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All About That Base, No Trouble

All About That Base, No Trouble By Peter Tchir of Academy Securities Last weekend we published Positioning & Key Drivers. Much of the work on interest rates followed up on the previous week’s Rates, Risk & Taylor Swift, but we really wanted to highlight “positioning”, aka “the base”. Positioning has been forming the “base” for market moves in both directions. The market’s response to Fed Chair Powell finally agreeing with us (they have to be much more cautious on rate hikes going forward) exposed the broader positioning in bonds and possibly equities. The rallies were strong, though I’d argue that the equities rally was less about positioning and more about people finally having to accept that the Fed has little interest in driving the economy into the ground. Powell’s message was not contradicted by other Fed speakers and was actually reinforced by them (all good for stocks). There is some furious debate over Friday’s market behavior. What Did Friday’s Price Action Tell Us? Price action early in the week was quite obvious. We saw weak data come in, which was coupled with the Fed pulling back on their tightening narrative (terminal rate is probably still too high). Friday saw stocks and bonds collapse after the Non-Farm Payroll data was released. The strong headline data wasn’t the key driver (though it had some impact). What drove the initial sell-off in stocks and bonds was the high and unexpected jump in average wages. That part is clear. What is less clear is why stocks and bonds reversed course (the 10-year came back from 3.63% to 3.48% and the S&P 500 e-mini futures rebounded from 4,007 back to 4,075 at the 4pm close). There are two competing theories: It’s all about the base. Positioning was so bearish that the market had to rally on news that just a couple of weeks ago would have sent it spiraling down. There is some logic to this, but there is little evidence that the market is so bearishly positioned. We can concede that the market isn’t overly bullish, but this “short covering panic theory” leaves a lot to be desired, at least for me. People questioned the data. For those of you who are sick and tired of reading T-Reports highlighting inconsistencies in the data (big focus on jobs and owners equivalent rent), you may have received many such notes from others this past week. My inbox and social media channels were filled with people questioning the jobs report. There was the now “obvious” discrepancy between the Establishment and the Household Surveys (the Household showed job losses). The data from 2 months ago got revised down (again). There were questions about the birth/death adjustment (was high in a period where other evidence showed that existing small businesses struggled, which isn’t typically a sign that new small businesses were being created rapidly). There were also questions about the historically low response rate (possibly due to timing of the survey and Thanksgiving). Finally, many people started to question if the new and improved ADP data isn’t the better data to watch. Maybe neither explanation is correct? No Trouble? Maybe there are two other big factors influencing markets: The potential for some form of armistice, truce, détente, or something between Russia and Ukraine. While many members of our Geopolitical Intelligence Group see the slog grinding through the winter, there are three things that I think have changed, making some sort of peace more likely. The U.S. election is over. Whether we like it or not, support of Ukraine was an election issue. This support had already started to break down along party lines. Why? I don’t know, but that is certainly my perception. So, with the election over, the ongoing cost of supporting Ukraine with weapons and aid will come to the forefront. The tricky question of “how does this end?” will rise to the top. Can we give Ukraine enough support to push Russia completely out? Possibly, but at what expense and where does that leave Putin and Russia? Energy. It is the winter and energy needs are spiking. The West is set to impose more sanctions and there is something about price caps (which I admit I haven’t read, because they are so unlikely to work and far more likely to backfire). Russia, by all accounts, has done a much better job than the West in securing transport for their fuel (not shocking as we pat ourselves on the back about sanctions while they are busy working around the issues). The logistics of these new sanctions will cause the amount of transportation needed to skyrocket. Quite simply, energy markets used to be somewhat efficient. A delivered to B and C delivered to D because they were closer. If A has to ship to D and B has to ship to C, the distances are longer. Ships would be at sea for longer, reducing the number of shipments. For a lot of reasons, addressing global energy concerns may take precedence over what Ukraine wants (and possibly even deserves). Winter. Winter was already mentioned in the energy discussion, but it plays several other roles. Academy’s GIG expects Russia to try to take advantage of frozen rivers to renew their attack on Ukraine. Russia needs to push west and all the rivers run north/south. At the moment, this forces the Russians to cross over bridges in very specific areas which are easily defended by Ukrainians with their highly capable weapons systems. Frozen rivers could help the Russians, but increasingly the efficiency of Ukrainian soldiers will make any Russian advance more difficult. That has led to targeting more and more infrastructure in Ukraine. Ukrainian winters are bleak at the best of times, let alone without the energy and raw resources needed to survive. The human toll will be bad for Ukraine even if they are technically “winning.” Finally, the forced migration of Ukrainians into Europe is placing unexpected burdens on the countries receiving those refugees. The longer the war and destruction lasts, the less likely people are willing or able to go “home” when it is all said and done. Winter will crystalize many risks. China. China seems to be nudging Putin along. You could almost argue that Xi, when he met with Putin, gave him a “win it, or get out ultimatum.” Let’s not fool ourselves, China would be okay with a Russian victory, but they are tired of the daily headlines. Since Russia hasn’t achieved this victory there could be pressure on Putin (whose health is being questioned again in some circles) to find some “graceful” way out. Putin is a bully, but even bullies recognize bigger bullies and try to appease them. The end of China’s zero-COVID policy. This attracts a lot of attention and seems logical (at least from our perspective). It seems realistic that China will set in motion steps to have fewer and less severe restrictions after the winter (there is that word again). That should be good for global supply chains, but with inventory levels already too high, I’m not sure how much of a bounce can be expected from China shifting their policy. Of all these narratives, I like the “peace” one the best (as you can tell by the time spent on that subject relative to others). If we get another big rally in stocks, it could be linked to developments on this front. Mo Trouble? We’ve examined no trouble, so what could cause more trouble? We covered this in more detail in Doesn’t Goldilocks Get Eaten in the End?, so we will just highlight the key issues. The Fed has already set the dominos in motion. The wealth effect and higher rates are bringing the economy to a screeching halt in some areas that will in turn impact others. The recession is coming sooner and will be deeper than expected (we will ultimately recover, but first we need to get through the recession fears). Quantitative tightening is like a nagging cough. It doesn’t seem too bad, but it certainly isn’t good, and you have to be worried about whether it will develop into something more severe. Without a doubt the Fed is committed to balance sheet reduction (because they now believe what I’ve believed all along – that QE affects asset prices directly and that is a big issue and one they want to resolve). When does bad news become bad? My guess is soon, even after Friday’s reversal (remember, Friday’s NFP data wasn’t really “bad” in any traditional sense, so it’s difficult to garner much information on how the market will respond to truly bad economic news, especially on the jobs front). The Pseudo-Random Wildcard! I like using the term pseudo-random as opposed to random because it sounds “smart,” but is actually appropriate as I’m going to apply it to the trading of daily and weekly expiration options. The prominence of these very short-dated options should not be understated. Report after report comes in showing that volumes in these options are increasing and are a large part of all options trading. This includes not just open interest, but also the back-and-forth trading of these contracts. This literally sets us up for large gamma moves each and every day. Any significant move has a greater likelihood of triggering additional buying or more selling, rather than encouraging profit taking or dip buying. It’s a minefield out there wondering what price point triggers buying from those who sold options, which in turn risks pushing levels to the next option point. It is a massive wildcard in trading these days. But it is not random. There are clearly strategies involved in trading these and just because I don’t understand them (yet) doesn’t mean we should ignore them. I’m reasonably certain of two things about these short expiration options: They mostly amplify already large moves. They allow markets to shift from seemingly being overbought to oversold in record time (and vice versa). In terms of learning more, this is an area that requires more study and better understanding. Bottom Line If it weren’t for my “hopes” that we will see some progress with Russia and Ukraine, I’d be in full anti-Goldilocks mode. Barring any positive news out of this war, I’d like to be in a “risk-off” position. Long/overweight bonds (especially in the 2-to-7-year part of the curve) and short/underweight credit spreads and equities. Since this is what I believe most strongly, it is what I should do. But, if you can’t beat them, join them, so I’d also buy some daily or weekly calls to benefit from any headline risk. Maybe the “everyone is short thesis” is correct, but I’m still not there and don’t believe that last week really supported this theory. The moves were rational given the data (and guesstimating the impact of the short-dated expiration options). On the Fed, I don’t expect them to backtrack, and I am looking for the data to drive the terminal rate lower. It isn’t often that you can be in bearish mode with world peace as the risk against you, so hopefully we get that peace dividend and the daily call options pay off! Tyler Durden Mon, 12/05/2022 - 10:50.....»»

Category: smallbizSource: nytDec 5th, 2022

The collateral damage of America"s tech war with China

The battle for the future of tech is heating up, but government-funded, billion-dollar computer-chip factories come with a cost for local Americans. President Biden has pushed to bring semiconductor manufacturing to the US, but the race to outrun China is costing AmericansSaul Loeb/Pool/Getty Images; Rachel Mendelson/InsiderThe collateral damage of America's battle with China for the future of techThe world runs on computer chips. From the phone in your hand and the fridge in your kitchen to car companies' manufacturing equipment and the military's missile systems, almost every part of today's digitally run society relies on the tiny, intricate devices known as semiconductors.Semiconductors are also incredibly difficult to make — especially the most advanced chips. They require massive, delicate machines, hard-to-find materials, and a staggering amount of technical know-how. Right now, production of these chips is made up of a complex web of companies and facilities around the globe — with a few key choke points. For instance, Taiwan's TSMC controls 90% of the physical production of the highest-end chips.The critical importance of semiconductors and the delicate manufacturing process have combined to turn these chips into the main battleground in a new race between the US and China for the future of technology. If the first Cold War was defined by the development of nuclear weapons, this Tech Cold War is defined by the computer chip."Strategists in Beijing and Washington now realize that all advanced tech — from machine learning to missile systems, from automated vehicles to armed drones — requires cutting-edge chips," Chris Miller, an associate professor of international history at Tufts University, wrote in his recent book, "Chip War."The Tech Cold War between the US and China, along with the recent surge in pandemic-induced chip shortages, has triggered a massive push by the federal government to bring semiconductor manufacturing to the US. But the reality of onshoring chip production has been far less glamorous than the patriotic aspirations of outpacing a geopolitical rival.The rush by states, counties, and cities to get in on the semiconductor gold mine has resurfaced old fights about how best to create jobs and exacerbated local battles over housing, public schools, and business development. While revitalizing parts of the country that are struggling economically is an admirable goal, the frenzied pace of the chip war is resulting in billions of dollars getting funneled to corporations, while locals are left with vague promises and underfunded public institutions. In the scramble to seize the future of technology, governments are ignoring the problems of today — and leaving many of their constituents out to dry. Building the 'Silicon Heartland'America's position as a semiconductor powerhouse has been eroding for decades. According to the Semiconductor Industry Association, a lobbying group, the share of chips made in the US fell from 37% in 1990 to just 12% in 2020. To reverse this decline, governments have been pulling out all the stops to attract chipmakers to bring their new factories to the US. On the federal level, Congress passed the CHIPS Act in August, which provides $280 billion in new funding to accelerate domestic research and manufacturing of semiconductors.This pool of cash, along with a wave of incentives from state and local governments, has already helped push companies to bring projects to the US. Intel, America's leading semiconductor maker, is spending $20 billion to build the world's largest chip factory, in a suburb of Columbus, Ohio, which the company says will employ at least 3,000 people after it's completed in 2025. "We helped to establish the Silicon Valley," Intel CEO Pat Gelsinger told Time when the facility was announced in January 2022. "Now we're going to do the Silicon Heartland." Intel considered 38 other sites across the country before choosing New Albany. In addition to the proximity to plenty of fresh water, which is needed to make computer chips, the suburb is prime for the new middle-class plant workforce. The affluent suburb is home to data centers for Amazon, Google, and Facebook, and the median household income is over $200,000. Early reports say the plant's average salary will be $135,000, with 70% of the jobs consisting of manufacturing technicians, a position that requires at least a two-year STEM degree.The massive Intel plant in Ohio is a key part of the race with China for the future of tech.SAUL LOEB/AFP/Getty ImagesEager to shed the "Rust Belt" label, Ohio lawmakers didn't hesitate to lay out the welcome mat for Intel's plant, the biggest private-sector investment in the state's history. Even before the company's announcement, Ohio's state Legislature passed a fiscal budget in June 2021 with incentives to attract megaprojects. And last-minute additions to the 2022-23 budget conveniently expanded tax credits and property-tax abatements — a reduction or complete omittance of property taxes — for projects that exceed $1 billion in investments. "We are in the game for these projects now," Lt. Gov. Jon Husted of Ohio said in a press conference on the budget. "We have the opportunity with the reshoring that's occurring, and we are going to aggressively fight for these investments and these jobs in the state of Ohio." A week after the announcement of the Intel site, Ohio announced an additional $2 billion incentive package, the largest in the state's history. As a part of the package, the state will spend $700 million on expanding the nearby highway and other infrastructure improvements, $600 million on the plant itself, and an additional $650 million on income-tax incentives.On the local level, New Albany granted Intel the longest property-tax abatement in its history — 30 years with zero property taxes — and annexed its neighboring township to have enough space to fit the 1,000-acre plant wholly within the city. "New Albany is a strategically-planned community, and this project fits within the parameters of our business park, where 19,000 people already work," New Albany's mayor, Sloan Spalding, said in a statement about the plant. In sum, the federal, state, and local subsidies granted to Intel are saving the company billions of dollars.What does the city get in return? But as with any funding decision, the effort to entice Intel comes with some trade-offs. Unlike the federal government, which has a vast ability to fund its initiatives and take on debt, state and local governments are more constrained in where they can put their resources. Giving companies cash or letting them forgo taxes means other initiatives or services miss out on those funds. In theory, the thousands of jobs created by these new businesses are supposed to bring more small businesses and taxpayers to the area — for the Columbus plant, Intel estimates 10,000 jobs in addition to the plant jobs — increasing the tax base and incentivizing growth. But as a 2020 analysis by researchers at the Ohio State University on the benefits of development policies like tax abatements found, instead of growing the base for everyone, these sorts of programs "undermine traditional public institutions, such as schools, who rely heavily on property taxes for their financial needs."Even before the Intel plant, the Columbus area was well acquainted with these sorts of trade-offs. Over the past few years, the city has battled over tax abatements given to developers as an incentive to build housing. In 2021 alone, the city's schools lost out on $51 million because of tax abatements given to developers as part of a push to incentivize new housing developments. The abatements were attempting to address a real problem: Central Ohio's population is projected to grow from 2 million in 2010 to over 3 million by 2050, so the city needs plenty of new homes. But, the Ohio State study found, Columbus' residential tax-abatement programs did little to meaningfully address the housing problem, while draining the city's funds.Federal, state, and local subsidies add up to billions of dollars that Intel is saving on its new Ohio semiconductor factory.SAUL LOEB/AFP/Getty Images"While the abatement programs have helped spur an influx of high wealth households into abatement areas, they degrade the public resources available to the nearly 30,000 children (of which more than half live in households with income under the poverty line) in abatement areas," the report said.The budget shifting — and the deteriorating facilities at many local schools — eventually sparked protests from the teachers union in 2022. "Developers get handouts; kids get sold out," teachers chanted as they marched on developers' headquarters in April. The battle culminated in a three-day 4,500-teacher strike in August, the union's first since 1975, that ended only after the school board agreed to a three-year contract that guaranteed some basic provisions, like air conditioning in all school buildings by 2025.This struggle will get worse since the city has handed out even more property-tax abatements to incentivize the construction of housing to absorb the 3,000 plant workers and 7,000 temporary construction workers needed for the Intel facility. According to the rental platform Zumper, the average rent for a one-bedroom apartment in Columbus has jumped from $600 in 2015 to almost $1,000 in 2023. The development incentives that the city has implemented do require developers who receive tax abatements to set aside a portion of "affordable" units built in designated zones. But the trouble with the policy, called the Community Reinvestment Area Program, is that the city determines "affordable" rent rates based on citywide data, which results in "affordable housing" that costs twice the average rent in lower-income neighborhoods. For example, the median income in Columbus is $57,800, but the median household income in the neighborhood of South Linden is $28,610. A CRA housing development built in Linden would far exceed what the average resident of the neighborhood could afford. There is also a buyout option in the policy where developers can choose to pay a fee to avoid including any "affordable" units. Mitchell Toomey, an organizer with Affordable Housing Columbus, told me that while the CRA policy incentivized housing that might be affordable for a six-figure salary, the middle- and low-income workers who need affordable housing are left with no options. Essentially, the affordable-housing policy, he told me, is "making it easier for people coming in from the Intel plant, who have a medium to high income, to price out all of the local people."Little chips, big waterThanks in part to the CHIPS Act, central Ohio isn't the only region getting in the semiconductor game. Factories are also being built in New York and Texas, and two factories are getting major expansions outside Phoenix. But the chip factories in Phoenix raise an even more serious problem than the battles over housing and tax incentives in Columbus. To make semiconductors, chip factories use millions of gallons of water every day. So it may seem odd that Arizona — famous for its desert and multidecade water crisis — would be the focal point of the burgeoning American chip industry. Advocates for the plants see the trade-off between new jobs and high water usage as a net positive. Intel already employs more than 10,000 people in Arizona and contributed $3.9 billion in GDP to Arizona in 2019. And despite the fact that the plants will be the largest water users in the state, the chipmakers say much of that water can be recycled: Intel's data shows that about 80% of the Arizona plant's water usage in 2020 was later recycled. "Given all the ways that we could allocate our water, semiconductor plants that recycle most of what they use are not a bad investment," Joanna Allhands, an editor, wrote in an op-ed in the Arizona Republic. Sarah Porter, the director of Arizona State University's Kyl Center for Water Policy, told KJZZ that with semiconductor plants, 1 million gallons of water can provide 200 high-paying semiconductor jobs, while a golf course would provide only 50 low-paying jobs.But that cost-benefit analysis does not address the long-term strain that the plants could place on the region's already taxed water resources. Intel's 16,000 acre-feet of water usage in 2020 converts to roughly 14 million gallons a day. Even if 80% of that was recycled, roughly 2.8 million gallons lost each day would still be a significant amount.Critics argue that the excessive water usage and housing issues are far from net positive. Rashad Shabazz, a professor of geography at Arizona State University and the author of "Spatializing Blackness," told me that the cultural desire to become the new Silicon Valley and the political drive to create jobs outweighed concerns over housing, schools, and water. "This is what happens when politicians and developers get together to create public policy," he told me. "Neither one of them has the foresight to see the bigger picture, to understand the impact that this is going to have on the environment, on schools, on infrastructure, on water."The discontents of onshoring Even if the massive investments in bringing chip production home help to grow America's domestic semiconductor industry, the US will still have to rely on other countries to complete the manufacturing process. Assembly and packaging will still be shipped abroad, and the technology being manufactured in these plants will be years behind the advanced chips that Taiwan can produce. In the meantime, companies like Intel and TSMC will enjoy billions of dollars in incentives as part of the chip war.It begs the question whether the onshoring of tech manufacturing can be done sustainably and equitably — without displacing, defunding, or diverting the funds that the most vulnerable and essential workers need. If there's a way to bring back jobs while securing funds for schools and not jeopardizing communities' water supply, it's still up for debate. What is clear is that, as Ashik Siddique, a research analyst for the Institute for Policy Studies, wrote, the bipartisan support for onshoring chip manufacturing "shows that getting an edge over China is apparently our government's most urgent priority."Taylor Dorrell is is a writer and photographer based in Columbus, Ohio.Read the original article on Business Insider.....»»

Category: dealsSource: nytJan 19th, 2023

Rolling back laws that set minimum wages for construction workers meant pay shrunk, jobs got more dangerous, and workers had to rely more on public assistance

Prevailing wage laws set minimum pay standards for government contractors. Getting rid of them doesn't save money, but does hurt workers. Visoot Uthairam/Getty Images A new study looks at the impact of rolling back prevailing wage laws on wages and workers. Prevailing wage laws set pay standards for government contract workers, particularly construction workers. Rolling back the laws led to lower wage growth, and increased worker fatalities. It turns out that getting rid of some minimum wage controls left workers earning less, being less productive, relying more on public assistance, and even facing a higher risk of dying on the job.That's according to a new study from the Illinois Economic Policy Institute (ILEPI) and Project for Middle Class Renewal (PMCR) at the University of Illinois at Urbana-Champaign. Researchers Frank Manzo, Robert Bruno, and Larissa Petrucci examine the impact of repealing prevailing wage laws — laws that essentially set minimum wages for construction workers on government contracts.With the bipartisan infrastructure bill pouring billions of dollars into construction projects across the nation, the findings show that contractors in states that have repealed prevailing wage laws may face problems staffing up. Historically, prevailing wage laws have helped plug labor shortages, and contractors could have trouble competing with higher-paying competitors across the country. Indiana, West Virginia, Kentucky, Arkansas, Wisconsin, and Michigan all repealed their prevailing wage laws between 2015 and 2018. Using data from the US Census Bureau and Department of Labor, the researchers looked at how construction workers fared as those laws were rolled back.Those states saw their wages for construction workers drop. In Indiana, West Virginia, and Kentucky — the three states that fully repealed prevailing wage laws — average construction hourly wages were $23.94 before the laws were rolled back. By 2017, the average hourly wage was $23.77. Meanwhile, states with the laws in place saw wages grow by 12.2% in the same period. "What prevailing wage does, it kind of standardizes and stabilizes the industry of a local market," Petrucci said. "When you repeal that, what you have is contractors who are able to undercut wages and pay workers far below the training that they have developed to get these kinds of jobs. Naturally, you're gonna see wages decrease."Worker productivity grew at a far slower rate than in states with prevailing wage rates in place, as did hours worked.There's also a real human cost to repealing the laws. On-the-job fatality rates went up in the states that fully repealed their laws. In states that kept the laws, fatality rates on the job actually went down.Some of that is due to training, or lack thereof, according to Manzo. "Better trained workers tend to be much safer," he said. "Prevailing wage attracts and develops skilled construction workers by including apprenticeship training contributions in with labor costs."One goal behind revoking the laws, as the researchers note, is to curb spending and save money on government-funded construction projects. With excessive spending currently in the crosshairs of the GOP — who are trying to abolish the income tax and IRS — it's a familiar refrain."In those states, the pro-repeal governors and state legislatures specifically promised that by cutting the middle class wages and benefits of skilled construction workers, repeal would save taxpayer money on public construction projects and grow their state economies," Manzo told Insider. "But these turned out to be empty promises."  The report finds that repealing wage laws actually led to in-state contractors getting a smaller share of construction work, marking an over $1 billion estimated drop in state revenue for 2017 as governments lost out on taxes that would have been collected from those employers and related businesses."That prevailing wage law is also supporting a community that can have a large enough tax base that it can provide the goods and services that it needs to, which attracts businesses, it supports families, it leads to development," Bruno said. At the same time, a greater share of construction workers in states without prevailing wage laws received food stamps — a similar effect to how raising minimum wages can actually save the country money, since workers won't have to rely on social assistance to cover basic living costs.Now, with historic investments in infrastructure across the country, those repeal effects might be acutely felt."Those states that just haven't invested in that workforce, or incentivized their home state contractors to do this work are going to miss an opportunity," Bruno said. "There's going to be a lack of gain and benefit that would come from that."Read the original article on Business Insider.....»»

