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News 16.11.22 : Today’s Articles of Interest from Around the Internets

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News 16.11.22 : Today’s Articles of Interest from Around the Internets
@mariellelindahl
News 16.11.22 : Today’s Articles of Interest from Around the Internets
Frank Muytjens’ home Hillsdale, New York
News 16.11.22 : Today’s Articles of Interest from Around the Internets
@mariellelindahl

In the winter of 2002, a young American named Ryan Neil joined an unusual pilgrimage: he and several others flew to Tokyo, to begin a tour of Japan’s finest collections of bonsai trees. He was nineteen, with an athlete’s body and a sunny, symmetrical face. The next-youngest adult in the group was fifty-seven. Then, as now, rearing tiny trees in ornamental pots was not commonly considered a young man’s hobby.

Neil had grown up in a small Colorado mountain town. For much of his youth, he was focussed on playing sports, especially basketball, which he approached with an almost clinical rigor: during high-school summer breaks, he’d wake up every day at five-thirty and attempt twelve hundred jump shots before going to the gym to lift weights. By his junior year, he was the best player on the team. By his senior year, he had torn one of his quadriceps—“It was hanging on by just a thread,” he recalls—and was looking for a new obsession.

Like many Americans of his generation, Neil had discovered bonsai through the “Karate Kid” films. He was especially fond of the third movie in the series, which features dreamy shots of characters rappelling down a cliff face to collect a miniature juniper. In the films, the wise karate instructor, Mr. Miyagi, practices the art of bonsai, and in Neil’s young mind it came to represent a romantic ideal: the pursuit of perfection through calm discipline. One day, after seeing bonsai for sale at a local fair, he rode his bike to the library, checked out every book on bonsai, and lugged them all home.

Read the rest of this article at: The New Yorker

News 16.11.22 : Today’s Articles of Interest from Around the Internets

News 16.11.22 : Today’s Articles of Interest from Around the Internets

The bad news just keeps coming. Ten months after America’s stockmarket peaked, its big technology companies have suffered another rout. Hopes that the Federal Reserve might change course have been dashed; interest rates are set to rise by more than previously thought. The bond market is screaming recession. Could things get any worse? The answer is yes. Stockmarket booms of the sort that crested in January tend to engender fraud. Bad times like those that lie ahead reveal it.

“There is an inverse relationship between interest rates and dishonesty,” says Carson Block, a short-seller. Quite so. A decade of ultra-low borrowing costs has encouraged companies to load up on cheap debt. And debt can hide a lot of misdeeds. They are uncovered when credit dries up. The global financial crisis of 2007-09 exposed fraud and negligence in mortgage lending. The stockmarket bust of the early 2000s unmasked the deceptions of the dotcom bonanza and the book-cooking at Enron, WorldCom and Global Crossing. Those with longer memories in Britain will recall the Polly Peck and Maxwell scandals at the end of the go-go 1980s.

The next downturn seems likely to uncover a similar wave of corporate fraud. Fraud-busters concede that exactly where is hard to know in advance. Everyone has a favourite hunch. The rush to comply with the demands of environmental, social and governance (ESG) investing seems ripe for more imbroglios; in May German police raided the offices of dws, an asset manager, over claims of greenwashing. The various government schemes to shore up businesses in the pandemic are another candidate. They were designed to be tapped quickly, so checks were by necessity lax. Evidence of fraud is already emerging.

The archetypal sin revealed by recession is accounting fraud. The big scandals play out like tragic dramas: when the plot twist arrives, it seems both surprising and inevitable. No simple formula exists to sort the number-fiddlers from the rest. But the field can be narrowed by searching within the “fraud triangle” of financial pressure, opportunity and rationalisation.

Start with pressure. This can be self-imposed. If you make the cover of Business Genius Monthly, in Mr Block’s words, “the guy on the cover becomes your identity, the ceo of a high-flying firm.” Fessing up that it isn’t flying high becomes unthinkable. Often it is the result of external expectations, says Andi McNeal of the Association of Certified Fraud Examiners, a 90,000-strong professional body based in Texas.

Read the rest of this article at: The Economist

After Barack was elected president, word got out that Marian Robinson, my 71-year-old mother, was planning to move to the White House with us. The idea was that she’d help look after Sasha and Malia, who were seven and 10 at the time, at least until they were settled. She’d make sure that everyone adjusted OK and then move back to Chicago. The media seemed instantly charmed by this notion, requesting interviews with my mother and producing a slew of stories, dubbing her “First Granny” and “Grandmother-in Chief”. It was as if a new and potentially exciting character had been added to the cast of a network drama. Suddenly, my mother was in the news. She was news.

If you’ve ever met my mother, however, you’ll know that the last thing she wants is to be well known. She agreed to do a handful of interviews, figuring it was just part of the larger transition process, though she said, again and again, that she was surprised that anyone would care.

By her own measure, my mom is nothing special. She also likes to say that while she loves us dearly, my brother and I are not special, either. We’re just two kids who had enough love and a good amount of luck and happened to do well as a result. She tries to remind people that neighbourhoods like the South Side of Chicago are packed full of “little Michelles and little Craigs”. They’re in every school, on every block. It’s just that too many of them get overlooked and underestimated. This would probably count as the foundational point of my mom’s larger philosophy: “All children are great children.”

My mother is now 85. She operates with a quiet and mirthful grace. Glamour and gravitas mean nothing to her. She sees right through it, believing that all people should be treated the same. I’ve seen her talk to the pope and to the postman, approaching them both with the same mild-mannered, unflappable demeanour. If someone asks her a question, she responds in plain and direct terms, never catering her answers to suit a particular audience. This is another thing about my mother: she doesn’t believe in fudging the truth.

