Exclusive-Ericsson informed U.S. DoJ in 2019 about Iraq probe - sources

Supantha Mukherjee
Thu, February 17, 2022

A general view of an exterior of the Ericsson headquarters in Stockholm


STOCKHOLM (Reuters) -Ericsson informed the U.S. Department of Justice (DoJ) about an internal investigation into payments in Iraq when it signed a Deferred Prosecution Agreement (DPA) in 2019 to settle separate corruption probes, sources familiar with the matter said.

The Swedish company's shares fell 14% on Wednesday over concerns that it might be subject to another fine by the DoJ following the disclosure of its Iraq investigation that found evidence of misconduct.


One of Ericsson's largest shareholders, Cevian Capital, told Reuters the company's actions were "unacceptable" after disclosure that some payments made in Iraq may have reached militant organisations, including Islamic State.

"The information that has now emerged is serious and the company’s actions are, of course, unacceptable," Christer Gardell, Cevian's managing partner and co-founder said in a statement to Reuters.

"As we understand the situation, the DoJ was informed about the internal investigation at the time of the so-called Deferred Prosecution Agreement, and Ericsson losing almost SEK 50 billion in market value yesterday is a strong overreaction," he said.

The DoJ did not immediately respond to requests for comment.

An Ericsson spokesman said it does not comment on dialogue with the U.S. authorities under the terms of its DPA.

Analysts said if Ericsson had not shared its findings with the DoJ, this could have posed serious financial risks for the company.

'OLD MISMANAGEMENT'

Ericsson went through several rounds of restructuring over the past decade and it faced a U.S. investigation into its anti-corruption programme.

"What has emerged with the 'Iraqi situation' is a remnant of this old mismanagement, " Cevian's Gardell said.

Swedish investment company Investor AB and Industrivarden are two of the largest investors in Ericsson with big voting rights and a say on how the company is operated.

An Investor AB spokeswoman said Ericsson's Board and management had its full support. Industrivarden did not immediately respond to a request for comment.

Ericsson started to turn around under CEO Borje Ekholm, who had served for a decade as CEO of the Wallenberg family-backed investment firm Investor AB.

"The company today takes these issues very seriously and has invested significant resources in solving the historical problems and ensuring that no new issues arise," Gardell said. "It needs to urgently address the remaining complexity and loss making businesses to help reduce such mismanagement in the future."

Ericsson's shares have doubled in the last five years, but Gardell thinks the valuation is still low. Cevian, which started investing in Ericsson in 2017, currently holds around a 4.55% stake based on stock market disclosures.

"With a valuation below 8x 2022's expected operating profit, the company is one of the cheapest large caps in Europe," Gardell said.

(Reporting by Supantha Mukherjee, European Technology & Telecoms Correspondent, based in Stockholm. Editing by Jane Merriman)

Fertilizer Markets Roiled by Belarus Potash Force Majeure


Elizabeth Elkin, Jen Skerritt and Tarso Veloso Ribeiro

Thu, February 17, 2022



(Bloomberg) -- A Belarusian potash miner that accounts for a major chunk of global supply has declared force majeure, shaking up a market that’s already contending with soaring prices.

JSC Belaruskali said around Feb. 16 that it won’t be able to meet its contracts, according to a letter from an exporter addressed to clients seen by Bloomberg. U.S. and European sanctions have also resulted in a halt of shipments.

The absence of Belarusian supplies will have big consequences. Potash is a key nutrient for major commodity crops like corn and soybeans, as well as produce. Fertilizer prices have already skyrocketed as soaring natural gas costs forced some European plants to halt or curtail production, and U.S. spot prices for potash in the Corn Belt have nearly doubled in the last year. Expensive fertilizer is making food more costly to produce and contributing to rising global inflation for consumers.

“Global potash contracts have settled at the highest price since 2008, ensuring another year of pricey inputs for farmers and strong earnings for producers,” Alexis Maxwell, an analyst Green Markets, a company owned by Bloomberg, said in an email. “U.S. sanctions on Belarus eliminated a key competitor” with no readily available alternative supplier.

Read More: U.S. Potash Sanctions May Push Belarus Deeper into Putin’s Arms

Belarus exports about 10-12 million metric tons annually, according to Green Markets data. The country accounts for about a fifth of global supply. It’s a major shipper to Brazil, as well as to India and China.

The U.S. Sanctions against Belaruskali OAO, Belarus's only potash miner, came into force on Dec 8, while penalties against Belarusian Potash Company, that exports all the potash from the country, should become effective April 1.

