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Global Affairs

Breakfast Briefing: Crypto Hack, Merkel Wobbles and iPhone’s Illegal Labour

 3 min read / 

iPhone Supplier Used Illegal Labour

Foxconn employed high school students who were made to work 11-hour days assembling the new iPhone in China.

Editor’s Remarks: Foxconn’s struggle to keep up with demand for the new iPhone has been well publicised and it appears that the company turned to illegal labour to meet production targets. So far, six students have come forward and said they were forced to work overtime in direct contravention of Chinese law. The six students were part of a wider group of 3,000 interns working at Foxconn’s Zhengzhou plant. Allegedly, they were also told that they had to complete the internship in order to graduate from high school. Apple and Foxconn have both acknowledged the issue and are pursuing remedial action.

Tencent Outstrips Facebook

The Chinese internet titan is now one of the world’s five most valuable companies.

Editor’s Remarks: Tencent has now surpassed Facebook in terms of market capitalisation after a 127% stock price rally year-to-date added $292bn to its value. As such, the Chinese giant’s market cap stands at $523bn compared to Facebook’s $522bn. Although Facebook has around double Tencent’s 1bn strong user base, the latter’s offerings are more diverse. The company emerged some 20 years ago before cornering the internet games market. It now owns WeChat, which operates an effective monopoly over Chinese instant messaging. Accordingly, investors appear to believe that the company’s dominance over China’s internet will enable it to continually expand its operations.

Merkel Languishes in Chaos

The collapse of German coalition talks has heralded the lowest point in Angela Merkel’s 12-year tenure as the nation’s chancellor.

Editor’s Remarks: Merkel, typically cast as the figurehead of a strong, united Europe, is facing domestic disarray. In September, Merkel led her party, the CDU, to its worst election performance for a generation. More significantly, for the first time since WW2 ended, hard-right politicians entered the Bundestag in the form of 94 AfD members. The proposed three-way coalition between the CDU, the pro-business FDP, and the Greens means that Merkel is effectively out of options when it comes to potential partners. Accordingly, she has strongly hinted that she would prefer another election to take place than have to settle for a weak government.

Crypto World Reacts to Tether Hack

Tether, which operates the USDT cryptocurrency, had $31m worth of tokens stolen in a hack. 

Editor’s Remarks: Tether is not a major player in the cryptocurrency world, but this recent hack highlights the problems facing virtual currencies. Tether, unlike most cryptocurrencies, is pegged against the US dollar and is primarily used by exchanges for settling balances. However, this did not stop a hacker from attacking the company’s “treasury wallet” and digitally absconding with $31m of USDT. Tether said it will not replace the stolen tokens and is instead working on tracking them down in order to prevent them from re-entering the wider cryptocurrency market. In reaction, bitcoin dipped around 5% for the blink of an eye before storming back to new highs at around $8,200.

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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.

Read more on Europe:

Keep reading |  1 min read

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