Huawei ban won't solve the problem of Chinese spying on Canada, experts say
Anja Karadeglija - Saturday
© Provided by National Post“Just a simple ban on Huawei isn't going to fix (Canada's security vulnerabilities). China doesn’t need Huawei to spy on us.”
OTTAWA — Banning the use of equipment from Chinese companies Huawei and ZTE in Canada’s 4G and 5G infrastructure will help make the country somewhat safer — but in no way solve the problem of potential espionage, security experts say.
The fact is that all telecommunications equipment has security vulnerabilities, says Stephanie Carvin, an associate professor of international relations at Carleton University.
“And just a simple ban on Huawei isn’t going to fix that. China doesn’t need Huawei to spy on us.”
On Thursday, the Liberal government announced that companies would have to strip Huawei and ZTE equipment from 5G networks by 2024 and 4G networks by 2027. Innovation Minister François-Philippe Champagne told reporters that Canadian telecoms won’t be “permitted to include in their networks products or services that put our national security at risk.” He said the ban would “make our network safer, not only for now but for generations to come.”
Christopher Parsons, a senior researcher at University of Toronto’s Citizen Lab, said the security benefits will have more to do with geo-political interests than cybersecurity. If Canada had continued using Huawei and ZTE equipment and they became dominant, that would have given the Chinese government leverage over Canada, he said.
But on the cybersecurity front, the Chinese government “will continue to be very effective in engaging in espionage and other operations against the government of Canada and other countries, regardless of the telecommunications network equipment they use,” Parsons said.
Margaret McCuaig-Johnston, a senior fellow with the Graduate School of Public and International Affairs at the University of Ottawa, said she’d hoped the government would go as far as the U.S. and outright ban all of the company’s products, such as consumer items like cellphones.
Canada to ban Huawei from country's 5G, 4G networks, in line with Five Eyes allies
Terry Glavin: There’s no Huawei ‘ban’ until we get it in writing
Canadians who are wondering about their Huawei cellphone in the wake of Thursday’s decision should consider whether they’re likely to be targeted, Parsons said.
“If you’re a CSIS officer, probably not the best of ideas” to have a Huawei phone, he said. But if you’re someone with a regular job “and life in Canada, you’re probably not at any substantive risk.”
What Canada needs is a wider strategy to address cybersecurity issues, both Parsons and Carvin said.
“We need a strategy to better understand what Canada wants to do from a cybersecurity perspective,” and that strategy needs to intersect with Canada’s foreign policy goals, including our policy toward China, and an industrial strategy, Parsons said.
Parsons said Canada also needs a “way of doing a comprehensive analysis and assessment of the different equipment in our critical infrastructure,” such as telecom and banking.
In addition to announcing the ban Thursday, the government said it will introduce a legislative framework for protecting critical infrastructure in the finance, energy, telecom and transport sectors.
“We can’t just ban our way” into better cybersecurity, Carvin said. She said it appears that the government “is going to take this more comprehensive approach overall, and that’s good.”
But, she cautioned, Canada is going to have to act much more quickly in the future, instead of taking years to issue a decision like it did with Huawei.
Canada was the last of the Five Eyes alliance — which consists of Canada, the United States, Britain, Australia and New Zealand — to ban the equipment.
The federal Liberals first announced a security review of Huawei equipment in September 2018. For much of that time, a key factor in the delay was China’s use of hostage diplomacy, as China held two Canadians in prison in retaliation for Canada arresting Huawei executive Meng Wanzhou on behalf of the U.S. The two Michaels were released in September 2021.
On Friday, a spokesperson for the Chinese embassy said in a statement China “expresses its grave concerns and strong dissatisfaction” with the decision. The statement accused Canada of “acting in collusion with the United States to suppress Chinese enterprises” and called “Canada’s so-called security concerns… nothing but a cover for political manipulation.”
China could retaliate in a number of ways, experts said. For its part, the embassy warned that “China will evaluate this development in a comprehensive and serious manner and take all necessary measures to protect the legitimate and legal rights and interests of Chinese enterprises.”
Carvin said the worst-case scenario and “something I really would hope would not be the case, would be retaliation against Canadian citizens in particular.”
Fen Hampson, a professor of international affairs at Carleton University, said it’s hard to say whether China will react immediately or wait to respond.
In addition to angry words and a potential “dressing down” to our diplomats in Beijing, China could take further trade actions, Hampson said.
He said when it comes to commercial ties with China, Canada has an imbalance of trade. “We buy a lot more from them than we sell to them. The selling job just got a lot harder,” he said.
The decision won’t be a “death knell” for Canada’s relationship with China, Hampson said, but a continuation of the trajectory that was on a downward slope.
“At the end of the day, we’re not going to see big dividends in trade and economic ties with China, and I think a lot of Canadian companies are understandably very wary now of doing business in China because of the fear that their corporate representatives could find themselves in jail.”
Church of Scotland general assembly votes to allow same-sex marriages
Severin Carrell Scotland editor -
The Guardian
The Church of Scotland has voted to allow same-sex marriages, after fresh warnings that its historical opposition had increased the church’s decline towards irrelevance.
The church’s general assembly, its decision-making body, voted by 274 to 136 on Monday to allow its ministers and deacons to opt in to officiate at same-sex weddings, ending a centuries-old prohibition.
The church’s legislation will be updated to remove references to a marriage taking place between a husband and wife, and refer instead to “parties”.
Some ministers said within minutes of the vote that they had immediately applied to be registered to carry out same-sex weddings, including the Rev James Bissett, a chaplain to the Royal Air Force’s air cadets.
The move was also welcomed by equalities campaigners and other church groups. The Scottish Churches Trust said the first weddings would take place soon.
The vote makes the Church of Scotland the largest church in the UK to allow gay marriages, increasing the split within the Protestant faith. It has already allowed gay ministers to marry.
