Month: August 2023

By Charles Kennedy of OilPrice.com

The UK regulator Ofgem said on Wednesday it had fined Morgan Stanley & Co. International plc (MSIP) for failure to record and retain electronic trading communications in energy trades after wholesale energy traders were found to have used WhatsApp on privately owned phones to discuss energy market transactions.

The failure to comply with the requirement to record and retain electronic trading communications was for the period between January 2018 and March 2020.   

Ofgem has levied a fine of $6.8 million (£5.41 million) on Morgan Stanley for the use of WhatsApp on privately owned phones in the first-ever fine issued in the UK under legal requirements to record and retain electronic communications relating to trading wholesale energy products.

The rules have been designed to protect consumers and ensure market transparency and integrity by providing Ofgem the powers to investigate and sanction against market manipulation and insider trading, the UK regulator said in a statement.

The breach emerged following Morgan Stanley’s responses to information requests made using the information collection powers Ofgem has under these regulations.

Morgan Stanley has admitted the breaches between January 2018 and March 2020, and “has taken steps to ensure the breaches do not happen again, including enhanced staff training and the strengthening of its internal systems and controls,” Ofgem said.

The bank has fully co-operated with Ofgem’s investigation and has agreed to settle the case. The fine includes a 30% penalty discount for settling.

“This fine sends a strong message to market participants that they must comply with all REMIT rules or face enforcement action,” said Cathryn Scott, Regulatory Director of Enforcement and Emerging Issues at Ofgem.

“It is unacceptable that MSIP failed to prevent electronic communications which could not be recorded or retained. It risks a significant compromise of the integrity and transparency of wholesale energy markets.”

In March, Silicon Valley Bank collapsed, plunging its parent company SVB Financial Group into bankruptcy a week later.

While many expected a wave of bank failures to follow, much of this has since been averted – but cracks have begun to emerge with Moody’s recent downgrading of 10 small and mid-sized banks.

Across the wider corporate landscape, bankruptcies have begun to tick higher. Overstretched balance sheets coupled with 11 interest rate hikes since last year have added to mounting challenges for companies across many sectors.

As Visual Capitalist’s Dorothy Neufeld and Sabrina Fortin show in the graphic below, based on data from S&P Global, corporate bankruptcies in 2023 are surging…

U.S. Corporate Bankruptcies Grow

So far in 2023, over 400 corporations have gone under. Corporate bankruptcies are rising at the fastest pace since 2010 (barring the pandemic), and are double the level seen this time last year.

Below, we show trends in corporate casualties with data as of July 31, 2023:

Represents public or private companies with public debt where either assets or liabilities are greater than or equal to $2 million, or private companies where assets or liabilities are greater than or equal to $10 million at time of bankruptcy.

Firms in the consumer discretionary and industrial sectors have seen the most bankruptcies, based on available data. Historically, both sectors carry significant debt on their balance sheets compared to other sectors, putting them at higher risk in a rising rate environment.

Overall, U.S. corporate interest costs have increased 22% annually compared to the first quarter of 2021. These additional costs, combined with higher wages, energy, and materials, among others, mean that companies may be under greater pressure to cut costs, restructure their debt, or in the worst case, fold.

Billion-Dollar Bankruptcies

This year, 16 companies with over $1 billion in liabilities have filed for bankruptcy. Among the most notable are retail chain Bed Bath & Beyond and the parent company of Silicon Valley Bank.

Mattress giant Serta Simmons filed for bankruptcy early this year. It once made up nearly 20% of bedding sales in America. With a vast share of debt coming due this year, the company was unable to make payments due to higher borrowing costs.

What Comes Next?

In many ways, U.S. corporations have been resilient despite the sharp rise in borrowing costs and economic uncertainty.

This can be explained in part by stronger than anticipated profits seen in 2022. While some companies have cut costs, others have hiked prices in an inflationary environment, creating buffers for rising interest payments. Still, S&P 500 earnings have begun to slow this year, falling over 5% in the second quarter compared to last year.

Secondly, the structure of corporate debt is much different than before the global financial crash. Many companies locked in fixed-rate debt over longer periods after the crisis. Today, roughly 72% of rated U.S. corporate debt has fixed rates.

At the same time, banks are getting more creative with their lending structures when companies get into trouble. There has been a record “extend and amend” activity for certain types of corporate bonds. This debt restructuring is enabling companies to keep operating.

The bad news is that corporate debt swelled during the pandemic, and eventually this debt will come due likely at much higher costs and with more severe consequences.