Category: smallbizSource: nytJan 16th, 2023

The Gas Stove Scare Is A Fraud Created By Climate Change Authoritarians

The Gas Stove Scare Is A Fraud Created By Climate Change Authoritarians Authored by Brandon Smith via Alt-Market.us, In the past I have often tried to take a big picture approach to the issues facing the American public and how there is almost always a deeper connection between a variety of political and economic events. And, what has become increasingly clear to me is that in order to understand government actions and geopolitics, you must always ask yourself “Who benefits?” The bottom line is this – At the heart of nearly every conflict and every crisis the same group of power mongers usually benefits, and they have taken a keen interest in the climate change narrative in particular. But like I said, this is the big picture. Right now I’d like to take a look at a relatively small issue and how the little dominoes lead up to a bigger con game and a bigger disaster. Let’s talk about gas stoves… Frankly, I don’t care about what my stove uses to cook with as long as it works. That said, around 38% of US households use natural gas for cooking and heating. That’s a significant percentage of people that rely on gas based energy for their daily needs. Here’s the problem, though – Natural gas is not politically correct these days. Nearly all carbon emitting energy sources have been marked by climate activists and western governments as a threat that needs to be erased between 2030 to 2050. Globalist institutions and climate change grifters have put natural gas on the naughty list, but there are a couple of realities that must be addressed. First, as noted, a vast portion of the western world including the US and Europe rely on natural gas for numerous energy applications. Ban natural gas and civilization faces an immediate plunge in economic activity, as well as much higher prices on all remaining energy sources due to increasing demand. There is NO green energy solution that can fill the same roll as gas. All you have to do is look at Europe and the UK today and see how they are struggling with vastly higher costs due to sanctions on Russian gas exports. It’s a mess, and they are lucky that the winter has so far been rather mild, because the moment things freeze, they are in trouble. There are not enough alternative energy resources available to fulfill Europe’s shortages if the temperatures plummet. But what does this have to do with banning gas stoves in the US? Isn’t that a health issue rather than an environmental issue? No, it’s not a health issue, it’s a climate agenda issue being rebranded as a health issue. There has been a coordinated government and media blitz on the gas stove narrative this week, with an avalanche of claims that natural gas causes everything from asthma in children to a slowdown in cognitive development. What is the evidence for these claims? The Biden Administration and the agency weighing a potential ban, the Consumer Product Safety Commission (CPSC), have not given specific sources yet. The assertions are most likely rooted in a single study published in December by the International Journal of Environmental Research and Public Health in December. The group is privately funded and this particular study on gas stoves was led by RMI, a non-profit research entity that advocates for aggressive green policies and works to “transform global energy systems across the real economy.” The two lead authors, Talor Gruenwald and Brady Seals, are RMI researchers who have contributed to the group’s “carbon-free buildings” initiative. In other words, the study is written by people with a built in bias, and since science these days is now being linked to activism, no single study funded by a private ideological group can be trusted. RMI is not only part of the climate cult, they also promote “equity” theory and general woke politics. These concepts and real science cannot coexist. The American Gas Association made this exact point in a responding statement, noting that the study’s testing did not include real life appliance usage, and: “Ignored [previous] literature, including one study of data collected from more than 500,000 children in 47 countries that ‘detected no evidence’ of an association between the use of gas as a cooking fuel and either asthma symptoms or asthma diagnosis.” The push for a gas stove ban is not about health, it’s about control. It is an attempt to falsely link carbon emissions and energy products to negative health concerns as a way to trick the public into supporting decarbonization out of fear. But why revert to such a strategy? Is the climate cult really that desperate? Yes, yes they are. You see, the truth about climate change is beginning to spread to the masses, and the debunking of anti-carbon propaganda is picking up momentum. Here are the facts: The average global temperature is not climbing to dangerous levels. The Earth’s temps have increased according to the NOAA by less than 1°C in the past century. There is no evidence that this kind of temperature increase represents a threat to the environment or human health. In fact, the Earth’s temps have been much higher than they are today multiple times in the Earth’s history long before man-made carbon emissions were a thing. The official temperature record used by climate scientists only goes back to the 1880s – That is a TINY sliver of time in comparison to the epic lifespan of the Earth’s atmosphere. And what about all those arguments that there are more dangerous weather patterns emerging due to global warming? That’s a lie. There is no significant difference between storm patterns today compared to 100 years ago. And let’s not forget that global warming propaganda has been going on a long time now. Back when I was a kid in the 1980s, they used to tell us in school that large parts of continents would be under water by the year 2000. This obviously never happened and likely never will. Many of us who grew up in that era are still waiting around for the icecaps to melt. The climate change agenda is about giving governments and globalist institutions the power to bottleneck energy usage, tax carbon emissions and thus control almost every aspect of our daily lives. Without the free flow of carbon based energy almost all industry will collapse. Green energy is inefficient and cannot fill the void left behind by gas, petroleum and coal. All that would be left is a minimal manufacturing base, minimal food production and a shrinking human population. Those that survive would be slaves to carbon restrictions; it would be a living nightmare. There are very rich and powerful people out there that greatly benefit from such a scenario. The globalists have been scheming to use environmentalism as an excuse for centralization since at least 1972, when the Club Of Rome, a think-tank attached to the UN, published a treatise titled ‘The Limits To Growth’. Twenty years later they would publish a book titled ‘The First Global Revolution.’ In that document they specifically recommend using global warming as a vehicle: “In searching for a common enemy against whom we can unite, we came up with the idea that pollution, the threat of global warming, water shortages, famine and the like, would fit the bill. In their totality and their interactions these phenomena do constitute a common threat which must be confronted by everyone together. But in designating these dangers as the enemy, we fall into the trap, which we have already warned readers about, namely mistaking symptoms for causes. All these dangers are caused by human intervention in natural processes, and it is only through changed attitudes and behaviour that they can be overcome. The real enemy then is humanity itself.” The statement comes from Chapter 5 – The Vacuum, which covers their desire for global government. The quote is relatively clear; a common enemy must be conjured in order to trick humanity into uniting under a single banner – The globalist banner. And the elites see environmental catastrophe, caused by mankind itself, as the best possible motivator. How does this agenda start? It starts with gas stoves. It starts with something we might see as small, and then it grows from there. Pretty soon, they will be banning natural gas for heating. They will ban wood stoves. They will artificially induce gas price inflation. Then they will implement carbon taxation on manufacturers which will in turn cause prices to rise for consumers. Then there will be carbon taxes for the average individual. They will use whatever means at their disposal to make it impossible to use “fossil fuels.” Again, it’s not about health, it’s about control. It’s always about control. The gas stove issue is a fraud; one domino in a long chain that leads to carbon totalitarianism. *  *  * If you would like to support the work that Alt-Market does while also receiving content on advanced tactics for defeating the globalist agenda, subscribe to our exclusive newsletter The Wild Bunch Dispatch.  Learn more about it HERE. Tyler Durden Sun, 01/15/2023 - 15:30.....»»

Category: blogSource: zerohedgeJan 15th, 2023

Twitter alternatives like Mastadon see downloads plunge

Emerging rivals include Mastadon, Hive Social, Counter Social, Post.News, Spoutible, and Jack Dorsey's upcoming Bluesky. Elon Musk and a Twitter logo are seen in this illustration photo in Warsaw, Poland on 30 November, 2022.STR/NurPhoto via Getty Images Elon Musk's chaotic reign at Twitter proved a huge boost to smaller rivals. Usage of several Twitter alternatives has surged in recent months. With tricky user interfaces, security issues, and uneven beta launches, success could be fleeting. Never before have there been so many possible alternatives to Twitter, even if none seem to be anywhere close to a real replacement for the platform.Long before Elon Musk came along, Twitter users bemoaned the service yet remained addicted to it. A potent mix of news, opinion, comedy, cringe and unpredictable drama has kept it a fixture for a decade-plus. And it is easy to use, the hallmark of American-born social media companies. Whatever the benefits of a decentralized network like Mastodon, easy to use it is not."There is a usability hurdle," said David Carr, senior insights manager at SimilarWeb, who has been tracking Mastodon's trajectory. "You have to choose a server and really, people don't like to make decisions. It's more like, 'Just tell me what to do.'"Still, Mastodon and other new potential Twitter rivals have grown, particularly since Musk officially took control of Twitter at the end of October, data gathered by Insider shows. Daily usage of Mastodon, Hive Social, and Counter Social are all up dramatically over the last two months. Meanwhile, at least half a dozen other Twitter-like platforms have recently been launched in beta or are set to be early next year, including Post.News, Spoutible, Mozilla.Social and Bluesky, founded by none other than Twitter co-founder and former CEO Jack Dorsey.If ever there was a time for a text-based platform to threaten the hold Twitter has over its user base, it's now. Investors are looking to back new social media companies, as not only Twitter, but Instagram and Facebook, have lost some of their edge. These emerging services probably won't be acquired, with antitrust authorities limiting Big Tech M&A, so they have a chance to grow on their own.Most importantly, people seem ready and willing to try something new. With refinement and good features, any of these platforms could feasibly be the next Twitter. Or they could fizzle out, and instead be the next Clubhouse. There are already signs of trouble for several of these new offerings: Downloads have plunged recently, suggesting interest may already be waning. See below for a complete look at some of the new platforms so far available for use and their performance since Musk took over Twitter.MastodonMastodon's emphasis on decentralization only appeals to the most tech-savvy.Jonathan Raa/NurPhoto via Getty ImagesMastodon was founded in 2016 in Germany by Eugen Rochko, so the only truly new part of the platform is the attention it's getting as a Twitter alternative. It is a text-based social platform, or "microblogging" site, home to independent servers, or "instances." New users have to find a server to join and be admitted to, along with a few other steps before being able to post and use the platform. In early November, the hashtag TwitterMigration was trending on Mastodon for several days as Twitter users set up accounts amid Musk's chaotic takeover. After the billionaire enacted his first round of Mass layoffs, former Twitter employees even set up their own server on Mastodon, Macaw.Social.For just the month of November, Mastodon's web traffic jumped 1,000% year-over-year on just 200 of its more popular servers, according to SimilarWeb data. The platform has about 1,000 servers set up, but some host only one user. Downloads of its iOS app are up more than 4,000% since Oct. 24, with daily active users up 6,000% to more than 1 million, according to Apptopia data. However, downloads have started to drop off over the last month, falling by 52%. Daily users have held steady though, at 1.4 million, a major increase from its usage prior to Musk's takeover of Twitter, which typically hovered around 20,000 daily users.   Hive SocialHive SocialHive was first launched in 2019 by Raluca Pop, now 24 years old. Unlike Mastodon, Hive is a centralized platform and its user interface is more straightforward and similar to the set-up process of Twitter or Instagram, in that all it takes to get an account and start posting is some basic information. The app is easiest to describe as a cross between Twitter and Instagram, with a focus on images and text and similar features like re-posting, comments and likes, with the addition of easy to add music and color themes.Like Mastodon, the service has seen huge growth since Musk took over Twitter. Downloads of the iOS app have grown 290,000% to 1.5 million since Oct. 24, with daily users up 660,000% to 321,000, according to Apptopia data. A major user security issue revealed at the end of November is at least partly to blame for Hive's 88% drop in downloads over the last month. Yet, it has maintained more than 500,000 daily users.Counter SocialA look at a homepage of Counter Social, a new Twitter alternativeCounter SocialCounter Social launched in 2020, started by the pseudonymous self-identified "hacktivist" The Jester. The platform is not trying to be all things to all people – it blocks entire countries from access, like Russia, China and Iran. It has a more unique interface that defaults to a dashboard showing a few columns of posts similar in look to TweetDeck. It refreshes constantly, offering a more kinetic feel than other social platforms, and there is a $4.99 per month upgrade available that unlocks a number of features, including live streams of network news, emergency radio traffic, and ephemeral file sharing and voice calls and various additional privacy features. The platform has received less public and media attention than Mastodon or Hive, but that doesn't mean it hasn't also grown in the wake of Musk's Twitter takeover. It's reached 110,000 downloads of its iOS app, an increase of 4,500% since the end of October, with daily users up 2,500% to about 18,000, according to Apptopia. Monthly usage is still up by 44%, although, like Mastodon and Hive, downloads have dropped off in the last month, falling by 83%. Post.News (beta)Post launched only in November, earlier than planned because as founder and former Waze CEO Noam Bardin wanted to capitalize on the moment created by Musk of people actively looking for alternatives to Twitter. It may have worked. Still in Beta, Post now has more than 300,000 active users and more than 600,000 people on a waitlist to join, according to Bardin. It has also received an undisclosed amount of funding from VC fund Andreessen Horowitz and Scott Galloway, the NYU professor and media personality. Bluesky (expected to launch in 2023)Born in 2019 as a research project at Twitter still under Jack Dorsey, Bluesky is now being built wholly independent of the platform he founded. Dorsey has shared little detail about Bluesky, beyond it being designed as a decentralized social network protocol. In October, not long before Musk took control of Twitter, Bluesky began to allow signups for a waitlist, saying its beta will "launch soon."   Spoutible (expected to launch in 2023)Spoutible comes out of Bot Sentinel, a tool created by Christopher Bouzy, that identifies, tracks and flags Twitter bots or accounts that are engaging in targeted or coordinated online attacks and disinformation campaigns. Announced at the start of December, Spoutible is being described as a new social platform that will allow users to "spout off" while avoiding harassment and other such issues. A beta version of the platform is expected in late January.Mozilla.Social (expected to launch in 2023)The latest Twitter alternative to be announced comes from Mozilla, the organization that runs the Firefox browser. Mozilla said just this week it is planning to launch its own publicly accessible instance in the "Fediverse." A portmanteau of federation and universe, the Fediverse is essentially a group of independent but interconnected servers that interact and offer their own software packages. Mastodon is also part of the Fediverse, for example. "An open, decentralized, and global social service that puts the needs of people first is not only possible, but it's absolutely necessary," Mozilla said. Mozilla.Social is expected in early 2023.Do you work for a social media company or are you someone else with insight to share? Contact Kali Hays at khays@insider.com, on secure messaging app Signal at 949-280-0267, or through Twitter DM at @hayskali. Reach out using a non-work device.Read the original article on Business Insider.....»»

Category: topSource: businessinsiderJan 9th, 2023

Rickards: On The Cusp Of A Global Liquidity Crisis

Rickards: On The Cusp Of A Global Liquidity Crisis Authored by James Rickards via DailyReckoning.com, Is there a financial calamity worse than a severe recession in early 2023? Unfortunately, the answer is “yes” and it’s coming quickly. That greater calamity is a global liquidity crisis. Before considering the dynamics of a global liquidity crisis, it’s critical to distinguish between a liquidity crisis and a recession. A recession is part of the business cycle. It’s characterized by higher unemployment, declining GDP growth, inventory liquidation, business failures, reduced discretionary spending by consumers, reduced business investment, higher savings rates (for those still employed), larger loan losses, and declining asset prices in stocks and real estate. The length and depth of a recession can vary widely. And although recessions have certain common characteristics, they also have diverse causes. Sometimes the Federal Reserve blunders in monetary policy and holds interest rates too high for too long (that seems to be happening now). Sometimes an external supply shock occurs which causes a recessionary reaction. This happened after the Arab Oil Embargo of 1973, which caused a severe recession from November 1973 to March 1975. Recessions can also arise when asset bubbles pop such as the stock market crash in 1929 or the bursting of a real estate bubble caused by the Savings & Loan crisis in 1990. Whatever the cause, the course of a recession is somewhat standard. Eventually asset prices bottom, those with cash go shopping for bargains in stocks, inventory liquidations end, and consumers resume some discretionary spending. These tentative steps eventually lead to a recovery and new expansion often with help from fiscal policy. Global financial crises are entirely different. They emerge suddenly and unexpectedly to most market participants, although there are always warning signs for those who know where to look. They usually become known to the public and regulators through the failure of a major institution, which could be a bank, hedge fund, money market fund or commodity trader. While the initial failure makes headlines, the greater danger lies ahead in the form of contagion. Capital markets are densely connected. Banks lend to hedge funds. Hedge funds speculate in markets for stocks, bonds, currencies and commodities both directly and in derivative form. Money market funds buy government debt. Banks guarantee some instruments held by those funds. Primary dealers (big banks) underwrite government debt issues but finance those activities in repo markets where the purchased securities are pledged for more cash to buy more securities in long chains of rehypothecated collateral. You get the point. The linkages go on and on. The Federal Reserve has printed $6 trillion as part of its monetary base (M0). But the total notional value of the derivatives of all banks in the world is estimated at $1 quadrillion. For those unfamiliar, $1 quadrillion = $1,000 trillion. This means the total value of derivatives is 167 times all of the money printed by the Fed. And the Fed money supply is itself leveraged on a small sliver of only $60 billion of capital. So, the Fed’s balance sheet is leveraged 100-to-1, and the derivatives market is leveraged 167-to-1 to the Fed money supply, which means the derivatives market is leveraged 16,700-to-1 in terms of Fed capital. Nervous yet? Experts say, so what? These numbers are not new and have been even more stretched at certain times in the past. Simply because the financial system is highly leveraged and densely connected does not mean it’s ready to collapse. That’s true. Still, it does mean the system could collapse catastrophically and unexpectedly at any time. All it takes to collapse the system is a shock failure leading quickly to panic. Margin calls are issued on losing position and immediate payment is demanded. Overnight repos are not rolled over. Overnight deposits are not renewed, and repayment is required. Everyone wants his money back at once. Assets are dumped to meet repayment obligations, which causes collapses in stock and bond markets, which causes even more losses and liquidations among banks and traders. Suddenly all eyes are on the Fed for easy money and on Congress for bailouts, guarantees and more spending. We’ve seen this pattern in 1994 (Mexico Tequila Crisis), 1998 (RussiaLTCM crisis), and 2008 (Lehman Brothers-AIG crisis). Note that two of those three most recent financial crises were not accompanied by a recession. There was no recession in 1994 and none in 1998. Only the 2008 global financial crisis happened to coincide with a severe recession. The point is that recessions and financial crises are both bad, but they are different and do not always come together. When they do, as in 2008, stocks can easily decline 50% or more. We may be looking at such a situation today. This brings us to the key question: If financial markets are almost always highly leveraged but financial crises occur once every eight years on average, what signs can investors look for that indicate a crisis is coming and conditions are not just business as usual for financial markets? One of the most powerful warning signs is an inverted yield curve. This signal was last seen in 2007 just ahead of the 2008 financial crisis. A normal yield curve slopes upward from left to right reflecting higher interest rates at longer maturities. That makes sense. If I lend you money for ten years, I want a higher interest rate than if I lend it for two years to compensate me for added risks from the longer maturity such as inflation, policy changes, default, and more. When a yield curve is inverted, that means that longer maturities have lower interest rates. That happens, but it’s rare. It means that market participants are expecting economic adversity in the form of recession or liquidity risk. They want to lock in long-term yields even if they’re lower than short-term yields because they expect yields will be even lower in the future. In a nutshell, investors see trouble ahead. Other ominous signs include sharp declines in the dollar-denominated reserve positions in U.S. Treasury securities of China, Japan, India and other major economies. Naïve observers take this as a sign that those countries are trying to “dump dollars” and dislike the role of the dollar as the leading global reserve currency. In reality, the opposite is true. They’re desperately short of dollars and are selling Treasuries as a way to get cash to prop up their own banking systems. These are some of the many signs pointing to a global liquidity crisis. As we’ve learned in the past, these liquidity crises seem to emerge overnight, but that’s not true. They actually take a year or more to develop until they hit a critical stage at which point, they burst into the headlines. The 1998 Russia-LTCM crisis started in June 1997 in Thailand. The 2008 Lehman Brothers crisis started in the spring of 2007 with reported mortgage losses by HSBC. The warning signs are always there in advance. Most observers either don’t know what the signs are or are simply not looking. Well, I am looking and what I see is a rare convergence of a severe recession and a liquidity crisis at the same time as happened in 2008. It’s coming. Tyler Durden Wed, 01/04/2023 - 14:21.....»»

Category: blogSource: zerohedgeJan 4th, 2023

The 10 most bizarre weapons of World War II

From exploding rats to paper balloon bombs, see the most bizarre weapons ever used in battle during World War 2. The Panjandrum, a rocket-propelled explosive cart, was one of the more curious weapons to have come out of World War II.British Government/Wikimedia Commons World War II led to many successful innovations in technology — including weapons. Some however were considered major flops. From explosive rats to a 155-foot-long gun, here are some of the most bizarre weapons from WWII. Unfortunately, war can drive innovation. During World War II, the world's major powers set their sights on advancing technology, medicine, and communications in order to be efficient and fearsome in battle. Some of the advancements made in WWII were fundamental to modern technology — others, not so much.Here is a look at some of the most bizarre, useless, and downright insane weapons developed on both sides during WWII.1. A ship-mounted aerial mine rocket launcherCrewman on HMS King George V with 7-inch UP Unrotated Projectile antiaircraft projectiles.Royal Navy via Wikimedia CommonsThe unrotated-projectile rocket launcher was an especially ill-conceived antiaircraft measure. Created to protect ships from enemy planes, the unrotated projectile was fired from a ship, and, upon reaching 1,000 feet in elevation, it would explode and disperse mines attached to parachutes via 400 feet of cable. The general idea was to create an aerial minefield wherein enemy planes would become ensnared in the mess of cables, pulling the mines into their fuselages and downing the plane. However, the mines, cables, and parachutes were all easily visible and enemy pilots had no trouble flying above or below the "aerial minefield".Here's what the weapon looked like when launched:The unrotated projectile firing and parachuting downward.Youtube / This Is GeniusThe undetonated mines would then be at the mercy of the wind, and they would often float back down toward the British ships that fired them."There are no records of UPs bringing down any aircraft. It's entirely possible that this system injured or killed more Britons than enemies due to accidents, fires, etc," according to a page dedicated to one of the battle cruisers that carried the weapon. 2. PanjandrumThe Panjandrum, a rocket-propelled explosive cart, was one of the more curious weapons to have come out of World War II.British Government/Wikimedia CommonsTo find a way to breach the German's concrete defenses in Normandy, the British military devised a large carriage-like contraption called the Panjandrum — a name from a nonsense term coined by an 18th-century British playwright, according to Merriam-Webster.The device was propelled by rockets attached along the rim of the two wheels. In the middle, a drum would be filled with explosives. According to Wired, the hope was that the Panjandrum could speed toward a concrete wall and blow a hole big enough for a tank to pass through.But during testing, the device repeatedly lost control and veered off its intended path. In one testing incident, generals had to flee for cover and a cameraman was nearly moved down, according to "Pigeon Guided Missiles: And 49 Other Ideas that Never Took Off," a book co-authored by James Moore and Paul Nero.Nikita Karatsupa, the Soviet Union's most celebrated border guard, and his dog, Ingus, in 1936.не указаны via Wikimedia Commons3. Suicide bomb dogsIn 1942, Hitler's Nazi infantry invaded Soviet Russia with German "Panzer" tanks.The Russians, who had used military dogs since 1924, sought to turn their canine soldiers into antitank mines by strapping explosives around the dogs' bodies.During training, the dogs were starved and let loose on stationary Soviet tanks that had food hidden under them.Once the dogs were underneath the tank they were trained to pull a detonator cord with their teeth. However, most dogs were unable to comprehend or execute the task while the sights, sounds, and smells of battle raged around them. The dogs would usually turn around and run toward their Russian handler, only to be shot and killed on sight.4. Explosive ratsAn explosive dummy rat that was sold at a Bonhams auction.Courtesy BonhamsDogs were not the only unfortunate animal victims of experimental war weapons.The Special Operations Executive branch of the British military also used dead rats that were filled with small explosives, according to Military History. The plan was to infest the German's coal supply with the rats, which would then detonate once they were unknowingly shoveled into a broiler at a military base or of a steam engine.The rats were not used as expected because the Germans discovered the device, but, according to The Guardian, they did cause some disruption. Records from the Special Operations Executive branch showed that the German's discovery of the device prompted a massive search operation for more explosive rats, The Guardian reported.5. The largest gun ever used in battleScreen grabEager to invade France, Nazi leader Adolf Hitler demanded a new weapon that could easily pierce the concrete fortifications of the French Maginot Line — the only major physical barrier standing between him and the rest of Western Europe.In 1941, the year after France fell, German steelmaker and arms manufacturer Friedrich Krupp A.G. began constructing Hitler's Gustav gun, according to the documentary "Top Secret Weapons."The four-story, 155-foot-long gun, which weighed 1,350 tons, shot 10,000-pound shells from its mammoth 98-foot barrel. The gun's size was not only its source of strength but also its downfall.The huge gun could only be transported via the rail system and was an easy target for Allied bombers flying overhead. The project was scrapped within a year.6. Dummy paratroopersThe back of the decoy dummy, "Rupert."Courtesy Air Force Museum of New ZealandAs part of the Normandy landings in June 1944, the UK's Royal Air Force and Britain's Special Air Service carried out a deception operation to mislead the Germans away from the actual drop zones of Allied troops.To do so, about 400 stuffed burlap mannequins were released outside the drop zones in Normandy and north of France, according to the Air Force Museum of New Zealand.These figures, codenamed "Rupert," were under half a meter tall, contained small explosives to destroy the dummy, and were attached with a noisemaker that mimicked the sound of a firing rile, according to the museum.Actual British soldiers who were dropped with the dummies were told to allow some German troops to escape so that they could report the sightings of a massive drop of paratroopers.The operation, codenamed "Titanic," appeared to be a success as German records revealed that troops were directed to the area of the dummy drop, according to the New Zealand museum.The US also had its own version of a dummy paratrooper, which can be seen in this declassified video: 7. V-3 cannonThe extremely long German V-3 cannon.Bundesarchiv, Bild via Wikimedia CommonsThe V-3 was the unnecessary younger sibling of the V-1 and V-2 rockets that pulverized London during the Blitzkrieg. Devised in the summer of 1944, the V-3 was designed to fire 300 nine-foot-long dart-shaped shells every hour. A series of secondary charges positioned along the 416-foot barrel was meant to speed up the projectile, which would hypothetically be able to reach London from well over 100 miles away in the French town of Mimoyecques. But when the V-3 finally became operational, the velocity of the shell was a mere 3,280 feet per second, which was estimated to be about half what was needed to reach London.Hitler had authorized the production of 50 of these weapons, but before the original plans for the V-3 could be implemented, Allied forces bombed and destroyed the gun, despite Germany's best efforts to hide the munitions under haystacks.youtubeIn the end, only two miniature (if you can call 150-feet long miniature) versions of the gun became operational, with only a few shots ever fired to an unknown effect.8. The Krummlauf curved barrel To solve the conundrum of shooting a rifle while taking cover, the Germans created a curved barrel attachment that would allow soldiers to shoot their weapons around corners.The device was called Krummlauf and gave a soldier the ability to shoot a weapon from within a tank, according to the Imperial War Museums.But the attachment turned out to be highly impractical. The bullets often shattered in half before exiting the barrel and the attachment itself became distorted from the immense pressure after a few hundred rounds.9. A mini "tank-like" remote-controlled demolition vehicleWikipediaThe Nazis' Goliath tracked mine was anything but Goliath-like in stature. Known as the "Doodlebug" by American troops, the Goliath was run with a joystick operated by a controller. It had coiled within its compartments 2,145 feet of cable leading back to the controller. The mini-tank was powered by two electric motors, later replaced by gas burners, and able to carry more than 100 pounds of high explosives.The Goliath was meant to slide under Allied tanks and deliver its explosive payload to their vulnerable undersides. However, it proved to be susceptible to cord-cutting, and later on, radio-controlled models were introduced. The Germans built 7,500 Goliaths during the war, which suggests that they met with some success. However, the real success of the Goliath was that it paved the way for radio-controlled weapons, which in our modern age are becoming the new mode of warfare.10. The "Fugo" balloon bombA Japanese balloon flying over North America.Toronto Star Archives/Toronto Star via Getty ImagesIn November 1944, Japan released thousands of paper balloon bombs made out of the bark of the mulberry tree.The balloons were "33 feet in diameter and could lift approximately 1,000 pounds," according to J. David Rodgers, a Missouri University of Science and Technology professor."But the deadly portion of their cargo was a 33-lb anti-personnel fragmentation bomb, attached to a 64-foot long fuse that was intended to burn for 82 minutes before detonating," he wrote.The bombs were released into the Pacific jet stream, which would silently carry the large devices from Japan to the US without a pilot. The trip would take several days, NPR reported.Despite releasing thousands of these devices, the balloon bomb turned out to be ineffective, not to mention resource intensive. It took 30 minutes to an hour to prepare one balloon and required about 30 men to do so, according to the Atomic Heritage Foundation.During the war, there were only six reported casualties from the balloons, Rodgers wrote — a minister's wife and five Sunday school students on a fishing trip who encountered one of the balloons near Bly, Oregon. Only a few hundred balloon bombs have been found.Amanda Macias contributed to this report.Read the original article on Business Insider.....»»

