James Webb telescope reveals the universe may have far fewer active black holes than we thought

Briley Lewis
Fri, September 1, 2023 

Illustration of active galactic nucleus.


Every galaxy, including our own Milky Way, has a monster lurking in its heart — a supermassive black hole. Despite how common these gargantuan objects are, astronomers are still trying to figure out how the universe's supermassive black holes were born, and how they grew to their humongous sizes.

Now, new observations from NASA's James Webb Space Telescope (JWST) have revealed a key insight into the growing pains of supermassive black holes, also known as SMBHs: there are actually fewer rapidly growing black holes than previously predicted. This work was recently submitted to the Astrophysical Journal and made available to read before peer review on the preprint database arXiv.

Teenage SMBHs grow rapidly, eating up material around them, and appear to us as a bright blob known as an active galactic nucleus (AGN). Astronomers generally agree our galaxy's SMBH has long since quieted, leaving its active years in its past. Most of the monsters' growth spurts actually happened around 7 to 11 billion years ago.

Related: A black hole 'assassin' ripped a star to shreds and left its guts strewn about the galaxy

In their new research, the study authors used the ultra-powerful JWST to hunt for more active black holes in the midst of their prime growth years, surveying a patch of sky for distant galaxies with unprecedented sensitivity. They observed around 400 galaxies that are billions of light-years away, meaning we're seeing them as they were billions of years ago — right during their galactic growth spurts.

MIRI Pointing 1 (right panel) alongside the Spizter/IRAC (middle) and MIPS (left) observations of the same region.

"Until now, we were only able to see the most actively growing and biggest supermassive black holes," lead study author Allison Kirkpatrick, an astronomer at the University of Kansas, told Live Science. "It would be like aliens trying to piece together what the average human can do but only studying Olympic athletes. Now, with JWST, we have our first look at the population of ‘normal’ galaxies in the distant past."

Astronomers previously thought that even "average"-sized black holes like the one in the Milky Way would show signs of their rapid growth, since the large AGN observed previously were clearly growing up fast. Even with the massive increase in sensitivity from JWST's instruments to peer down to smaller galaxies, though, they couldn't find more really active teenage AGN. In fact, the population of active black holes was far fewer than previous estimates have suggested.

Installation of MIRI into the instrument module of the James Webb Space Telescope.

RELATED STORIES

—James Webb Space Telescope discovers oldest black hole in the universe — a cosmic monster 10 million times heavier than the sun

— 1st image of our galaxy's 'black hole heart' unveiled

—Black holes may be swallowing invisible matter that slows the movement of stars

By looking at these average galaxies, astronomers even gleaned insight into our Milky Way's past. "If most galaxies, like ours, lack detectable AGN, it could imply that our black hole was never more active in the past," Kirkpatrick said in a statement.

The team's next steps are to look at even more galaxies; after all, 400 galaxies out of billions in the universe is only a drop in the bucket. With her next survey, Kirkpatrick plans to observe thousands of galaxies instead of hundreds, hopefully clearing up the picture of how smaller galaxies get their black holes, and evolve into something like the galaxy we know and live in today.

Star-studded stellar nursery shines in new Hubble Telescope photo

Samantha Mathewson
Fri, September 1, 2023

Hundreds of bright blue stars sparkle against the dark background regions of dust clouds, from which new stars are born, including the massive protostar OH 339.88-1.26, which lurks at the center of this image, behind the dark vertical streak.

The Hubble Space Telescope has photographed a bright stellar nursery studded with dazzling infant stars.

Taken using Hubble's Wide Field Camera 3 instrument, the image captures a massive protostar called OH 339.88-1.26 lurking behind star-forming clouds of dust and gas. OH 339.88-1.26 lies an estimated 8,900 light-years from Earth in the constellation Ara.

During the protostellar phase, stars are still in the process of gathering mass from their parent molecular clouds. Despite its young age, OH 339.88-1.26 is estimated to be about 20 times the mass of the sun, according to a statement from the European Space Agency (ESA). (Hubble is a joint mission of NASA and ESA.)

Related: The best Hubble Space Telescope images of all time!