Authored by Kyle Anzalone via The Libertarian Institute, 

Warsaw plans to buy nearly 100 Apache attack helicopters manufactured by Boeing for $12 billion. Until Poland receives the helicopters, the US will provide Apaches to its NATO ally. 

The Defense Security Cooperation Agency (DSCA) announced the State Department greenlit the massive arms sale on Monday. The deal is for 96 AH-64E Apache Attack Helicopters, spare parts, thousands of missiles, other munitions, as well as maintenance and training for the helicopters.

The State Department claims the sale will further the security of the US. “This proposed sale will support the foreign policy goals and national security objectives of the United States by improving the security of a North Atlantic Treaty Organization (NATO) Ally that is a force for political stability and economic progress in Europe,” the DSCA press release stated.

“The proposed sale will improve Poland’s capability to meet current and future threats by providing a credible force that is capable of deterring adversaries and participating in NATO operations.”

The statement further sought to assure, “There will be no adverse impact on U.S. defense readiness as a result of this proposed sale.”

Poland is amid a military buildup with its neighbor, Belarus. Minsk has increasingly sought closer ties to Moscow and now hosts Russian tactical nuclear weapons.

Any conflict between Poland and Belarus would likely cause a nuclear holocaust perpetrated by the White House and Kremlin. 

With 96 Apache helicopters, Poland will operate the largest international fleet of AH-64s, second only to the U.S. https://t.co/ROwJUI7fto

— The Aviationist (@TheAviationist) August 22, 2023

Warsaw says until it is ready to field its own Apaches, Washington will deploy American attack helicopters to Poland. Polish Defense Minister Mariusz Blaszczak said, “until the procedures are completed and the purchased helicopters are delivered to Poland, the US Army will provide us with Apache helicopters from its own resources.”

Taking place from August 23 to August 27, this year’s Gamescom is bound to again become the biggest video game trade fair in the world with upwards of 300,000 visitors and 1,200 exhibitors.

As Statista’s Florian Zandt shows in the chart below, while Germany is a crucial video gaming market, generating roughly ten billion euros with the sales of games, hardware and online services in 2022, the top 5 in terms of the highest user penetration in the gaming sector is populated by other countries.

Three out of these five come as no surprise, though.

You will find more infographics at Statista

According to estimates from our Statista Digital Market Outlook, Japan has consistently placed first or second in terms of the percentage of the population being considered gamers.

A penetration rate of 53 percent in 2017 and 58 percent in 2022 earned Japan the top spot in both years.

South Korea, home to many elite e-sports players and organizations, also snags a top 5 spot and even comes in third in 2022.

In the future, the United Kingdom will most likely overtake Japan in terms of user penetration.

By 2027, 70 percent of UK residents are expected to qualify as gamers, reflecting the importance of the market.

In a Newzoo ranking, the country places sixth with estimated revenue of $5.7 billion in 2022.

Overall, video games have become the most lucrative media segment concerning revenue over the last few years. Still, 2022 saw the market contract to around $182 billion, according to Newzoo estimates, with $92 billion generated with mobile gaming alone. In comparison, revenues from the music and film industries reached $25.9 billion and $21.3 billion in 2021, while video streaming providers like Netflix and Disney+ generated an estimated $62 billion in 2020.

By Felicity Bradstock of OilPrice.com

The EU simply cannot seem to keep up with the U.S. when it comes to its green energy policy or China when it comes to green investment. Despite bold promises of establishing a law that would stand up against President Biden’s Inflation Reduction Act (IRA), the EU has so far failed to deliver. And its investment in green energy and related technologies nowhere near compares with the massive levels of funding being pumped into the sector in China. So, can we expect the EU to deliver on its green promises or to fall short of the world’s expectations?

Around a year after the U.S. introduced its most far-reaching climate policy, the IRA, the EU is still finding it difficult to provide such an expansive climate law. The IRA provides companies billions of dollars in grants, subsidies, and tax exemptions to develop green energy projects and clean technologies. This has attracted huge investment in the sector over the last year, with significantly more funding expected in the coming years, thanks to the favourable tax environment. The combination of the IRA and the $108-billion Bipartisan Infrastructure Law, established in 2021, has made the U.S. highly competitive when it comes to clean energy and tech, allowing it to rival its biggest competitor – China. While its spending on the sector may remain lower than in China, it is rapidly becoming a major regional green hub. 