Faced with the threat of a global revolt within the Anglican communion, the Church of England has consistently refused to approve same-sex marriages.
In 2017 the Scottish Episcopal church, which is Anglican, voted at its synod to approve same-sex marriages, becoming the first in Scotland to do so. The Church of Wales has indicated it may follow suit in several years’ time. Methodists, Quakers and the United Reform church already conduct ceremonies.
The measure had already been supported in an indicative vote by Church of Scotland presbyteries, which are its local governing bodies, but critics warned it could increase its internal rifts and leave the church open to legal action.
Related: Gay minister's appointment divides Church of Scotland
The Rev Scott Rennie, a minister at the centre of a bitter and protracted dispute in the church over the employment of openly gay clergy 13 years ago, told the general assembly he was heartened that despite the fear and uncertainty surrounding the proposal, it now had majority support.
“Marriage is a wonderful thing,” Rennie said. “My marriage to my husband, Dave, nurtures my life and my ministry, and frankly I do not think I could be a minister of this church without his love and support. It is always there in the background. Same-sex marriage is like opposite-sex marriage and it has its joys and sorrows, its glories and its tensions. It’s pretty normal, really.”
Another speaker, Craig Dobney, told the general assembly that its past opposition to gay marriages had alienated people: a primary school near his church had stopped using it after the church refused to appoint a gay minister. “I worry that our churches have become irrelevant to our communities,” he said.
There were warnings from opponents that the measure could expose ministers who opposed it to pressure and ostracism from equalities activists. Some are expected to call for stronger protection for traditionalists in church legislation at the general assembly on Wednesday.
The Rev Alistair Cook said he opposed the measure and would continue to refer to marriages taking place between a man and a woman. He said it was disingenuous to suggest this was a matter for individual ministers; this was church policy. “That is a deep theological change for the church,” he said.
The Rev Ben Thorp, another critic, said there would be continuing tensions for ministers and presbyteries, since more than a third of presbyteries had voted against it. Churches that refuse to participate risk being targeted by groups supportive of same-sex marriage, he said.
“It won’t be the end of the journey,” he said. “It won’t stop the decline of the church. It won’t make us suddenly more attractive to younger people. We will continue to be divided.”
The general assembly’s vote comes against a background of steeping declining numbers of church marriages in Scotland and a sharp fall in religious observance.
Swiss Re, UBS among founding buyers in carbon removal scheme
: Logo of Swiss bank UBS is seen in Zurich
Sun, May 22, 2022
By Susanna Twidale
LONDON (Reuters) - Insurance firm Swiss Re and banking giant UBS are among five founding buyers of credits from a scheme set up by a Swiss company to drive down the cost of taking carbon dioxide out of the atmosphere.
Even with pledges of huge reductions in emissions, many scientists believe extracting carbon dioxide from the atmosphere by planting forests and using technology will be essential to meet global goals set under the Paris climate agreement to curb climate change.
Swiss carbon project developer South Pole's NextGen facility has committed to buying 1 million carbon removal credits from a range of projects by 2025 to help provide them with secure revenue streams and drive down the cost of the technologies.
“With this we can start moving these technologies down the cost curve, ideally the price levels you see today will come down in a similar way to what we have seen with solar PV,” South Pole CEO Renat Heuberger told Reuters in an interview.
The cost of solar PV modules for renewable solar power have fallen by around 90% since the end of 2009, according to the International Renewable Energy Agency, as the technology and supply chains developed.
Current carbon removal technology costs can range from around $50 to $400 a ton, depending on the type of project.
Founding buyers in NextGen will include Boston Consulting Group, private banking firm LGT, shipping company Mitsui O.S.K. Lines (MOL), Swiss Re and UBS, South Pole said, without specifying how many credits each company had committed to, or at what price.
Many companies have set emissions reduction targets that will require them to purchase carbon offset or removal credits to compensate for emissions they are unable to cut themselves.
“This effort is a part of MOL’s broader goal to achieve net-zero emissions by 2050,” Takeshi Hashimoto, President & CEO of Mitsui O.S.K. Lines, Ltd said in a statement.
(Reporting by Susanna Twidale; Editing by Mark Potter)
EXPLAINER: What are the key climate themes at Davos?
People walk in front of the congress center where the World Economic Forum take will place, on the eve of the event in Davos, Switzerland, Saturday, Jan. 21, 2022. The annual meeting of the World Economic Forum is taking place in Davos from May. 22 until May. 26, 2022. (AP Photo/Markus Schreiber)
PETER PRENGAMAN
Sun, May 22, 2022
DAVOS, Switzerland (AP) — While the COVID-19 pandemic and Russia's war in Ukraine will be focuses of the World Economic Forum’s gathering of business and government leaders, so too will climate change. It's captured the world’s attention in unignorable and devastating ways.
The acceleration of rising temperatures, the ferocity and costliness of major weather events, and the impact, particularly on people in developing countries, have pushed the issue from one of science to something that touches every aspect of life, including (or, perhaps especially) business and economics.
Of the roughly 270 panels Monday through Thursday, one-third are about climate change or its direct effects. U.S. climate envoy John Kerry, Ugandan climate activist Vanessa Nakate and Alok Sharma, president of last year's international climate conference COP26, are among the climate leaders expected in the Swiss resort town of Davos.
At the forum’s first in-person gathering in two years, the climate panels are as varied as the issue. They range from combating “eco-anxiety" to helping debt-ridden countries finance a renewable transition. Here's a look at some broader themes that are likely to emerge:
ENVIRONMENTAL, SOCIAL, GOVERNANCE
Several panels will wrestle with an approach to investing that considers the environment and other key factors. Known by the acronym ESG, it's become a force, with trillions of dollars invested in companies that meet certain criteria.