"Winding lanes of dark dust thread through this image, which is also studded with bright stars crowned with criss-crossing diffraction spikes," ESA officials said in the statement. "The dark vertical streak at the center of this image hides OH 339.88-1.26, which is an astrophysical maser."

A maser (short for "microwave amplification by stimulated emission of radiation") is a naturally occurring source of stimulated spectral line emission, or laser, that produces coherent light at microwave wavelengths. This type of emission has been observed in molecular clouds, comets, planetary atmospheres like that at the north pole of Jupiter and stellar atmospheres, ESA officials said.

The recent views of OH 339.88-1.26 were collected as part of an initiative to study the hearts of regions where massive stars are born to better understand the nature and formation of protostars like OH 339.88-1.26.

RELATED STORIES:

— Hubble images a museum of galaxies, and some are gravitationally warped (photo)

— Hubble telescope sees an angry star and an evaporating planet

— Hubble telescope captures the making of a 'cosmic monster' (photo)

Observations to support Hubble's findings were also taken using the ground-based Atacama Large Millimeter/submillimeter Array (ALMA) in Chile and the now-retired Stratospheric Observatory For Infrared Astronomy (SOFIA), which previously operated out of a converted 747 aircraft. ALMA comprises 66 high-precision antennas, spread over distances of up to 10 miles (16 kilometers), making it the largest currently operational ground-based astronomical project, according to the ESA statement.

OH 339.88-1.26, cloaked by dark dust at the center of the image, is surrounded by hundreds of stars whose bright light causes diffraction spikes from reflecting off Hubble's mirrors. The recent image of OH 339.88-1.26 was released online on Monday (Aug. 28).

Ouch! Jupiter Just Got Smacked By an Unidentified Celestial Object

Passant Rabie
Fri, September 1, 2023 

Jupiter’s south pole as captured by NASA’s Juno spacecraft.

As the largest planet in our solar system, Jupiter is not one to play with. That doesn’t stop wandering comets or asteroids from testing the gas giant, occasionally crashing into Jupiter due to its enormous size and immense gravitational pull.

An amateur astronomer caught a brief impact on Jupiter this week, appearing as a bright burst of light left behind by a small object.

The last recorded impact took place in September 2021, in which the object was of similar size to this recent one. But perhaps the most famous impact event took place in 1994 when fragments of the Shoemaker-Levy 9 comet collided with Jupiter with the force of 300 million atomic bombs, according to NASA.


This composite is assembled from separate images of Jupiter and comet Shoemaker-Levy 9, as imaged by the NASA/ESA Hubble Space Telescope in 1994.

Luckily, Jupiter can shake these collisions off. If a similar sized object were to impact Earth, our planet would suffer a lot more damage.

Jupiter may actually play a role in protecting Earth, and the rest of the inner solar system planets, from these types of impacts. The planet either takes on objects that come near the solar system itself, or flings them further out away from Earth. The solar system’s gas giant certainly knows how to keep the peace in its cosmic neighborhood.

CRYPTID/CRYPTOZOOLOGY
Second ‘sighting’ of Loch Ness monster in same week


Simon Johnson
Fri, 1 September 2023 

The photograph taken by Charlotte Robinson in August 2018 - PETER JOLLY/NORTHPIX

A girl has claimed to have spotted the Loch Ness monster in the same week other newly released photographs were taken allegedly showing the legendary beast.

Charlotte Robinson, 12, from Leeds in Yorkshire, was recorded in the official sightings register as having seen the mythical creature emerge from the loch around 50ft away.

She said that it had a “a neck and head was in the shape of a hook” and that it disappeared, before reemerging elsewhere for about a minute.


She took a picture on her mobile phone that appears to show something protruding from the loch’s surface, although it is unlikely to settle the decades-long debate over whether a serpent-type creature is living in its waters.

Charlotte Robinson on the shores of Loch Ness, where she believes she took a photograph of the creature in 2018 - PETER JOLLY/NORTHPIX

Charlotte’s picture was taken on Aug 17, 2018, four days after other images that were hailed as the “most exciting ever” when they emerged this week.

Chie Kelly, a translator, who took those photographs, said she had witnessed the creature moving at “steady speed” on the banks of the loch while she was holidaying there.

