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Global Affairs

Breakfast Briefing: Trump’s Win, Uber’s Loss and UPS’s New Trucks

Uber Loses EU Case

The ride-hailing app was classified as a “service in the field of transport” by the European Court of Justice (ECJ).

Editor’s Remarks: The ECJ has ruled against Uber following a case it brought after being told to obey local taxi laws in Barcelona. The decision means that it is up to individual member states to decide how they wish to regulate Uber, since it is now classified as a taxi company under EU law. The company announced that although the decision will not impact its existing operations across the European bloc, which comply with local taxi laws, its expansion into new areas of the EU will be halted. Going forward, the result of the case is likely to have wider implications on the rest of the gig economy.

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Youbit Bankrupt After Hack

One of South Korea’s largest bitcoin exchanges has filed for bankruptcy after a massive hack. 

Editor’s Remarks: Yapian, the company that operates South Korea’s Youbit exchange, was the target of a cyber attack that caused it to lose 17% of its reserves. The hack, which followed another attack back in April, was the second in less than eight months, highlighting the growing pressure on cryptocurrency exchanges to ramp up their security measures. Youbit allowed users to trade bitcoin, Ethereum and XRP and has promptly stopped trading. Investors are expected to be able to draw out roughly 75% of their holdings and will be compensated for their outstanding balance once the bankruptcy procedure is complete.

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UPS Buys Tesla Trucks

UPS, the delivery company, announced that it will buy 125 Tesla semi-trucks.

Editor’s Remarks: Elon Musk unveiled Tesla’s new all-electric semi-truck last month to a mixed reception. While the trucks were lauded as being a marvel of electric vehicle engineering, Tesla’s Model 3 production bottleneck left many wondering why the company has even forayed into the trucking space. Regardless, UPS has opted to pick up 125 of the state-of-the-art trucks, making it Tesla’s largest truck order to date, ahead of JB Hunt, Pepsi and Walmart. The trucks cost around $200,000 apiece and the recent raft of pre-orders should provide Musk with a much-needed cash injection.

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Coinbase Launches Bitcoin Cash

The cryptocurrency exchange had to suspend trading after just two minutes.

Editor’s Remarks: Bitcoin holders were incensed when Coinbase announced back in August that it would not support bitcoin cash after the corresponding hard fork. On Tuesday night, however, the exchange released bitcoin cash onto its platform, meaning that anyone who held bitcoin before August 20th now had a proportional holding in bitcoin cash. There were setbacks though, and Coinbase froze trading due to significant volatility in bitcoin cash just ahead of the announcement. The exchange is now investigating the matter, while bitcoin cash had climbed over 50% at the time of writing.

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Trump Passes Tax Bill

President Donald Trump has pushed through his controversial tax reform bill.

Editor’s Remarks: Trump promised tax cuts for Christmas and he delivered. After the Senate voted in favour of overhauling the US tax code, the bill was sent back to the House of Representatives, where it was passed on to the President. Republicans joined Trump at the White House after the bill was passed to celebrate their first major legislative victory. However, the likely effects of the tax reforms are being heavily scrutinised by both Democrats and the media, many among whom feel the new bill will disproportionately help the already-wealthy and large corporations.

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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 said 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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