When it comes to climate change, ESG can be important. For individual investors all the way up to firms and government agencies that analyze how companies operate, disclosures and public declarations are paramount. They can be the basis of evaluating a company’s emissions, environmental impact and financial risks tied to climate change.
They are also controversial and raise questions: Should certain declarations be mandatory? Should they be standardized and regulated, and by whom? Or has the ESG movement already gone too far, ultimately hindering investment and doing little to rein in greenhouse gas emissions?
Viewpoints sometimes fall along political lines. In the U.S., many Republicans call them “woke,” while many on the left, particularly environmentalists and campaigners, argue that ramping up reporting and transparency could lead to real change.
Many managers of some of the world’s largest mutual funds have argued ESG is essential to evaluate risk. Just last week, Tesla CEO Elon Musk said the approach had “been weaponized by phony social justice warriors.”
ENERGY TRANSITION AND ‘NET ZERO'
The world’s top climate scientists have warned that significantly reducing greenhouse gas emissions this decade is necessary to minimize warming and avoid the most devastating effects to the planet. That will require major changes in how business is done, from the way products are produced to how they are transported.
Several panels will look at areas where businesses have successfully transitioned much of their energy portfolio to renewables, the role of finance and government to incentivize or mandate changes, and strategies to keep businesses accountable. Despite heightened consciousness and pledges by businesses, emissions are going up worldwide.
“Moving climate debate from ambition to delivery” is a title of one panel that sums up the enormous challenge.
Sessions will look at sectors, like decarbonizing shipping and aviation, renewable transition plans and the challenges of achieving them in countries like China and India. There will be discussion of strategies to ensure major shifts are inclusive and consider people in historically marginalized countries, which are feeling some of the most intense effects of climate change.
An important current through all the discussions will be identifying what “net zero” is — and isn’t — when looking at pledges from companies and countries. Moving away from fossil fuels like coal and oil to renewables like solar and wind can reduce emissions and get a company closer to goals of taking an equal amount of emissions out of the atmosphere as it puts in.
But a transition to renewables often makes up only a small part of company plans. Many rely on balancing their carbon footprint by investing in forest restoration or other projects. While better than nothing, experts note that depending on carbon offsets doesn’t represent a shift in business practices.
WAR IN UKRAINE AND THE FUTURE OF ENERGY
Russia's war in Ukraine will loom large at the conference. When it comes to climate change, the conflict raises two central questions: How should countries respond to energy shocks from reducing or being cut off from Russian oil and gas? And will the war hasten the transition to renewable energies or help fossil fuel companies maintain the status quo?
Since the war began, there has been no shortage of businesses, environmentalists and political leaders trying to influence the answers to those questions, which will carry over to Davos.
“Energy Security and the European Green Deal” is one panel where participants are expected to argue that the way forward is away from fossil fuels. But European countries, some of which are heavily reliant on Russia for energy, also are scrambling to find other sources of natural gas and oil to meet short-term needs.
While no sessions explicitly make the case for a doubling down on reliance on fossil fuels or expanding extraction or exploration, if the last few months are any guide, those points of view will certainly be present.
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Peter Prengaman is the Associated Press' global climate and environmental news director. Follow him here: http://twitter.com/peterprengaman
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Associated Press climate and environmental coverage receives support from several private foundations. See more about AP’s climate initiative here. The AP is solely responsible for all content.
Explosive Tonga volcano 'surprisingly intact'
Jonathan Amos - BBC Science Correspondent
Sun, May 22, 2022,
Seabed change
The Tonga underwater volcano that produced a spectacular eruption in January remains astonishingly intact.
A New Zealand-led team has just finished mapping the flanks of the seamount, which many people thought might have been torn apart in the ferocity of the event.
But structurally, Hunga-Tonga Hunga-Ha'apai hasn't changed that much.
The Tonga eruption produced the biggest atmospheric explosion recorded on Earth in more than a century.
It generated tsunamis across the Pacific and in other ocean basins around the world. It even lifted the clouds over the UK, 16,500km away. Mercifully, only a handful of people lost their lives in the kingdom of Tonga.
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New Zealand's National Institute for Water and Atmospheric (NIWA) Research has now managed to get in close with a ship to map the post-eruption shape of Hunga-Tonga Hunga-Ha'apai (HTHH) and of the surrounding seafloor.
Professor snorkels over Tonga volcano
Tonga eruption was 'record atmospheric explosion'
Robot boat to map Tonga volcano aftermath
Although there's clearly been a lot of ash deposition and movement of sediment, the volcano continues to stand tall.
The expedition leader, NIWA marine geologist Kevin Mackay, said he was taken aback by what he'd seen in the Research Vessel (RV) Tangaroa's sonar data.
"Given the violence of the eruption on 15 January, I'd expected the edifice to either have collapsed or been blown apart, and this is not the case," he explained.
"While the volcano appeared intact, the seafloor showed some dramatic effects of the eruption. There is fine sandy mud and deep ash ripples as far as 50km away from the volcano, with gouged valleys and huge piles of sediment."
The Tangaroa in front of the two parts of the caldera rim that sit above the ocean surface
From its 22,000-sq-km survey, the Tangaroa team calculates that about 6 to 7 cubic km of material have been added to the seafloor.
This is ash and rock that was initially ejected by the volcano into the air but which then fell back down into the water and descended the flanks of the submarine mountain to run out over the ocean bottom.
These density, or pyroclastic, flows were the major factor in generating the tsunami waves that inundated local islands, Mr Mackay told BBC News.
The volcano and surrounding seafloor was last mapped in 2016
The 1.8km-high HTHH was last surveyed in 2016. Combining the previous data with Tangaroa's new information has allowed scientists to make a "difference map".
