Good morning, Q-MHI readers!
WHAT TO WATCH FOR TODAY AND OVER THE WEEKEND
The EU attempts to block Donald Trump’s Iran sanctions. The European Commission plans to activate a statute today that would punish any EU firm that curtails its business in Iran due to US sanctions against Iran in a bid to keep the nuclear accord with Tehran alive, Commission President Jean-Claude Juncker said.
Juncker told reporters in Sofia that EU leaders decided Wednesday night to activate the so-called blocking statute, which bans European companies from complying with the U.S. sanctions against Iran.“We have the duty, the Commission and the European Union, to protect our European businesses,” said Juncker, adding: “We must act now and we will act now. That’s why we are launching the process to use the 1996 ‘blocking statute’ to neutralize the extraterritorial effects of U.S. sanctions on European companies … We will do that tomorrow morning at 10:30.”
The blocking statute would forbid EU companies, under threat of punishment, to cancel business ties with Iran because of the U.S. sanctions. To do that, the EU will need to update the law to include Donald Trump’s sanctions, a process that could take up to two months, depending on how fast the European Parliament and Council vote on the update. EU countries need to approve the text by a qualified majority, meaning skeptics like Germany alone would not be able to veto the law.
Juncker also said that leaders have decided “to allow the European Investment Bank to facilitate European companies’ investment in Iran.” This means that the investment bank could potentially issue loans for companies that might no longer be covered by European banks, which are expected to withdraw their operations from Iran out of fear of consequences for their business with the United States.
Meanwhile German chancellor Angela Merkel and Russia’s Vladimir Putin will meet in Sochi today to discuss salvaging the Iran nuclear deal is a rare topic for rapprochement between Europe and Moscow, whose relations are marred by disagreements over the Syria conflict, Moscow’s 2014 annexation of Crimea and the subsequent war in eastern Ukraine.
These tensions have only worsened in recent months following the poisoning of former Russian spy Sergei Skripal in Britain that led to an unprecedented wave of expulsions of Russian diplomats from Western countries.
As part of the historic 2015 Iran deal, Tehran agreed to curb its nuclear program by pledging not to seek an atomic bomb in exchange for the lifting of some international sanctions on the Middle East country.The Europeans now want to avoid at all costs Tehran abandoning the deal and relaunching its program to acquire a nuclear weapon.They also want to protect their economic interests in Iran, threatened by Washington’s reintroduction of sanctions.
The Kremlin, allied with Iran in its support for the Bashar al-Assad regime in the Syrian conflict, has in recent days increased its diplomatic efforts to try to maintain the agreement it described as “crucial for regional stability and for the stability of the entire world”.
Venezuela holds a presidential election amid a worsening crisis. Autocratic leader Nicolás Maduro is widely expected to be re-elected on Sunday after the opposition coalition opted to boycott the contest, saying the vote is rigged.
Several hundred Venezuelan opposition demonstrators blocked traffic in a march to the Organization of American States (OAS) headquarters in Caracas on Wednesday to protest this weekend’s presidential vote, which they say is rigged.
With the mainstream opposition boycotting Sunday’s election and two of their most popular leaders barred from standing, leftist President Nicolas Maduro is expected to win re-election despite Venezuela’s crushing economic crisis.
Wednesday’s march, a far cry from months of mass protests that drew hundreds of thousands onto the streets last year, was led by a recently-formed new opposition grouping called Broad Front, which is promoting abstention.
WHILE YOU WERE SLEEPING
Trump threatened Kim Jong Un. The president said the North Korean leader would suffer the same fate as Libya’s Muammar Gaddafi and North Korea would be “decimated” if he doesn’t reach a deal with the US over nuclear disarmament. If he does, however, Trump said he could keep “running his country,” which would be “very rich.”
Cambridge Analytica filed for bankruptcy in New York. The company at the heart of the Facebook data-privacy scandal said earlier this month it would shut down after suffering a drop in business.The U.K.-based political consulting firm, which had already said it would cease operations and wind down in its home country, listed liabilities of $1 million to $10 million. The Chapter 7 petition to liquidate U.S. affiliates — including SCL Elections Ltd., and SCL USA Inc. and SCL Social Ltd. — was signed by board members Rebekah Mercer and Jennifer Mercer, daughters of former New York hedge fund manager Robert Mercer whose family backed Donald Trumppresidential campaign and helped reshape American conservative politics.