Category: topSource: businessinsiderJan 1st, 2023

5 of the biggest surprises of Putin"s devastating war in Ukraine

Putin expected a quick victory in Kyiv when his forces invaded, but top Western officials have since blasted Russia's war efforts as a "failure." Ukrainian soldiers fire in the recently retaken Kupiansk in the Kharkiv region, Ukraine, Friday, Sept. 23, 2022.AP Photo/Kostiantyn Liberov When Russian forces invaded Ukraine in late February, Putin and other observers expected the country to crumble fast. Over 10 months later Ukraine still stands, and its forces has even liberated occupied lands. Throughout this conflict, there have been surprises on both sides. Here are 5 of the biggest twists. Russian President Vladimir Putin expected victory to come quickly and without trouble when his forces invaded Ukraine. When the Russian leader delivered his televised war declaration on February 24, sending his troops forward to carry out a large-scale invasion, he anticipated that Kyiv would fall in a matter of days — a grave assessment echoed by US and Western intelligence, as well as many think tank experts and analysts.More than 10 months later, the city of nearly 3 million people remains in Ukrainian hands. The country's forces have managed to not only weather Moscow's invasion on multiple fronts, but have even pushed Russian troops back in some areas, liberating thousands of square miles of territory that had fallen to Russian troops early in the war.   US officials have declared Putin's war efforts in Ukraine a "failure." That said, there is still no end in sight for the sight for this devastating conflict that has caused hundreds of thousands of casualties and left Ukrainian cities in ruins. The poor performance of the Russian military has surprised Putin and other observers, but it's only one of several unexpected twists in the past 10 months of war. Here are some other unforeseen moments. The way Russia invaded and the failures that came with itUkrainian soldiers at a checkpoint in Kyiv, Ukraine, on February 25, 2022.Anastasia Vlasova/Getty ImagesThe earliest — and perhaps biggest — surprise was the way that Russia carried out its invasion of Ukraine. Seeming to overestimate the strength of his armed forces and underestimate the will of Ukraine to resist, Putin — and some Western intelligence — expected Kyiv would not be able to hold out more than a few days. Miscalculations by Russian leadership coupled with the poor communication of objectives to officers and troops tasked with fighting the war, however, let to an array of Russian mistakes and blunders during the early days of the war, like units finding themselves isolated or struggling with substantial logistical problems.Russian forces were expected to move in large groups consisting of soldiers, armor, and artillery, conducting combined arms warfare with air support and other assets, but that didn't happen."We would have thought that they would have done a much more deliberate, well-thought-through operation. That is not what they did," Jeffrey Edmonds, a Russia expert at the Center for Naval Analyses and former CIA military analyst, told Insider, explaining that Russia didn't lead with a massive air campaign and its soldiers were basically just told to drive to Kyiv."That's not the way we at all thought that they would invade," he said. Ukraine's ability to not only stop the Russians but drive them backUkrainian artillery unit fires with a 2S7-Pion, a self-propelled gun, at a position near a frontline in Kharkiv region on August 26, 2022, amid the Russian invasion of Ukraine.Photo by IHOR THACHEV/AFP via Getty ImagesHeading into the war, Russia greatly underestimated the will of the Ukrainian people to defend their homeland and the strength and combat capability of the country's military. "Another surprise was the level of capability of the Ukrainians to defend against the invasion, despite Russian screw ups," Edmonds said. "And that's continued throughout."Ukraine managed to not only protect Kyiv against the advancing Russian troops, but it even managed to force their retreat from the capital region after just a few weeks. Beyond that, Ukrainian troops have since managed to liberate thousands of square miles of territory from Russian occupation during various counteroffensives along the war's northeastern and southern fronts.One significant achievement was the recent liberation of Kherson. This southern city was the first major city captured by Putin's forces and the only regional capital Russian troops had managed to seize. It was a big early war win for Russia, but it was unable to hold it.The weapons Ukraine had to fight the war and the way they were used on the battlefield have made a tremendous difference.Edmonds said the effectiveness of US-provided High Mobility Artillery Rocket System (HIMARS), and Ukraine's ability to integrate these weapons into its arsenal, were unexpected. These rocket launchers were much-sought-after by Ukraine, and quickly became celebrated among the country's armed forces and its top officials for the damage they could deliver to Russian forces.  The Kharkiv counteroffensive that hit in the northeast as everyone was looking southUkrainian troops fire an M777 howitzer in the Kharkiv Region on July 28, 2022.Vyacheslav Madiyevskyy/Ukrinform/Future Publishing via Getty ImagesAfter months of fighting in a grinding and slow-moving conflict in Ukraine's eastern Donbas region, Kyiv's forces launched two major counteroffensives along the war's northeastern and southern fronts.Only the southern offensive to retake Kherson had been expected, as Ukraine had been telegraphing that one for months. As Russian troops moved to defend along the southern front, Ukrainian forces suddenly hit hard from unexpected direction.Ukraine's northeastern counteroffensive, which was focused in the Kharkiv region, began in late summer and featured a blitz-style push on Russian positions. The advance quickly turned into a rout that forced Russian troops to abandon massive amounts of weaponry and saw Ukraine liberate huge chunks of land.  Edmonds said the Kharkiv counteroffensive was a "big surprise" to everyone, including the Ukrainians, especially considering the "extent and speed" of Ukraine's advances. Ukraine has "shown a remarkable ability to take advantages of opportunities that present themselves on the battlefield, and the current counteroffensive in Kharkiv is no exception to that," Pentagon Press Secretary Air Force Brig. Gen. Pat Ryder said in mid-September. Explosive attacks behind Russian lines that stirred instability and fear at rear positionsIn this image taken from video provided by the Russian Defense Ministry Press Service, a Tu-95 strategic bomber of the Russian air force prepares to take off from an air base in Engels near the Volga River in Russia, Monday, Jan. 24, 2022.Russian Defense Ministry Press Service via APAnother unexpected aspect of the war in Ukraine has been the number of attacks far behind the line in Russian-controlled territory. There have been attacks in occupied areas like the Crimean peninsula but also in Russia.Earlier this month, a handful of Russian bases — two of them located hundreds of miles from the Ukraine border — were rocked by explosions. The attacks were reportedly the result of drones launched from Ukrainian territory, though Kyiv denied involvement. The Russian defense ministry blamed the attacks on Soviet-era drones. Although there was some speculation on the type, it is unclear. That Russian bases could be targeted so deep within the country raised eyebrows, as it pointed to a major force protection failure and a longer reach than expected for Ukraine."I don't think anybody foresaw them having UAV capability that could reach into Russia and attack strategic air bases," Edmonds said.And those strikes were not isolated instances. A few weeks prior, Ukraine appeared to attack Russia's naval forces at southern Crimea's Sevastopol using unmanned surface vehicles (USVs) and UAVs.  Although the use of drones throughout this conflict has not been a surprise, Edmonds said that "some of the ways in which they've been used, and the success of the operations with them, have been somewhat surprising."The extent of Western support for UkrainePresident Joe Biden gives a press conference after the NATO summit in Brussels, on June 14, 2021.Olivier Hoslet/Getty ImagesImmediately after Russia's February 24 invasion, Western countries wasted no time in banding together to condemn Putin for launching the attack — a response that the Russian leader did not anticipate, at least not at the level seen throughout the war.Ten months into this conflict, countries from NATO and the European Union have since stayed relatively unified in their support for Ukraine, providing military and humanitarian aid while also slapping round after round of sanctions on Russia. Putin's miscalculations on the strength of a united Western response, meanwhile, have opened the door to NATO expansion, something he has historically been strongly against. The war has even led some countries — like Germany and Switzerland — to reverse various military, foreign, and financial policies. "I think both the US response and the European solidarity on [the war] were surprising to everybody." Edmonds said. "I just think there's this upwelling feeling of like, this just isn't acceptable."For now, the war continues with no clear immediate off ramp. Despite significant setbacks for Russia in this conflict, Moscow has signaled that it intends to continue its fight. Putin himself has said this will be a long process, and Ukraine is bracing for the possibility of new Russian offensives in the new year.Read the original article on Business Insider.....»»

Category: worldSource: nytJan 1st, 2023

Science says parents of successful kids have these 26 things in common

There isn't a set recipe for raising successful kids, but psychology research points to a handful of factors that could help. Research suggests that parents who manage stress well and maintain a positive mood impact their child's mood in a positive way.MoMo Productions/Getty Images Every parent wants their children to grow up and do amazing things with their lives. While there are several factors that affect a child's development, some of it comes down to parenting.  These factors and techniques are a great starting point for every parent. Parents want their kids to stay out of trouble, do well in school, and go on to do awesome things as adults.And while there isn't a set recipe for raising successful children, psychologists have pointed to several factors that predict success. While it takes a range of practices and techniques to raise a child well-equipped for adulthood, some themes run throughout these tips: spending time with your child, letting your child make decisions, and maintaining a happy family.Here's what parents of successful kids have in common, according to research.They tend to let their children take the lead in easy or moderately difficult tasks Too much parental direction can frustrate a child or lead them to lose focus on a task, according to a 2021 study led by Stanford University professor Jelena Obradović. The research looked at children who were cleaning, playing, or discussing a problem. Children with parents who stepped in to provide instructions frequently displayed more difficulty regulating their emotions later, the researchers wrote. The study suggests parents should take a step back in letting their children figure out how to play, clean, or solve a problem. "Too much direct engagement can come at a cost to kids' abilities to control their own attention, behavior and emotions. When parents let kids take the lead in their interactions, children practice self-regulation skills and build independence," Obradović wrote in the study. They tend to make their kids do chores."If kids aren't doing the dishes, it means someone else is doing that for them," Julie Lythcott-Haims, former dean of freshmen at Stanford University and author of "How to Raise an Adult" said during a TED Talks Live event. "And so they're absolved of not only the work, but of learning that work has to be done and that each one of us must contribute for the betterment of the whole," she said. Lythcott-Haims believes kids raised on chores go on to become employees who collaborate well with their coworkers, are more empathetic because they know firsthand what struggling looks like, and are able to take on tasks independently.  She bases this on the Harvard Grant Study, the longest longitudinal study ever conducted."By making them do chores — taking out the garbage, doing their own laundry — they realize I have to do the work of life in order to be part of life," she told Insider.They tend to teach their kids social skills.Researchers from Pennsylvania State University and Duke University tracked more than 700 children from across the US between kindergarten and age 25 and found a significant correlation between their social skills as kindergartners and their success as adults two decades later.The 20-year study showed that socially competent children who could cooperate with their peers without prompting, be helpful to others, understand their feelings, and resolve problems on their own, were far more likely to earn a college degree and have a full-time job by age 25 than those with limited social skills.Those with limited social skills also had a higher chance of getting arrested, binge drinking, and applying for public housing."This study shows that helping children develop social and emotional skills is one of the most important things we can do to prepare them for a healthy future," said Kristin Schubert, program director at the Robert Wood Johnson Foundation, which funded the research, in a release.They tend to have high expectations.Using data from a national survey of 6,600 children born in 2001, University of California at Los Angeles professor Neal Halfon and his colleagues discovered that the expectations parents hold for their kids have a huge effect on attainment. "Parents who saw college in their child's future seemed to manage their child toward that goal irrespective of their income and other assets," he said in a statement.The finding came out in standardized tests: 57% of the kids who did the worst were expected to attend college by their parents, while 96% of the kids who did the best were expected to go to college.This falls in line with another psych finding: The Pygmalion effect, which states "that what one person expects of another can come to serve as a self-fulfilling prophecy." In the case of kids, they live up to their parents' expectations.They tend to have healthy relationships with each other.Children in high-conflict families, whether intact or divorced, tend to fare worse than children of parents that get along, according to a University of Illinois study review.Robert Hughes Jr., professor and head of the Department of Human and Community Development in the College of ACES at the University of Illinois and study review author, also notes that some studies have found children in nonconflictual single-parent families fare better than children in conflictual two-parent families.The conflict between parents prior to divorce also affects children negatively, while post-divorce conflict has a strong influence on children's adjustment, Hughes says.One study found that, after divorce, when a father without custody has frequent contact with his kids and there is minimal conflict, children fare better. But when there is conflict, frequent visits from the father are related to poorer adjustment of children.Yet another study found that 20-somethings who experienced divorce of their parents as children still report pain and distress over their parent's divorce 10 years later. Young people who reported high conflict between their parents were far more likely to have feelings of loss and regret.They've usually attained higher educational levels.A 2014 study lead by University of Michigan psychologist Sandra Tang found that mothers who finished high school or college were more likely to raise kids that did the same. Pulling from a group of over 14,000 children who entered kindergarten in 1998 to 2007, the study found that children born to teen moms (18 years old or younger) were less likely to finish high school or go to college than their counterparts. Aspiration is at least partially responsible. In a 2009 longitudinal study of 856 people in semirural New York, Bowling Green State University psychologist Eric Dubow found that "parents' educational level when the child was 8 years old significantly predicted educational and occupational success for the child 40 years later."They tend to teach their kids math early on.A 2007 meta-analysis of 35,000 preschoolers across the US, Canada, and England found that developing math skills early can turn into a huge advantage."The paramount importance of early math skills — of beginning school with a knowledge of numbers, number order, and other rudimentary math concepts — is one of the puzzles coming out of the study," coauthor and Northwestern University researcher Greg Duncan said in a press release. "Mastery of early math skills predicts not only future math achievement, it also predicts future reading achievement."They tend to develop a relationship with their kids.A 2014 study of 243 people born into poverty found that children who received "sensitive caregiving" in their first three years not only did better in academic tests in childhood, but had healthier relationships and greater academic attainment in their 30s. As reported on PsyBlog, parents who are sensitive caregivers "respond to their child's signals promptly and appropriately" and "provide a secure base" for children to explore the world."This suggests that investments in early parent-child relationships may result in long-term returns that accumulate across individuals' lives," coauthor and University of Minnesota psychologist Lee Raby said in an interview.They're often less stressed.According to recent research cited by Brigid Schulte at The Washington Post, the number of hours that moms spend with kids between ages three and 11 does little to predict the child's behavior, well-being, or achievement. What's more, the "intensive mothering" or "helicopter parenting" approach can backfire. "Mothers' stress, especially when mothers are stressed because of the juggling with work and trying to find time with kids, that may actually be affecting their kids poorly," study coauthor and Bowling Green State University sociologist Kei Nomaguchi told The Post.Emotional contagion — or the psychological phenomenon where people "catch" feelings from one another like they would a cold — helps explain why. Research shows that if your friend is happy, that brightness will infect you; if she's sad, that gloominess will transfer as well. So if a parent is exhausted or frustrated, that emotional state could transfer to the kids. They tend to value effort over avoiding failure.Where kids think success comes from also predicts their attainment. Over decades, Stanford University psychologist Carol Dweck has discovered that children (and adults) think about success in one of two ways. Over at the always-fantastic Brain Pickings, Maria Popova says they go a little something like this: A "fixed mindset" assumes that our character, intelligence, and creative ability are static givens that we can't change in any meaningful way, and success is the affirmation of that inherent intelligence, an assessment of how those givens measure up against an equally fixed standard; striving for success and avoiding failure at all costs become a way of maintaining the sense of being smart or skilled.A "growth mindset," on the other hand, thrives on challenge and sees failure not as evidence of un-intelligence but as a heartening springboard for growth and for stretching our existing abilities. At the core is a distinction in the way you assume your will affects your ability, and it has a powerful effect on kids. If kids are told that they aced a test because of their innate intelligence, that creates a "fixed" mindset. If they succeeded because of effort, that teaches a "growth" mindset.The moms tend to work.According to research out of Harvard Business School, there are significant benefits for children growing up with mothers who work outside the home.The study found daughters of working mothers went to school longer, were more likely to have a job in a supervisory role, and earned more money — 23% more compared to their peers who were raised by stay-at-home mothers.The sons of working mothers also tended to pitch in more on household chores and childcare, the study found — they spent seven-and-a-half more hours a week on childcare and 25 more minutes on housework."Role modeling is a way of signaling what's appropriate in terms of how you behave, what you do, the activities you engage in, and what you believe," the study's lead author, Harvard Business School professor Kathleen L. McGinn, told Business Insider."There are very few things, that we know of, that have such a clear effect on gender inequality as being raised by a working mother," she told Working Knowledge.They tend to have a higher socioeconomic status.Tragically, one-fifth of American children grow up in poverty, a situation that severely limits their potential.It's getting more extreme. According to Stanford University researcher Sean Reardon, the achievement gap between high- and low-income families "is roughly 30% to 40% larger among children born in 2001 than among those born 25 years earlier." As "Drive" author Dan Pink noted, the higher the income for the parents, the higher the SAT scores for the kids. "Absent comprehensive and expensive interventions, socioeconomic status is what drives much of educational attainment and performance," he wrote.They are more often "authoritative" than "authoritarian" or "permissive."First published in the 1960s, research by University of California at Berkeley developmental psychologist Diana Baumride found there are basically three kinds of parenting styles: Permissive: The parent tries to be nonpunitive and accepting of the child.Authoritarian: The parent tries to shape and control the child based on a set standard of conduct.Authoritative: The parent tries to direct the child rationally.The ideal is the authoritative. The kid grows up with a respect for authority, but doesn't feel strangled by it. They tend to teach "grit."In 2013, University of Pennsylvania psychologist Angela Duckworth won a MacArthur "genius" grant for her uncovering of a powerful, success-driving personality trait called grit. Defined as a "tendency to sustain interest in and effort toward very long-term goals," her research has correlated grit with educational attainment, grade-point average in Ivy League undergrads, retention in West Point cadets, and rank in the US National Spelling Bee. It's about teaching kids to imagine — and commit — to a future they want to create. They tend to apply behavioral control, not psychological control.According to a longitudinal study from University College London, parents' psychological control of their children plays a significant role in their life satisfaction and mental well-being.As Jeff Haden explains for Mic:People who perceived their parents as less psychologically controlling and more caring as they were growing up were likely to be happier and more satisfied as adults.On the flip side, the people whose parents applied greater psychological control as they were growing up exhibited significantly lower mental well-being throughout their adult lives; in fact, the effect was judged to be similar to the recent death of a close friend or relative.Not allowing children to make their own decisions, invading their privacy, fostering dependence, and guilting children into doing what they want are all examples of how a parent might apply psychological control.Whereas psychological control is about trying to control a child's emotional state or beliefs, Haden points out that behavioral control is different in that it's about setting limits on behavior that could be harmful. Examples of behavioral control include setting curfews, assigning chores, and expecting homework to be completed.They tend to understand the importance of good nutrition and eating habits.Successful people recognize that good eating habits can help you focus and be productive throughout the day.As Business Insider previously reported, Dr. Catherine Steiner-Adair, a family and children's clinical psychologist and author of books like "The Big Disconnect: Protecting Childhood and Family Relationships in the Digital Age," told Slate that developing food habits in kids that are both mentally and physically healthy requires involvement from parents.To help their kids develop a sense of body acceptance and a body-positive self-image, she said parents need to role model good attitudes about their own and others' bodies, healthy eating habits of their own, and a positive attitude about food.They tend to give their kids bias-proof names.A host of research shows just how much your name can affect your lifetime success, from your hireability to your spending habits.Career-wise, people with names that are common and easy to pronounce, for example, have been found to have more success.When they do face conflict, they tend to fight fair in front of their kids.When kids witness mild to moderate conflict that involves support, compromise, and positive emotions at home, they learn better social skills, self-esteem, and emotional security, which can help parent-child relations and how well they do in school, E. Mark Cummings, a developmental psychologist at Notre Dame University, told Developmental Science."When kids witness a fight and see the parents resolving it, they're actually happier than they were before they saw it," he said. "It reassures kids that parents can work things through."Cummings said kids pick up on when a parent is giving in to avoid a fight or refusing to communicate, and their own emotional response is not positive."Our studies have shown that the long-term effects of parental withdrawal are actually more disturbing to kids' adjustment than open conflict," he said. He explains the children in this instance can perceive that something is wrong, which leads to stress, but they don't understand what or why, which means it's harder for them to adjust.Chronic stress from repeated exposure to destructive conflict can result in kids that are worried, anxious, hopeless, angry, aggressive, behaviorally-challenged, sickly, tired, and struggling academically.They tend to let their children fail.One of the newest trends in raising children is "snowplow parenting," or micro-managing a child's life so that they never encounter failure. One of the most damaging aspects of snowplow parenting is that it continues well into adulthood. According to a poll by The New York Times and Morning Consult, three-quarters of parents of adults aged 18 to 28 book their children's doctor's appointments and haircuts for them.Julie Lythcott-Haims, author of "How to Raise an Adult: Break Free of the Overparenting Trap and Prepare Your Kid for Success," told the Times that snowplow parenting is the exact opposite of good parenting."The point is to prepare the kid for the road, instead of preparing the road for the kid," she said.They usually don't let their kids watch too much TV.According to a 2011 study from Ohio State University, children who watch television at a young age tend to have suppressed communication skills, and that TV reduces the amount of parent-child communication.The study found that reading was far more conducive to parent-child communication. "TV co‐viewing produces a relatively detrimental communication environment for young children, while shared book reading encourages effective mother–child exchanges," the authors wrote..They tend to let their kids make decisions.According to mental health counselor Laura JJ Dessauer, not letting your child make decisions can turn them into codependent adults.Making every decision for a child, including the clothes they wear, exactly when they do their homework, and who they can play with, can eliminate their desire to make decisions, Dessauer writes in Psychology Today. "As they grow older they are likely to seek out relationships in which someone else has all the power and control," Dessauer said.What should controlling parents do to fix their problem? "If you LISTEN, without offering advice, your child will likely figure out some things they can do differently," Dessauer said.They tend to teach their kids self-control.If your child has a good sense of self-control, they're more likely to be healthy, wealthy, and safe.According to a 32-year study published in the Proceedings of the National Academy of Sciences, parents who made sure their children controlled their impulses were found to raise more stable kids. Those children went on to be healthy, have more money, not engage in criminal behavior, and not have substance abuse problems."In another cohort of 500 sibling-pairs, the sibling with lower self-control had poorer outcomes, despite shared family background," the authors said.They tend to pay attention to their children.According to a 2014 study out of the University of Delaware, people born into poverty were more likely to be successful if their parents gave them "sensitive caregiving" — in other words, if parents paid attention and listened to their children.The children did better on academic tests, had healthier relationships as adults, and were more likely to pursue higher education.The parents tend to take parental leave. The early months of childhood are a crucial time for parents to bond with their children, and that bonding time can have long-term effects.A study of European leave policies by the University of North Carolina found that taking parental leave can substantially reduce infant mortality rates and better a child's overall health.Mothers who take maternity leave are doing their children a huge favor, according to a recent study from The Institute for the Study of Labor (IZA) in Bonn.Those children go on to have higher IQs, be more educated, and make more money than children of moms who didn't take maternity leave. The data showed that this is especially true for children from lower-educated households.They tend to read to their children.Besides making for some nice bonding time, reading to your child has long-term positive effects. Numerous studies show that reading to your child everyday boosts literary and language skills, as well as cognitive development. For example, children who are read to more frequently at age around age four achieve higher scores on reading and writing tests at age eight. This is regardless of socio-economic status, research shows. Paging through books with your kid also likely builds an appetite for reading, which will come in handy down the line in school and beyond. They're optimisticKaren Young, a psychologist based in Australia, told Insider, "By its very nature, optimism is about being able to look ahead positively to the longer term, even when things feel messy right now." Young believes that children are more likely to learn from what parents do than what they say. "By holding the longer-term goals more positively and surely, they will be more able to persevere through challenges, and be more open to learning from their mistakes," she said.  Young is the creator of "Hey Sigmund" — a website and Instagram account with over 20,000 followers— through which she produces content about anxiety, parenting, and mental health amongst children and adolescents. Ivan De Luce contributed to an earlier version of this post. This article was originally published in 2019.Read the original article on Business Insider.....»»