Her images were only published this week as she feared public ridicule at the time.

Ms Kelly was eventually persuaded to release them by Steve Feltham, who has spent more than 30 years searching for Nessie.

The photos taken by Chie Kelly - Chie Kelly/Peter Jolly/Northpix

‘I couldn’t believe it’

Charlotte’s sighting came on the first day of her holiday at Loch Ness Highland Lodges at Invermoriston with her parents.

“There was something in the water about 50ft from the shore. I took a photo. It had a neck and head was in the shape of a hook,” she said.

“I just took what I saw. It was black – I just don’t know how far it was out of the water. I’m not good at judging distances. But after about a minute it disappeared and then came back up again in a different place.

“It was up for less than a minute the second time. I kind of believed in Nessie, but I wanted to see the proof. I always imagined her as having a long neck and flippers. I have seen something but I’m not sure what.”

Her mother Kat, a business intelligence data analyst, told reporters at the time: “Charlotte said she had taken a photo of a creature in the loch and I said ‘right, sure you have!’ For weeks she’s been going on about seeing the Loch Ness monster.

“But when I saw the picture, I couldn’t believe it. Something’s there. With all the sightings over the years there must be something in the loch.”

Charlotte’s sighting was accepted by the Official Loch Ness Monster Sightings Register, while Ms Kelly’s four days earlier has just been added.
‘Extraordinary week’

Gary Campbell, the keeper of the register, said: “It was some extraordinary week because as well as Charlotte’s sighting there were three others of an unexplained creature.

“It appears that the creature was moving between Dores and Fort Augustus. These pictures by Ms Kelly and Charlotte are the best of Nessie ever taken and are totally baffling. It all adds to the evidence that is definitely something unexplained in Loch Ness.”

Mr Feltham said the photographs taken by Ms Kelly were “the most exciting surface pictures I have seen” and “vindication for all the people who believe there is something unexplained in Loch Ness”.

The first recorded sighting of the Loch Ness monster was made in 564 but the legend captured the public imagination in the 1930s.

It followed Mrs Aldie Mackay, a hotel manager, reporting seeing a “whale-like fish” in the waters of Loch Ness on April 14 1933, which was featured in the Inverness Courier. The story was quickly followed up by the national press.

The Surgeon’s Photo from 1934

The following year, the most famous image of the monster, known as “The Surgeon’s Photo”, was captured and published in the Daily Mail. For decades it was seen as evidence of the monster’s existence.

However, it was described as a fake by The Telegraph in 1975, and is now believed to have been created as part of an elaborate hoax.

LA REVUE GAUCHE - Left Comment: Search results for LOCH NESS 

UK

HE ALREADY PURGED THE LEFT

Starmer shows new ruthless side as he prepares to purge party of ‘problematic’ MPs

Archie Mitchell
Fri, 1 September 2023

Sir Keir Starmer is prepared to demonstrate his ruthless side with a purge of “problematic” Labour MPs before the next election.

The Labour leader is reportedly considering getting rid of up to a dozen MPs, including Liam Byrne, Khalid Mahmood and Neil Coyle.

As part of a crackdown to prepare Labour for government, Sir Keir is drawing up plans to drop MPs who could damage the party.

Decisions about who may be blocked from standing will be based on “behavioural, reputational issues,” according to reports.

A source told The Times “the party is preparing to clear the field” and will “take on some of the MPs it doesn’t want to stand at the next election”.

Another said: “We just can’t afford to f*** up a potentially historic majority with internal bulls***, it’s not worth it, and we need people who are actually competent to be able to do their jobs as an MP, including questioning their own conduct.”

A full list of those who may be banned has not been confirmed.

Mr Coyle had the Labour whip restored in May having been suspended for using “abusive language with racial overtones” in a drunken encounter on the parliamentary estate.

Mr Mahmood was last year found by a tribunal to have unfairly dismissed his aide and ex-girlfriend after she felt “marginalised and isolated” in the months leading up to her losing her job.

And Mr Byrne was suspended from the Commons for bullying a member of staff. He was also responsible for the infamous “no money” note, left in the Treasury after Labour lost the 2010 election.