The deposition of all the new material is marked in red (see top image). Blue indicates where material has been lost. This is mostly from around the neck of the volcano. The researchers say 2 to 3 cubic km has come away from the upper portions of HTHH.
In addition to the sonar survey, the Tangaroa's crew also studied the local ocean ecosystem.
On seamounts to the south of HTHH, sealife continues to flourish
Unsurprisingly, the flanks of the volcano are now devoid of biology, but the team only had to travel about 15km to find fish and mussels thriving on other seamounts.
"Both of these examples imply a resilience of animal populations in the region," said NIWA fisheries expert Dr Malcolm Clark. "And this is important because it can give insights into how the eruption can affect the surrounding sealife and what the possible chances of recovery might be."
The researchers also tested the water column for physical and chemical characteristics, including temperature, nutrients and oxygen concentration. In places, the ash-fall has had a fertilisation effect and triggered plankton blooms. But the flip side is that researchers could identify, too, zones where oxygen in the water has become depleted.
The team took thousands of pictures and collected hundreds of samples during the cruise, including 115 sediment cores and 250kg of rock, some of which was newly formed in the eruption.
The RV Tangaroa did not survey directly over Hunga-Tonga's opening, or caldera.
This will be left to a robot boat developed by the UK company Sea-Kit International. The 12m uncrewed surface vessel, called Maxlimer, is currently in Singapore en route to Tongatapu, the main island in the Tongan archipelago.
Because the boat can be controlled at a distance, it will be permitted to operate for extended periods over the caldera. The caution is warranted because the volcano appears still to be active.
NIWA marine ecologist Dr Sarah Seabrook said this was evident from a persistent ash layer near the volcano at a depth of about 200m.
"Our initial analyses on the origin of the ash layer suggest that it is not a remnant of the January eruption, but may instead show the volcano is still venting. That is, it's actively releasing volcanic ash, albeit on a far smaller scale," she explained.
Sea-Kit's USV Maxlimer will fully map the caldera
The information from Maxlimer's multi-beam sonar equipment is expected to be particularly instructive. A naval ship that sailed across the caldera recently found the depth of water over the caldera had increased dramatically.
Pre-eruption there was only 150-200m of seawater. Post-eruption there is now 800m or more of water. HTHH's magma chamber was hollowed out.
"Maxlimer definitely has the ability to measure that deep," said Mr Mackay. "And what we're really hoping is that once we get a really accurate map of the caldera, we can confirm those volumes of material that we've already initially indicated."
The RV Tangaroa's month-long mapping project was funded by the Nippon Foundation of Japan and organised by NIWA, together with Seabed2030, which is an international effort to properly chart Earth's ocean floor.
Consumers defy inflation to support economy. For how long?
Dan Gabel, right, and fellow musicians perform in downtown Boston, Tuesday, May 10, 2022. Gabel has canceled Netflix and other streaming services and tried to cut back on driving as the costs of gas, food, and other items, such as the lubricants he uses for his instruments, has soared. In the photo, from left to right, are Eric Baldwin, banjo; Ed Goroza, sousaphone; Josiah Reibstein, trombone; and Gabel, trumpet. (AP Photo/Steve LeBlanc)More
CHRISTOPHER RUGABER and ANNE D'INNOCENZIO
Sun, May 22, 2022
WASHINGTON (AP) — With prices across the economy — from food, gas and rent to cars, airfares and hotel rooms — soaring at their fastest pace in decades, you might think Americans would tap the brakes on spending.
Not so far. Consumers as a whole are showing surprising resilience, not only sustaining their spending but increasing it even after adjusting for inflation. In April, the government said, retail sales outpaced inflation for a fourth straight month. It was a reassuring sign that consumers — the primary drivers of America’s economy — are still providing vital support and helping allay concerns that a recession might be near.
Yet at the same time, there are signs that some people, especially in lower-income households, are starting to cut back, by shifting to lower-priced or alternative items or by skipping some purchases altogether as inflation shrinks their disposable income.
Last week, for example, Walmart, which caters to price-conscious consumers, reported that more of them were favoring lower-cost store brands of lunch meat over pricier national brands and buying half-gallon cartons of milk rather than full gallons. Likewise, Kohl's, a mid-priced department store, said its customers were spending less on each visit.
All of which has spotlighted a question floating over the economy: How long will consumers as a whole continue to spend at healthy levels — even if through gritted teeth — despite the pressures they're feeling from inflation near 40-year highs? The answer will be key to whether the nation can avoid a recession as the Federal Reserve moves to sharply raise borrowing rates.
By most measures, consumers have downshifted from last year’s blowout spending, which was fueled by stimulus checks and other government aid after the brutal pandemic recession. This year, noted Michelle Meyer, chief U.S. economist at the MasterCard Economics Institute, steadily surging prices have dimmed Americans’ outlook for the economy.
Even so, Meyer said, there is some cause for optimism.
"There’s still plenty of reasons to believe in the resilience of the consumer,” she said, pointing to America's robust job market and the solid pay increases many people are receiving. “There is a certain amount of frustration as they navigate the environment we’re in. But they’re still spending.”
Consider that even while consumer sentiment as measured by the University of Michigan plunged nearly 30% over the past year, Americans’ spending outran inflation during that time. Economists at Michigan noted that there has been a “historic disconnect” between sentiment and actual consumer behavior.
Some economists warn that steady consumer spending won't likely last in the face of the Fed's aggressive credit tightening. And if consumer spending does stay strong, the Fed might eventually have to jack up rates even further to cool the economy and slow inflation. Earlier this month, in its quest to quell inflation, the Fed raised its benchmark rate by a half-percentage point and signaled additional large rate hikes to come. Some fear the economy could slide into recession next year.
Still, several trends are driving Americans' spending, including rising pay, savings amassed during the pandemic and a rebound in credit card use. Those savings and continued wage gains, economists say, could fuel healthy spending throughout this year.
