dismal. more>

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