It is still used by the Tories to attack Labour.

The MPs have been contacted for comment.

Sir Keir previously said he had been “ruthless” to block former leader Jeremy Corbyn from standing as a Labour candidate at the next general election expected next year. He was accused by Momentum’s founder of behaving like a “Putin of the Labour Party” after his motion to block the ex-leader from running was backed by the National Executive Committee (NEC). However, he insisted the move would boost Labour’s chances.

It is thought he could use a similar mechanism to block other MPs from standing next year.

Another Black Swan Event For China's Real Estate Market? China's Former Largest Real Estate Developer Is Sounding The Alarm

Caleb Naysmith
Thu, August 31, 2023


The Chinese real estate market is experiencing another potential black swan event as Country Garden, once China's largest property developer by sales, spirals into a crisis that threatens to surpass the impact of China Evergrande Group.

The Foshan-based Country Garden is under heightened scrutiny because it oversees four times as many property projects as Evergrande. China's housing slump is exacerbating broader concerns over its economy, with signs of spillover effects ranging from missed payments by major shadow banks to a bond sell-off among Hong Kong property developers.

While the U.S. Market has seen turmoil, many markets are on the rebound. S&P 500 is up over 18% year-to-date, and the housing market continues to climb despite rising interest rates. The retail startup investing market continues to do well, with platforms like StartEngine having nearly $100 million invested in their platform this year alone, including over $17.5 million invested in their ongoing raise.

Liquidity Crisis And Missed Payments

Country Garden revealed that it is in ongoing negotiations with bond investors and banking institutions to extend maturities and secure its financial position. The company has already missed interest payments on some dollar bonds. Significant dates are fast approaching, including a yuan bondholders' vote this week on extending the payment deadline of a bond due Sept. 4. Additionally, the company must navigate the end of grace periods for a combined $22.5 million in dollar-note coupons by early September.
Financial Strains And Asset Devaluation

The situation is particularly alarming as Country Garden's bonds are trading at deeply distressed levels. A $1 billion note set to mature in January is currently trading at less than 13 cents on the dollar. The company has also seen its stock plunge by 67% this year, relegating it to penny stock status. Despite a 39% increase in revenue, the company posted a net loss of 48.9 billion yuan ($6.72 billion) for the first half of 2023, compared to a profit of 612 million yuan a year earlier.

Lack Of Proactive Measures

In a recent filing, Country Garden admitted to a lack of timely action to counteract the market slowdown. It also confessed to underestimating the risks associated with its heavy focus on lower-tier property markets.

"The profundity and persistence of the market's downtrend still caught the company off guard," the filing stated.

Key financial figures:

Revenue rose by 39.4% to 226.3 billion yuan.

Core net loss was 45.3 billion yuan, in stark contrast to a core net profit of 4.9 billion yuan last year.

Total debts shrank slightly to about 257.9 billion yuan, but roughly 108 billion yuan is due within the next 12 months.

Cash balance dwindled to 130.6 billion yuan, including 29.5 billion yuan in restricted form.

What's Next For The Chinese Economy?

The property slump in China has taken another hit with new home sales declining the most in the past year as of July. Despite a recent easing in mortgage policies by the central government, analysts remain skeptical that these measures will be sufficient to arrest the economic decline. China's major banks are also reportedly preparing to slash interest rates on existing mortgages and deposits to boost growth.

The unfolding crisis at Country Garden adds another layer of urgency to China's economic challenges and raises new questions about the stability of the global economy. The consequences of a potential collapse would be far-reaching, impacting not just the real estate sector but also financial markets and economic growth both within China and globally.

China ramps up economic support as Country Garden vote looms




Thu, August 31, 2023 
By Ziyi Tang, Clare Jim and Xie Yu

BEIJING/HONG KONG (Reuters) -China stepped up measures to boost the country's faltering economy on Friday, with top banks paving the way for further cuts in lending rates and sources saying Beijing plans further action including relaxing home-purchase restrictions.

As part of those measures, the authorities also cut the amount of funds institutions need to hold in foreign exchange reserves. The measures cheered investors, and analysts said they should prevent a further downturn in the ailing property sector.