Consumers have been shifting much of their spending away from appliances, electronics and exercise equipment — the kinds of goods many splurged on early in the pandemic while hunkered down at home — to travel, entertainment and other services. The intensity of that shift has caught many retailers off guard and contributed to some negative earnings reports.
Brian Cornell, Target's CEO, said that chain “did not expect to see the dramatic shift” in spending away from TVs, appliances and patio furniture and toward luggage, restaurant gift cards and other items that reflect Americans' increased desire to leave home and spend.
Southwest Airlines has said that surging demand for air travel will keep it profitable through this year. Though average fares jumped 32% in the first quarter from a year earlier, the carrier said it's seen no sign of curtailed demand.
For many people, the opportunity to travel after two years of restrictions is outweighing the financial pressures of higher prices.
Mike and Marsha Dyslin, who live in San Jose, flew to Washington, D.C., last week to visit their daughter, Sarah, a graduate student at Georgetown University.
“She’s been out here at school for two years, and we haven’t visited the whole time because of COVID," Marsha Dyslin said. “Your priorities change.”
To save on gas, Mike Dyslin said they've been driving their Toyota Prius more than their SUV but otherwise haven't made major changes in their spending habits.
Soaring gas and food prices have led other consumers, though, to start pulling back. The national average cost of a gallon of gas has jumped to $4.59, up a painful 50%-plus from a year earlier, according to AAA.
Walmart has said its shoppers are visiting its gas stations more frequently but filling up less each time. And Kohl's last week reported a drop in the payment rate for its store cards after a year in which customers made sizable payments. Higher levels of card debt raise the risk of increased delinquencies.
Dan Gabel, a musician in Millbury, Massachusetts, has pared his entertainment spending as costs have soared far beyond what he earns. Gabel, a big-band leader and trombonist, is facing soaring prices not just for gas but also for many items he needs for work — from dry clearing band uniforms to lubricant for maintaining instruments to the cost of paper and ink to print music scores.
To save money, Gabel, 33, and his partner, an opera singer, have dropped HBO and Netflix. Though the music gigs have been steady, Gabel now takes the train, if he can, rather than drive when he performs out of town.
“We're feeling the crunch,” Gabel said. “It's all these little things that do add up.”
Nationally, though, the overall resilience of consumer spending illustrates a trend that can perpetuate inflation: Though people hate higher prices, they often keep paying them if their wages are also rising.
“Inflation doesn’t cure itself,” said Laura Veldkamp, a finance professor at Columbia University. “If the prices of goods and wages rise together, then that doesn’t necessarily bring down demand.”
Across the economy, median wages jumped 6% in April from a year earlier, according to the Federal Reserve Bank of Atlanta. That was the largest increase since 1990, though it was below the inflation rate of 8.3%.
A surprisingly large portion of workers, though, are receiving pay gains that exceed inflation: About 45% did so in March compared with a year earlier, according to research by the Indeed Hiring Lab.
Nick Bunker and AnnElizabeth Konkel, economists at Indeed, called it “remarkable” that that figure was so high given the level of inflation. It shows, they said, how desperate many employers are to find and keep workers with unemployment just 3.6% and posted job openings near record highs.
Many other consumers have had to draw on their savings to keep spending. The national saving rate has fallen to about 6%, below pre-pandemic levels, after having reached 16.6% in 2020, the highest on records dating to 1948, and 12.7% in 2021.
And with more Americans turning to credit cards for spending, household debt rose 8.2% in the first three months of this year compared with a year earlier. It was the biggest such increase since early 2008, when the economy was entering a recession.
Economists say, though, that overall debt hasn’t yet reached problematic levels. They estimate that households still have about $2 trillion in savings beyond what they would have had based on pre-pandemic trends.
And Paul Ashworth, an economist at Capital Economics, notes that household debt is equal to 86% of disposable income, sharply lower than its peak of 116% in 2008.
“Never bet against the U.S. consumer," Ashworth said.
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D'Innocenzio reported from New York. AP Writer Steve LeBlanc contributed to this report from Boston.
Kazakhstan Cuts Iron Supplies To Russian Steelworks
Editor OilPrice.com
Sun, May 22, 2022,
Kazakhstan’s largest iron ore-enricher has cut supplies to a major steelworks in Siberia as the repercussions of international sanctions against Russia disrupt economic ties between these two members of the Eurasian Economic Union, a free-trade zone.
The Sokolov-Sarybai Mining Production Association in northern Kazakhstan was the main supplier of ore to the Magnitogorsk Iron and Steelworks until Russia invaded Ukraine.
Known by the acronym SSGPO, the Kazakhstani plant, based in Rudniy, was supplying 70 percent of the ore sourced by the steelworks in Magnitogorsk, which lies just 340 kilometers away. The Russian plant, often shortened to MMK, obtained the rest from suppliers in Russia.
Because of the halt in supplies from Kazakhstan, MMK has been forced to source ore from nearly 2,000 kilometers away, Russia’s Vedomosti newspaper reported on May 17, citing anonymous sources from both companies.
“Problems with supplies of iron ore arose at MMK after the start of the Russian special military operation in Ukraine and large-scale sanctions against the Russian Federation,” the newspaper said, using the euphemism for the war that Russian media are legally required to write.
Related: Global Supply Chains Will Never Be “Normal” Again
Reports of SSGPO halting shipments to Russia emerged in April, Vedomosti noted.
MMK majority shareholder and chairman Viktor Rashnikov is the target of international sanctions, which the company has dismissed as “groundless.”
Firms in Kazakhstan have no obligation to implement international sanctions against any person or entity in Russia. However, many are wary of contagion from damage to their trade with foreign buyers or their reputations if they do business with Russian companies.