Category: topSource: businessinsiderDec 30th, 2022

Transcript: Charlie Ellis

   The transcript from this week’s, MiB: Charlie Ellis on Vanguard’s Rules of Investing is below. You can stream and download our full conversation, including any podcast extras, on iTunes, Spotify, Stitcher, Google, YouTube, and Bloomberg. All of our earlier podcasts on your favorite pod hosts can be found here. ~~~ ANNOUNCER: This is Masters… Read More The post Transcript: Charlie Ellis appeared first on The Big Picture.    The transcript from this week’s, MiB: Charlie Ellis on Vanguard’s Rules of Investing is below. You can stream and download our full conversation, including any podcast extras, on iTunes, Spotify, Stitcher, Google, YouTube, and Bloomberg. All of our earlier podcasts on your favorite pod hosts can be found here. ~~~ ANNOUNCER: This is Masters in Business with Barry Ritholtz on Bloomberg Radio. BARRY RITHOLTZ, HOST, MASTERS IN BUSINESS: This week on the podcast, what can I say? Charlie Ellis is a legend in the world of finance, whether it was at Greenwich Associates, or as chair of the Yale endowment, or a board member at Vanguard. He has seen pretty much everything in the world of investing. His career spans the entire modern era dating back to, you know, the Paul Volcker era, and what took place during the boom periods of the ‘80s and ‘90s, and how technology has changed the world of investing. He’s just one of these people who is so thoughtful and insightful about everything. It’s just always a pleasure to chat with him. I found our discussion to be absolutely fascinating, and I think you will also. With no further ado, my conversation with Greenwich Associates’ Charlie Ellis. The last time we spoke, we really were talking about the retirement crisis, and we spent a little bit of time discussing Vanguard. But this new book is so interesting and so filled with details that only an insider can have. Let’s delve into it a little bit. Tell us what first led you to Vanguard. How did you get involved with them? CHARLIE ELLIS, FOUNDER AND FORMER MANAGING PARTNER, GREENWICH ASSOCIATES: Well, it started a long time ago, 1966, I was working with a securities firm in New York, and Wellington was a client in Philadelphia. And I would go down to Philadelphia and meet with John Neff, Jack Bogle and the others, and I got convinced that these were very bright and interesting people doing interesting things. But old Wellington was not really a great and interesting place. It was a balanced portfolio. The assets were going down year by year by year. As people said, you know, it’s just out of date, I’m going to get a performance fund. I’m going to beat the market. These guys will never get out of the slow that they’re in. But still, there was something special about Jack and John. So — RITHOLTZ: The irony of that is in 1966, hey, we were about to start, you know, a long period of equity underperformance. You would have guessed, had you known that a balanced fund, the stock and bond portfolio was going to do a lot better than just the pure stock funds over the next 16 years. ELLIS: That’s the way the world works. Just when you least expect it, something goes in a different direction. I’ve really liked the guys. When Jack said he was going to be leaving after the merger made in heaven, with the Boston group, Jack, you really are stretching it. This is a very unlikely proposition. You’ve got less than 30 people working with you. You’re in charge of the back office activities. That’s an activity you never ever personally enjoyed at all. You always assigned that to somebody else. And he would say to me, don’t worry about it. Jim Reid (ph), he’s going to take responsibility for that. RITHOLTZ: Right. ELLIS: I don’t have to do it. You’re not allowed to do anything in investment management, and then allow it to do anything in sales. The mutual fund business is all about sales and investing. What are you going to do? And the answer was, I’m going to hang in there and find a way to make this thing work. RITHOLTZ: And the fascinating story is the argument that he concocted around indexing, first, it’s not investment management because, hey, we’re not making any decisions. We’re just buying all the stocks in the index. And second, there’s no sales. People are going to come to us. So therefore, this is outside of the deal he cut with the folks at Wellington. ELLIS: Right. And it was just barely enough over a period of several months to convince his board of directors it’s okay to do that. RITHOLTZ: And he just kind of skated through. They barely approved it. ELLIS: Very close run. But Jack was a very argumentative, persuasive, always had the facts supporting whatever case like a really good litigating lawyer. He was always able to make his own case very, very, very well. RITHOLTZ: So let’s talk about that initial fund. The plan was to do an IPO to raise $200 million in new client assets for the funds. How much did they end up actually raising? ELLIS: This is the first index fund. RITHOLTZ: The first index fund? ELLIS: It’s a very interesting story. Going to raise a pretty serious amount of money, it was very hard to get Wall Street to agree to do the underwriting. And then it was really hard to get salespeople in the various cities to say, yeah, I’m going to pitch this to my clients for a very good reason. Everybody knew in those days, the purpose of investment management is to beat the market. Everybody understood that was the game. So you’re looking for a manager who’s going to beat the market. Everybody talked that way. And here’s a guy coming along, saying, hey, I got a really good idea for you. I’m not going to beat the market. Jack would have argued, well, wait a minute. 75% of the active funds are underperforming what they said they were going to do. If I meet the market, match it, I’m going to beat most of them. I’ll be in the top quartile as a consequence. Yeah, yeah, yeah. But Jack, you’re going to charge a sales load of 8% on this index fund, so people’s first day are 8% behind the market, how are they ever going to catch up with the market? Don’t let that bother you. We’ll find a way to make it work out. But that was a killer, and people would look at him and say, straight faced, I’m not going to go to my clients and say, go into this investment opportunity, you’re guaranteed to be behind the market for the rest of the time that you hold on to it. RITHOLTZ: Now, some of the data that Jack had showed that the active managers, all of whom were high fee, not even counting the fees after a period of time, the vast majority, some 95%, lag the market. And then once you work the fees and after 10 or 15 years, they’re way behind the market. Why did it take so long for that concept to be recognized by investors? ELLIS: We’re all governed by our beliefs, and beliefs are much more powerful than data. And as we’ve seen in politics, as we’ll see in all kinds of other subject areas, what people believed is what drives them to their behavior and decisions. Don’t bother me with the facts, is a reality of human beings. So if you’re fact-based, you got to be prepared for people to say, you’re crazy, that doesn’t make any sense. I know what’s right. RITHOLTZ: And when you look back to the 1970s and ‘80s, you know, we’ve taken for granted how much data is available today, how easy it is for us to access historical returns for various indices versus inflation, versus dividends, versus everything. That technology and that information wasn’t all that readily available 40, 50 years ago. ELLIS: What do you mean it wasn’t readily available? It wasn’t available, period. I mean, we go back a little bit of personal history. I was privileged to have the responsibility for representing Greenwich Associates consulting with Wall Street firms. The smartest people on Wall Street in terms of picking up an understanding, this is really good information, I can really put it to work. John Whitehead at Goldman Sachs, who was unbelievably demanding and rigorous as a client, but I loved working for him because he always took everything very, very seriously. And there’s one other person, Mike Bloomberg at Salomon Brothers, and Mike took the information and convert it into decisions on a regular basis. That put him in a very strong position competitively, but it also proved to him the value of having good hard information. And you can’t deny, anybody can have good hard information and not use it. He was really good at using it. And that’s characteristic of why he’s been so extraordinary and as successful as years and years and years later. RITHOLTZ: So all of this is really fascinating. What made you 19 books and decide to say, hey, you know, it’s time to tell the inside story of Vanguard, what led you to saying now’s the time? ELLIS: I was a director of Vanguard. I had worked with Vanguard as a strategy consultant before being a director. And I was deeply convinced that this was for almost any American investor, the right way to do your investing. And that it was low cost, yup; high value, yup; reliably delivered in a systematic way. And that looking at it as a director, it seemed to me very, very clear that Vanguard was way underestimated by almost everybody. The clients of Vanguard underestimated how good a deal they were really getting. People who weren’t clients of Vanguard were crazy not to know what the facts were. They can make their own decision, but they should know at least what the facts are. Here’s a better way of being able to get good investment, guidance and information. And as a director, I said, you know, I think we really are making a big mistake not to make it clear to our own people how good a deal they’re getting. Yeah, yeah, yeah. But, you know, everything about Vanguard as an organization is modesty, and particularly with Jack Brennan, who was very much, Mr. Modesty, and it just didn’t take off. And then after I left the board, Jack and I were both advisors to a very, very large investment fund, and so it gave me an opportunity to make the pitch to him one more time. And he said, you know, I think you’re right. I think this would be good for investors. I said, but Jack, it’s going to be good for Vanguard too. He said, yeah, but it’s really good for investors. So let’s go ahead. RITHOLTZ: So I like the concept of Vanguard’s culture as unique in the world of finance, low cost, high integrity. And tell us a little bit about the Vanguard culture. ELLIS: Well, it starts with one very simple proposition, nobody is making a profit. Every other investment organization got a problem that somebody is taking money out of the pot every day, every month, every year as a profit. That’s the American way. It’s a good incentive. Yeah, yeah, yeah. But here’s a group who’s highly motivated, they’re doing all kinds of leadership things, and nobody is taking a profit. Everybody who’s an investor in Vanguard is an owner of Vanguard. The only owners of Vanguard are the investors in Vanguard. So it’s a nice tight little situation where you eat your own cooking and you’re doing what’s really right because it’s what’s really right for everybody. RITHOLTZ: Really interesting. So given how the world has changed over the past few decades, have you noticed any changes in the culture at Vanguard over that period? ELLIS: Honestly, no. It’s astonishing. It’s still Boy Scouts and Girl Scouts gathered together every day to do — as they like to say, to do the right thing. And that’s the only metric by which they make a judgement. What’s the right thing to do for our investor clients? Because it’s their shop and we’re here to do the right thing for them. RITHOLTZ: So when we look around at the world of low cost indexes, they’re all pretty much the same. They’re cheap. They tend to hold almost identical portfolios. What makes the Vanguard version of this so different? How does Vanguard brand itself in what is essentially a commodity product? ELLIS: It’s really fascinating, essentially, a commodity product. If you have a client, they will understand and appreciate. They get good service, not fabulous service, but good service at low cost, on a very unreliable basis. And there’s a group of people who are working full time to protect them from anything dumb or getting conned. Not bad. RITHOLTZ: So let’s talk about the enigma that is Jack Bogle. He spent the first 25 years of his career on the active side of the street. It seems like it’s almost a coincidence that Vanguard was even launched. Tell us about that. ELLIS: A lot of different ways you’d commit to answer your question. First, Jack engineered what was supposed to be the great merger made in heaven, combining old fashioned Wellington with all of the integrity that it might have had in days gone by, heavy sales load, heavy on sales activities, not so good on investing, combined with a hot ticket group in Boston. And it looked like that would be a winning proposition for everybody. Only problem, culture, personality, way of thinking, way of doing business. Jack always wanted to have complete control of everything. The guy said the Thorndike, Doran, Paine & Lewis Partnership, which is now the core of modern Wellington, believed deeply in a consensus development as friends talking things out, figuring out together what’s the best thing to do, take a long term point of view. The two cultures did not mix. And Jack insisted on his culture being dominant because that was key to his personality. And that made it worse, not better. And then he insisted more on having it his way, and that made it even worse. And so, finally, they got to the point of saying you have to go. RITHOLTZ: And essentially, they deposed him. They tossed out the king, eventually winning a vote at a board level where he was removed from Wellington, the investment firm. But Jack had a clever backdoor way around it. He was still a participant and part of the board, where there were numerous independent directors. And the way the mutual fund industry is set up, the administration of the funds and the management of the investments are two different creatures. So he was able to stay with the admin side. Tell us a little bit about that. ELLIS: You’ve said such a nice job of summarizing it, there’s almost nothing to say other than you got it exactly right. RITHOLTZ: Oh, I got a couple of chapters just on that. ELLIS: Jack Bogle understood that the directors had certain kinds of power that could not be taken away. And they were because of the SEC and the whole concept of regulation of mutual fund industry, representatives of the investors in the mutual funds. That was a very strong base. And so, legally, the directors were responsible for figuring out what to do about investing, then the directors were responsible for figuring out what to do about sales. That’s legally. That’s not the way it actually worked. The way it actually worked is the directors did exactly what they were told by the management company, because otherwise they wouldn’t get the very nice fees that they were getting and they wouldn’t have the privilege of coming to the meetings, and so on and so on. RITHOLTZ: All the directors were buddies of the folks running the investment. ELLIS: Why else would you choose one? RITHOLTZ: Right. ELLIS: Obedient directors, friends of the firm, all this sort of stuff, it’s really not a nice part of the history. It’s very different today. But 25, 30 years ago, it was a different world. So Jack had worked out that the directors would have responsibility for making the final decision on things that were important enough so that they had some real gravitas and some real strength. And he had a very close relationship with several of the directors. And several of the directors had a high regard for Jack as a man of integrity, and so they were very strong in support for him. Guys like Chuck Root for an example. He was the head of TF&C, the actuarial firm, and a really distinguished talent in the Philadelphia business community. And basically thought that Jack was good guy with strong intentions, and maybe too strong a personality sometimes, but a good guy for the long run, and was clear going to support him. And Jack had similar relationships with people who give him support, just enough so that he could get the vote on his side for things that had to do with administration. Interesting phenomenon. One of the guys said he was most focused on getting to be sure that he would get the right support, management consultant named Warden who was doing some terrific work for European companies, trying to understand American business after the Second World War, and built up a very nice franchise. He died and if he hadn’t died, the vote might have — RITHOLTZ: The night before the vote. ELLIS: If it hadn’t happened that way, vote might have gone the other way, so that close. Jack won by marginal vote, the right to be able to do the administration. What a win. You think about Pyrrhic victories, what a win. Let me just be sure I understand this. I’m Jack Bogle. The one thing I don’t care about at all, have no interest in whatsoever is fund administration. RITHOLTZ: Right. ELLIS: That’s my sole business. And I’m going to have less than 30 people working with me. And the crowd of funds that I’m managing are basically going downhill because redemptions are larger than new sales. That’s not much to start with, but — RITHOLTZ: Not at all. ELLIS: — you’ve got to understand at the start, there’s a magic missing ingredient. Jack’s ability to be ferociously angry and beautifully articulate for any case he ever wanted to make was a major competitive factor. And then a couple of things were lucky breaks, money market funds came out and you could charge 1% on a money market fund, which is a lot to charge for something. This is plain vanilla on some money market fund. But a money market fund was sure to be a winner compared to the bank CDs that were limited by regulation to 5% interest. Then Paul Volcker was driving the interest rates up to 8%, 10%, 12%, even 14% on money market instruments. All you had to do as a money market fund manager is buying the standard stuff, Treasury bills, commercial paper and the like. You could put together a portfolio that’s producing a very high income, and the banks that had all the money were limited to that 5.5%. So then when they float out of the banks into the mutual funds, and Vanguard made itself obvious choice by having slightly lower fees, and then lower fees, and then lower fees as their assets built up. So they had low fees for an identical product. Then you don’t have to be that smart to figure out, hey, wait a minute, these are identical products — RITHOLTZ: Right. ELLIS: — and one is low cost, why not? RITHOLTZ: Why not? So let’s also talk about what was then thought of as a fairly radical concept, neutralizing the mutual funds business. Tell us a little bit about that idea, where instead of being profit-driven, the profits would eventually flow back to the owners, the investors in the funds, through lower fees. ELLIS: Well, you just said beautifully. RITHOLTZ: Well, you know, I’ve been — ELLIS: The proposition. RITHOLTZ: I’ve been educated with this book, so it’s deep in my thought process. ELLIS: And you know, once you get 2 and 2 is 4, it’s easy to remember and put to work. But the secret here over and over and over again is ferocious drive to not fail, which was Jack, ferocious drive to be recognized as Mr. Wonderful, which was a very important part of Jack Bogle all through his career, but — RITHOLTZ: Saint Jack. ELLIS: — to get more and more and more important as he got deeper into Vanguard. Those two phenomena show up over and over and over again. RITHOLTZ: So given how successful the mutualization was, why didn’t any other asset managers copy the structure? It seems like — ELLIS: Oh, wait, wait, wait, wait, wait, what’s the American way? I start a business to make a profit. If I do a good job, people will come to my business. I’ll get bigger, I’ll make more profits. So I do a good job, I keep getting more. And it’s a positive cycle. Okay. What would attract anybody to get into a business where you do a really good job and you break even? You do a really, really good job for years and you breakeven. You do a really, really, really good job for year after year after year for all kinds of people, and you breakeven. You mean you never ever make a profit? That’s right. You never ever make a profit. Well, what’s in it for me? RITHOLTZ: Well, you — ELLIS: And that is a stopper for almost everybody who starts a business. If you can’t make a profit, why in the world would you get going? RITHOLTZ: Well — ELLIS: It goes back to Adam Smith and all the way through since then. RITHOLTZ: You do end up achieving a certain size where there are economies of scale, and you pay yourself a very nice salary. Hey, maybe you don’t go public, maybe you don’t sell the firm. But you sleep at night and you know you’re doing the right thing for your clients. There’s got to be some appeal for that. ELLIS: Now you’re getting to why is the culture at Vanguard so steadily the same and why do people at Vanguard enjoy being where they are? First, they really like doing a good job and doing the right thing in doing a good job. It’s amazing. People really do like being honest. People really do like delivering good value. People really do like doing a great job for other people as customers. And particularly if you make clear, when you join Vanguard, you’re never going to get rich. It is not going to happen. So if that’s the main item on your agenda, go somewhere else. And there are plenty of places as Wall Street, where they’ll say you want to get rich? Come here. So if you don’t want to get rich, but you do want to do something you’re proud of every day, with a group of people who are just like you, proud of what they’re doing. Boy Scouts, Girl Scouts, pretty soon you start to say, you know, there’s something to this, maybe being a Jesuit is not all that bad an idea. Then pretty soon, you start finding, hey, wait a minute, this works. RITHOLTZ: Let’s talk a little bit about not just Jack Bogle, but the era and the team he assembled that was so crucial to Vanguard’s success. Tell us a little bit about how this, you know, 1927 Yankees came together. ELLIS: Great question. First, Jack was a man with a mission. And if you spent time with him, you could be infected with that sense of mission and purpose. And if that rang the bell for what you wanted to do with your working career, it was almost magic because there wasn’t very much competition from other people doing things in the investment world. Secondly, this was a man of tremendous conviction about what was going to be the right thing to do. Sometimes that worked very much at the advantage of Vanguard. There were some times when it worked just the other way and it was a real negative, but decisive. Whichever way, it was characteristic of Jack. As a personality, he could put on the charm in a way in which almost anybody would melt. And then, of course, there were hard-hitting times when he was absolutely determined that everybody was going to do this or that. You were already onboard and you sort of say, well, you take the good with the bad, we can work this one out, so on and so on. RITHOLTZ: Really interesting. Tell us a little bit about Jack Brennan, the man who succeeded Bogle as the second CEO of Vanguard. He’s really quite a fascinating character. ELLIS: Well, he had a terrific impact. And if you look at the impact in terms of assets under management, what Bogle did in his time, Brennan did 10 times as much in his time — RITHOLTZ: Wow. ELLIS: — 10 times as much. And he did it by putting together a team of other people, empowering them to be strong and effective of what they were doing. Then it goes back to a couple of different root factors; Boston, Irish, Catholic, training. His dad was told by his guidance counselor in high school, no kid, you’re not going to become a mechanic. You’re going to go to school because you’re too good and too smart to stop your life right at this, graduating from high school. You’re going to college. And that was a breakthrough. And Jack’s father became a consequential banker in the Boston area. But he always stayed clear to his basic roots. Jack Brennan grows up as a son of that kind of straightforward guy, and becomes a very, very straightforward guy himself. The second characteristic is he was a very good athlete, and he was very good at lacrosse in particular. And one day his kids were asking him, well, Dad, were you the highest scorer? He said, that’s not the right question. What do you mean, Dad? They gave him a copy of the Dartmouth Indian, the student newspaper, Brennan 28 assists — RITHOLTZ: Right. ELLIS: — 8 goals. He said it’s not whether you score, it’s whether your team scores. RITHOLTZ: Right. ELLIS: And that’s Jack Brennan all the way through. He’s all about bringing the team forward. As he said himself, being famous is not on my agenda. RITHOLTZ: Right. Right. ELLIS: And it’s very clear. Most people have never heard of Jack Brennan. He’s probably the most important person in the development of Vanguard as an organization. RITHOLTZ: That’s quite a statement. I don’t disagree, but I don’t think most people are aware how he professionalized Vanguard, how he brought in a huge team of people. But he also found all sorts of both cost savings and growth that as good as Bogle was, it was just outside of his expertise. ELLIS: Yeah. And what Jack Bogle always said, I’m a small company guy. And Jack Brennan understood to be the really right Vanguard in the future, you’re going to have to be a big organization. Second, you’re going to have to have a lot of computing power because technology is the secret to keeping costs low, low, low in the long run. Jack Bogle would say over and over again, computers are too damn expensive. And he was right on the day that you buy them, but if you can only think of them as that moment — RITHOLTZ: Right. ELLIS: — you’re not going to be able to get a payoff. If you think of them as going on for 5 years or 10 years and going to use them as tools to bring the cost of the operation down, it’s a completely different answer. And so Jack Brennan was absolutely key to the whole idea of using technology, particularly computers, and moving in advancement to that direction. Second thing is he’s very good at distributing responsibility and hiring in outstanding individuals to do in a quiet way, the things that needed to get done. So shift from one person to a team, and the team has got maybe a dozen key players on it. Then you get something that’s got tremendous capacity to manage a larger and larger organization which Vanguard had to become in order to get the economic power that it has today. RITHOLTZ: Right, to keep driving costs lower. So Brennan and Bogle were very close. Eventually to Brennan’s dismay, the relationship fell apart. Tell us a little bit about that episode. ELLIS: Well, easy analogy would be father and son, older guy, younger guy, Mr. Outside Jack Bogle, Mr. Inside Jack Brennan. So long as that was the working relationship, things were great. But Jack Bogle always thought of Vanguard as my company. And when you have a possessive view like that, you can talk yourself into making serious mistakes. He had agreed with Jim Rabe (ph) way back when that the longest that anybody ought to work at Vanguard would be maybe till 70. So let’s have 70 be our retirement age. They get closer and closer and closer to it, and Jack Bogle said, well, yeah, but it doesn’t apply to the chairman. It doesn’t apply to me. It can’t be really the right thing in the board of director. He said, no, it really is the right thing. In fact, the company has already gone past your skill set. RITHOLTZ: Right. ELLIS: And Jack Brennan has got the skill set, and he’s proving it over and over and over again. We want to make that change in a very clear way. I don’t want to make that change. Then Jack Bogle really, really resisted it. Finally, it turned out he was deeply upset about not having made a fortune the way Ned Johnson had made a fortune at Fidelity. So they gave him a substantial settlement to leave with good behavior and a great opportunity for him to start Bogle Research, which turned out to be a marvelous success for Jack Bogle and for people who are paying attention in that direction, but take him out of the controls position on Vanguard, so it could basically grow in its natural way as a major phenomenon. RITHOLTZ: So let’s talk a little bit about John Neff, another name that made a huge difference early on, doesn’t really get talked about all that much. Tell us what he did and why he was so pivotal to Vanguard’s success. ELLIS: People don’t talk about John Neff today. But in the ‘60s and the ‘70s and the ‘80s, people talked about John Neff because he had the best record of any mutual fund manager in the country. RITHOLTZ: Wow. ELLIS: And you could argue that one of the great managers at Capital Group had an even better record, but Capital broke up the funds into multiple different portfolio managers, so it was not public. But among the public recorded, John Neff had the best performance over the