The American bankruptcy case could shed light on some of the company’s relationships and finances, as U.S. legal proceedings are more transparent than those in the U.K., and creditors can use bankruptcy law to subpoena information and probe asset transfers. Cambridge Analytica, which did work for Trump’s 2016 campaign, said in a May 2 statement on its website that it lost “virtually all” customers and suppliers as a result of reports that it improperly obtained information from tens of millions of Facebook Inc. users.The company listed creditors including Facebook, Target and Google without specifying the size or type of claims they had. A spokesman for Facebook declined to comment and representatives for Google and Target didn’t immediately return calls for comment.
Elon Musk presented his boring idea to Los Angeles. The Tesla, SpaceX, and Boring Company CEO told an enraptured crowd in Bel-Air that his network of “personalized mass transit” tunnels under the city could be created with minimal disturbance. He’s trying to get city approval for the 2.7-mile tunnel beneath a busy stretch of Los Angeles’ West Side has drawn a court challenge from two neighborhood organizations.
It also comes as Musk wrestles with production problems for the rollout of his highly anticipated Model 3 sedan at Tesla, with some investors concerned his overlapping leadership roles at Boring and his rocket-building firm SpaceX has him spread too thin.Resistance to his tunneling project marks a somewhat new type of challenge for Musk. Opponents say the exemption Boring seeks from a lengthy environmental review of the Los Angeles test tunnel violates state law forbidding such waivers for large-scope projects on a piecemeal basis.
Germany hit back at the US over the Russian gas pipeline.The United States must reckon with Europe responding in kind if it declares “America First” and places its own economic interests before those of others, Germany’s Economy Minister Peter Altmaier said.
Peter Altmaier say that the US was attempting to block a planned gas pipeline from Russia to Germany to boost its own shale gas exports. Altmaier said that the US was acting out of self-interest and Europe would resist.
“They have a large LNG terminal infrastructure to get value out of,” said Altmaier, a close ally of Chancellor Angela Merkel, “but that LNG will be significantly pricier than pipeline gas, so blocking Nord Stream 2 will not on its own guarantee exports.”
China dropped an anti-dumping probe of US sorghum imports.The gesture was made as officials meet in Washington to head off a trade war between the world’s two biggest economies. China has reportedly offered the Trump administration a package to slash the US trade deficit by up to $200 billion.contradicting a Chinese foreign ministry spokesman who denied that such a reduction had been offered.
“This rumour is not true. This I can confirm to you,” Chinese foreign ministry spokesman Lu Kang told a regular news briefing on Friday, adding that consultations in Washington “are constructive.”
Q-MHI OBSESSION INTERLUDE
Josh Horwitz on the “SoftBank of China.” “Tencent, the social media company best known for its messaging app WeChat, has been funding dozens of Chinese and overseas companies over the past few years at an astonishing rate… What’s not clear is whether or not Tencent, like SoftBank, has a grand vision that explains its disparate investments.”
MATTERS OF DEBATE
US cities should be catering to freelancers instead of courting Amazon.More than one in three Americans has done some sort of freelancing, and the frequency of this work is likely to continue. Not every city can be the home of Amazon. But with some thought, Trends point to most of the workforce being independent in less than a decade.
Time is an illusion. Chronology is just a story we tell ourselves to make sense of existence.Time feels real to people. But it doesn’t even exist, according to quantum physics. “There is no time variable in the fundamental equations that describe the world,” theoretical physicist Carlo Rovelli ,If you met him socially, Rovelli wouldn’t assault you with abstractions and math to prove this point. He’d “rather not ruin a party with physics,” he says. We don’t have to understand the mechanics of the universe to go about our daily lives. But it’s good to take a step back every once in a while.“Time is a fascinating topic because it touches our deepest emotions. Time opens up life and takes everything away. Wondering about time is wondering about the very sense of our life. This is [why] I have spent my life studying time,” Rovelli explains.
John Bolton is pushing all the wrong buttons in North Korea.The White House’s resident warmonger may be intentionally sabotaging peace talks.
