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Global Affairs

Breakfast Briefing: James Damore, Samsung and the VC Boom

Google Sued by James Damore

Damore was sacked after questioning the company’s diversity policy and has brought a class action suit.  

Editor’s Remarks: James Damore has brought a class action suit against his former employer on behalf of every employee that he alleges have been discriminated against for “their perceived conservative views…their male gender [or] their Caucasian race”. After publishing an internal memo claiming that Google’s diversity policies were misguided because of inherent differences in men and women, Damore was dismissed by CEO Sundar Pichai in August. Damore maintains that the company suffers from “groupthink”, which drowns out any remotely conservative thought. Pichai drew the ire of the wider conservative community for his actions, which many perceived as restricting free speech.

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Samsung Misses Targets

The stronger won led to the South Korean giant missing its sales targets.

Editor’s Remarks: The company reported lower-than-expected profit due to both a stronger South Korean won and weaker performance in its memory chip business. The South Korean won gained around 7% in the final quarter of 2017 against the dollar, which eroded profits abroad. However, demand increased for organic light-emitting diode (OLED) screens, which boosted sales in that quarter. Samsung is currently the market leader in OLED screens and supplies them for Apple’s iPhone X, despite the two companies waging a war for the smartphone sector. Samsung saw its shares fall 1.6% on the news and is due to publish its final results later this month.

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VC Boom Continues

Venture capital funding is at its highest since the dot-com boom.

Editor’s Remarks: Despite the huge amounts of cash being pumped into US startups, the number of VC-backed exits has hit its lowest since 2011. Last year, US VCs piled $84bn into some 8000 or so companies. However, the CEO of PitchBook, a leading research firm, says that the dynamics of the VC market is very different to its state at the turn of the millennium. He added that late-stage companies with strong customer bases are also attracting large amounts of capital – as shown by SoftBank’s recent investment in Uber – meaning that there is no concentration of capital in very early stage investments. On the flipside, the lack of companies going public means VCs are struggling to realise their gains.

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Indian E-Commerce Shifts

Allcargo Logistics is turning to the e-commerce market in an attempt to cash in on the sector.

Editor’s Remarks: Coinciding with a report that over 200 million Indians will shop online by 2022, Allcargo – one of India’s largest logistics companies – is reinventing itself as an e-commerce player in a bid to challenge both Amazon and Flipkart. Both Amazon and local rival Flipkart have invested billions into broadening their products and services to capitalise upon the vast swathes of India that are now coming online. Allcargo will reshape itself into a business-to-customer enterprise by extending its logistical operations to the so-called “last mile” of e-commerce – actually delivering goods to the doorstep.

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China Cracks Down on Bitcoin

The Chinese government continues to crack down on cryptocurrencies. 

Editor’s Remarks: Last year, China banned ICOs and stopped basically all cryptocurrency trading on online exchanges. Since then, the government’s regulators have stepped up efforts to curb the rise of bitcoin and its cousins in order to keep as much of the nation’s economy under close watch as possible. As a consequence, China – the home of most of the world’s bitcoin miners – is losing its role at the forefront of the cryptocurrency community. However, China has also been running trials for its own prototype digital currency, which will enable the state to take full control of digital transactions.

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Global Affairs

BP and Iraq Sign Development Deal for Kirkuk Oil Fields

 2 min read / 

BP Kirkuk deal

Iraqi Government and British energy giant BP have signed an agreement for the future development of the Kirkuk oil fields in Northern Iraq.

A statement on the Iraqi Oil Ministry’s website said the “memorandum of understanding” between the government and the London-based oil company would enable further development of the oil fields as well as “to open a new page of work” for the North Oil Company, a subsidiary of the Oil Ministry, on “solid foundations”.

BP Director, Michael Townsend, said the company would conduct the necessary surveys and prepare the required statistics.  He claims the company will increase production by 750,000 barrels of oil a day.

The Kirkuk Oil Field, discovered in 1927, is one of the largest oil fields in the world, producing half of Iraq’s oil exports, a reported million barrels a day. However, it has also been a wellspring for local instability: the fields had been seized in 2014 by the Kurdistan Regional Government, who piped oil across the Turkish border, a few hundred kilometres to the north. The fields were only retaken by government forces in October 2017.

Baghdad is attempting to reassert its authority throughout its provinces and according to Iraq’s Minister for Oil, Jahbar Ali al-Allaibi, Thursday’s announcement will “speed up the rehabilitation process”.

During the Saddam Hussein era, the fields suffered irrecoverable damage due to poor management. Excess production was reinjected back into the ground making Kirkuk’s oil thicker and therefore harder to extract.