long term. Wow. Does that make a difference when you’re looking at year after year after year after year? With some exceptions sometimes for two or three years, but over any long-term investment, he had the best record of anybody in the investment business. RITHOLTZ: What about Gus Sauter? He was the first chief investment officer at Vanguard Group, highly regarded. Tell us a little bit about his contributions. ELLIS: A terrific quant with a great deal of modesty and a wonderful ability to think things through. And Gus Sauter was critical to development of the ETF business, and critical to the development of the indexing business and the capacity to manage with the quantitative group, substantial fractions of the actively managed portfolios because he could replicate what an active manager might do. And one of his quiet, soft spoken, it’s not about me, it’s about the interesting work that my team is doing; the team builder and just terrific technology understander, who was able to put things together in a way that was really wonderful. RITHOLTZ: You mentioned how important Jack Brennan was. Let’s talk a little bit about Bill McNabb. He was running Vanguard right in the heart of the financial crisis. He’s the one who basically told all the crew members, hey, nobody is getting fired, just get on the phone, speak to the clients, and don’t worry about your jobs. We’re all safe. Tell us a bit about his decision-making and how important he was not just during the financial crisis, but, you know, I think Vanguard was about $800 billion pre crisis. And now, it’s 10x. It’s $8 trillion. Tell us a little bit about what Bill McNabb brought to the table. ELLIS: The secret to Bill McNabb is modesty, competence and discipline. And if you look at how would you understand that, think of him as he was for many, many years, a rower. In crew, there are no fabulous individual performers. It’s all about how the whole group of eight people rose simultaneously to a level of perfection. And if they get it really, really right, perform in a way that you can’t match. And that’s what Bill McNabb was all about, is disciplined, steady, reliable performance. And aw-shucks personality on the outside, but Mr. Trustworthy on the inside, and everybody knew he was the kind of solid citizen that you would like to have your sister marry, or you’d like to have your mother marry, or you’d like to have your daughter marry, one of those things. He’s just Mr. Good guy. And while every other firm in the investment business was cutting costs because the market was down and looked like it was going to go down a lot, he said, no, we’re not going to cut costs at all. Nobody is losing their job. We’re all going to stay here together because the number of customers is not going down. It’s just that the profitability of the business is going down, and we are not a profit-minded organization. We’re a service-minded organization. We’re all about the customers because they are owners, that we’re going to stay right steady on through. And that made a terrific impact internally. But of course, it also meant that they had a wonderfully strong organization coming out of the financial crisis and that was a big help too. RITHOLTZ: Yeah, perfectly positioned. Tell us about Charlie Root, what was his role as an advisor and a board member. ELLIS: He was the head of the major actuarial consulting firm in Philadelphia, very disciplined thinker, and an organizationally-minded person, and one of those people that you’d love to have as a director of your corporation. Unfortunately, shortly after some of the most important decisions, he was cleaning out the gutters in his home and the ladder he had climbed up to the gutters on, started to slip a little bit to the side. RITHOLTZ: Uh-oh. ELLIS: And I’m afraid that has caused his death. And it was a real loss to Vanguard and a real loss to the Philadelphia community. RITHOLTZ: There’s one person I really have to ask about and that’s you. You were a director of Vanguard for over a decade. You were a strategy consultant. Tell us about how you felt your role was and what your contributions were during that era. ELLIS: In all fairness, I have to feel — RITHOLTZ: Look at you, you’re blushing. I can’t believe this. ELLIS: I really enjoyed being a director. We didn’t get paid very much. I have to admit the food that we were served at meals was really pretty crummy. But it was all part of the keep the cost down, keep the cost down attitude. Management was so candid and so open with us as directors. It was a privilege to be working with them. And it didn’t hurt that I was sitting side by side with Burt Malkiel, who is one of those outstanding people in the investments world. And Burt has just turned 90. RITHOLTZ: Wow. ELLIS: And his great book, A Random Walk Down Wall Street, has just come out with a new, very considerably updated version. And to sit with him and to realize, on item after item after item, Burton and I agreed, Burton and I agreed, Burton and I agreed. So it was a wonderful privilege and opportunity to be able to be candid, direct, blunt spoken, and to have a really capable guy sitting right beside you, I think you’re on the right track, keep going, keep going. And to have a management team that was so glad to hear what we had to say, even when it might be really in disagreement with them or might be slightly in disagreement with them, they’d love to having the candor coming from the outside. RITHOLTZ: Let’s talk a little bit about the current state of Vanguard. But I have to preface it with Jack Bogle’s CMH, not EMH, not the efficient market hypothesis, but the costs matter hypothesis, which really dates back to his Princeton thesis. It wasn’t so much about active versus passive, it was about expensive versus inexpensive. Tell us a little bit about how that impacted the development at Vanguard. ELLIS: First, you got to understand that Jack Bogle was a master of the personality franchise development business. When nobody else gave a damn about becoming clearly identified in a very specific way, Jack cared greatly about that. And it goes back to when he likes to tell the story on himself, at least did tell the story on himself whether he likes it or not. When he was in school, he came in second in his academic performance. And he went around to each one of his teachers, pleading with them to really examine and modify his grade so he could come in first. He wanted to be the valedictorian, not the salutatorian. Now, why would he care so much about that? It is not the be all and end all of the world. It’s because of his personality. Something deep inside him drove him to always enhance things, make things look better, make things look better, make things look better. And so all the way through the story of Vanguard, you’ll find Jack Bogle doing things or saying things to make the record look much more positive about what he contributed than the reality. And one of the awkwardness is the franchise building was done so beautifully, so consistently, so skillfully by a master of that craft, that it’s still 20 years later, 30 years later, carries on. And most people if you ask them, when you think of Vanguard, who do you think of? Bang, they’ve got it. Well, Jack Bogle was terribly important to the starting. Nobody could have started the organization without being Jack Bogle, partly angry, partly talent, partly skills of various particular characteristics, one of which was building the personal franchise. Nobody could have started Vanguard. But if Jack Bogle had stayed in control, it would never have become the organization it is today. It would be substantially smaller. It would be deeply outclassed by people who use automation to make their offering a better and more effective proposition. And we wouldn’t see the Vanguard that’s been developed since then. RITHOLTZ: So let’s talk a little bit about that Vanguard, very huge in ETFs, big overseas investing, lots of other things that Vanguard and Bogle didn’t see eye to eye about. How often did the company disagree with its founder? ELLIS: Interesting question, and I’m not sure I could do it in terms of numerical quantitative. But if you look back the concepts that Jack Bogle really believed in, computers, he thought were terribly expensive. That would have been a stopper today. RITHOLTZ: Real, for sure. ELLIS: He couldn’t do it. RITHOLTZ: Right. He really believed in he’s making the decisions. It’s too complicated of a business. There are too many things going on. There are too many different responsibilities for one person to do all of the decision-making. If you look at Vanguard today, you’re looking at a substantial organization that’s going through a substantial transformation towards becoming more of an effective organization, at serving clients’ interests, and doing a better and better job for the people who are already the investor-owners of Vanguard. So they are not making a major commitment internationally. They are not spending a lot of money to build a future business. In other countries, they’re looking for places where the resistance by the banking establishment or the financial establishment in those different countries is more open to non-local competition. But it’s hard to find, very hard to find. They’ve made some changes that we’re keeping up with the times. They’ve got a substantial institutional business. If you’re in the investment business as an institution, you really want to know something about private equity. If Vanguard doesn’t have private equity, that’s going to take them out of the running. So they’ve developed a really interesting joint venture, where they’re able to get access to a very competent private equity investment organization at a very controlled cost. They’re not aiming to be the very best, but second quartile of performance on a reliable basis, with broadly diversified capability. Okay, that will work very nicely. They’re doing the same sort of a change in going towards more and more advice. And anybody who has been in the investment management business, as you have been, looking back on things, you can tell almost everybody would be well-advised to have been more a long-term investor, make fewer choices and decisions, figure out what’s really right for you. And at the same time, you’d recognize that every individual is unique. Nobody is exactly the same. Now, if you look at personality, for example, your eyeglasses, I wear eyeglasses; your shoe size, my shoe size; your shirt sizes, color, size, sleeve length. Pretty soon you realize Barry’s clothes are different from mine because Barry is different from me. And he ought to wear the clothes that are right for him, and I want to wear the clothes that are more right for me. I might get advice from my wife or something on what to wear, but we’re two different guys. RITHOLTZ: We’re actually dressed shockingly similarly with our collared shirts and a blue sweater on top. But doesn’t that kind of raise the point of, well, everybody is different. But everybody needs to save for retirement to pay for their kids’ college, to leave something to the next generation. It shouldn’t vary radically. The broad strokes should all be fairly similar, shouldn’t they? ELLIS: In terms of the macro proposition, you’re exactly right. But everybody is different from everybody else in age, income, wealth, attitude towards life, how many years you want to keep working, things like risk tolerance. RITHOLTZ: Sure. ELLIS: Everybody differs. So it turns out that almost everybody is specifically individually themselves different from somebody else, specifically individually themselves. And as a result, advice to individuals is increasingly obviously a useful part of the total investment proposition. And Vanguard is moving in that direction, and capable probably of more power in a direction that anybody would ever understand or estimate. RITHOLTZ: I read a crazy statistic somewhere, I don’t recall if it was in the book or elsewhere, in the state of Pennsylvania, the certified financial planners, something like 96% of them in the state work for Vanguard. That’s just a crazy number as they’ve pushed into the advisory business and hiring all of these CFPs. ELLIS: They’ve made a major commitment to serving the investor with what they really need. And most people really ought to have a good investment plan, but they don’t. Most people ought to have a clear definition of their long-term purpose as investors, other than I want to do better than the market, or I want to do at least as well as the market, or I want to do well or something vague and general like that. Very hard to get people to be very specific about what do they really, really want to do and why. And if you’ve got a good advisor, you can do a lot to improve on your results by figuring out together, what makes sense to you that’s available in the marketplace, and making the right decisions of what’s available and realistic as opposed to dreams that may or may not come true. RITHOLTZ: So let’s talk about two areas that are a little controversial. One is the thought that as indexing became more and more appealing and attracted more and more assets, Jack Bogle was a little concerned about oligopoly, about potential any trust issues. At what size is passive or indexing too large? ELLIS: I think it’s a wonderful question. But if you don’t mind, I’m going to say it’s the wrong question. RITHOLTZ: Okay. ELLIS: The right question is when will active investors say to themselves, as the professionals, the people who are making their living as active investors, say to themselves, I think I’m going to get a different career? I think I’m going to leave this business and go in a different direction. At what age will they say to their children, look, it was okay for me in my time, but it’s not a good place for you. Don’t do it, don’t do it. At what point are you going to see fewer people taking courses on investment management at business schools? We’re nowhere near that. RITHOLTZ: Right. ELLIS: We’re putting more people through the learning process of how to be pretty damn good as an analyst through business school courses, and then out into the industry that are coming out of the industry through retirement. And that’s where the market is really controlled for market efficiency, or correct pricing. There’s really smart people. If you go back 50 years ago, there were a small number of people who made their living as analysts, and a small number of people made their living as portfolio managers, maybe as many as 500 people in the world. And today, it’s somewhere between one and a half and 2 million people. RITHOLTZ: Wow. ELLIS: That’s a big change, and there have been lots of other changes. The one that I think is the most powerful, here we are at Bloomberg Radio, think about how many people own a terminal, a Bloomberg terminal that will give you any answer to any question you ever want to ask for the rest of your life within seconds. RITHOLTZ: It’s all data and technology. ELLIS: It’s all over the place. Everybody has computing power in their pocket that is much as a 360, which was IBM’s magical power force 50 years ago. And everybody has access to the Internet and it’s instantaneous communication worldwide. And thank goodness, we speak the English language because that’s the language of investing worldwide. But it means that there’s a huge transformation that’s taking place, and it has made the markets more and more skillful at finding the right price. But makes it harder for active managers. And as you and I’ve talked about before, active managers underperform the chosen segment of the market they went after. And now, we’re somewhere between 85% and 90% of active managers fall short of their intention. And when they fall short, they often get desperate and fall very short by Hail Mary passes and other kinds of dramatic efforts. RITHOLTZ: The paradox of skill is the better the professionals get; it becomes increasingly harder to even beat the market. So that’s quite fascinating. One other question that’s a little controversial, we’ve seen some pushback to ESG, environmental, social, governance investing and the voting of proxies. How does an entity like Vanguard manage these issues on behalf of their huge 30 million clients and their $8 trillion in assets? ELLIS: Very simple. They do what you would like to. If you were a corporate executive, what would you like to have your shareholders do? Pay attention to the votes, be quite consistent about always voting. And as you know, most people don’t vote at all. And then many institutional investors say, it’s not our decision to make because we’re on behalf of others. So your very best client, if you’re a corporate executive, best shareholder is to be somebody who is in it for the long run. And if you’re a Vanguard and indexing, you’re in it permanently for the long, long, long run, cares about certain basic principles and they do, and they advertise what those principles are. For example, they believe that a board of directors should have an incentive in the company stock. They’re very strong to have diversification of personality and background. Okay, fine. Those are pretty much straightforward things. Nobody would have any trouble with that. Yeah. And they’re very much in favor of certain kinds of incentives, but not others. And most people look at and say, yeah, those are the right things to be in favor of. So it’s one after another after another items where Vanguard and State Street, and BlackRock are all three in agreement, basically, that good governance is an important characteristic of a board of directors, and they really want to see that going. What is it that you wouldn’t like about the way in which the voting is done? It’s a terrifically powerful answer. What wouldn’t you like? And there is nothing that you wouldn’t like. Now, is it possible that a group could quietly somehow skillfully get together and agree, let’s do something that’s really not going to be right for our investors? Yeah, you could say mechanically, it’s possible. But there’s Canada for an example, it’s a country right next to one of the most powerful military organization, nations in the world. Are the Canadians afraid the Americans are going to attack again? Of course not. In fact, we cooperate in our activities. RITHOLTZ: Right. ELLIS: Yeah. Okay. What would happen if somebody at any one of the indexing leaders were to do something that was not quite Boy Scout/Girl Scout right down the line? They get called out. I think they’d called out. Would it be the newspapers? Yes. Would it be on Bloomberg Radio? Yes. Would you have an interview with somebody who had called them out? Yes. One of those perfectly marvelous situations where you’re forced to do what you damn well want to do. RITHOLTZ: State Street, Vanguard, BlackRock, they all have pretty good businesses. Why would you want to mess with that? Really, really fascinating stuff, Charlie. Let’s jump to some of our favorite questions that we ask all of our guests. And I want to start with the last time I saw you was before the pandemic, what have you been doing during the pandemic? And tell us what what’s been keeping you entertained. ELLIS: Well, part of the entertainment value is that our children, our daughter and her husband and their two kids under 5 have moved into our house. So we’ve had the privilege of watching little kids again, and I have to tell you that is a dream come true. It’s a lot of fun. Second thing is we have an agreement in our family that we’re worried about the children and COVID. So we don’t do very much at all in the way of travel. And I used to be five days a week get on a train into Manhattan — RITHOLTZ: Right. ELLIS: — as a way of doing business. I’ve been in New York City three times in three years. RITHOLTZ: Wow. ELLIS: It’s really something else. And so I’m delighted to be here today. But in our family, I have to drive in, and then turn around and drive back. Then as you know, the traffic is not all that convenient, and so on and so on. But things like that have been distractions. I’ve enjoyed the privilege — Zoom has made a wonderful difference to my life and I’m sure to most other people, the freedom to be able to do repeat messages and communication in a serious way through Zoom. It’s really been terrific. The third thing is I’ve got a real bee in my bonnet that I want to be able to try to be helpful to people. And so doing investment advice is just as easy for me, located where I am. Once you make the communication contact, it works out fine. And I’ve really enjoyed being able to provide some useful investment advice to individuals as we’re going along. And then the third thing is I’ve been quite active in writing. I’ve written for the Financial Times several different pieces and I’ve written a couple of different books. I’ve got three books in the process of coming out. So have I been busy? Yeah, I’ve been busy. RITHOLTZ: So one of the things I always like to ask people is about their mentors who helped shape your career. ELLIS: Well, the most important person probably is Nellie Walsh, my sixth grade school teacher, who called me on the carpet one day and I was terribly surprised because I thought I was doing just the right thing. And she said, you were wrestling with Peter Neely, weren’t you? Well, I was. But that’s because of I couldn’t get him to stop throwing the snowballs with cinders in with the little kids, and he was picking on the little kids and I didn’t think that was fair. And she said, Charles, she never called me Charlie, always Charles, I think more of you, I expect more of you that you would lower yourself to the likes of Peter Neely. You may go. And ever since then, I’ve been held to a higher account, higher standard, higher expectation in every way to be responsive to Nellie Walsh. And more serious, people in the investment world, Joe Lasser, who was the director of Research at Wertheim, a traditional Wall Street firm. He believed deeply in security analysis, and was a very strong advocate of the CFA program. And so he got me in a training group to take the CFA exam as soon as we could. That was an important breakaway time. Another would be Coyler Crum who was a terrific professor of Investment Management at Harvard Business School. I enjoyed very much working with him. You could argue also, Ben Graham and David Dodd because of their wonderful book, Security Analysis, which was the first affirmation of professionalism in the financial analysis and securities pricing industry. And it really made a big difference to me. One of the great privileges of my life was to work, when I was working in Wall Street, and then working for Greenwich Associates for 30 years, working all day, every day with some of the smartest, most capable people in the world. And they were all involved in investment management. And if any one of them competed, all the others competed, and they all wanted to try to find ways to be better. And they’re all willing to tell you any insights that they had. And they’re all willing to provide a chorus of teachers and guidance in terms of what’s going on in investment management. And for me, that’s really the most important single place for learning that I had, and what a privilege all day, every day, is to be with the smartest people in the room, who are trying to figure out investment management. Then when you add it all together, you realize they’re competing with themselves. And they’re not going to be able to beat each other on a systematic and regular basis, voice that make a big difference to your way of thinking. RITHOLTZ: So you mentioned Graham and Dodd, and their books on Security Analysis. Tell us some of your other favorites and what else you’ve been reading more recently. ELLIS: Well, more recently, I have to tell you, I haven’t found a book on investment management that I thought was really compelling. You could argue, no, come on, there is a very recent book. That’s the new edition of an established book, Burton Malkiel’s A Random Walk Down Wall Street. It’s got to be one of the best books that’s ever been written about investment management, and about the markets and how to think about them. A wonderful guy and a wonderful book, and has done so much for so many people. Then if you look at other books that I would like to read, then you tend towards history, biography. and I’m always looking for suggestions of more books to read in that general field because I think you’ll learn so much about the way human beings do things, if you study about them, study about them, and study about them. And so I’m a nut for trying to learn from others. RITHOLTZ: I like the suggestions. What sort of advice would you give to a recent college graduate who is thinking about a career in investment management? ELLIS: Here I have a very strong opinion that you should think very candidly about why you’re interested. We all know for an example, that it’s a very well paid line of work. Most people don’t really appreciate how well paid it is, but it is wonderfully well paid. Secondly, you don’t have to retire at 65. In fact, many people work into their 70s. Many people even work into their 80s. At 85, I’m still working. I have just very wonderful privilege of not having to stop work at some arbitrary date like 65 or 60. Now, that’s a characteristic. When you look at the lifetime compensation of being in the markets all the time and free to pick anytime you want to, to pick a stock individually, that can be for some people, a very attractive characteristic. So if you like to make some substantial financial success, that’s one reason. If that’s your motivation, I think you’re in trouble. Because, yes, of course, you will make a substantial amount of income. But it’s not the most important part of your life. When you get to the end of life and you’re off standing in front of St. Peter at the pearly gates, and he said, well, you had your life, you were very lucky to be born at all. But there you were, and you chose the investment management world. What did you really do during that that you’re proud of? I made a lot of money. That’s not a good answer to a really great question. So be sure that if you’re going into the investment management field, that you know, is it because you want to make a lot of money, or is it because you like the idea of competing all the time with some of the smartest, most hardworking people in the world, which could be a terrific motivator and you could understand, or is it because you want to serve people and help them with what they’re trying to figure out about what they want to accomplish? If you’re the latter group, then you’re going to be in a profession and you will also get paid well, but your compensation will come primarily from being good as a profession. That lasts a lifetime. But you have to be clear about what is your motivation. RITHOLTZ: Really, really very interesting. And our final question, what do you know about the world of finance and investing in Wall Street today that you wish you knew 50 or so years ago? ELLIS: Well, you know, it’s pretty obvious in a way, I wish I’ve understood how much change was going to take place in the investment management activity and field. Computers for an example, when I first got started, there were no computers being used — RITHOLTZ: Wow. ELLIS: — or maybe in the back office, but they were clunky kinds of operations. And the idea that there would be the transformation of information worldwide is available to you instantaneously through Mike Bloomberg’s wonderful invention, the terminal, that the Bloomberg Terminal has transformed the world of information gathering. The Internet has transformed the world of information gathering. And as a consequence, the world of investing is now worldwide. And everybody in the world is competing with everybody else in the world in the investment management fields. So I wish I’ve understood how dramatic a change there would be, because it would make a big difference. If you understood that, you’d have the forces of change working for you and you could have made a completely different transformation of life. RITHOLTZ: Quite fascinating. Charlie, thank you for being so generous with your time. We have been speaking with Charlie Ellis, author of the new book Inside Vanguard: Leadership Secrets From the Company That Continues to Rewrite the Rules of the Investing Business. If you enjoy this conversation, be sure and check out any of the previous 475 podcasts we’ve done over the past eight years. You can find those at iTunes, Spotify, YouTube, wherever you get your favorite podcasts from. Be sure and sign up for my daily reading list at ritholtz.com. Follow me on Twitter @ritholtz. You can follow all of the Bloomberg podcasts at podcasts on Twitter. I would be remiss if I did not thank the crack team that helps put these conversations together each week. Justin Milner is my audio engineer. Atika Valbrun is my project manager. Paris Wald is my producer. Sean Russo is my head of Research. I’m Barry Ritholtz. You’ve been listening to Masters in Business on Bloomberg Radio. END   ~~~   The post Transcript: Charlie Ellis appeared first on The Big Picture......»»