The sanctions may result in shifting trade flows and some demand rationing, Nutrien Ltd.’s interim Chief Executive Officer Ken Seitz said in an interview. Customers who have historically purchased from Belarus are trying to secure supplies elsewhere. For example, Russia is doubling fertilizer quantities offered to Brazil, Brazilian President Jair Bolsonaro said during an interview to Radio Jovem Pan Thursday.

Nutrien has an additional half million tons of capacity that would be available in the latter half of 2022 if needed, Seitz said. Grower margins are strong, so higher potash prices won’t result in less demand.

The company could also ramp up potash output, but first, it would need to see a prolonged impact on the market for “years” to bring on additional sustained capacity, Seitz said. Nutrien increased its potash capacity by 1 million tons in 2021 and additional volumes are expected to come online in 2022 from other companies, he said.

“We’re not standing around saying we’re not doing anything,” Seitz said, noting the company doesn’t want to be left with additional cost if supply challenges go away quickly. “We are bringing on volumes.”

Nutrien anticipates global potash shipments will be between 68 million tons and 71 million tons in 2022.

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KAPITALI$M IS KRISIS
Allianz Hedge Fund Implosion Results in $4.2 Billion Charge

Stephan Kahl
Fri, February 18, 2022


(Bloomberg) -- The price tag for one of the biggest trading debacles during the pandemic-fueled market meltdown of early 2020 is beginning to emerge.

Allianz SE, facing multiple lawsuits and regulatory probes tied to the collapse that year of its Florida-based hedge funds, took an unprecedented, 3.7 billion-euro ($4.2 billion) charge to cover a settlement reached Friday morning with the vast majority of investors in the funds.

In a sign of more pain to come, the German insurance and financial-services firm, which also owns bond giant Pacific Investment Management Co., warned that ongoing probes by U.S. Securities and Exchange Commission and Department of Justice are at a “sensitive” stage and that it couldn’t yet estimate the final price tag.

“There are still ongoing conversations with remaining plaintiffs,” Chief Financial Officer Giulio Terzariol said in an interview on Bloomberg TV Friday. “We are in conversations with the DOJ, and this conversation is very constructive.”

Investors -- including public pension funds, Blue Cross & Blue Shield and New York’s Metropolitan Transportation Authority -- claimed they lost billions of dollars from the collapse of the hedge funds, which were designed to withstand a market crash yet incurred steep losses during the tumultuous early days of the pandemic. Allianz liquidated two of the vehicles in March 2020 and has been unwinding the others.

The lawsuits accuse Allianz of abandoning a stated investment mandate and downside risk protections of its Structured Alpha Funds, and then doubling down on risky strategies in an attempt to recoup losses during the market volatility -- a move that some plaintiffs derided as an “extraordinarily risky and self-interested gamble.”

In its defense, Allianz told a judge last year that the plaintiffs are sophisticated investors that chose high-risk private funds with open eyes.

Allianz, as a result of the one-time charge, posted a 292 million-euro loss for the fourth-quarter, overshadowing an otherwise strong rebound from the pandemic. The company also announced plans to repurchase as much as 1 billion euros of stock and proposed increasing the annual dividend 12.5% to 10.80 euros a share.

“It’s a step in the right direction,” analysts at Morgan Stanley wrote in a note. “However, management did mention that it expects to incur additional expenses before the matter is finally resolved, which does imply some litigation-related overhang to persist.”

Shares of the insurer fell 1.4% at 11:41 a.m. in Munich, paring gains this year to 5.7%.

Chief Executive Officer Oliver Baete told reporters that management would see a significant impact on compensation from the hedge fund debacle. He has been tying to persuade investors that the company is strong enough to shoulder the extra legal and regulatory costs, boosting the insurer’s medium-term performance targets last year.

The firm hadn’t set aside reserves earlier because it couldn’t estimate the price tag. In a Feb. 8 note to clients, Berenberg analysts pegged the total cost at 5.8 billion euros, describing the unresolved disputes as the “main overhang” for the company.

Allianz warned in August that the hedge funds’ implosion could “materially impact” earnings, after the Justice Department launched its probe into the funds, joining the fray with the SEC and investors, who alleged losses of about $6 billion.

Asset Management

In October, Allianz appointed the CEO of its life-insurance unit, Andreas Wimmer, as the head of asset management, succeeding Jackie Hunt. Wimmer indicated in an interview last month that the company plans to push further into alternative asset classes and continue its focus on active fund management.