On Wednesday al-Allaibi met with Britain’s ambassador, John Wilkes, where according to the ministry’s website, they talked about joint cooperation between the two countries in the oil and gas industry.

Keep reading |  2 min read

America

Trump’s Presidency and Russian Relationship: The Future

 4 min read / 

Trump Russia

Much has been contested about Donald J. Trump’s love affair with Russia. Questions deserve a thorough and honest investigation. As distasteful and risky it may be, the best outcome of the enquiry is accusations continue to swirl, Trump limps through three more years, and in 2020, he is crushed at the ballot box. The world moves on. If removed from office, odds are Trump whips his base into a frenzy. Only the height and duration of civil unrest is in question. A worse case is that Trump emerges emboldened, eager to settle Putin’s longstanding challenge.

Putin Mocks Trump

The competition is real. Putin’s economic and political dominance gnaws Trump. Putin knows this. So, he taunts the President and dares Trump to employ the same ruthless tactics he exploited to consolidate power and possibly become the world’s richest man. Since Trump only sees green, he took the bait. The race is on to be the world’s first trillionaire.

Russia’s population is 142 million. Its $3.86trn translates into a measly $26,900 per capita GDP. In contrast, the 326 million people of the United States generate $18.62trn in GDP, nearly five times Russia’s total. The US per capita GDP of $57,600 more than doubles Russia’s. Despite Russia’s meek economy and reports  that Putin has embezzled up to $200bn in assets, Putin remains incredibly popular in Russia.

The apathy regarding this unparalleled heist makes Trump and Putin salivate over what they could jointly pilfer from the world economy. To advance their contest, the pair will identify a common threat. US-Russia relations will warm. Under the guise of “Peace through strength,” Russian sanctions will be lifted, and the Magnitsky Act repealed.

The administrative state in retreat, animal spirits will run wild. Trump’s name will be emblazoned across the globe. Countries desperate for jobs will be compelled to forge deals sponsored by Putin and Trump. Ethics be damned, the race to the bottom of the $120trn global economy will prompt a wave of corruption never seen before. Every facet of human decency will be compromised: environmental regulations, free and fair-trade by-laws, intellectual property, and human rights protections. The collusion is real.

In time, complicity will turn to double-crossing. It’s the Trump-Putin way. Makeshift “me-first” trade deals will collapse. Boycotts, divestitures and sanctions will be commonplace. Cooperation will evaporate. New political boundaries will be drawn with little world condemnation.

It doesn’t have to happen this way. Patience is a virtue. The checks and balances of the three branches of government are powerful mechanisms to thwart overt corruption.

Yet, for the impatient who seek Trump’s impeachment or removal via the 25th Amendment, be careful what you wish for. Only Trump can tame his army. To assume Trump will plead mercy at the feet of the administrative state contradicts Trump’s lifelong persona. He will relentlessly counterpunch and encourage his followers to do likewise. The short and long-term political and social risks are astronomical.

If Trump stems the tide, consolidates power and aggressively partakes in Putin’s race for two terms, the risks outstrip his forced removal. The consequences will be multi-generational.

Rope-a-Dope is the Key to Containing Trump

The only path that possibly prevents extensive collateral damage is to check Trump into policy oblivion. Legislators must play rope-a-dope for as long as it takes, even three years if necessary. If Democrats take back both houses in 2018, the tactic will not set up Trump and his base for a final knock-out punch in 2020. For that to occur, numerous members of the GOP must join the effort. They too must throw periodic jabs at Trump then absorb a barrage Trump’s counterpunches.

With foes in every corner, even Trump – the self-proclaimed greatest counterpuncher in history—and his base will wear themselves out well before 2020. Then the decisive knockout punch can be delivered at the ballot box—without collateral damage.

Trump is severely wounded. If he gracefully and peacefully surrenders the Presidency, great. But don’t expect it. Rope-a-dope deployed by both parties is the countries best hope for a peaceful end to the Trump Presidency. Any other scenario risks the once unthinkable; an ‘American Spring’.

Keep reading |  4 min read

Europe

May Meets Macron

May Macron

The UK prime minister agreed to pay £44.5m towards tighter border security at Calais.

Editor’s Remarks: The French president arrived in the UK for the Anglo-French summit amid widespread complaints from the Tory party about just why Britain is paying another £44.5m for tighter security in France. One Tory MP pointed out that this addition brings the total figure the UK has paid to France in recent years up to £170m. France, meanwhile, says that the amount is necessary because the migrants in Calais are trying to get to the UK, who must, therefore, contribute towards their costs. The talks were also consumed by the imminent task of reaching consensus over the UK’s trade deal with the UK after Brexit goes through.

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