Category: blogSource: TheBigPictureDec 30th, 2022

The Truth About Temu, the Most Downloaded New App in America

Temu is the most downloaded new app in America. But it's also starting to develop a reputation for undelivered packages, mysterious charges, and incorrect orders. The most downloaded free app on both the App Store and Google Play for much of the last two months wasn’t TikTok, YouTube, or Instagram, but a shopping app that didn’t exist just four months ago. Temu offers steep discounts on a slew of products, mostly shipped directly from Chinese factories or warehouses. In addition to incredibly low prices, Temu can no doubt attribute its popularity to its strategy of giving free stuff to users who promote the app on their social networks and get friends and family to sign up. [time-brightcove not-tgx=”true”] But the company—the U.S. offshoot of Chinese e-commerce giant Pinduoduo—is also starting to develop a reputation for undelivered packages, mysterious charges, incorrect orders, and unresponsive customer service. Temu has already been subject to more than 30 complaints to the Better Business Bureau, and has a BBB customer rating of less than 1.5 stars. “They’re making delivery promises, and people aren’t getting their stuff when they’re supposed to be,” Melanie McGovern, the director of public relations and social media for the BBB, tells TIME. When contacted by TIME, the company did not directly address questions about customer complaints or the concerns of the BBB. Temu’s business model—if it catches on—could also have major implications for U.S. retailers and the global supply chain in the coming year. What is Temu and how does it work? Upon first glance, Temu could leave some users questioning whether it’s legit. On top of really cheap consumer goods, Temu boasts opportunities to earn credits through spin-the-wheel games or if you convince your friends to join. Over the last couple months, posts praising Temu have spread like wildfire across Facebook, Twitter, and TikTok—though many of them use glowing language that appears to be recycled from one post to the next. But, at the moment, Temu is very much a real platform, offering a variety of real, heavily discounted products, from air fryers to wireless Lenovo earbuds ($8.98), computer keyboards ($15) to clothes ($1.69 for five pairs of socks). Users who turned to Temu this month as a lifeline for holiday shopping in the face of the highest inflation in a generation made it one of the fastest growing platforms in the U.S. What does Temu sell? The better question is what Temu doesn’t sell. Users on the Temu website or app are immediately besieged by deals of all kinds: running shoes for $17.48, universal wrenches for $4.48, talking toy hamsters for $6.99. A banner brags about items up to 90% off retail prices, thanks to a new year’s sale. The breadth of items and prices is remarkable, and the site’s aesthetic comes off as something like a virtual dollar store. TemuTemu offers extremely low prices on a range of inexpensive consumer goods shipped directly from Chinese factories and warehouses. But the strategy makes sense once you realize that Temu is a “sister company” of the Chinese e-commerce giant Pinduoduo, which has offered similar deals in China for the last few years. Pinduoduo has found success in China selling heavily discounted products straight from manufacturers to low-income buyers, as well as agricultural products to farmers. The company now has a market cap of $102 billion, and its stock price increased during a year in which competitors like Alibaba took severe hits. Pinduoduo launched Temu in September in order to court the American market, and Temu’s website lists an office in downtown Boston. A Temu spokesperson responded to questions from TIME with a statement from its website: that the company’s prices are enabled by a “deep network of merchants, logistic partners, and [Pinduoduo’s] established ecosystem built over the years.” How are people getting stuff for free on Temu? While Temu’s prices are cheap, many new customers actually aren’t paying anything at all. That’s because Temu has launched a campaign on social media in which the more you convince others to sign up, the more credit you earn. This has enabled some people who have earned enough credit to receive home goods without even giving Temu their credit card information. “It seems like they’re being subsidized to be a loss leader in order to gain market share, which is not unlike what Amazon did for a long time,” says Douglas Schmidt, a professor of computer science at Vanderbilt University. Brianna Lukey, who lives in Fort Worth, Texas, says she’s received $200 worth of items from Temu for free. She first heard about the app from a friend a month ago, and was initially leery of it: “I know there’s a lot of things that go around that may not be legit,” she says. “But this was.” Lukey posted about Temu on Facebook, TikTok, and Snapchat, and eventually convinced friends to join the app, in the process earning a bunch of credits. She used them to order a ring light (priced at $25.48) for her plaster-art small business, Array of Aura’s, as well as an oils diffuser ($5.48), several necklaces, and a mouse and keyboard for her daughter ($19.98). Lukey says the keyboard works fine: “I didn’t think it would be that great quality. But it’s pretty good for being free,” she says. “So I’m grateful for it.” Temu may have given Lukey many items without her turning over any cash, but the company free advertising via Lukey’s social network in return. Temu is branding the campaign as a way for communities to band together to save money: their slogan is “Team Up, Price Down.” The strategy appears to be working: When Lukey posted a photo of her Temu shipment on Facebook, her post was soon deluged by 70 comments from her Facebook friends, which mostly consisted of people posting their own referral links in the hopes of scoring similar hauls. What’s the catch? One of the comments on Lukey’s post, however, was significantly less positive than the rest. Julie Roper Malloy wrote that the package she ordered from Temu containing Christmas gifts never arrived, despite the company’s pledge it would be delivered Dec. 19 at the latest. “Still waiting for my order from November! Thanks Temu, you’ve ruined Christmas!” she wrote. In a series of Facebook messages with TIME, Roper Malloy says she spent $178 on gifts from Temu for her family, including two drones and some makeup for her daughter. But the items never arrived. Malloy says she has contacted the company several times for a refund, which has also yet to arrive. “I will definitely be more diligent in the future when ordering online,” she wrote. Roper Malloy is not the only one to encounter problems with a Temu order. Temu itself acknowledges that its orders take longer to arrive than those from Amazon—typically 7-15 business days—as they come from “overseas warehouses.” But it appears that Temu also has had trouble delivering inside that larger time window. In October, the Boston branch of the Better Business Bureau opened up a file on Temu and has received 31 complaints about the website. Temu currently has a C rating on the BBB, and an average customer rating of 1.4 stars out of 5, albeit from only 20 reviews. (Complaints are separate from reviews, which do not factor into BBB’s official rating.) McGovern at the BBB says it’s unusual for such a new company to receive so many complaints in such a short amount of time. She notes that Temu has acknowledged and responded to every complaint posted to the BBB website, but many of those complaints remain unresolved. Temu’s parent company, Pinduoduo, has long been accused of hosting sales of counterfeits, illegal goods, or products that do not match their descriptions. (Pinduoduo wrote in its SEC filings that it immediately removes unauthorized products or misleading information on its platform, and freezes the accounts of sellers on the site who violate its policies.) There have been no BBB complaints that allege the goods Temu ships are counterfeit or fake. Additionally, in 2021, the deaths of two Pinduoduo employees spurred investigations and boycotts over the company’s working conditions, according to the New York Times. How Temu could affect the U.S. economy Schmidt, at Vanderbilt, who specializes in security and privacy, says that Temu’s data and privacy practices aren’t out of the ordinary: The company collects lots of personal data about users and then deploys that data to sell ads. However, he says that Temu’s rise could have a bigger impact not in terms of privacy concerns, but in terms of pressure on American companies and workers. If more and more American consumers flock to Temu to buy cut-rate goods, that could pressure Amazon and other competitors to slash their prices too, which would affect wages, Schmidt argues. “This is an interesting example of the manufacturing base in China getting sufficiently sophisticated that it no longer feels like it needs to go through distributors. They’re selling directly to consumers. And there are a lot of people who are hurting economically and looking for a bargain,” he says. “This is obviously going to put pressure on producers of goods to further slash their cost basis and profit structure—which could have the consequence of further eroding domestic manufacturing in the U.S.”.....»»

Category: topSource: timeDec 29th, 2022

Meet Pavel Durov, the tech billionaire who founded Telegram, fled from Moscow 15 years ago after defying the Kremlin, and has a penchant for posting half-naked selfies on Instagram

Before founding Telegram, Durov founded Russian social network Vkontakte. The site brought him fame — but it also made him a target of the Kremlin. Telegram founder and CEO Pavel Durov.Manuel Blondeau/AOP.Press/Corbis/Getty Images Pavel Durov, the founder of Telegram and the "Zuckerberg of Russia," is worth $15.1 billion.  The Russian-born tech mogul fled from Moscow 15 years ago and now lives in Dubai. Durov has a big social-media presence, perhaps most notably for launching the "Shirtless Putin Challenge" on Instagram. Editor's note: This story first appeared in March 2022 and has been updated to reflect the most recent financial figures as well as Durov's recent comments about Fragment.Pavel Durov, 38, is the founder and owner of messaging app Telegram. The billionaire has been called the "Mark Zuckerberg of Russia."Telegram co-founder Pavel Durov, center, smiles following his meeting with Indonesian Communication and Information Minister Rudiantara in Jakarta, Indonesia in 2017.Tatan Syuflana/APDurov, who was born in St. Petersburg in Soviet Russia, has a net worth of $15.1 billion, per Forbes.The tech entrepreneur cofounded encrypted-messaging service Telegram with his brother Nikolai in 2013. The brothers were born into a family of intellectuals, according the Digital-Life-Design Conference website. Durov spoke at the conference in January 2012.Much of Durov's wealth comes from Telegram, which has 700 million active users and is valued at $30 billion.Durov did not reply to Insider's requests for comment for this story.Before founding Telegram, Durov founded a Russian social network called Vkontakte. The site brought him fame and money — but it also made him a target of the Kremlin. A post shared by Pavel Durov (@durov)  Durov created the network in 2006 and went on to sell a 12% stake in the company for $300 million in 2015.The site brought him fame: He became known as Russia's "biggest celebrity entrepreneur," per The New York Times. But it also came with political trouble, namely when Durov refused the Kremlin's demands to access Vkontakte data of Ukrainian protest leaders.Durov said he was fired in April 2014 from his position as the CEO of Vkontakte as state-backed entities sought to control the network, per Reuters. The Mail.Ru group, which is owned by oligarch Alisher Usmanov, bought the network for $1.47 billion later that year.Usmanov's press service told Insider the group sold Vkontakte in December. The network is now owned by state-run insurer Sogaz.Durov told the Times he was forced to leave Moscow in 2014 after a SWAT team appeared at his home.Durov's conflicts with the Kremlin didn't end with Vkontakte.Telegram founder had become a cult icon for antiauthoritarianism in the region.Peter Kovalev/TASS via Getty ImagesIn 2018, Telegram was banned in Russia after Durov denied the Kremlin access to user data. In response to the ban, hundreds of people protested, some of whom were holding signs of Durov illustrated as a saint (pictured above). The app was reinstated in Russia two years later.Today, Telegram is playing a major role in the war in Ukraine.Durov vowed in a Telegram post in March to protect the data of Ukrainian users. Durov is of partial Ukrainian descent, according to the post."When I defied [the Kremlin's] demands, the stakes were high for me personally," Durov wrote in the post. "I stand for our users no matter what. Their right to privacy is sacred," he added.On a November 30 post on Telegram, Durov announced that Telegram plans to build a cryptocurrency wallet. Durov added that the wallet, Fragment, "took only 5 weeks and 5 people including myself to put together."Durov claims some $50 million worth of usernames were purchased in less than a month on Fragment.Durov now lives in Dubai, where Telegram's operations are based.Palm Jumeirah in the Gulf emirate of Dubai on January 10, 2022.Giuseppe Cacace/AFP/Getty ImagesDurov moved to Dubai in 2017 and relocated Telegram's operations to an office in Dubai's Media City, per Bloomberg. The network had been previously been based in Berlin.In an interview with Bloomberg in December 2017, Durov said moving to Dubai afforded him "better ways to use [his] money to benefit society," as the city has no personal income tax.According to the Russian edition of Forbes, Durov obtained citizenship in the United Arab Emirates in February 2021. The Forbes report details that Durov is a citizen of four countries.In January 2018, Durov wrote on Twitter that Telegram is "unlikely to ever consider any location be [its] permanent base."Durov became a citizen of St. Kitts and Nevis in 2014 by investing $250,000 in the local sugar industry, according to The Moscow Times. The Caribbean nation has no income or inheritance tax, as well as capital gains tax.Durov was also naturalized as a French citizen in August 2021, according to France's government website.Durov is the wealthiest person in the United Arab Emirates, the Khaleej Times reported in 2021. A post shared by Pavel Durov (@durov) Durov is the youngest self-made billionaire in the Middle East, per the Khaleej Times.Durov has a big Instagram presence, with more than 785,000 followers. His posts range from photos showing off his Dubai lifestyle to shirtless snaps showing off his physique. A post shared by Pavel Durov (@durov) In August 2017, Durov's Instagram post parodying Russian President Vladimir Putin went viral.Durov's post on Instagram, aptly named the "Putin Shirtless Challenge," called for users to post photos of themselves bare-chested in the style of Putin."Two rules from Putin – no photoshop, no pumping. Otherwise you're not an alpha," Durov wrote in the post in August 2017. Over 3,000 posts with Durov's hashtag were uploaded on Instagram. To date, it's gotten over 120,000 likes.Despite having 1.3 million followers on Twitter, Durov doesn't follow anyone, but once followed Elon Musk.While not much is known about Durov's assets, he's been known to share the occasional yacht shot on Instagram. A post shared by Pavel Durov (@durov) He shared a photo from the deck of a Lurssen yacht off the coast of Italy in 2016.The cost of a Lurssen yacht starts at around $1 million and can run as high as $185 million, per Yacht World. Durov never confirmed if he owned the Lurssen yacht that he sailed in.Durov said in an Instagram post in August 2016 that while he wasn't a "fan of giant Lurssen yachts," he liked the manufacturer's sailing vessel. Lurssen currently only has one sailing yacht that was built in the 21st century.Durov posted another photo of a superyacht on Instagram in 2015.In a March 18 post on his official Telegram account, Durov claims he doesn't own any private jets, yachts, cars, or houses, adding that he is "unlike most billionaires."Durov's profile was once found on Tinder in 2017, according to Bloomberg. A post shared by Pavel Durov (@durov) Bloomberg reported that Durov was "half-naked" on his profile photo on the dating app."Not looking for anything serious or not serious here," he wrote on his profile, per the publication. "Just playing with the app," he added.Durov was once married to Daria Bondarenko, who he met in university, according to Russia Beyond, citing a documentary on Durov by filmmaker Rodion Chepel.In a 2020 blog post, Durov spoke out against Silicon Valley, writing that the region has "limited cultural life."Telegram founder and CEO Pavel Durov delivers his keynote conference during day two of the Mobile World Congress at the Fira Gran Via complex in Barcelona, Spain on February 23, 2016.Manuel Blondeau/AOP.Press/Corbis/Getty ImagesDurov wrote the post in response to journalist and YouTuber Yury Dud's film about Silicon Valley. The film has garnered 45 million views on YouTube.In the post, Durov listed seven reasons he did not want to move to Silicon Valley."The US is not the best place to live or run an IT business," Durov wrote. "Local programmers are expensive, spoiled and often unable to focus on work due to the flow of outside suggestions and ideas," he added. Durov also described the US as a "police state" and said he was attacked in San Francisco in June 2015 by thieves who wanted to steal his phone.From the tech platforms he has founded to his comments on his personal social-media accounts, Durov is no stranger to controversy.—Pavel Durov (@durov) March 18, 2017Part of the controversy stems from the nature of the social networks he has built. Telegram, for example, is the "app of choice" of terror networks like ISIS, per the Middle East Media Research Institute."We cannot make messaging technology secure for everybody except terrorists," Durov said in an interview with CNN in February 2016. "It's either secure or not secure."But he's also something of an instigator on his personal accounts.In 2014, for example, when the Russian state called for a ban on Vkontakte, Durov's response was to post a photo of a dog in a hoodie on Twitter. When Vkontakte was accused of hosting pornography, he changed his Twitter handle from "VK CEO" to "Porn King," according to The Calvert Journal. And in 2017, he shared his passport photo on Twitter, writing that it's "strangely suitable for media articles about terrorists using Telegram."Read the original article on Business Insider.....»»

Category: topSource: businessinsiderDec 28th, 2022

The "world"s coolest dictator" rounded up 60,000 people in a supposed crackdown on MS-13. A shrimp farming community is fighting back.