Senior executives have remained supportive of the unit that offered the funds, Allianz Global Investors, while pledging to take a close look at its product offerings. Of the roughly 450 active investment strategies that existed at the end of 2019 at the unit, about 140 were discontinued or merged with others in the past two years, Wimmer said in the interview.

Despite the debacle, AGI saw third-party clients add 9.5 billion euros in the fourth quarter. Its bigger sister unit Pimco recorded 11.1 billion euros in net inflows.

“It was a very isolated event at AllianzGI U.S. We are very comfortable with the current team and are happy with the trajectory the business is taking,” Baete told Bloomberg in a phone interview.

Allianz cuts bonuses, settles some lawsuits after funds debacle

Tom Sims and Alexander Hübner
Fri, February 18, 2022


By Tom Sims and Alexander Hübner

FRANKFURT (Reuters) -Allianz announced on Friday big bonus cuts for its CEO and board, and a settlement with the "vast majority" of investors, as it braces for the outcome of U.S. regulatory investigations into a multibillion-dollar trading debacle at its funds arm.

Speaking at a news conference, CEO Oliver Baete said the issue would have a significant impact on compensation for himself and all board members, but declined to give details.


Baete's pay in 2020 totalled 6.39 million euros ($7.27 million), and the entire board's was 32 million euros.

Baete also said the German insurer and asset manager had settled U.S. lawsuits with the "vast majority of investors," without giving details of the agreement.

But the fallout continues, with investigations by the U.S. Department of Justice and the Securities Exchange Commission underway, and settlements still pending with other investors.

"Ongoing governmental and litigation matters remain at a sensitive stage," Baete said.

The issue centres around Allianz funds that used complex options strategies to generate returns but racked up massive losses when the spread of COVID-19 triggered wild stock market swings in February and March 2020.

The matter has cast a shadow over Allianz, one of Germany's most valuable companies and one of the world's biggest money managers with 2.6 trillion euros of assets under management.

On Thursday, Allianz announced that it would earmark 3.7 billion euros to deal with investigations and lawsuits in the wake of the funds' collapse and said more expenses were likely.

The company as a result posted a fourth-quarter loss, and its 2021 profit was the lowest since 2013.

Investors in the so-called Structured Alpha set of funds have claimed some $6 billion in damages from the losses in a slew of cases filed in the United States.

The $15 billion set of funds catered in particular to normally conservative U.S. pension funds, from those for labourers in Alaska to teachers in Arkansas to subway workers in New York.

After the coronavirus sent markets into a tailspin early in 2020, the Allianz funds plummeted in value, in some cases by 80% or more. Investors in their lawsuits alleged Allianz strayed from its stated strategy.

Baete declined to specify which investors had settled.

Allianz shares were down 1% at 1031 GMT.

Ingo Speich, head of sustainability and corporate governance at Deka, a top Allianz investor, who once called the issue a "massive setback" for the insurer, expressed some relief.

He said the amount and timing of the provision were a positive for Allianz and investors.

Allianz has publicly disclosed the SEC and DOJ investigations. It previously said it intended to defend itself "vigorously" against the investors' allegations. Baete has said "not everything was perfect in the fund management."

($1 = 0.8794 euros)

(Reporting by Tom Sims; editing by Mark Potter and Jason Neely)

SO HE SAYS
USDA Supervisor Was Threatened Over Uncertified Avocado Shipment

Leslie Patton
Thu, February 17, 2022



(Bloomberg) -- The U.S. Department of Agriculture said it’s maintaining a ban on avocados from Mexico for now, adding to concern that supply of the popular fruit may run low at some restaurants and grocery stores.

The USDA halted avocado imports from Michoacán, a coastal state west of Mexico City, on Feb. 11 after a supervisor received a “credible” phone threat to himself and his family because an inspector questioned the integrity of a particular shipment and refused to certify it.

“We will resume inspections as soon as possible,” the agency said in a Thursday statement. “We must have assurances that our employees’ lives are not at risk.”

The ban is happening during peak growing season for avocados in Mexico, which runs January through March. The U.S. gets more than 80% of its avocados from Mexico, so the disruption is already driving prices up across the country as restaurants and grocery stores race to secure extra stock from elsewhere.