China is grappling with a slowdown that has rattled global markets, with the spotlight now firmly focused on troubled developer Country Garden's spiralling debt crisis in a sector that contributes to roughly a quarter of the economy.

As pressure mounts, the authorities have rolled out a series of measures to spur the economy and revive the property market, with steps including the easing of some borrowing rules and a cut to the amount of forex banks must hold as reserves.

The country is set to take further action including relaxing home-purchase restrictions, four people familiar with the matter said.

Regulators including the housing ministry, central bank and financial regulator in coming weeks will implement measures they have been working on over the past few months under State Council guidance, two of the people said.

ANZ's senior China economist Betty Wang said several nation-wide property easing measures in the past couple of weeks have exceeded market expectations.

"This is the first time since 2021 that China has announced a series of nationwide property easing measures. They will help restore market confidence and prevent the sector from declining further."

COUNTRY GARDEN TEST

In the near term, however, market sentiment will be swayed by the outcome of a crucial test of investor confidence in Country Garden.

On Thursday, Country Garden delayed a deadline for creditors to vote on whether to postpone payments for an onshore 3.9 billion yuan ($537 million) private bond until Friday 1400GMT to give bondholders "sufficient time" to prepare for the vote.

Ahead of the voting result on Friday, some onshore creditors of that private Country Garden bond received interest payments, sources with direct knowledge of the matter said. They declined to be named as they were not authorised to speak to the media.

Country Garden declined to comment.

Friday's vote is a key hurdle Country Garden faces as it strives to avoid default, with one holder of the developer's dollar bonds saying if the company cannot extend its domestic debt, it will be unable to service external bondholders.

"This has been a slow-moving car crash," said the bondholder, who declined to be identified due to the sensitivity of the issue, adding that concerns centred around uncertainty over the broader economy and tensions with Washington.

"Everything they do right now is going to have an impact five to 10 years down the line."

Country Garden, China's largest private developer by sales, did not immediately respond to Reuters request for comment.

Stress in the property market has intensified pressure on Beijing to implement supporting measures and fanned concern about the ability of policymakers to arrest a decline in China's broader economic growth.

China's new home prices fell for the fourth month in August, according to a private survey on Friday, as the property debt crisis kept confidence at a low ebb despite the string of support measures.

DEPOSIT RATES CUT

The central bank said on Friday it would cut the foreign exchange reserve requirement ratio (RRR) by 200 basis points (bps) to 4% from 6% beginning Sept. 15, a move seen aimed at slowing the pace of yuan declines.

The lenders lowering mortgage rates on Friday included Industrial and Commercial Bank of China, China Construction Bank Corp and Agricultural Bank of China, which cut their deposit rates by between five and 25 basis points, websites from each bank showed. Several midsized banks also announced they will start cutting interest rates on a range of deposits by 10-25 basis points.

The measures helped lift confidence in the market and battered property stocks rallied, with China's CSI 300 Real Estate Index ending up 2.4%, while the blue-chip CSI300 Index climbed 0.5%.

Three sources familiar with the matter told Reuters on Tuesday that major state banks would cut deposit rates as they prepare to lower interest rates on existing mortgages soon.

Starting from Sept. 25, first-time home buyers with mortgages can apply to their banks for a lower interest rate on their existing loans, China's central bank and financial regulator announced on Thursday.

The deposit rate cuts are the third such cuts within a year, with the scale of cuts bigger than previous rounds in June and in September last year.

Lower deposit rates will partially offset various pressures on banks' narrowing net interest margins - a key gauge of profitability, said Nicholas Zhu, a banking analyst at Moody's.

"The impact of the deposit rate cut is material, given that close to three-quarters of Chinese banks' liabilities are deposits," Zhu said.

China's mortgage loans totalled 38.6 trillion yuan ($5.29 trillion) at the end of June, representing 17% of banks' total loan books.

Meanwhile, Beijing and Shanghai on Friday announced that they would allow home buyers to enjoy preferential loans for first-home purchases regardless of their previous credit records.

With this, all of China's first-tier cities have broadened the definition of first-home mortgages, in a bid to boost buyer sentiment.