Read the rest of this article at: The Guardian

News 16.11.22 : Today’s Articles of Interest from Around the Internets

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News 16.11.22 : Today’s Articles of Interest from Around the Internets

“There is no longer such thing as the international community,” a prominent African leader recently complained to me, lamenting that this week’s G20 would, like September’s UN general assembly, October’s IMF-World Bank meetings and this month’s Cop27, fail to combat the world’s food, energy, debt, inflation, currency, pollution and poverty crises.

At the very moment the world needs to work together to address global problems that cannot be resolved without global solutions, it is being pulled apart not just by conflicts but also by a rising protectionism. And while it is not difficult to blame poor leadership, an outdated geopolitics is threatening a decade of perma-crises.

Pillars of the post-cold war world order are tumbling down as we leave behind the unipolar, hyper-globalised, neoliberal era. Those who try to build the present in the image of the past are finding themselves wholly ill-equipped to meet the challenges of the future. As Mohamed El- Erian and Michael Spence have written, we need new models for growth, national economic management and global cooperation.

No one can deny the significance of the emergence of new power centres around the world, the growing importance of services and the digital economy at the expense of manufacturing; the education-rich and education-poor divide that is replacing the old manual/non-manual divide, and the serious, existential threats to our planet. No growth model can meet the needs of the 21st century without incorporating rising concerns about environmental and economic equity and re-evaluating the role of finance. And the manufacturing-led, export-driven, low-wage models of development that until recently served every industrialising country are being overtaken not just by demographic shifts but by technological advances that mean more goods can be manufactured by a markedly smaller workforce.

All this is determining the seismic shifts in our geopolitics. First, as we move from a unipolar to a multipolar world, no single country – no matter the size of its military or economy – has the power to command and control us, only the power to propose and persuade. Second, there is now no consensus that open markets benefit all. The hyper-globalisation of the last 30 years is not giving way to de-globalisation or even slowbalisation, but lowbalisation: a globalisation-lite defined by near-shoring, friend-shoring and shortening supply chains. Policies promoting privatisation, deregulation and liberalisation, which became popularly known as the Washington consensus, now have few supporters – even in Washington.

Most important of all, nationalism has replaced neoliberalism as the dominant ideology of the age. If, for the past 30 years, economics drove political decision-making, now politics is determining economic decisions, with country after country weaponising their trade, technology, industry and competition policies. The win-win economics of mutually beneficial commerce is being replaced by the zero-sum rivalries of “I win, you lose”, as movements such as “America first”, “China first”, “India first” and “Russia first”, “my tribe first”, threaten to descend into an us versus them geopolitics of “my country first and only”. And with national security establishments now freezing the central bank reserves of hostile regimes and limiting access to global payments systems, trade, technology, and capital wars are set to intensify.

Read the rest of this article at: The Guardian

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News 16.11.22 : Today’s Articles of Interest from Around the Internets

In his 1910 book, Finance Capital, the Austrian-born economist Rudolf Hilferding introduced the idea of “promoter’s profit.” Unlike an industrial capitalist, the promoter harvests their gains not from the sale of a widget at a price above its cost but from the sale of promises — of claims to future profits. Hilferding saw the promoter as being particularly useful for selling stocks, to the benefit of big banks and others that managed those sales, and he predicted that corporate dividends would dwindle as the financiers captured an increasing profit share for themselves. For a promoter, being famous clearly helped. If you’re famous, someone will want you to promote their stock, and if you promote a lot of stocks, you might find yourself getting famous all on your own — as well as very wealthy. It’s an old tradition.

Finance Capital was received as a worthy update to Marx, and Hilferding became a leading voice on economic policy for the German left in the Weimar period, rising to finance minister. An Austrian Jew by birth, he died in Gestapo custody, but his predictions were harder to kill. Soon after Hilferding’s book, Charles A. Lindbergh helped define the modern celebrity, starting with the inaugural transatlantic flight of 1927. The Guggenheim family, which invested millions in aviation-related programs, paid him to barnstorm around the country, boosting the idea of air travel and convincing capital to invest in air companies. It worked, helping to create a “Lindbergh Boom” as Wall Street raced to finance the new industry. But Lindbergh was more than a celebrity endorser; he was also a promoter with a stake in what he was promoting. In 1934, facing rumors of impropriety, Lindbergh’s team released financial statements revealing millions of dollars in inflation-adjusted profits from the sale of airline stocks over the previous six years, with more still held in Pan Am shares. Not bad, especially considering it was the Great Depression. In comparison, his annual salaries from two airlines were token.

There were echoes of Lindbergh and Hilferding when Amazon founder Jeff Bezos took the inaugural spaceflight on his Blue Origin rocket ship in the summer of 2021. He too was trying to interest people — and capital — in flight, and, like Lindbergh, he was personally invested in the result, though his company is closely held and not yet on the public markets. Still, doing an ostensibly death-defying stunt while yelling “Look at my company!” is perhaps the ultimate act of a promoter.

If the figure of the promoter isn’t new, it has made a qualitative jump during the young 21st century. More than anyone else, Tesla CEO Elon Musk defines the archetype. In the supercharged pandemic stock market, he proved the value of a celebrity profile by vaulting over rivals like Bezos and Mark Zuckerberg to become, by some measures, the richest man in the world. Tesla is at least partly propelled by Musk’s personal brand, and the equity markets translate celebrity into cash. “It’s hard to fathom how somebody could make more money faster than anyone ever has by tweeting, yet that’s pretty much what happened,” as Lane Brown has written of Musk for this magazine.

Read the rest of this article at:  New Yorker Magazine

P.S. previous articles & more by P.F.M.