The MS-13 gang made El Salvador one of the most violent places not at war. The "world's coolest dictator" created a new layer of misery. Residents of the Bajo Lempa meet weekly at a retreat center to discuss the mass arrests.Fred Ramos for InsiderGang violence has made El Salvador one of the world's most violent places not at war. The crackdown by its "Bitcoin president" created a new layer of misery.SISIGUAYO, EL SALVADOR — On the morning that Walber Rodriguez was arrested last May, he was just two minutes from his home in Sisiguayo, El Salvador.Walber and his wife Estefany had worked the overnight shift at the shrimp cooperative, and then taken their six-year-old daughter Michelle to visit a relative. Walber was driving the family motorcycle, and Estefany and Michelle sat behind him. They were headed home.Walber was pulled over at "El Ceibo," a gathering place in Sisiguayo that's marked by a sturdy tree with an abundant canopy. Soon, Walber's sister, mother, and father had arrived, trying to reason with the officer, who knew them by name. They didn't understand why Walber was being handcuffed. Sisiguayo was a place that saw police and soldiers as allies. Back in 2015, when the MS-13 gang descended on the hamlet looking to recruit local teenagers, the cops had come down hard, even murdering some of the gang members, and Walber and his neighbors had raised money to build a new police station. Now, backup was arriving for the officer. Two navy soldiers showed up, including one who had been with Walber just the night before, watching a soccer game, and informed the others that Walber was "a working man." A patrol vehicle full of additional cops followed. No one named anything that Walber had done wrong. Yet the family's pleas didn't work. "Look," said the officer who led Walber off, flipping his wrist to the sky, "this comes from above." Within days of Walber's arrest, the Rodriguezes learned he was being accused of belonging to MS-13. "El Ceibo," a gathering place in Sisiguayo, is marked by a sturdy tree with an abundant canopy. It was here that Walber Rodriguez was arrested on May 1, 2022.Fred Ramos for InsiderScenes like this have been playing out across El Salvador since March, when President Nayib Bukele declared a "state of exception" and suspended certain constitutional rights, ostensibly to deal with MS-13 and two offshoots of the rival Barrio 18 gang, Barrio 18 Sureños and Barrio 18 Revolucionarios — all of which have terrorized El Salvador and made it one of the world's most violent places not at war. The declaration was meant to be temporary, lasting 30 days, but Bukele's administration has renewed it nine times. More than 60,000 people, mostly working-age men, have been arrested, while signs along roadways feature cinematic images of heavily-armed police ridding the country of "terrorists." Just as commercial fishermen trawl their way through columns of water to maximize their catch, Salvadoran authorities have rounded people up indiscriminately and with flimsy explanations.The 'world's coolest dictator' Even before authorities crushed in tens of thousands in a span of mere weeks, El Salvador's prisons were overcrowded and disease-ridden. It now tops the list of countries with the highest percentage of their populations behind bars, according to the World Prison Brief, a distinction that has been previously held by the United States. The supposed targets, MS-13 and Barrio 18, began in Los Angeles in the late twentieth century and arrived in El Salvador by way of gang members deported from the US. In 2018, then-President Donald Trump referenced MS-13 to say the US had allowed "animals" to cross into the country, and to justify draconian immigration policies. In El Salvador, the gangs have become one of the country's biggest employers, and they have cemented their power through backroom deals with elected leaders. That appears to have continued under Bukele, a former executive at a family public relations firm who was elected president in 2019 and has fashioned himself, in his ever-changing Twitter bio, as the "world's coolest dictator." Outside El Salvador, Bukele is best known for adopting Bitcoin as a national currency. A sign in the capital, San Salvador, announces the anti-gang crackdown.Fred Ramos for InsiderLast year, the US Treasury sanctioned two senior officials from Bukele's administration for cutting a deal with the gangs in exchange for support in the 2021 midterm elections — which saw Bukele's New Ideas party win a supermajority — and committing fewer homicides. What preceded the state of exception was a horrific weekend in which the gangs killed nearly 90 people. It, too, was allegedly a product of that deal: Salvadoran journalists at the investigative news outlet El Faro reported that the rampage was MS-13's retribution for a break-down in the agreement. The cooperation doesn't end there. Earlier this year, when the U.S. federal court of the Eastern District of New York requested the extradition of MS-13's leadership to stand trial on terrorism charges, Bukele-allied judges blocked some of the extraditions. The administration then released one of the wanted gang leaders from prison, and a senior official helped him flee to Guatemala. The administration denies all this, and, so far, things appear to be going Bukele's way. Tough-on-crime stances have historically been as popular in El Salvador as in the United States. And, as in the U.S., the public is primed to believe that anyone targeted by police is guilty until proven innocent. A Gallup poll released in October recorded Bukele's public approval at 86%. Police make an arrest in San Salvador on June 14th, 2022.Fred Ramos for InsiderThe word on the street, according to family members gathered at prisons for news of loved ones, is that while local gang cliques have gone quiet, they're still out there — hiding in full knowledge of the police, whose focus is elsewhere. According to the Passionist Social Services, nearly 40% of the murders in El Salvador since the beginning of the state of exception have been committed by police. Meanwhile, the administration has steadily eroded public access to information about who they are taking and why. El Faro obtained documents involving 690 arrests between March and April, and found that, overwhelmingly, the police are using criteria like "looking suspicious" or "acting nervous" to justify the arrests. Bukele, for his part, has breezily mentioned a margin of "one percent error." "This time, they're not coming out," he tweeted about the state of exception detainees in mid-April. The administration is building a new prison that Bukele says will house 40,000 "terrorists" who "will be cut off from the outside world." But, by terrorists, the president seems to mean people like Walber. 'Until we can embrace them'Once it became clear that Walber had been caught up in the crackdown, the Rodriguez family's hope for a quick release evaporated. By this point, they had discovered that they were not alone. All around them in Sisiguayo and the surrounding Bajo Lempa valley, people were arrested with no satisfactory explanation. The sons of two cousins who lived in a nearby community, Mario and Pablo, were among the first to be taken; their boys were handcuffed while drinking beers after a soccer game. Another neighbor was arrested even though he'd obtained and was carrying around his spotless police record, believing, wrongly, that such a thing would matter to police. He was detained holding his one-year-old in his arms.Residents of the Bajo Lempa who'd been touched by the arrests had begun meeting weekly at a nearby retreat center. There were only about a dozen attendees then, most of them trembling in fear and unable to tell their stories without crying. Now, Estefany, along with Walber's sister, Glenda, and Walber's parents, Tomas and Margarita, became the group's newest members. The group had started in April, launched by Rossy Iraheta Marinero and José Salvador Ruiz, known as Chamba  — two lay pastoral guides whose faith follows the tenets of Latin American liberation theology. They came from the same limited economic reality as their neighbors, and, in fact, they have full-time jobs and families. None of their own relatives had been detained. But they'd been stirred by the plight and compelled by their own theological solidarity practices to act. In the early days, they found that even civil society organizations that were traditionally fearless in denouncing state violence seemed reluctant to aid the so-called "terrorists." A handful of human rights organizations, principally one called Cristosal and a feminist collective in San Salvador, stepped up and, through them, the group has now filed 111 claims of habeas corpus  — a legal demand that prosecutors present their evidence against a detained person, or forfeit custody. "The families have hope that their loved ones are still alive, but they don't have certainty of that," Rossy told me. They also created a website where they posted photos of their imprisoned kin, and composed a song, "Until we can embrace them," that enshrines their suffering and their demands.   Few groups elsewhere in the country have coalesced in this way to lobby. Rossy evokes groups in Argentina and Mexico – and even in El Salvador itself – who never stopped agitating for justice on behalf of loved ones who had been disappeared by the state in earlier decades, leaving maps for others to follow. "A long battle" lies ahead, Rossy cautioned them in one meeting. "You have to be prepared."Outside MarionaWalber, and many of the others from the Bajo Lempa, had ended up at a prison informally known as Mariona, for the municipality where it's located. Under the state of exception, prisons were sealed off. Not even lawyers could get in. There was no protocol for finding out how Walber was doing, or if he was even alive. In El Salvador, it falls to families to help feed and clothe incarcerated relatives. Although the State provides meals to those in prison, Bukele has limited the men to two meager plates per day, as punishment. To leave supplemental food and other essentials, or to elicit a nugget of information from a bureaucrat at the prison's entrance, Estefany, Glenda, and others from Sisiguayo had no choice but to camp out outside Mariona. It's mostly men who have been arrested, and, in the first months of the crackdown, it was mostly women waiting outside prisons, by the thousands, for days at a time, sharing meals and makeshift cardboard mattresses. Everyone was taking on debt to afford the litany of expenses that follow an arrest, and some said they'd lost their jobs because they had spent so many days waiting. It was rumored that some police were offering to trade a man's freedom for sex or money.Glenda Rodriguez walks to the Mariona prison to get news of her brother, Walber Rodriguez, on June 20, 2022.Fred Ramos for Insider The jailings came so fast that Cristosal rushed to set up an online system where families could report arrests and sign up for support as they navigated the justice system. Families described traveling hours to a public defender's office and finding a line so long they lost hope of being seen. There's now about one public defender for every 200 arrests. Initial hearings include up to 500 defendants simultaneously, and Bukele has warned he'll be monitoring judges for "favoring delinquents."  If a name disappears from the register of detainees, it could mean they'd been moved to another prison, or to a hospital, or to a morgue. The country's major newspapers run regular reports of families being unceremoniously delivered the lifeless bodies of loved ones. One of the few men who'd been held at Izalco prison and then released told the Salvadoran outlet La Prensa Grafica that prisoners had been made to run barefoot in circles for hours. When one man fell from exhaustion, the guards broke his ribs, and he died eight days later, the man said. This is the kind of news the families of the Bajo Lempa live in terror of receiving. 'We fear each other again'Sisiguayo sits in the fertile valley where the Lempa river makes its final stretch through El Salvador before flowing out to the Pacific Ocean. Here, the air tastes salty and thick, a reminder of the mangrove forests and the ocean just beyond them. Homes are one-story cinderblock structures, painted in tropical greens and blues and surrounded by clotheslines, palm trees and outhouses. A communal speaker system broadcasts news and emergency alerts.A sunbaked dirt road connects Sisiguayo to the nearest highway, and along it, residents commute by bicycle or motorbike, bending around the cows, horses and dogs that loll about. Every year around November, the rainy season leaves behind deep potholes, so each family gives the share of money they can spare to pay for gas to power the construction equipment loaned from the mayor's office to fortify the road. Most young people work in shrimp cooperatives, where many tasks are nocturnal. It's a life of little sleep and hard manual labor. Night shifts start at around three in the morning. The workers return home for breakfast at about nine, and head off to a second job, like seasonal farming or bricklaying. Here, as everywhere else, the state of exception has been a financial drain. More than a dozen men from one of the shrimp cooperatives were netted in the crackdown, and what normally takes the cooperative two weeks to accomplish now takes two or three months. Roxana, another one of the Rodriguezes' neighbors, was hit especially hard by the arrests. Her two sons, a daughter-in-law and a brother-in-law were rounded up, as well as her boyfriend Jeremias' two nephews. Now, she spends much of her time running endless arrest-related errands. Her youngest daughter, who's 12, had to leave school to help run the family's corner store and care for Roxana's 5-year-old grandchild. Within the first six weeks, the costs ballooned to around $1000 — a small fortune that's twice the amount Roxana spent to open and fully stock her shop. By the late summer, Jeremias is usually out in the fields alongside Roxana's two boys and his two nephews, planting corn for the family to eat. With them in prison, he had to forgo the crop this year, because it's too much to handle alone.  The state of exception "has a human cost that we still can't fully see," said Noah Bullock, Executive Director of Cristosal. "There is the torture, the inhumane treatment, the more than eighty deaths in prisons, and that's only talking about the people who are detained. Life projects that people have built slowly over generations are suddenly paralyzed and collapsed. There's the loss of income and the simultaneous expenses. The social cost of being stigmatized as 'terrorists.'" The administration seems unperturbed by the volume of blameless people it has locked up. "There will always be victims in war," Vice President Felix Ulloa has said of the state of exception. Walber's father, Tomas, at home in Sisiguayo, on June 17, 2022.Fred Ramos for InsiderThe last time state security forces were targeting the people of the Bajo Lempa en masse and without explanation, it was in the middle of a civil war. From late 1979 until 1992, vicious US-backed government forces clashed with a leftist guerrilla movement. More than 75,000 Salvadorans died and thousands more were disappeared. A United Nations truth commission later found that 85% of the war kidnapping, torture and murder were committed by the government forces, including police and military. Walber's parents were among those fighting on the side of the guerrillas. In 1992, when they dropped their rifles after U.N.-brokered peace talks, they were given land as a way to return to civilian life. Margarita, Tomas and their neighbors came to inhabit Sisiguayo, with its rich coastal tracts, generous for fishing and farming. For Margarita, her son's senseless arrest reminded her of the state-sponsored kidnappings that had led her to take up arms. "That's what most hurts," she told me. "Now we fear each other again."  A photo of Walber Rodriguez's father, Tomas, from when he was a member of a guerrilla group during the Salvadoran civil war, hangs in his house.Fred Ramos for InsiderThe Bajo Lempa is also a flood plain, a condition that was exacerbated by poor government management of the hydroelectric dams that line the river. During repeated devastating floods in the past three decades, the people of the region, the Rodriguez family among them, lobbied and protested, even marching about sixty miles on foot to the capital to demand better dam administration. For Walber and his older sister Glenda, who were children at the time, this was an early education in democracy. The Bajo Lempa won. San Salvador committed to building the levies needed to ameliorate the annual floods, and to communicating its plans to discharge water from the dams, so the communities in harms' way could evacuate in time.Now, they are again under siege. Surf City Abroad, Bukele is best known for two things. First, his announcement, at the Bitcoin 2021 conference in Miami, that his government would "push humanity at least a tiny bit in the right direction" by adopting Bitcoin as a national currency. Second, his "Surf City" initiative along El Salvador's 190-mile Pacific coastline, where consistent eight-to-ten-foot waves in prime spots makes it one of the best surfing destinations in the Americas. Bukele's target audience for Surf City is Bitcoin enthusiasts and international surfers. And everyone knows that Surf City is his. After the apparent breakdown in negotiations between the administration and MS-13, the gangs left a message for Bukele in the form of a mangled cadaver on the highway that connects the beaches to the capital.By June 2022, Bloomberg estimated that Bukele's crypto gamble had cost El Salvador nearly $56 million. That same month, as thousands of Salvadorans were being locked up, Surf City was playing host to the World Surf League's Championship Tour at a beach called Punta Roca. "Eighty-two degree water, no wetsuits!" a voice thundered from the loudspeaker.Nearby, cameramen grumbled to a Salvadoran surfer that they couldn't pan without a uniformed man with a rifle coming into the image.  Locals, who in theory stand to benefit from all of this, were remarking that whitewashing the entrance wall to one beach, El Tunco, and stamping it with an English name left it looking like a drive-through bank. "It was good that he saw the potential in our waves," Enzo, who runs a couple of cafes in the area, told me one evening. Promised infrastructural improvements, like finally completing a waste-water treatment plant so that businesses aren't reliant on bottled water, haven't arrived. Meanwhile, new luxury apartments with a base price of $400,000 are being marketed to crypto enthusiasts, prompting worry that excessive development will smother the area's natural beauty and put everyone out of business. It's almost as if Surf City is Bukele's Potemkin Village, thrown up to boost his standing in a handful of elite circles as he loses legitimacy elsewhere. Bukele "wants to promote the country as a place that other people can buy," said Bullock of Cristosal. "But what is his plan for the middle-aged man who has sold coconuts in Punta Roca his whole life? El Tunco already has local commerce and its own identity. Why not honor that identity?"'Dad's not working, is he?'When Walber was jailed, Estefany told their six-year-old, Michelle, that Walber had gone out of town for a job. When Estefany and Glenda left for days camped outside the prison, she said they were studying. Michelle's questions became harder to escape. When he was away working, Walber usually sent a flood of adoring messages to his daughter on Estefany's phone, but this time, there were none to show. Before ten days had passed, Michelle cornered her mom: "Dad's not working, is he?"  At six, Michelle is absorbing that her life is built on shifting sands — a father in prison, a mother who might withhold the truth. Estefany tried to explain, saying, "The authorities make mistakes." But it's just another tectonic lesson for a child. Walber and Estefany have known each other since they were kids and they've been partners for years, but it was only last year that they finally got married. They were the first in the family to have a real wedding, and Glenda remembers how they both giggled when they asked her to save the date — Dec. 17. Graduation photos of Walber Rodriguez, left, and his sister, Glenda Rodriguez, right, at the family house in Sisiguayo.Fred Ramos for InsiderEstefany's dress, which Glenda and Margarita helped her choose, was the color of red wine and had a sparkling brooch at the bosom. Walber had splurged on a new oxford shirt, jeans, and white tennis shoes. He also surprised Estefany with a wedding ring, which he had secretly saved for months to buy. It was a luxury she had never imagined. The cake, a single-tier white sphere adorned with fruit, held the children rapt until it was time to dig in. When Glenda thinks about the politicians and the police who get to return home to their families at night, so easy in their freedom, it fills her with rage. They can't even begin to comprehend what they have stolen from their people.'No one else will defend him but us' The retreat center where the families met every week was a thirty-minute crawling drive down the potholed dirt road from where Walber was arrested. In late June, 54 days after Walber's arrest, three-dozen of them sat as they usually did, in a circle of plastic chairs in an open-air pavilion, roofed in ceramic tile and ringed in a garden of carefully-manicured green.Rossy stood in the middle of the circle, wearing flip-flops and a white tunic embroidered with flowers, calling on people to speak. Chamba kept a notebook propped between his thigh and the arm of his wheelchair. The families were debating: Should they stay the course, and pursue their habeas corpus claims in court? Or was it time to take to the streets? The habeas corpus route had been Rossy's idea. Back in 2020, right when COVID-19 upended global travel, Rossy was in Ecuador at a theological conference. Bukele was about to close the borders and implement some of the most restrictive pandemic measures in the world. She managed to get onto the last flight into the Salvadoran airport and ended up at a quarantine center for six weeks. Desperate for a way out, a lawyer friend advised her to file a habeas corpus claim. It worked – she was released. Now, it's a tactic that more than 1,800 other Salvadorans across the country have also used since March, but to little effect since the administration has wrenched the legal system into its orbit, forcing many judges to retire and intimidating the rest, along with flooding the system with many times more defendants than it can handle. Members of the group have been harassed by the police, and there was always concern that cops might show up in the middle of the meeting to arrest everyone. One woman who had started attending after her husband was arrested was then herself arrested. Now, the neighbors couldn't agree on what was best. The state of exception allowed the police to detain anyone for any reason. If they protested and ended up incarcerated alongside their loved ones, who would defend them then?  People clamored to speak. Rossy called on a gray-haired man in a cowboy hat. He was one of the many who had spent consecutive days and nights on the street outside Mariona, where his son was being held, and while there, he heard rumor that the guards take vengeance on prisoners whose families caused trouble out front. He rose slowly, and then stated his firm opposition to any public action. He reminded the group that it wasn't only themselves who would pay the price for protesting. When he took up arms in the civil war, he said, it was his own life he was putting at risk. But now, any action might put his son's life at risk. When he finished speaking, Glenda – who, at 28 years old, was among the youngest group members – raised her hand. "I may not have as much life experience as many of you. And I didn't live the war fighting in the mountains like many of you did," she began. But, she continued, she did know that all of El Salvador's civil rights victories, including democracy itself, were the product of struggles on the street. She too had camped outside Mariona, and she had learned that viral malicious rumors appeared on social media as part of an attempt to silence families. A meeting of the Bajo Lempa families on June 17, 2022.Fred Ramos for Insider"If the state is going to kill my brother, it will do so whether or not I speak out. If it will incarcerate me – the same is true," she reasoned. "No one else will defend him but us." Finally, there was simply the value of the truth: "The president wants to make this country look like a wonderland, like everything is Surf City," she said – but the world needed to know what was really happening in El Salvador.  The group ultimately decided that Glenda was right: it was time to take the streets. And just as each Bajo Lempa family had discovered that they were not alone when they found the group, now they saw there were hundreds of families around the country who, like them, were ready to march in San Salvador. They began regularly joining the others in the capital to protest and speak to the media, while continuing their habeas corpus petitions. Just before Christmas, the families of the Bajo Lempa packed a bridge on a main thoroughfare and demanded their loved ones be freed. For now, the Bukele administration remains unmoved. The group is now planning to sue their government in an international human rights court.One day last summer, before anyone comprehended how long this would last, Roxana told me something that multiple women in the Bajo Lempa echoed: Since her children were detained, she has been dreaming of them. In one dream, she was sitting at home in the dark, and one of her three sons walked through the front door. He paused in the threshold. She thought it was Cristian, the only one who has not yet been taken. But when he stepped out of the shadow, she saw that it was Javier, her youngest. He was dressed just as he had been on April 27, the night the police hauled him away. She called to him – and then the dream ended. "As a mother," she said, "you wake up to a nightmare."This reporting was supported by the International Women's Media Foundation's Howard G. Buffett Fund for Women Journalists.Read the original article on Business Insider.....»»

Category: topSource: businessinsiderDec 27th, 2022

The "world"s coolest dictator" rounded up 60,000 people in a crackdown on MS-13. A shrimp farming community is fighting back.