But when it comes to Europe’s efforts to develop far-reaching green policies, analysts believe its efforts have been limited due to a lack of cash and coordination. Johanna Lehne, an analyst at the climate thinktank E3G, stated “It’s very much the EU masquerading as if it is doing industrial policy.” She added When you look into the package itself – the fact that there is no new funding, that they are basically leaving it up to member states, that they haven’t been able to create a really cohesive and coordinated approach – it’s not more than the sum of its parts.”

Meanwhile, Niklas Nienaß, a German MEP with the Green party, believes “The big gamechanger that the IRA brought was this immense amount of funding, and there we are falling way behind.”

He added, “I would call [the EU response] a sleight of hand. The magician shows you this card, the IRA response you are looking for, but in fact, we have just shifted one card for another.”

So far, the EU has committed to making 40 percent of strategic net zero technologies within Europe by 2030. The European Commission has also asked member states to contribute an additional $10.9 billion to existing funds, to attract $174 billion in public and private investment to the sector. This is fairly low considering the U.S. forecast of $382 billion in federal spending alone under the IRA. 

At the beginning of the summer, the EU prepared itself for the possible loss of two climate change leaders, Frans Timmermans, the European Commissioner in charge of climate and environment policies and Spain’s climate minister Teresa Ribera. Timmermans, who is viewed as a figurehead in the EU’s international climate negotiations, has since quit to run in Dutch national elections. The EU Green lawmaker Michael Bloss explained “We achieved, in terms of laws and legislation in the last three years, something that we didn’t achieve in 10, 15 years before,” in reference to Timmerman’s role in the organisation. In addition, there is a risk that Spanish climate minister Ribera could be ousted from the government by the country’s new conservative leadership. Ribera has represented Spain at COP negotiations since 2018, becoming a key figure in climate change in the EU. 

The lack of progress on EU climate policy means the region could become highly reliant on China for its green technology until it is able to develop a strong industry of its own. Research shows that almost half of the world’s low-carbon spending took place in China in 2022, with the country spending $546 billion on green investments, from solar and wind energy to electric vehicles and batteries. That’s almost four times the green investment made by the U.S., which amounted to around $141 billion. Meanwhile, the EU was second to China, with $180 billion of clean energy investments. However, this is expected to shift as the IRA continues to attract greater private spending in the sector. 

Several factors have hampered the EU’s climate policy progress, with the risk of falling behind the US when it comes to green law and China in terms of clean tech spending. But there is still time to turn it around. The EU has a strong track record when it comes to climate change and green energy, having invested heavily over the last decade. Further, it has some of the highest environmental standards in the world, with many of its regulations being adopted by other governments, suggesting it could remain a world leader in the green transition if it takes action sooner rather than later. 

YouTube has been the dominant force in video streaming for well over a decade, with music being a huge driver of the platform’s growth.

However, there seems to have been a demographic shift in YouTube’s audience over the years.

As Visual Capitalist’s Freny Fernandes details below, while commercial music videos once dominated the rankings of the most-viewed videos on YouTube, they have since faced stiff competition from an unlikely source: nursery rhymes and children’s educational videos.

This graphic pulls up the 20 most viewed videos on YouTube, revealing the rising demand for kid-focused content and videos as of August 2023.

Now Streaming for Children

Launched in 2016 by Korean education brand Pinkfong, the catchy “Baby Shark (do-do, do-do-do-do)” dance video became the first music video ever to cross 10 billion views in January 2021.

Nine of the top 20 most-viewed YouTube videos today offer content geared toward children:

With total views of 13 billion today, “Baby Shark” surpasses the music video for Luis Fonsi’s “Despacito” (previously the most-viewed YouTube video) by almost five billion views.

And other popular child-focused music videos are close behind. “Johny Johny Yes Papa” (#3) and Cocomelon’s “Bath Song” (#4) nudged Ed Sheeran’s “Shape of You” and Wiz Khalifa’s “See You Again” down to the fifth and sixth rank in the list of most-viewed YouTube videos.

Catchy or Educational?

While many attribute the popularity of kid-focused videos to repetitive lyrics, familiar nursery rhymes, or otherwise catchy music that can’t get out of your head, research says otherwise.

A study by the Pew Research Center found that YouTube plays a key role in providing content for children. 81% of parents of kids aged 11 and younger allow their children to watch YouTube, with 35% of these kids using the platform regularly.

And this has become a lucrative business too. In 2021, the company behind Cocomelon and other popular kids channels was acquired for around $3 billion.