Grocery-chain and distributor SpartanNash Co., based in Grand Rapids, Michigan, is looking to California for more of the superfruit. Meanwhile, Chipotle Mexican Grill Inc. can get avocados from Peru, Chief Restaurant Officer Scott Boatwright said.

“We use so many avocados. We source them from everywhere,” he said in an interview.

Avocados are inspected to ensure agricultural products from Mexico are complying with certification and export requirements that protect U.S. producers from pests and disease.

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Can Norwegian Natural Gas Solve Europe's Energy Crisis?

Editor OilPrice.com
Thu, February 17, 2022

Norway’s Equinor will maintain maximum natural gas production rates through the spring and summer to help the European Union fill its gas storage facilities, the company’s chief executive said this week.

The pledge comes amid continued concern about gas supplies into the warmer months of the year, which is typically the time storage is filled up for the peak demand period of winter. Last year, most of Europe failed to make sure it had enough gas for the winter, which sparked the gas crunch.

Speaking to Bloomberg this week, Equinor’s Anders Opedal said that Norway had always been a reliable partner of Europe and will continue to supply as much gas as it can to the continent as possible. The problem for Europe is that what’s possible is less than half of the gas it needs. Much less, in fact.

According to Eurostat, the EU imported 46.8 percent of its natural gas from Russia in the first half of last year. Norway, for its part, accounted for 20.5 percent of natural gas imports during that period—less than half of what Russia sent the EU’s way.

According to Bruegel, a European economics think tank, Norway exported over 2.9 billion cu m weekly to the EU in late 2021. This compared with a little over 2.3 billion cu m for Russia. During the first half of the year, however, Gazprom kept flows above 3 billion cu m weekly while Norway never reached that level.

The situation highlights the biggest problem that the EU has with its gas supply security. It has been over-reliant on Russia for years, and this has bred complacency and the certainty that whatever happens, Russia will continue shipping gas to Europe.

Russia shares the sentiment, but the recent events around gas prices and Ukraine have shaken it among European governments, which are now in a rush to find alternative suppliers in case they are needed. The task is proving more challenging than perhaps they had expected.

Norway can probably keep pumping at maximum for a while longer, although it would need to stop for maintenance at some point. Yet Norway clearly cannot cover the whole amount of gas that Russia supplies to Europe right now. Also, it can’t cover the additional demand that will be coming from Germany as it closes its coal and nuclear power plants.

This was the point of the Nord Stream route expansion, by the way—ensuring supply for nuclear-free and, later, coal-free Germany. The Nord Stream 1 pipeline currently ships more than a third of Russian gas exports to Europe. Doubling its capacity with Nord Stream 2—unless the Biden administration makes good on its threat to kill it, of course—will make it fit to handle more than two-thirds of Russia’s gas exports to Europe.

What other options does Europe have besides Norway? Central Asia is an option, and more specifically Azerbaijan, which is already shipping some gas through the Southern Gas Corridor ending in Italy. The only other alternative is LNG.

Europe has been the top destination for U.S. liquefied natural gas for three months amid the energy crunch, despite limited LNG import terminal capacity. According to data from Refinitiv reported by Reuters, as much as 75 percent of U.S. LNG exports went to Europe last month. So far this month, half of all U.S. LNG cargos have been sent to Europe.

Qatar and Australia are also LNG options for the EU. The union even suspended an antitrust investigation into Qatar Petroleum—recently renamed QatarEnergy—this month in what might be a sign Brussels is willing to make concessions in exchange for gas.

By Irina Slav for Oilprice.com

Big Oil Is Spending Serious Money On Clean Energy

Editor OilPrice.com
Wed, February 16, 2022

With the energy transition now in full swing, the green and low-carbon energy sectors have been seeing record investment inflows as governments as well as public and private sectors double down on climate goals. In 2021, global spending on green energy climbed 27% Y/Y to a record $755B as per a Bloomberg New Energy report. That compared favorably with annual global energy investments which are estimated to have increased 10% Y/Y to USD 1.9 trillion, in line with pre-crisis levels.

In the past, fossil fuel companies have been repeatedly lambasted for ‘greenwashing’ and dedicating only minuscule amounts of their huge capex budgets to renewable energy. But that trend now appears to be turning around.

According to a report by energy investment navel-gazer Evaluate Energy, global upstream M&A hit a record $144 billion in 2021 with Woodside Petroleum (OTCPK:WOPEF), Santos (OTCPK:STOSF), and BHP Group (NYSE:BHP) undertaking multibillion-dollar international mergers while Pioneer Natural Resources (NYSE:PXD), ConocoPhillips (NYSE:COP) and Continental Resources (NYSE:CLR) made huge Permian acquisitions and scores of gas companies joined the consolidation wave in the U.S.