($1 = 7.2633 Chinese yuan renminbi)

(Reporting by Ziyi Tang, Ryan Woo and Wang Jing, additional reporting by Davide Barbuscia in New York; Writing by Sumeet Chatterjee; Editing by Anne Marie Roantree, Lincoln Feast and Susan Fenton)

Robinhood to buy back Bankman-Fried's stake from US govt for $605.7 million

Fri, September 1, 2023 
By Manya Saini and Hannah Lang

(Reuters) -Robinhood said on Friday it had entered into a share repurchase agreement with the United States Marshal Service (USMS) for $605.7 million to buy back stock from Sam Bankman-Fried's Emergent Fidelity Technologies.

The shares of Robinhood were seized and subsequently transferred to the custody of the U.S. government after Bankman-Fried's FTX and Emergent filed for bankruptcy protection last year. Bankman-Fried has pleaded not guilty to criminal fraud and conspiracy charges stemming from FTX's November 2022 collapse.

Robinhood shares climbed more than 3% in premarket trading on the news.

The online brokerage said the 55.3 million shares would be sold at $10.96 apiece.

U.S. District Judge Lewis Kaplan in Manhattan approved the deal, court records showed. Kaplan, who is overseeing Bankman-Fried's criminal case, called Robinhood's proposed share purchase agreement "appropriate" and "in the best interest of the relevant stakeholders" in an Aug. 28 order unsealed Friday.

Robinhood first disclosed its intention to buy back the stake in February and said the company's board had authorized it to pursue purchasing most or all of the stock.

Just six months before his company filed for bankruptcy last November, Bankman-Fried revealed a 7.6% stake in Robinhood but said he did not have any intention of taking control of the retail trading platform. He told Reuters at the time that FTX was "excited about Robinhood's business prospects and potential ways we could partner with them."

Bankman-Fried rode a boom in the value of bitcoin and other digital assets to build a net worth of an estimated $26 billion and become an influential political donor in the United States, but FTX's collapse wiped out his fortune.

Kaplan earlier this month ordered Bankman-Fried be jailed ahead of his October trial, finding that the former billionaire likely tampered with witnesses while confined to his parents' Palo Alto, California, home on $250 million bail.

(Reporting by Manya Saini in Bengaluru and Hannah Lang in Washington; Additional reporting by Luc Cohen in New York; Editing by Devika Syamnath and Mark Potter)

DIRTY BANK

JPMorgan processed more than $1 billion for Epstein, US Virgin Islands says

Luc Cohen
Thu, August 31, 2023 


By Luc Cohen

NEW YORK (Reuters) - A lawyer for the U.S. Virgin Islands said on Thursday that JPMorgan Chase told U.S. authorities it processed more than $1 billion for Jeffrey Epstein over 16 years.

JPMorgan reported the transactions as suspicious to the U.S. Treasury Department following Epstein's suicide in 2019, Mimi Liu, a lawyer for the territory, said at a hearing concerning its lawsuit against the largest U.S. bank.

Reuters did not view the bank's disclosures to the Treasury, which are not public. A JPMorgan spokesperson declined to comment.

Epstein had been a JPMorgan client from 1998 to 2013, when the bank fired him. The disgraced financier had been awaiting trial on sex trafficking charges at the time of his death.

The U.S. Virgin Islands, where Epstein owned two private islands, is suing JPMorgan for at least $190 million and likely much more, saying it ignored red flags that Epstein was running a sex trafficking operation because he was a lucrative client.

JPMorgan has denied knowing that Epstein was running a sex trafficking operation, and has faulted the territory for having a cozy relationship with him.

Liu mentioned the $1 billion amount, which had not been previously disclosed, in arguing that U.S. District Judge Jed Rakoff in Manhattan should find before the case goes to trial that the bank participated in Epstein's sex trafficking.

She said no reasonable juror could find that JPMorgan was in the dark about its jet-setting client.

"JPMorgan was a full service bank for Jeffrey Epstein's sex trafficking," Liu said.

Felicia Ellsworth, a lawyer for JPMorgan, said it was not appropriate for the judge to determine the question of the bank's knowledge before trial, because current and former employees have testified that they were unaware of Epstein's sex trafficking.