If these trends keep up, we may see more kid-focused content climb up this Top 20 list in the future as well.

Authored by Katabella Roberts via The Epoch Times (emphasis ours),

The United Nations (U.N.) says it is battling mis- and disinformation on social media and beyond through what it calls a “digital army” located across the globe.

In an Aug. 19 press release, U.N. officials said peacekeepers throughout the world are building the “digital army” through smartphones, editing apps, and “innovative approaches” as part of efforts to “fight back against falsehoods that can trigger tensions, violence, or even death.”

The intergovernmental organization has also been monitoring how mis- and disinformation and hate speech can “attack health, security, stability” as well as progress towards its Sustainable Development Goals (SDGs), officials said.

“Digital platforms are crucial tools that have transformed social, cultural, and political interactions everywhere. Across the world, they connect concerned global citizens on issues that matter,” U.N. Secretary-General António Guterres said in a policy brief (pdf) published in June on information integrity on digital platforms.

Such platforms have “given people hope in times of crisis and struggle, amplified voices that were previously unheard, and breathed life into global movements,” Mr. Guterres wrote.

However, they have also “exposed a darker side of the digital ecosystem,” the U.N. secretary-general noted.

“They have enabled the rapid spread of lies and hate, causing real harm on a global scale,” he wrote in the brief. “Optimism over the potential of social media to connect and engage people has been dampened as mis- and disinformation and hate speech have surged from the margins of digital space into the mainstream. The danger cannot be overstated.”

The U.N. policy brief acknowledges that there are “no universally accepted definitions” of the term “disinformation” but says the U.N.’s own working definition of the term refers to “false informatio

‘Digital Army Capable of Detecting False Information’

Disinformation is described by the United Nations Educational, Scientific, and Cultural Organization (UNESCO) as “false or misleading content that can cause specific harm, irrespective of motivations, awareness or behaviors.”

The term “misinformation” is described in the U.N. policy brief as “the unintentional spread of inaccurate information shared in good faith by those unaware that they are passing on falsehoods.”

“Misinformation can be rooted in disinformation as deliberate lies and misleading narratives are weaponized over time, fed into the public discourse, and passed on unwittingly,” the U.N. brief reads. “In practice, the distinction between mis- and disinformation can be difficult to determine,” it adds.

According to the U.N., peacekeepers have been working across the globe to put “new tools into the hands of civilians of all ages” aimed at combatting mis- and disinformation, including launching workshops in the Democratic Republic of the Congo (DRC).

Peacekeepers at the workshops are training young people to become “a digital army capable of detecting false information” by “producing content with the help of a smartphone and editing software and simultaneously spreading objective, credible information” through what they call “relay clubs” that disseminate these messages through their networks.

Misinformation ‘Festival’

The U.N. is also launching similar efforts in Mali, where it recently held a “festival” to combat misinformation which drew crowds of nearly 400 people, officials said.

Earlier this month, in Abyei—which is located on the border between South Sudan and Sudan and is a disputed region—the U.N. mission there, the United Nations Interim Security Force for Abyei UNISFA, also launched its own radio station called “Voice of Peace” aimed at countering hate speech and fake news, according to the latest press release.

“The ability to disseminate large-scale disinformation to undermine scientifically established facts poses an existential risk to humanity and endangers democratic institutions and fundamental human rights,” Mr. Guterres concluded in the June policy brief.

The announcement regarding the U.N.’s “digital army” comes shortly after the U.N. Development Programme (UNDP) quietly rolled out its automated fact-checking and anti-disinformation tool, iVerify, this spring.

The tool, which is supported by the UNDP Chief Digital Office and the UNDP Brussels-based Task Force on Electoral Assistance and developed in concert with media organizations and the private sector, uses Artificial Intelligence, machine learning, and human-supported fact-checking to “identify false information and prevent and mitigate its spread,” according to the U.N.

On its official website, the U.N. says the new tool will be provided to “national actors,” who can then use it to review content and establish whether it is “fact-checkable and/or constitutes hate speech, as opposed to the expression of an opinion.”

The new tool was originally piloted in Zambia, ahead of the August 2021 general elections, and was used in the general election in Honduras in November 2021, according to the U.N., which noted the tool helped combat “the spread of false narratives during election periods.”

According to Breitbart, iVerify was developed in partnership with Meta and “left-wing nonprofit groups,” including the International Fact-Checking Network, which is funded by billionaire George Soros.