But an even more interesting trend has emerged: last year, traditional oil and gas companies were among the most active when it came to striking green energy deals and investments.

Upstream oil and gas producers struck a total of 81 green energy deals in 2021, the most active of which were Shell Plc. (NYSE:RDS.A), Eni S.p.A (NYSE:E), BP Plc. (NYSE:BP), TotalEnergies SE (NYSE:TTE), and Chevron (NYSE:CVX). Another interesting finding was that a greater number of emerging sectors have been gaining traction, including hydrogen production projects, electric vehicle charging, and biofuels.

Source: Evaluate Energy

#1. Shell Plc

According to Evaluate Energy, Shell agreed to 10 green/low carbon energy deals

in 2021, making it the single most active company among all oil and gas producers.

The company’s investments were highly diverse, with no more than three deals related to any individual sector. Half of its deals revolved around wind and solar energy but it also had deals in the electric vehicle, biofuel, and retail power sectors globally.

Shell agreed to four new deals in Q4 alone, of which two were in the U.S. solar services sector. First, it acquired a cleantech solar power service company, Cleanloop, via a U.S. solar subsidiary. Then it acquired a large utility-scale solar and energy storage developer, Savion LLC, from Macquarie’s Green Investment Group. The other two Q4 deals were in the Australian retail power sector and the Irish offshore wind sector.

Shell has accelerated the pace of divestiture of its oil and gas assets and is preparing to sell stakes in two natural gas-producing clusters in the British North Sea, according to Reuters.

The Clipper Hub and Leman Alpha complex could fetch as much as $1b for the supermajor.

Shell has sold a number of aging upstream assets in the North Sea in recent years, including a $3.8b sale to Harbour Energy (OTCPK:PMOIF) in 2017.

#2. Eni S.p.A

Italy’s largest integrated oil and gas company, Eni S.p.A, closed nine green energy deals in 2021, with six being in wind or solar. The deals could potentially result in Eni’s combined wind and solar portfolio across Italy, France, Spain, and the U.K. growing by over 5 GW in annual capacity, should all related projects reach completion.

Eni agreed to two of its deals in Q4. It acquired a 20% stake in the U.K.’s Dogger Bank Wind Farm C project from Equinor (NYSE:EQNR) and SSE for £70 million apiece. The combined stake represents around 240 MW overall capacity. The project is the third phase of the world’s largest offshore wind farm (3.6 GW) and is currently under construction. Production of this particular phase is slated to start in 2025.

In separate news, Var Energi, a private North Sea oil and gas producer owned by Eni and HitecVision, is set to go public in Oslo on February 16th at an ~$8.0b valuation.

Eni owns 70% of Var, having contributed their North Sea assets to Var in exchange for equity in 2018. Rumors of the IPO have been in the market for weeks, as Bloomberg flagged listing plans in January at a $10b valuation.

#3. BP Plc

Evaluate Energy notes that BP has been extremely active in the electric vehicle space in recent years compared to its peers. In March, the British major acquired a stake in German firm Digital Charging Solutions GmbH alongside BMW Group (OTCPK:BMWYY) and Daimler Mobility AG. DCS is one of Europe’s leading developers of digital charging solutions for automotive manufacturers and vehicle fleet operators.

In June, BP led a $13.2 million investment round and invested $7 million in U.S.-based EV charging firm IoTecha. BP completed its EV activity for the year in December, agreeing to acquire another U.S.-based EV charging firm, AMPLY Power.

#4. TotalEnergies SE

French energy multinational TotalEnergiesSE completed six low-carbon deals in 2021. The bulk of TotalEnergies’ green energy investments came in the first half of 2021, with arguably the highest-profile of these deals taking place in the solar sector.

In January, the company acquired a 20% stake in Adani Green Energy Ltd. (AGEL) in India and then completed another significant acquisition a week later, this time in the United States. Both deals are key to Total’s plans to reach 35 GW of gross production capacity from renewable sources by 2025 while adding 10 GW per year from that point going forward. AGEL has over 14.6 GW of contracted renewable capacity, with an operating capacity of 3 GW, plus 3 GW under construction and 8.6 GW under development. The company aims to achieve 25 GW of renewable power generation by 2025.