She said JPMorgan notified the Treasury Department at least six times about Epstein's transactions, including as early as 2002.

Ellsworth also disputed the U.S. Virgin Islands' claim that JPMorgan obstructed investigations into Epstein, saying the bank had asked federal authorities about their own probes into his conduct.

That is "the polar opposite of trying to obstruct," she said.

An Oct. 23 trial is scheduled. Rakoff said he would decide by the end of September whether to resolve major legal disputes sooner.

In June, Rakoff preliminarily approved JPMorgan's $290 million settlement with women who say Epstein abused them.

Deutsche Bank, where Epstein was a client from 2013 to 2018, had earlier reached a $75 million settlement with his accusers.

(Reporting by Luc Cohen in New York; Editing by Noeleen Walder and Grant McCool)

CRIMINAL CAPITALI$M

India's Enforcement Directorate arrests Jet Airways founder Naresh Goyal - source

Reuters
Fri, September 1, 2023 

Naresh Goyal, Chairman of Jet Airways speaks during a news conference in Mumbai
In this article:

(Reuters) -India's financial crime fighting agency on Friday arrested Jet Airways founder Naresh Goyal, an Enforcement Directorate source said, in a case local media said was related to an alleged 5.38 billion Indian rupees ($65.06 million) money laundering case linked to Canara Bank.

Goyal was taken into custody under the Prevention of Money Laundering Act (PMLA), following a long session of questioning at the ED's office in Mumbai, according to local media reports.

Canara Bank had filed a complaint in May against the airline, Goyal, his wife and a former airline director for "causing wrongful loss" to the lender.

Jet Airways and the ED could not be immediately reached for comment.

Once India's biggest private airline, Jet ran out of cash in April 2019 and filed for bankruptcy. It was supposed to resume operations by the first quarter of 2022 under its new owners.

However, it is deadlocked with creditors over the resolution plan to lift the airline out of bankruptcy.

($1 = 82.6887 Indian rupees)

(Reporting by Aditya Kalra in Delhi and Kanjyik Ghosh in Bengaluru; Editing by Shounak Dasgupta and Krishna Chandra Eluri)

Lula Tightens Grip on Brazil Politics as Economy Defies Odds

Andrew Rosati
Fri, September 1, 2023 

(Bloomberg) -- Just six months ago, grim warnings about Brazil’s economy were looming over Luiz Inacio Lula da Silva’s pledge to restore the prosperity he oversaw during his previous presidency.

But now with the first half of the year under his belt, the economy that soared on his watch two decades ago is once again defying the odds.

Official data released Friday showed gross domestic product expanded 0.9% in the April-June period from the previous quarter, three times more than expected by economists surveyed by Bloomberg. That’s the second straight period of solid growth, and many analysts see the economy outperforming at least through December despite headwinds.

Lula is “stronger today than when he assumed office” on Jan. 1, said Christopher Garman, managing director at political risk consultancy Eurasia Group. “We’ve had positive shock which means Lula is going to be much stronger for much longer than we were handicapping for.”

At the start of 2023, economists braced for sluggish growth as steep borrowing costs and above-target inflation chipped away at consumers’ spending power. Investors fretted that ambitious plans to fight poverty would overburden Brazil with debt. And the leftist leader was staring down a divided congress and an emboldened opposition whose most radical supporters stormed congress mere days after his inauguration.

Fast forward to September: Lula’s approval rating is touching 60%, major banks have raised their 2023 GDP forecasts, with Bank of America Corp betting on an expansion of 3% — over three times the rate most analysts were calling for in January — and Fitch Ratings has upgraded Brazil on the government’s spending reform progress.

To be fair, not all sectors are benefiting equally. Key industries like manufacturing have wobbled from tight financial conditions and lack of investment even as overall growth powered forward. Much of the bump wasn’t of Lula’s making either, Brazil’s massive agriculture sector saw strong harvests in the first quarter, inflation cooled on tight central bank policy while the labor market stayed surprisingly strong.