The Libya reference was a dark one to make ahead of a summit focused on denuclearization. In 2003, Libyan leader Muammar Qaddafi agreed to give up his nascent nuclear program, and eight years later US-backed rebels violently killed him. Last year the Kim regime, via KCNA, noted that the regimes of Qaddafi and Saddam Hussein in Iraq were each destroyed after willingly giving up their nuclear programs. It added that North Korea wouldn’t follow that path.Making the Libya comparison “pushes all the wrong buttons… The diplomacy with North Korea is going very well and Bolton threw a spanner in the works,” Ploughshares Fund president Joe Cirincione, a disarmament advocate, told Bloomberg (paywall).
Following yesterday’s angry KCNA statement, the White House backed away from Bolton’s statements on the Libya model.Part of the problem is the Kim regime’s strong aversion to Bolton himself. Yesterday’s KCNA statement read, “We shed light on the quality of Bolton already in the past, and we do not hide our feeling of repugnance towards him.”Bolton is a war hawk who’s long pushed for regime change in North Korea. Shortly before starting his current role in March, he argued in a Wall Street Journal column (paywall) that a preemptive attack on North Korea was both prudent and legally justified. As a State Department official in the early 2000s, he played a key role in steering the Bush administration away from engagement with North Korea and toward classifying it as part of the “Axis of Evil.”
Bitcoin is on track to consume 0.5% of the world’s electricity this year. The energy footprint for mining cryptocurrencies is doubling every six months.It’s expected to double again by the end of the year, according to a new peer-reviewed study out Wednesday. And if that happens, bitcoin would be gobbling up 0.5 percent of the world’s electricity, about as much as the Netherlands.
Most of the world’s 321 female billionaires rely on inheritance money. The number of billionaires around the world is growing, rising by 15% to 2,754 people in 2017 from the previous year, according to data by market research firm Wealth-X.Out of that total number of billionaires, there are 321 women—a rise of 18% from last year, outpacing the growth of 14.5% in the male billionaire population. However, when you look at the reasons for the source of their wealth, inheritance takes up a far greater proportion than men’s.For 53% of the women, inheritance is the source of their wealth, compared to 8% for men.
Investors are buying real estate near North Korea’s borders.Property prices are rising along both the Chinese and South Korean borders as speculators bet on peace.
When it comes to making money out of North Korea, Chinese real-estate investors could be the proverbial early birds that get the worm.As the diplomatic efforts to bring North Korea out of the cold intensify, home prices in Dandong, a Chinese town bordering the reclusive state, are rising. Prices jumped 2% in April from a month earlier, the biggest gain among 70 major Chinese cities, according to data from China’s national statistics bureau published Wednesday (May 16).
The spike in home sales is not limited to North Korea’s border with China. South Korean investors are also betting on real estate in areas around the Demilitarized Zone (DMZ) that divides the Korean peninsula. Land transactions in Paju, a city located just south of the DMZ, more than doubled in March to 4,600 from a month earlier, Reuters reported citing official data.
Getting rich off North Korea, of course, comes with a lot of risk. This week, North Korea called off a high-level meeting with Seoul at the last minute because of its dissatisfaction with joint military drills between the US and South Korea. It then threatened to cancel a summit planned for June 12 between Kim Jong Un and Donald Trump. Buyer beware.
A prison research project may tell us if salt is unhealthy. The study plans to use inmates as guinea pigs for low-sodium diets.The salt-intake study, Jones says, falls in the last category. The results could inform salt guidelines for both what average people should eat and what people are fed in prisons. The pilot study will be privately funded, he says, but they hope to seek federal funding for a larger study at several different prison sites, ideally federal prisons for the sake of standardization. Each site will be randomly assigned to feed inmates either their current diet or a low-sodium diet of less than 2,300 milligrams per day, as recommended by the American Heart Association. Individual prisoners will not choose the menu they’re offered—the rationale being they already do not have control over prison menus, says Jones—but they can decide whether they want their health data to be collected for the study.
Two bottles of Scotch could be auctioned for more than $1 million. The 60-year-old bottles (paywall) of 1926 Macallan could go for as much as $573,000 apiece in Hong Kong.Offered as separate lots at the sale, each 750 milliliter bottle from 1926 carries an estimate of HK$3.6 million to HK$4.5 million ($459,000 to $573,000) excluding a 22.5 percent buyers premium, which is added to the hammer price.
The auction record, including buyers premium, of HK$4.9 million was set in 2014 for a six-liter bottle of Macallan 60 year old in a Lalique decanter. Any hammer price in excess of HK$4 million on Friday would surpass that record once the buyers premium is included.