The acquisition in the United States saw Total acquire a development pipeline of 2.2 GW of solar projects and 600 MW of battery storage assets in Texas from SunChase Power.

#5. Chevron Corp.

Chevron Corp. stands out as the only non-European to feature on this list. The U.S. supermajor has been especially active in the more emerging sectors that make up the green energy industry. Among its highlights for the year, Chevron made two investments in hydrogen-based projects in the U.S.

The first was an investment in Raven SR Inc. with a handful of industry partners. Later, Chevron agreed to acquire ACES Delta LLC, which was previously a joint venture between Mitsubishi Power Americas Inc. and Magnum Development LLC.

By Alex Kimani for Oilprice.com

Charlie Munger: We are never going back to a five-day work week in the office

Alexandra Semenova
·Reporter
Wed, February 16, 2022,

Will we ever return to a five-day in-office work week? Charlie Munger doesn’t think so.

Even as COVD-19 restrictions ease across the U.S. and employers call on workers to resume in-person workdays, the famed investor said Wednesday during The Daily Journal’s annual shareholders meeting that he does not expect white-collar employees will ever return to in-person work full-time again.

“It’s amazing the percentage of people in computer science that don’t want to be in the office for a normal life,” Munger said. “They want to do a lot of it from locations that are more convenient for them — I think that’s going to remain forever.”

His view comes amid a broad push by leaders in corporate America to get staff back to the physical workplace as states increasingly drop mask mandates and lift pandemic-related restrictions. Most recently, Microsoft told U.S. employees to begin returning to their offices starting Feb. 28 in an attempt to resume normal operations as virus case numbers recede.

Corporate employers have played back-and-forth for months on office policies amid changing guidelines from local government leaders and the ebbs and flows in coronavirus case counts across the country, with the Delta and Omicron variants disrupting plans for broader returns this past year.

As the latest Omicron-driven wave appears to abate, on Wall Street, office attendance at financial giants including JPMorgan, Goldman Sachs and Bank of America have risen in recent weeks, while American Express said earlier this month it would ask New York employees to work from their offices at least once a week starting in March, embracing a hybrid model.

The J.P. Morgan logo sign on the entrance of a glass office building in Midtown Manhattan, New York, USA on 23 January 2020. JPMorgan Chase & Co. is an American multinational investment bank and financial services holding company has the headquarters in New York City. NY, USA

 (Photo by Nicolas Economou/NurPhoto via Getty Images)

But many employees who have become accustomed to working remotely over the past two years have resisted calls for full-time onsite returns, especially as some companies continue to embrace at-home work and experiment with hybrid schedules.

A recent survey conducted by the Advanced Workplace Associates, global management consulting firm, of nearly 10,000 people working in the finance, technology and energy sectors around the world found that only 3% of white-collar employees are willing to return to full-time office hours.

In the U.S., 84% of survey participants said they want to work from home two or more days a week.

“Employers have to realize that the genie is out of the bottle,” AWA managing director Andrew Mawson said in a statement. “Workers have seen that flexibility can work and bosses who are not sensitive to their employees’ needs will suffer accordingly.”

At The Daily Journal meeting, Munger also suggested that a full recovery in business travel was unlikely.

“I don’t think the average corporation is going to fly its directors around so they can sit at the same table for every meeting of the year,” Munger said.

“The Berkshire Hathaway directors have met face-to-face twice a year and done everything else on the telephone or with consent minutes, and it’s worked fine,” he added. “I don’t think we needed all these goddamn meetings and airplane flights.”

While Munger argued that completing business activities remotely has made certain components of work “simpler, cheaper, and more efficient,” he argued, on the other hand, that federal stimulus for workers sidelined during the pandemic has been too liberal.

“What makes capitalism work is the fact that if you’re an able-bodied young person, if you refuse to work, you suffer a fair amount of agony, and because of that agony, the whole economic system works,” he said, adding effective, prospering economies have traditionally imposed hardship on young people who don’t want to work.

“You take away that hardship and say ‘you can stay home and get more than if you come in to work,’ that’s quite disruptive to an economic system like ours,” Munger added. “The next time we do this, I don’t think we ought to be so liberal.”

Facing Texas pushback, BlackRock says it backs fossil fuels

Ross Kerber
Thu, February 17, 2022, 


Lease Operator Jeremy Jay walks through an oil production facility owned by Parsley Energy in the Permian Basin near Midland

BOSTON (Reuters) - At the risk of being dropped from Texas pension funds, BlackRock Inc has ramped up its message that the world's largest asset manager is a friend of the oil and gas industries.