MMK is sourcing replacement ore from two enriching plants on Russia’s border with Ukraine. They are owned by Alisher Usmanov, a Russian oligarch who is under international sanctions, via his Metalloinvest steel company.
“There are no disruptions with raw material [supplies],” an anonymous source from MMK told Vedomosti. The company “has already moved to purchasing greater volumes of iron ore from Russian producers.”
The Kazakhstani company has not commented, but it must be casting around for buyers for the ore it was formerly selling to MMK.
That previously amounted to 7-8 million metric tons annually, according to Vedomosti. That sum is equivalent to about a quarter of the nearly 31 million tons the enricher produces every year.
The search for new customers comes at a time when the international appetite for steel is subsiding. The World Steel Association forecast last month that demand would rise just 0.4 percent this year, compared to growth of 2.7 percent in 2021.
Falling demand comes against the backdrop of “global spillovers from the war in Ukraine, along with low growth in China,” where strict coronavirus lockdowns are in place, the association said.
By Eurasianet.org
Congress struggles to ban lawmaker trading amid ‘very tough’ negotiations
Ben Werschkul
Senior Producer and Writer
Sun, May 22, 2022
Earlier this year a ban on lawmaker trades seemed inevitable.
But months have now passed, and in spite of a wide swath of lawmakers across the political spectrum —from Sen. Elizabeth Warren (D-MA) to Sen. Josh Hawley (R-MO) — expressing support, the parties have yet to come together on the details.
Close observers now say the last best hope for action this year is from ongoing talks among about a dozen senators.
Senator Jeff Merkley (D-OR) is one of the leaders of that effort which includes Warren and others. During a detailed conversation with Yahoo Finance this week, he said consensus is building around certain issues, but he doesn't "feel we're anywhere close to being able to say we've got it all wrapped up.”
“Oh boy,” he added with a laugh when pressed on when the clock might run out for action during this election year. He didn't offer an answer but said he is having conversations on the topic every day.
Senator Jeff Merkley, D-OR in April. (BONNIE CASH/POOL/AFP via Getty Images)
This year's last-ditch effort comes amid a stock market selloff that has seen the S&P 500 (^GSPC) flirt with a bear market with other indexes already there. Much of what has galvanized the issue in Washington — and the strong public support for action — was a 2020 scandal that saw two senators sell stocks after a private briefing on the coronavirus in 2020 before the market fell that year.
While Merkley says he's seen no evidence of additional trading during this current sell-off, advocates for a ban often note that even the proximity of a lawmaker trade to market movements can be damaging. There’s corruption and then “there is also the perception of corruption, and that's a problem” Merkley says.
Merkley has now been pushing for a stock trading ban for the better part of a decade alongside Sen. Sherrod Brown (D-OH). They began pretty much immediately after then-President Barack Obama signed the Stop Trading on Congressional Knowledge (STOCK) Act in 2012 which required public disclosure of trades but stopped short of a ban.
‘Family members have to be included’
The Oregon Senator says agreement was forming around some issues.
“I think there's a consensus that family members have to be included,” he said of one of the recent points of contention, specifically whether a lawmaker’s spouses would also be banned from trading stocks.
Craig Holman works as Public Citizen’s Capitol Hill lobbyist says the big issue there “would be what happens with Nancy Pelosi in the House.” The House Speaker has drawn attention to the matter because of her husband's plentiful stock trades, but Holman says “she seems to have come around and is willing to accept some sort of restriction on spouses.”
The Speaker has tasked one of her deputies, House Administration Committee Chair Zoe Lofgren (D-CA), with leading the effort in the House. Pelosi made widely noted remarks last December, which later backed away from, that "we are a free market economy [and lawmakers] should be able to participate in that."
Speaker of the House Nancy Pelosi (D-CA) with her husband Paul on Capitol Hill in 2019. (REUTERS/Joshua Roberts)
Merkley also says there is consensus that any deal will have strong enforcement mechanisms and penalties for lawmakers that violate the rules.
Another point of contention is how widespread any ban would be. Some are pushing for restrictions to also apply to a range of figures around Washington like President Biden, sitting Supreme Court justices, and some Federal Reserve officials.
Merkley suggests that the best path there - in order to gain Republican support and the 60 votes for passage - is “first we need to get our house in order...and if we can work it out for ourselves it will provide a foundation for applying to judiciary, or strengthening the provisions for the executive.”
But he acknowledges it’s still an ongoing discussion. One of the leading proponents for a wider ban, Sen. Kirsten Gillibrand (D-NY) recently told Yahoo Finance “it's important that, if we do this ban, it's across all layers of government.”
‘The thornier issues’
But perhaps the biggest hurdle to any unity bill - and adoption by the wider Congress - is how to deal with lawmakers’ incoming assets. Gillibrand suggests a model would be along the lines of “we would allow people to own what they own, but they would have to put it behind the blind trust.”
But the various sides seem far from agreement on a range of related issues like whether lawmakers would be able to dissolve their assets tax-free if they wanted and how blind trusts would work for people below certain asset levels.
Sens. Jeff Merkley (D-OR) and Elizabeth Warren (D-MA) are two of the leaders in the current effort to ban lawmakers from trading stocks. (Alex Wong/Getty Images)
“I think that's the most contentious issue,” says Holman.
Merkley says negotiators are trying to take the best elements from existing guidance in the House, the Senate, the executive branch, and federal law. But he than noted another set of “what I think are the thornier issues” and have not been widely discussed such as what to do about lawmakers that hold stakes in private companies as well as bond-holders.
‘Doing nothing is the absolute worst option’
Donald Sherman is a Senior Vice President at Citizens for Responsibility and Ethics in Washington (CREW) and he has been pushing lawmakers to be as aggressive as possible. “I'm confident that the Senate is going to introduce some legislation” he said this week but was withheld judgment about whether it would be effective.