In the second quarter, industry gained 0.9% on a strong performance in extractive sectors like mining while services grew 0.6%, representing the top drivers of the period. Meanwhile agriculture contracted 0.9% after seeing a major jump in the previous three months, the statistics agency said.

What Bloomberg Economics Says

“The outsize print adds a strong upside bias to the analyst consensus estimate for 2023 growth. However, it may reinforce the central bank’s concern on the level of economic slack. We think the central bank will still proceed with rate cuts, but it’s less likely to accelerate the pace.”

— Adriana Dupita, Brazil and Argentina economist

— Click here for the full report.

Brazil’s benchmark stock exchange, the Ibovespa, opened on the green on Friday after stronger than expected GDP data, rising 1.6% in Sao Paulo in morning trading. The index was boosted by materials and consumer discretionary stocks, while the real gained 0.4% against the dollar.

Brazil is not alone in enjoying better-than expected growth. This week, in Latin America’s second largest economy, Mexico, the central bank of lifted its GDP forecasts for this year and 2024 on strong trade and private consumption. Chile also saw a surprising rise in economic activity in July.

The Brazilian president welcomed Friday’s economic data, but said the gains “needed to be distributed” among the population.

Lula has so far managed to defy naysayers and please supporters who voted him back into office on hopes he’d resurrect the glory days. On the campaign trail last year, fans donned red caps with white stitched letters that read: “Make Brazil 2002 Again.” It was a throwback to when he was first elected president.

During his 2003-2010 administration, the now 77-year-old head of state oversaw a commodities-fueled economic renaissance that pulled millions of people into the ranks of the middle class. When he left office, he was by far Brazil’s most popular leader since the end of military dictatorship.

Popularity Soars

The economy’s current performance is still short of that boom. Even so, Lula is reaping the benefits with supporters and detractors alike.

Between April and August, Lula’s approval rating rose 9 percentage points to 60%, according to the pollster Quaest. It also jumped to 50% or above among conservative demographics that largely opposed him during last year’s election, including evangelicals and residents of the wealthy south of Brazil.

That’s almost double the ratings Lula’s ideological allies are getting elsewhere in South America. After winning elections on mandates for change, Chile’s Gabriel Boric and Colombia’s Gustavo Petro are both mired in economic slumps, struggling to advance their agenda and polling in the low 30s.

“Lula has chosen to debate the economy and its effects,” said Felipe Nunes, the director of Quaest. He “is neutralizing the divisive aftermath of the election and opening space to conquer part of the opposition.”

A bitterly fought race against former President Jair Bolsonaro culminated in Lula’s victory with the slimmest margin in Brazil’s modern history. The right-wing leader’s refusal to explicitly recognize his loss, combined with false claims he spread about voter fraud, fanned the rage of Bolsonaro backers who rioted in Brasilia on Jan. 8.

In his third term, Lula has concerned himself more with budgetary matters and rewriting Brazil’s byzantine tax code than with his predecessor’s legacy. Most of Lula’s public bouts of anger have been directed not at Bolsonaro, but rather his central bank chief for resisting calls for looser monetary policy.

The fracas shook financial markets, but the central bank since began easing its key rate in August, which should boost growth further on and may also serve to soothe Lula.

Investors have also found an unlikely ally in Lula’s Finance Minister Fernando Haddad. The longtime confidant of the president is credited with striking a balance between the market’s concerns and demands of the ruling Workers’ Party. Lula signed a major fiscal reform into law on Thursday.

Garman, the political risk analyst, says Lula’s popularity is strengthening his hand in congress, and the passage of key parts of his economic agenda could help growth in the mid-term.

“It creates a positive feedback loop that generates the conditions for an economic rebound in the second half of next year,” he said.

Brazil is still facing plenty of challenges. Its dominant trade partner, China, is in an economic slowdown. Interest rates in the US are expected to stay higher for longer, which could weigh on monetary policy locally. The long process of turning Lula’s reforms into laws is also likely to take toll on his popularity.

For now at least, Lula seems vindicated when he declared “Brazil is back” after getting elected last year. Looking at the economic data, it’s hard to prove him wrong.

--With assistance from Robert Jameson and Leda Alvim.

Bloomberg Businessweek