As a large and long-term investor in fossil fuel companies, "we want to see these companies succeed and prosper," BlackRock executives wrote in a letter that a spokesman confirmed was sent at the start of the year to officials, trade groups and others in energy-rich Texas.


"We will continue to invest in and support fossil fuel companies, including Texas fossil fuel companies," states the memo, signed by Dalia Blass, BlackRock's head of external affairs, and copied to Mark McCombe, BlackRock's chief client officer.

Although the message is consistent with its other statements, the emphasis is new after years in which BlackRock has stressed its efforts to take climate change and other environmental, social and governance (ESG) issues into account in its investment and proxy voting decisions.

BlackRock faces a balancing act as some pension funds and endowments move to divest from fossil fuel stocks over climate-change concerns, and because of its size. Like rivals, BlackRock has declined to follow suit.

The U.S. securities regulator is developing a new rule on corporate climate-change disclosures.

In Texas, new legislation requires the state's comptroller, Glenn Hegar, to draw up a list of financial companies that boycott fossil fuels. Those firms could then be barred from state pension funds like the $197 billion Teacher Retirement System of Texas, which has about $2.5 billion with BlackRock.

A spokesman for Hegar, a Republican, said via email his agency is "currently working to establish suitable candidates for the divestment list."

BlackRock in its letter wrote that "we have not and will not boycott energy companies," and cited holdings in Texas-based companies like Exxon Mobil Corp, ConocoPhillips and Kinder Morgan Inc.

Texas Lt. Governor Dan Patrick, a Republican, has called on Hegar to put BlackRock first on the list, citing among other things BlackRock's statements in support of "net zero" targets for companies to reduce emissions. That amounts to a boycott under the new Texas law, Patrick wrote in a Jan. 19 letter, by invoking environmental standards beyond federal and state laws.

Many other top asset managers including Vanguard Group and State Street Corp have embraced similar efforts such as signing on to the Net Zero Asset Managers initiative.

Patrick's office did not respond to questions.

BlackRock's letter was first made public online on Twitter by Alex Epstein, author of a book backing the use of fossil fuels.

(The story corrects third paragraph to show letter was copied to McCombe, not signed by McCombe.)

(Reporting by Ross Kerber; Editing by Marguerita Choy)

'Morally Obscene': Sanders Blasts GOP, Manchin Over 41% Spike in Child Poverty

"How did this happen? Fifty Republicans and one corporate Democrat allowed the $300-a-month Child Tax Credit to expire," said Sen. Bernie Sanders.

Children and teachers complete a mural in celebration of the launch 

of the expanded child tax credit on July 14, 2021 in Washington, D.C. 

(Photo: Jemal Countess/Getty Images for Community Change)

JAKE JOHNSON

February 18, 2022

Sen. Bernie Sanders on Thursday castigated the GOP and Democratic Sen. Joe Manchin for killing the boosted Child Tax Credit after new research showed that child poverty spiked by 41% in January—the first month since July 2021 that eligible families didn't receive the popular benefit.

"In January, the child poverty rate increased by 40% in just one month—jumping from 12.1% to 17% as 3.7 million children slipped into poverty," Sanders (I-Vt.) wrote in a Twitter post. "How did this happen? Fifty Republicans and one corporate Democrat allowed the $300-a-month Child Tax Credit to expire. That is morally obscene."

The new figures come from a study released Thursday by the Center on Poverty and Social Policy at Columbia University, which found that the December lapse of the expanded Child Tax Credit (CTC) helped push child poverty to "the highest rate since the end of 2020."

"On its own, the monthly Child Tax Credit kept three million children from poverty in July; by December, it was keeping 3.7 million children from poverty and reducing monthly child poverty by 30%," the center noted in a policy brief. "A roundup of the available research reveals that the monthly Child Tax Credit payments buffered family finances amidst the continuing pandemic, increased families’ abilities to meet their basic needs, reduced child poverty and food insufficiency, and had no discernable negative effects on parental employment."



The study was published as Democratic lawmakers' efforts to extend the boosted CTC remained stalled due to the continued opposition of every Senate Republican and Manchin (D-W.Va.), who has reportedly told colleagues in private that he believes some parents used the monthly benefit payments to buy drugs.