“There are a range of options available on the spectrum,” he says, adding “doing nothing is the absolute worst option.”
Others have been less optimistic that any sort of deal is in the offing. Punchbowl News recently quoted senior Democratic aides as saying the the effort was stalled with no current path forward. It was even described as “in ‘Nowhereland.’”
Other have questioned whether Congress can ever regulate itself. "It's not really a mystery to me why it's difficult to pass," Congresswoman Alexandria Ocasio-Cortez (D-NY) told Yahoo Finance in February and Merkley himself added - perhaps more diplomatically - that “when you get into people's finances and into things that affect their family, there are a lot of complexities that have to be ironed out.”
Either way, as Sherman puts it, “this is either going to be something that [lawmakers] are able to run on in November or something that they'll have to run from.”
Ben Werschkul is a writer and producer for Yahoo Finance in Washington, DC.
US sees risk of COVID supply rationing without more funds
Pedestrians wearing protective masks walk along Broadway in the SoHo district of New York, March 4, 2022. The White House is planning for what it calls “dire” contingencies that could include rationing supplies of vaccines and treatments this fall if Congress doesn’t approve more money for fighting COVID-19. Biden administration officials have been warning for weeks that the country has spent nearly all the money approved for COVID-19 response. (AP Photo/John Minchillo)More
ZEKE MILLER
Sat, May 21, 2022,
WASHINGTON (AP) — The White House is planning for “dire” contingencies that could include rationing supplies of vaccines and treatments this fall if Congress doesn’t approve more money for fighting COVID-19.
In public comments and private meetings on Capitol Hill, Dr. Ashish Jha, the White House coronavirus coordinator, has painted a dark picture in which the U.S. could be forced to cede many of the advances made against the coronavirus over the last two years and even the most vulnerable could face supply shortages.
Biden administration officials have been warning for weeks that the country has spent nearly all the money in the $1.9 trillion American Rescue Plan that was dedicated directly to COVID-19 response.
A small pool of money remains, and the administration faces critical decisions about how to spend it. That means tough decisions, like weighing whether to use it to secure the next generation of vaccines to protect the highest risk populations or giving priority to a supply of highly effective therapies that dramatically reduce the risks of severe illness and death.
That decision may be made in the coming week, according to the administration, as the White House faces imminent deadlines to begin placing orders for vaccines and treatments before other nations jump ahead of the U.S. in accessing supply.
Jha has warned that without more money, vaccines will be harder to come by, tests will once again be scarce, and the therapeutics that are helping the country weather the current omicron-driven surge in cases without a commensurate increase in deaths could be sold overseas before Americans can access them.
“I think we would see a lot of unnecessary loss of life if that were to happen,” Jha said this past week. “But we’re looking at all the scenarios and planning for all of them.”
He said the administration was “getting much more into the scenario-planning business to make sure that we know what may be ahead of us so we can plan for it and obviously also lay those out in front of Congress."
Jha, who declined to put a specific projection on potential loss of life, has become the face of the Biden administration’s efforts to persuade Congress to approve an additional $22.5 billion for COVID-19 response.
“The scenarios that we’re planning for are for things like what if Congress gives us no money and we don’t have adequate vaccines,” Jha told the AP in a May 12 interview. “We run out of therapies. We don’t have enough tests. What might things look like? Obviously, that’s a pretty dire situation.”
Already, the domestic production of at-home testing is slowing, with workers beginning to be laid off. In the coming weeks, Jha said, manufacturers will sell off equipment and “get out of this business,” leaving the U.S. once again dependent on overseas suppliers for rapid test.
Drug manufactures and the Food and Drug Administration, meanwhile, are working on evaluating the next generation of vaccines, potentially including ones that are targeted at the dominant omicron strain. But getting them ready before the predicted case surge in the fall means placing orders now, since they take two to three months to produce.
Jha said this week that the U.S. has yet to start negotiations with drugmakers because of the lack of money.
“We’ve had some very preliminary conversations with the manufacturers,” he said. “But the negotiations around it have not yet begun, partly because we’re waiting for resources.” He added: “The truth is that other countries are in conversations with the manufacturers and starting to kind of advance their negotiations.”
The U.S., he said, doesn't have enough money to purchase additional booster vaccines for anyone who wants one. Instead, the supplies of those vaccines may be restricted to just the most vulnerable — not unlike the chaotic early days of the COVID-10 vaccine roll-out.
“Without additional funding from Congress, we will not be able to buy enough vaccines for every American who wants one once these new generation of vaccines come out in the fall and winter,” he said.
And while the U.S. has built up a stockpile of the antiviral pill Paxlovid, which has been widely effective at reducing severe disease and death, it’s running out of money to purchase new doses — or other, even more effective therapies that are in the final stages of development.
“If we don’t get more resources from Congress, what we will find in the fall and winter is we will find a period of time where Americans can look around and see their friends in other countries — in Europe and Canada — with access to these treatments that Americans will not have,” Jha said.
A congressional deal for a slimmed-down COVID-19 response package of about $10 billion fell apart in March over the Biden administration’s plans to lift virus-related restrictions on migration at U.S. borders. But a federal judge on Friday put that plan on hold, just days before it was to take effect on Monday.
There is no guarantee of swift action on Capitol Hill, where lawmakers — particularly Republicans — have grown newly wary of deficit spending. On Thursday, a $40 billion measure to assist restaurants that struggled during the pandemic failed on those grounds. GOP lawmakers have also objected to additional funding for the global pandemic response, and called for any new virus response funding to come from unspent economic relief money in the $1.9 trillion rescue plan.
The administration is preparing to lay the blame on lawmakers if there are tough consequences this fall due to lack of money. Still, it could be perilous for Biden, who has struggled to fulfill his promise to voters to get control of the pandemic.
Mozambique insurgency: Why 24 countries have sent troops
Joseph Hanlon - Mozambique analyst
Sun, May 22, 2022
A Rwandan soldier walks in front of a burned truck near Palma, Cabo Delgado, Mozambique on September 22, 2021
At least 24 countries have sent soldiers to support Mozambique in its fight against insurgents in northern Cabo Delgado province.
The discovery of 7,000 "ghost soldiers" in the ranks of a poorly paid and badly trained army underline why Mozambique needs help.
The Carta de Moçambique daily newspaper discovered many of the salaries of fake soldiers were paid to senior defence officials, and that there are a growing number of children of former officers and politicians who receive salaries without ever having been in military training, let alone setting foot in a military unit.
More than 2,000 well trained Rwandan troops were sufficient to largely take control of the two coastal districts, Palma and Mocimboa da Praia, near giant gas fields. Despite their successes, Mozambique's civil war rumbles on.
The big struggles now are political - about money, the causes of the war, who can fight, and if the gas project can resume.
Cabo Delgado is Mozambique's resource-curse province, with gas, rubies, graphite, gold and other natural resources.
Protests were growing that the profits were all going to an elite in the ruling party, Frelimo, and that few local jobs were being created.
The coastal zone is historically Muslim. Local fundamentalist preachers said Sharia, or Islamic law, would bring equality and a fair sharing of wealth - effectively, a socialist message.
The war started in 2017 when young people in Mocimboa da Praia attacked the local police station and army post, capturing weapons.
Since then, more than 4,000 people have been killed and 800,000 forced from their homes.
The conflict has created a massive humanitarian crisis in northern Mozambique
The first struggle is over the roots of the war. President Filipe Nyusi and Frelimo say it is entirely an external aggression and thus not their fault.
The European Union (EU) and the World Bank want to contribute hundreds of millions of dollars to try to stop the war, partly by creating jobs and resolving the grievances, but Frelimo has for six months refused to put an EU-World Bank proposal to the cabinet.
Civil wars always attract outsiders, and there has been some involvement from Islamic State (IS) and jihadists from other wars, as well as finance from some Middle Eastern states.
Most Mozambican researchers say local issues remain dominant. But both the US and IS want this to be seen not as a local civil war, but as a clash between two global powers.
In March 2021, the US labelled the insurgents as Isis-Mozambique and "global terrorists".
This was widely rejected by those researching the war, and the US refused to release its evidence.
US Secretary of State Antony Blinken on 14 July 2021 stressed that the main US interest in Mozambique was "countering Isis".
And on 4 April 2022 the US named Mozambique as one of five countries under the Global Fragility Act, which would involve substantially increased US involvement in Mozambique.
Meanwhile, apparently pleased with the growing publicity for such a small investment, IS began to call the insurgents IS Mozambique.
The fear is that IS and the US seem to be aiming for a proxy war in Mozambique.
This stirs unhappy memories because in the 1980s, before the end of the Cold War, the US waged a proxy war against the then Soviet Union that killed one million Mozambicans.
So Mozambique is trying to keep the US at arm's length. It has been allowed a small military training mission, but no more.
Entire villages have been destroyed in attacks by insurgents
Two other countries have pushed to send in their soldiers - Portugal and South Africa.
Portugal is the former colonial power which was defeated in the 1965-1975 independence war, and has been trying to regain a military presence ever since.
It has sent its troops through a European Union training mission - most soldiers are Portuguese but 10 other countries, including Greece, Spain, and Italy, have also contributed.
South Africa sees itself as the regional power and Mozambique as its back yard.
It pushed to create a Southern African Development Community (Sadc) military force. Mozambique stalled.
President Nyusi met Rwanda's President Paul Kagame and France's President Emmanuel Macron last year.
Rwanda has a professional army heavily involved in peacekeeping operations, and the lead company in the suspended gas project is French, TotalEnergies.
The first 1,000 Rwandan troops arrived on 9 July 2021 and in three weeks cleared insurgents from key areas.
The Sadc Mission in Mozambique (Samim) had been created earlier in 2021 but Mozambique only allowed the first South African troops to arrive on 19 July, after the Rwandans were already in operation.
Most Samim troops are South African but nine other Sadc states have also contributed personnel. They include Angola, Botswana and Zimbabwe.
Samim has been assigned to less important zones far from the gas, and has not proved effective in fighting the insurgents.
President Nyusi visited Uganda in late April and met President Yoweri Museveni, who had received military training from Frelimo in Cabo Delgado in the 1970s when he was waging a guerrilla war against the then-Ugandan government.
Mr Museveni revealed he was already supporting the Mozambican military and suggested sending a troop contingent.
Thus the Rwanda-Uganda-France axis is helping to keep South Africa, Portugal and the US at bay.
Map
Two other struggles continue. The first is that Frelimo and the military want to keep tight control of the war zone, restricting journalists and aid workers.
The government and military want to control the distribution of aid. Special humanitarian visas must be individually approved by the National Disaster Agency, and are restricted to working for a named agency.
TotalEnergies head Patrick Pouyanné told investors on 28 April that there could be no return to Mozambique until the people had returned to Mocimboa da Praia district and were living in peace with a normal life. He said a simple security zone was not acceptable.
But, so far, Mozambican authorities are not allowing displaced people to return to most of Mocimboa da Praia. They say conditions are not suitable yet, and they fear that many displaced people still support the insurgents.
So there is a stand-off. Will the government allow people to return and allow aid agencies in, or are they hoping that TotalEnergies will eventually accept a security zone without population?
Dr Joseph Hanlon is a visiting senior fellow in international development at the London School of Economics, author of eight books on Mozambique, and editor of Mozambique News Reports and Clippings.