"One U.S. senator 'heard stories' about people allegedly using the Child Tax Credit 'for drugs' without any evidence or data to back it up," Rep. Alexandria Ocasio-Cortez (D-N.Y.) tweeted Thursday. "He then used that as justification to nuke the entire national program, causing millions of kids to fall into poverty in weeks. Horrifying."

"Meanwhile," she added, "the press talks about it like it’s some beltway drama without ever showing the people who are sleeping in bubble jackets with no heat or the kids going hungry waiting for some guy in a yacht to decide if they are fully human or not. It’s just shameful, all of it."

Rep. Rashida Tlaib (D-Mich.), a lead sponsor of ambitious new legislation that would cut child poverty by an estimated two-thirds, said Thursday that "it is beyond revolting how little attention is given to the fact that the wealthiest nation in the history of the world can afford endless wars and trillions in tax cuts to the 1%, but cannot feed, house, or care for its own children."

Related Content

'Manchin Has Probably Doomed the Party': Support for Dems Dips After Child Tax Credit Killed

With the entirety of its Build Back Better agenda—including a proposed CTC extension—stuck in the Senate, the Biden White House has shifted its focus in recent days to urging recipients of the credit to file their tax returns, which will allow them to get the other half of the benefit.

The first half of the CTC payments—$300 per child under the age of six and $250 per child between the ages of six and 17—were delivered on a monthly basis in 2021.

"If you are one of the more than 30 million families who have already received the Child Tax Credit, you still need to file your taxes," Vice President Kamala Harris said during an event earlier this month. "That is the only way to receive the second half of what you are owed. So, remember: You are owed more, but you still need to file your taxes."

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 The Emergencies Act and double standards

"Freedom Convoy" protesters and Ottawa Police face off in a confrontation on Friday. Credit: Ottawa Police RABBLE.CA The top story this week was of course Prime Minister Justin Trudeau’s invoking of the federal Emergencies Act on Monday February 14. As we produce this newsletter, after weeks of inaction as described by Karl Nerenberg and Robin Browne, police forces have begun to end the occupation in Ottawa. As we continue to monitor events in Ottawa closely, the question everyone is asking - particularly residents who find themselves confined to “red zones” with limited movement - is how has this been permitted to go on for as long as it has? Writers on rabble.ca argue, because that’s what the police do: uphold white supremacy in Canada.  Monia Mazigh writes that "If there is a lesson to be drawn from the ongoing occupation of Ottawa’s downtown, it is that anti-terrorism legislation is unconstitutional and ultimately, useless in protecting public safety. It is time to repeal these laws and hold a public debate about the meaning of freedom. Instead of laws that curtail our civil liberties, we should reflect on the importance of respecting our human rights to ensure both our safety and our security." Rachel Snow agrees that the Ottawa convoy exposes the racism that First Nations have long known. When the truckers and supporters first descended on Ottawa in January, there was “practically a red-carpet welcome” from the police forces, writes Snow. Live footage posted on social media sites point to joviality between the police and protestors.  When the issue of all-night honking went to court, the judge was slow to grant an injunction at first. He maintained he could not issue anything because there was no surety in exactly “who was making the noise – the trucks or their supporters” so the honking noise was “indistinguishable.”  This sort of slow-moving justice has never been granted for Indigenous peoples. “What happens to First Nation people standing against injustice? They are beaten, cuffed and thrown into jail,” she writes. “This is your Canada. There is a rule of law for the First Nations and a rule of law that applies to non-First Nation people.”  Robin Browne observes that, “the Ottawa Police Service, like all police forces in Canada, has always had one mandate: protect the powerful – or at least don’t get in their way. And the thousands of convoy protesters, with their millions in the bank, are the powerful.” Become a monthly sustainer

In some cities, residents have taken it upon themselves to stop the convoys. Archana Rampure reports from the frontlines in Ottawa this week as 4,000 people marched in support of vaccines, mask mandates, and democracy. “We take care of ourselves. We have been abandoned by the police,” she writes. “What does it say about the state of affairs in the nation’s capital when ordinary people step up to what the police won’t?”  Meanwhile in Edmonton, a small group of counter-demonstrators managed to blockade a parade of “Freedom Convoy” supporters on their way to the city’s downtown last Saturday. The blockade had managed to stop a line of pickup trucks, SUVs and four semi-trailers cabs in the eastbound lane of River Valley. Wildly, police told the counter-demonstrators to remove themselves from the area and threatened them with application of Alberta’s Critical Infrastructure Defence Act.