The MS-13 gang made El Salvador one of the most violent places not at war. The 'world's coolest dictator' created a new layer of misery. Residents of the Bajo Lempa meet weekly at a retreat center to discuss the mass arrests.Fred Ramos for InsiderGang violence has made El Salvador one of the world's most violent places not at war. The crackdown by its "Bitcoin president" created a new layer of misery.SISIGUAYO, EL SALVADOR — On the morning that Walber Rodriguez was arrested last May, he was just two minutes from his home in Sisiguayo, El Salvador.Walber and his wife Estefany had worked the overnight shift at the shrimp cooperative, and then taken their six-year-old daughter Michelle to visit a relative. Walber was driving the family motorcycle, and Estefany and Michelle sat behind him. They were headed home.Walber was pulled over at "El Ceibo," a gathering place in Sisiguayo that's marked by a sturdy tree with an abundant canopy. Soon, Walber's sister, mother, and father had arrived, trying to reason with the officer, who knew them by name. They didn't understand why Walber was being handcuffed. Sisiguayo was a place that saw police and soldiers as allies. Back in 2015, when the MS-13 gang descended on the hamlet looking to recruit local teenagers, the cops had come down hard, even murdering some of the gang members, and Walber and his neighbors had raised money to build a new police station. Now, backup was arriving for the officer. Two navy soldiers showed up, including one who had been with Walber just the night before, watching a soccer game, and informed the others that Walber was "a working man." A patrol vehicle full of additional cops followed. No one named anything that Walber had done wrong. Yet the family's pleas didn't work. "Look," said the officer who led Walber off, flipping his wrist to the sky, "this comes from above." Within days of Walber's arrest, the Rodriguezes learned he was being accused of belonging to MS-13. "El Ceibo," a gathering place in Sisiguayo, is marked by a sturdy tree with an abundant canopy. It was here that Walber Rodriguez was arrested on May 1, 2022.Fred Ramos for InsiderScenes like this have been playing out across El Salvador since March, when President Nayib Bukele declared a "state of exception" and suspended certain constitutional rights, ostensibly to deal with MS-13 and two offshoots of the rival Barrio 18 gang, Barrio 18 Sureños and Barrio 18 Revolucionarios — all of which have terrorized El Salvador and made it one of the world's most violent places not at war. The declaration was meant to be temporary, lasting 30 days, but Bukele's administration has renewed it nine times. More than 60,000 people, mostly working-age men, have been arrested, while signs along roadways feature cinematic images of heavily-armed police ridding the country of "terrorists." Just as commercial fishermen trawl their way through columns of water to maximize their catch, Salvadoran authorities have rounded people up indiscriminately and with flimsy explanations.The 'world's coolest dictator' Even before authorities crushed in tens of thousands in a span of mere weeks, El Salvador's prisons were overcrowded and disease-ridden. It now tops the list of countries with the highest percentage of their populations behind bars, according to the World Prison Brief, a distinction that has been previously held by the United States. The supposed targets, MS-13 and Barrio 18, began in Los Angeles in the late twentieth century and arrived in El Salvador by way of gang members deported from the US. In 2018, then-President Donald Trump referenced MS-13 to say the US had allowed "animals" to cross into the country, and to justify draconian immigration policies. In El Salvador, the gangs have become one of the country's biggest employers, and they have cemented their power through backroom deals with elected leaders. That appears to have continued under Bukele, a former executive at a family public relations firm who was elected president in 2019 and has fashioned himself, in his ever-changing Twitter bio, as the "world's coolest dictator." Outside El Salvador, Bukele is best known for adopting Bitcoin as a national currency. A sign in the capital, San Salvador, announces the anti-gang crackdown.Fred Ramos for InsiderLast year, the US Treasury sanctioned two senior officials from Bukele's administration for cutting a deal with the gangs in exchange for support in the 2021 midterm elections — which saw Bukele's New Ideas party win a supermajority — and committing fewer homicides. What preceded the state of exception was a horrific weekend in which the gangs killed nearly 90 people. It, too, was allegedly a product of that deal: Salvadoran journalists at the investigative news outlet El Faro reported that the rampage was MS-13's retribution for a break-down in the agreement. The cooperation doesn't end there. Earlier this year, when the U.S. federal court of the Eastern District of New York requested the extradition of MS-13's leadership to stand trial on terrorism charges, Bukele-allied judges blocked some of the extraditions. The administration then released one of the wanted gang leaders from prison, and a senior official helped him flee to Guatemala. The administration denies all this, and, so far, things appear to be going Bukele's way. Tough-on-crime stances have historically been as popular in El Salvador as in the United States. And, as in the U.S., the public is primed to believe that anyone targeted by police is guilty until proven innocent. A Gallup poll released in October recorded Bukele's public approval at 86%. Police make an arrest in San Salvador on June 14th, 2022.Fred Ramos for InsiderThe word on the street, according to family members gathered at prisons for news of loved ones, is that while local gang cliques have gone quiet, they're still out there — hiding in full knowledge of the police, whose focus is elsewhere. According to the Passionist Social Services, nearly 40% of the murders in El Salvador since the beginning of the state of exception have been committed by police. Meanwhile, the administration has steadily eroded public access to information about who they are taking and why. El Faro obtained documents involving 690 arrests between March and April, and found that, overwhelmingly, the police are using criteria like "looking suspicious" or "acting nervous" to justify the arrests. Bukele, for his part, has breezily mentioned a margin of "one percent error." "This time, they're not coming out," he tweeted about the state of exception detainees in mid-April. The administration is building a new prison that Bukele says will house 40,000 "terrorists" who "will be cut off from the outside world." But, by terrorists, the president seems to mean people like Walber. 'Until we can embrace them'Once it became clear that Walber had been caught up in the crackdown, the Rodriguez family's hope for a quick release evaporated. By this point, they had discovered that they were not alone. All around them in Sisiguayo and the surrounding Bajo Lempa valley, people were arrested with no satisfactory explanation. The sons of two cousins who lived in a nearby community, Mario and Pablo, were among the first to be taken; their boys were handcuffed while drinking beers after a soccer game. Another neighbor was arrested even though he'd obtained and was carrying around his spotless police record, believing, wrongly, that such a thing would matter to police. He was detained holding his one-year-old in his arms.Residents of the Bajo Lempa who'd been touched by the arrests had begun meeting weekly at a nearby retreat center. There were only about a dozen attendees then, most of them trembling in fear and unable to tell their stories without crying. Now, Estefany, along with Walber's sister, Glenda, and Walber's parents, Tomas and Margarita, became the group's newest members. The group had started in April, launched by Rossy Iraheta Marinero and José Salvador Ruiz, known as Chamba  — two lay pastoral guides whose faith follows the tenets of Latin American liberation theology. They came from the same limited economic reality as their neighbors, and, in fact, they have full-time jobs and families. None of their own relatives had been detained. But they'd been stirred by the plight and compelled by their own theological solidarity practices to act. In the early days, they found that even civil society organizations that were traditionally fearless in denouncing state violence seemed reluctant to aid the so-called "terrorists." A handful of human rights organizations, principally one called Cristosal and a feminist collective in San Salvador, stepped up and, through them, the group has now filed 111 claims of habeas corpus  — a legal demand that prosecutors present their evidence against a detained person, or forfeit custody. "The families have hope that their loved ones are still alive, but they don't have certainty of that," Rossy told me. They also created a website where they posted photos of their imprisoned kin, and composed a song, "Until we can embrace them," that enshrines their suffering and their demands.   Few groups elsewhere in the country have coalesced in this way to lobby. Rossy evokes groups in Argentina and Mexico – and even in El Salvador itself – who never stopped agitating for justice on behalf of loved ones who had been disappeared by the state in earlier decades, leaving maps for others to follow. "A long battle" lies ahead, Rossy cautioned them in one meeting. "You have to be prepared."Outside MarionaWalber, and many of the others from the Bajo Lempa, had ended up at a prison informally known as Mariona, for the municipality where it's located. Under the state of exception, prisons were sealed off. Not even lawyers could get in. There was no protocol for finding out how Walber was doing, or if he was even alive. In El Salvador, it falls to families to help feed and clothe incarcerated relatives. Although the State provides meals to those in prison, Bukele has limited the men to two meager plates per day, as punishment. To leave supplemental food and other essentials, or to elicit a nugget of information from a bureaucrat at the prison's entrance, Estefany, Glenda, and others from Sisiguayo had no choice but to camp out outside Mariona. It's mostly men who have been arrested, and, in the first months of the crackdown, it was mostly women waiting outside prisons, by the thousands, for days at a time, sharing meals and makeshift cardboard mattresses. Everyone was taking on debt to afford the litany of expenses that follow an arrest, and some said they'd lost their jobs because they had spent so many days waiting. It was rumored that some police were offering to trade a man's freedom for sex or money.Glenda Rodriguez walks to the Mariona prison to get news of her brother, Walber Rodriguez, on June 20, 2022.Fred Ramos for Insider The jailings came so fast that Cristosal rushed to set up an online system where families could report arrests and sign up for support as they navigated the justice system. Families described traveling hours to a public defender's office and finding a line so long they lost hope of being seen. There's now about one public defender for every 200 arrests. Initial hearings include up to 500 defendants simultaneously, and Bukele has warned he'll be monitoring judges for "favoring delinquents."  If a name disappears from the register of detainees, it could mean they'd been moved to another prison, or to a hospital, or to a morgue. The country's major newspapers run regular reports of families being unceremoniously delivered the lifeless bodies of loved ones. One of the few men who'd been held at Izalco prison and then released told the Salvadoran outlet La Prensa Grafica that prisoners had been made to run barefoot in circles for hours. When one man fell from exhaustion, the guards broke his ribs, and he died eight days later, the man said. This is the kind of news the families of the Bajo Lempa live in terror of receiving. 'We fear each other again'Sisiguayo sits in the fertile valley where the Lempa river makes its final stretch through El Salvador before flowing out to the Pacific Ocean. Here, the air tastes salty and thick, a reminder of the mangrove forests and the ocean just beyond them. Homes are one-story cinderblock structures, painted in tropical greens and blues and surrounded by clotheslines, palm trees and outhouses. A communal speaker system broadcasts news and emergency alerts.A sunbaked dirt road connects Sisiguayo to the nearest highway, and along it, residents commute by bicycle or motorbike, bending around the cows, horses and dogs that loll about. Every year around November, the rainy season leaves behind deep potholes, so each family gives the share of money they can spare to pay for gas to power the construction equipment loaned from the mayor's office to fortify the road. Most young people work in shrimp cooperatives, where many tasks are nocturnal. It's a life of little sleep and hard manual labor. Night shifts start at around three in the morning. The workers return home for breakfast at about nine, and head off to a second job, like seasonal farming or bricklaying. Here, as everywhere else, the state of exception has been a financial drain. More than a dozen men from one of the shrimp cooperatives were netted in the crackdown, and what normally takes the cooperative two weeks to accomplish now takes two or three months. Roxana, another one of the Rodriguezes' neighbors, was hit especially hard by the arrests. Her two sons, a daughter-in-law and a brother-in-law were rounded up, as well as her boyfriend Jeremias' two nephews. Now, she spends much of her time running endless arrest-related errands. Her youngest daughter, who's 12, had to leave school to help run the family's corner store and care for Roxana's 5-year-old grandchild. Within the first six weeks, the costs ballooned to around $1000 — a small fortune that's twice the amount Roxana spent to open and fully stock her shop. By the late summer Jeremias, is usually out in the fields alongside Roxana's two boys and his two nephews, planting corn for the family to eat. With them in prison, he had to forgo the crop this year, because it's too much to handle alone.  The state of exception "has a human cost that we still can't fully see," said Noah Bullock, Executive Director of Cristosal. "There is the torture, the inhumane treatment, the more than eighty deaths in prisons, and that's only talking about the people who are detained. Life projects that people have built slowly over generations are suddenly paralyzed and collapsed. There's the loss of income and the simultaneous expenses. The social cost of being stigmatized as 'terrorists.'" The administration seems unperturbed by the volume of blameless people it has locked up. "There will always be victims in war," Vice President Felix Ulloa has said of the state of exception. Walber's father, Tomas, at home in Sisiguayo, on June 17, 2022.Fred Ramos for InsiderThe last time state security forces were targeting the people of the Bajo Lempa en masse and without explanation, it was in the middle of a civil war. From late 1979 until 1992, vicious US-backed government forces clashed with a leftist guerrilla movement. More than 75,000 Salvadorans died and thousands more were disappeared. A United Nations truth commission later found that 85% of the war kidnapping, torture and murder were committed by the government forces, including police and military. Walber's parents were among those fighting on the side of the guerrillas. In 1992, when they dropped their rifles after U.N.-brokered peace talks, they were given land as a way to return to civilian life. Margarita, Tomas and their neighbors came to inhabit Sisiguayo, with its rich coastal tracts, generous for fishing and farming. For Margarita, her son's senseless arrest reminded her of the state-sponsored kidnappings that had led her to take up arms. "That's what most hurts," she told me. "Now we fear each other again."  A photo of Walber Rodriguez's father, Tomas, from when he was a member of a guerrilla group during the Salvadoran civil war, hangs in his house.Fred Ramos for InsiderThe Bajo Lempa is also a flood plain, a condition that was exacerbated by poor government management of the hydroelectric dams that line the river. During repeated devastating floods in the past three decades, the people of the region, the Rodriguez family among them, lobbied and protested, even marching about sixty miles on foot to the capital to demand better dam administration. For Walber and his older sister Glenda, who were children at the time, this was an early education in democracy. The Bajo Lempa won. San Salvador committed to building the levies needed to ameliorate the annual floods, and to communicating its plans to discharge water from the dams, so the communities in harms' way could evacuate in time.Now, they are again under siege. Surf City Abroad, Bukele is best known for two things. First, his announcement, at the Bitcoin 2021 conference in Miami, that his government would "push humanity at least a tiny bit in the right direction" by adopting Bitcoin as a national currency. Second, his "Surf City" initiative along El Salvador's 190-mile Pacific coastline, where consistent eight-to-ten-foot waves in prime spots makes it one of the best surfing destinations in the Americas. Bukele's target audience for Surf City is Bitcoin enthusiasts and international surfers. And everyone knows that Surf City is his. After the apparent breakdown in negotiations between the administration and MS-13, the gangs left a message for Bukele in the form of a mangled cadaver on the highway that connects the beaches to the capital.By June 2022, Bloomberg estimated that Bukele's crypto gamble had cost El Salvador nearly $56 million. That same month, as thousands of Salvadorans were being locked up, Surf City was playing host to the World Surf League's Championship Tour at a beach called Punta Roca. "Eighty-two degree water, no wetsuits!" a voice thundered from the loudspeaker.Nearby, cameramen grumbled to a Salvadoran surfer that they couldn't pan without a uniformed man with a rifle coming into the image.  Locals, who in theory stand to benefit from all of this, were remarking that whitewashing the entrance wall to one beach, El Tunco, and stamping it with an English name left it looking like a drive-through bank. "It was good that he saw the potential in our waves," Enzo, who runs a couple of cafes in the area, told me one evening. Promised infrastructural improvements, like finally completing a waste-water treatment plant so that businesses aren't reliant on bottled water, haven't arrived. Meanwhile, new luxury apartments with a base price of $400,000 are being marketed to crypto enthusiasts, prompting worry that excessive development will smother the area's natural beauty and put everyone out of business. It's almost as if Surf City is Bukele's Potemkin Village, thrown up to boost his standing in a handful of elite circles as he loses legitimacy elsewhere. Bukele "wants to promote the country as a place that other people can buy," said Bullock of Cristosal. "But what is his plan for the middle-aged man who has sold coconuts in Punta Roca his whole life? El Tunco already has local commerce and its own identity. Why not honor that identity?"'Dad's not working, is he?'When Walber was jailed, Estefany told their six-year-old, Michelle, that Walber had gone out of town for a job. When Estefany and Glenda left for days camped outside the prison, she said they were studying. Michelle's questions became harder to escape. When he was away working, Walber usually sent a flood of adoring messages to his daughter on Estefany's phone, but this time, there were none to show. Before ten days had passed, Michelle cornered her mom: "Dad's not working, is he?"  At six, Michelle is absorbing that her life is built on shifting sands — a father in prison, a mother who might withhold the truth. Estefany tried to explain, saying, "The authorities make mistakes." But it's just another tectonic lesson for a child. Walber and Estefany have known each other since they were kids and they've been partners for years, but it was only last year that they finally got married. They were the first in the family to have a real wedding, and Glenda remembers how they both giggled when they asked her to save the date — Dec. 17. Graduation photos of Walber Rodriguez, left, and his sister, Glenda Rodriguez, right, at the family house in Sisiguayo.Fred Ramos for InsiderEstefany's dress, which Glenda and Margarita helped her choose, was the color of red wine and had a sparkling brooch at the bosom. Walber had splurged on a new oxford shirt, jeans, and white tennis shoes. He also surprised Estefany with a wedding ring, which he had secretly saved for months to buy. It was a luxury she had never imagined. The cake, a single-tier white sphere adorned with fruit, held the children rapt until it was time to dig in. When Glenda thinks about the politicians and the police who get to return home to their families at night, so easy in their freedom, it fills her with rage. They can't even begin to comprehend what they have stolen from their people.'No one else will defend him but us' The retreat center where the families met every week was a thirty-minute crawling drive down the potholed dirt road from where Walber was arrested. In late June, 54 days after Walber's arrest, three-dozen of them sat as they usually did, in a circle of plastic chairs in an open-air pavilion, roofed in ceramic tile and ringed in a garden of carefully-manicured green.Rossy stood in the middle of the circle, wearing flip-flops and a white tunic embroidered with flowers, calling on people to speak. Chamba kept a notebook propped between his thigh and the arm of his wheelchair. The families were debating: Should they stay the course, and pursue their habeas corpus claims in court? Or was it time to take to the streets? The habeas corpus route had been Rossy's idea. Back in 2020, right when COVID-19 upended global travel, Rossy was in Ecuador at a theological conference. Bukele was about to close the borders and implement some of the most restrictive pandemic measures in the world. She managed to get onto the last flight into the Salvadoran airport and ended up at a quarantine center for six weeks. Desperate for a way out, a lawyer friend advised her to file a habeas corpus claim. It worked – she was released. Now, it's a tactic that more than 1,800 other Salvadorans across the country have also used since March, but to little effect since the administration has wrenched the legal system into its orbit, forcing many judges to retire and intimidating the rest, along with flooding the system with many times more defendants than it can handle. Members of the group have been harassed by the police, and there was always concern that cops might show up in the middle of the meeting to arrest everyone. One woman who had started attending after her husband was arrested was then herself arrested. Now, the neighbors couldn't agree on what was best. The state of exception allowed the police to detain anyone for any reason. If they protested and ended up incarcerated alongside their loved ones, who would defend them then?  People clamored to speak. Rossy called on a gray-haired man in a cowboy hat. He was one of the many who had spent consecutive days and nights on the street outside Mariona, where his son was being held, and while there, he heard rumor that the guards take vengeance on prisoners whose families caused trouble out front. He rose slowly, and then stated his firm opposition to any public action. He reminded the group that it wasn't only themselves who would pay the price for protesting. When he took up arms in the civil war, he said, it was his own life he was putting at risk. But now, any action might put his son's life at risk. When he finished speaking, Glenda – who, at 28 years old, was among the youngest group members – raised her hand. "I may not have as much life experience as many of you. And I didn't live the war fighting in the mountains like many of you did," she began. But, she continued, she did know that all of El Salvador's civil rights victories, including democracy itself, were the product of struggles on the street. She too had camped outside Mariona, and she had learned that viral malicious rumors appeared on social media as part of an attempt to silence families. A meeting of the Bajo Lempa families on June 17, 2022.Fred Ramos for Insider"If the state is going to kill my brother, it will do so whether or not I speak out. If it will incarcerate me – the same is true," she reasoned. "No one else will defend him but us." Finally, there was simply the value of the truth: "The president wants to make this country look like a wonderland, like everything is Surf City," she said – but the world needed to know what was really happening in El Salvador.  The group ultimately decided that Glenda was right: it was time to take the streets. And just as each Bajo Lempa family had discovered that they were not alone when they found the group, now they saw there were hundreds of families around the country who, like them, were ready to march in San Salvador. They began regularly joining the others in the capital to protest and speak to the media, while continuing their habeas corpus petitions. Just before Christmas, the families of the Bajo Lempa packed a bridge on a main thoroughfare and demanded their loved ones be freed. For now, the Bukele administration remains unmoved. The group is now planning to sue their government in an international human rights court.One day last summer, before anyone comprehended how long this would last, Roxana told me something that multiple women in the Bajo Lempa echoed: Since her children were detained, she has been dreaming of them. In one dream, she was sitting at home in the dark, and one of her three sons walked through the front door. He paused in the threshold. She thought it was Cristian, the only one who has not yet been taken. But when he stepped out of the shadow, she saw that it was Javier, her youngest. He was dressed just as he had been on April 27, the night the police hauled him away. She called to him – and then the dream ended. "As a mother," she said, "you wake up to a nightmare."This reporting was supported by the International Women's Media Foundation's Howard G. Buffett Fund for Women Journalists.Read the original article on Business Insider.....»»

Category: topSource: businessinsiderDec 27th, 2022

The "world"s coolest dictator" rounded up 60,000 people he claims are MS-13 gang members. A shrimp farming community is fighting back.

The MS-13 gang made El Salvador one of the most violent places not at war. The 'world's coolest dictator' created a new layer of misery. Residents of the Bajo Lempa meet weekly at a retreat center to discuss the mass arrests.Fred Ramos for InsiderGang violence has made El Salvador one of the world's most violent places not at war. The crackdown by its "Bitcoin president" created a new layer of misery.SISIGUAYO, EL SALVADOR — On the morning that Walber Rodriguez was arrested last May, he was just two minutes from his home in Sisiguayo, El Salvador.Walber and his wife Estefany had worked the overnight shift at the shrimp cooperative, and then taken their six-year-old daughter Michelle to visit a relative. Walber was driving the family motorcycle, and Estefany and Michelle sat behind him. They were headed home.Walber was pulled over at "El Ceibo," a gathering place in Sisiguayo that's marked by a sturdy tree with an abundant canopy. Soon, Walber's sister, mother, and father had arrived, trying to reason with the officer, who knew them by name. They didn't understand why Walber was being handcuffed. Sisiguayo was a place that saw police and soldiers as allies. Back in 2015, when the MS-13 gang descended on the hamlet looking to recruit local teenagers, the cops had come down hard, even murdering some of the gang members, and Walber and his neighbors had raised money to build a new police station. Now, backup was arriving for the officer. Two navy soldiers showed up, including one who had been with Walber just the night before, watching a soccer game, and informed the others that Walber was "a working man." A patrol vehicle full of additional cops followed. No one named anything that Walber had done wrong. Yet the family's pleas didn't work. "Look," said the officer who led Walber off, flipping his wrist to the sky, "this comes from above." Within days of Walber's arrest, the Rodriguezes learned he was being accused of belonging to MS-13. "El Ceibo," a gathering place in Sisiguayo, is marked by a sturdy tree with an abundant canopy. It was here that Walber Rodriguez was arrested on May 1, 2022.Fred Ramos for InsiderScenes like this have been playing out across El Salvador since March, when President Nayib Bukele declared a "state of exception" and suspended certain constitutional rights, ostensibly to deal with MS-13 and two offshoots of the rival Barrio 18 gang, Barrio 18 Sureños and Barrio 18 Revolucionarios — all of which have terrorized El Salvador and made it one of the world's most violent places not at war. The declaration was meant to be temporary, lasting 30 days, but Bukele's administration has renewed it nine times. More than 60,000 people, mostly working-age men, have been arrested, while signs along roadways feature cinematic images of heavily-armed police ridding the country of "terrorists." Just as commercial fishermen trawl their way through columns of water to maximize their catch, Salvadoran authorities have rounded people up indiscriminately and with flimsy explanations.The 'world's coolest dictator' Even before authorities crushed in tens of thousands in a span of mere weeks, El Salvador's prisons were overcrowded and disease-ridden. It now tops the list of countries with the highest percentage of their populations behind bars, according to the World Prison Brief, a distinction that has been previously held by the United States. The supposed targets, MS-13 and Barrio 18, began in Los Angeles in the late twentieth century and arrived in El Salvador by way of gang members deported from the US. In 2018, then-President Donald Trump referenced MS-13 to say the US had allowed "animals" to cross into the country, and to justify draconian immigration policies. In El Salvador, the gangs have become one of the country's biggest employers, and they have cemented their power through backroom deals with elected leaders. That appears to have continued under Bukele, a former executive at a family public relations firm who was elected president in 2019 and has fashioned himself, in his ever-changing Twitter bio, as the "world's coolest dictator." Outside El Salvador, Bukele is best known for adopting Bitcoin as a national currency. A sign in the capital, San Salvador, announces the anti-gang crackdown.Fred Ramos for InsiderLast year, the US Treasury sanctioned two senior officials from Bukele's administration for cutting a deal with the gangs in exchange for support in the 2021 midterm elections — which saw Bukele's New Ideas party win a supermajority — and committing fewer homicides. What preceded the state of exception was a horrific weekend in which the gangs killed nearly 90 people. It, too, was allegedly a product of that deal: Salvadoran journalists at the investigative news outlet El Faro reported that the rampage was MS-13's retribution for a break-down in the agreement. The cooperation doesn't end there.: Earlier this year, when the U.S. federal court of the Eastern District of New York requested the extradition of MS-13's leadership to stand trial on terrorism charges, Bukele-allied judges blocked some of the extraditions. The administration then released one of the wanted gang leaders from prison, and a senior official helped him flee to Guatemala. The administration denies all this, and, so far, things appear to be going Bukele's way. Tough-on-crime stances have historically been as popular in El Salvador as in the United States. And, as in the U.S., the public is primed to believe that anyone targeted by police is guilty until proven innocent. A Gallup poll released in October recorded Bukele's public approval at 86%. Police make an arrest in San Salvador on June 14th, 2022.Fred Ramos for InsiderThe word on the street, according to family members gathered at prisons for news of loved ones, is that while local gang cliques have gone quiet, they're still out there — hiding in full knowledge of the police, whose focus is elsewhere. According to xxx, nearly 40% of the xxx murders in El Salvador since the beginning of the state of exception have been committed by police. Meanwhile, the administration has steadily eroded public access to information about who they are taking and why. El Faro obtained documents involving 690 arrests between March and April, and found that, overwhelmingly, the police are using criteria like "looking suspicious" or "acting nervous" to justify the arrests. Bukele, for his part, has breezily mentioned a margin of "one percent error." "This time, they're not coming out," he tweeted about the state of exception detainees in mid-April. The administration is building a new prison that Bukele says will house 40,000 "terrorists" who "will be cut off from the outside world." But, by terrorists, the president seems to mean people like Walber. 'Until we can embrace them'Once it became clear that Walber had been caught up in the crackdown, the Rodriguez family's hope for a quick release evaporated. By this point, they had discovered that they were not alone. All around them in Sisiguayo and the surrounding Bajo Lempa valley, people were arrested with no satisfactory explanation. The sons of two cousins who lived in a nearby community, Mario and Pablo, were among the first to be taken; their boys were handcuffed while drinking beers after a soccer game. Another neighbor was arrested even though he'd obtained and was carrying around his spotless police record, believing, wrongly, that such a thing would matter to police. He was detained holding his one-year-old in his arms.Residents of the Bajo Lempa who'd been touched by the arrests had begun meeting weekly at a nearby retreat center. There were only about a dozen attendees then, most of them trembling in fear and unable to tell their stories without crying. Now, Estefany, along with Walber's sister, Glenda, and Walber's parents, Tomas and Margarita, became the group's newest members. The group had started in April, launched by Rossy Iraheta Marinero and José Salvador Ruiz, known as Chamba  — two lay pastoral guides whose faith follows the tenets of Latin American liberation theology. They came from the same limited economic reality as their neighbors, and, in fact, they have full-time jobs and families. None of their own relatives had been detained. But they'd been stirred by the plight and compelled by their own theological solidarity practices to act. In the early days, they found that even civil society organizations that were traditionally fearless in denouncing state violence seemed reluctant to aid the so-called "terrorists." A handful of human rights organizations, principally one called Cristosal and a feminist collective in San Salvador, stepped up and, through them, the group has now filed 111 claims of habeas corpus  — a legal demand that prosecutors present their evidence against a detained person, or forfeit custody. "The families have hope that their loved ones are still alive, but they don't have certainty of that," Rossy told me. They also created a website where they posted photos of their imprisoned kin, and composed a song, "Until we can embrace them," that enshrines their suffering and their demands.   Few groups elsewhere in the country have coalesced in this way to lobby. Rossy reminds the families ofthat they are not friendless in their woe, evoking groups in earlier decades in Argentina and Mexico – and even in El Salvador itself – who never stopped agitating for justice on behalf of loved ones who had been disappeared by the state in earlier decades, leaving maps for others to follow. "A long battle" lies ahead, Rossy cautioned them in one meeting. "You have to be prepared."Outside MarionaWalber, and many of the others from the Bajo Lempa, had ended up at a prison informally known as Mariona, for the municipality where it's located. Under the state of exception, prisons were sealed off. Not even lawyers could get in. There was no protocol for finding out how Walber was doing, or if he was even alive. In El Salvador, it falls to families to help feed and clothe incarcerated relatives. Although the State provides meals to those in prison, Bukele has limited the men to two meager plates per day, as punishment. To leave supplemental food and other essentials, or to elicit a nugget of information from a bureaucrat at the prison's entrance, Estefany, Glenda, and others from Sisiguayo had no choice but to camp out outside Mariona. It's mostly men who have been arrested, and, in the first months of the crackdown, it was mostly women waiting outside prisons, by the thousands, for days at a time, sharing meals and makeshift cardboard mattresses. Everyone was taking on debt to afford the litany of expenses that follow an arrest, and some said they'd lost their jobs because they had spent so many days waiting. It was rumored that some police were offering to trade a man's freedom for sex or money.Glenda Rodriguez walks to the Mariona prison to get news of her brother, Walber Rodriguez, on June 20, 2022.Fred Ramos for Insider The jailings came so fast that Cristosal rushed to set up an online system where families could report arrests and sign up for support as they navigated the justice system. Families described traveling hours to a public defender's office and finding a line so long they lost hope of being seen. There's now about one public defender for every 200 arrests. Initial hearings include up to 500 defendants simultaneously, and Bukele has warned he'll be monitoring judges for "favoring delinquents."  If a name disappears from the register of detainees, it could mean they'd been moved to another prison, or to a hospital, or to a morgue. The country's major newspapers run regular reports of families being unceremoniously delivered the lifeless bodies of loved ones. One of the few men who'd been held at Izalco prison and then released told the Salvadoran outlet La Prensa Grafica that prisoners had been made to run barefoot in circles for hours. When one man fell from exhaustion, the guards broke his ribs, and he died eight days later, the man said. This is the kind of news the families of the Bajo Lempa live in terror of receiving. 'We fear each other again'Sisiguayo sits in the fertile valley where the Lempa river makes its final stretch through El Salvador before flowing out to the Pacific Ocean. Here, the air tastes salty and thick, a reminder of the mangrove forests and the ocean just beyond them. Homes are one-story cinderblock structures, painted in tropical greens and blues and surrounded by clotheslines, palm trees and outhouses. A communal speaker system broadcasts news and emergency alerts.A sunbaked dirt road connects Sisiguayo to the nearest highway, and along it, residents commute by bicycle or motorbike, bending around the cows, horses and dogs that loll about. Every year around November, the rainy season leaves behind deep potholes, so each family gives the share of money they can spare to pay for gas to power the construction equipment loaned from the mayor's office to fortify the road. Most young people work in shrimp cooperatives, where many tasks are nocturnal. It's a life of little sleep and hard manual labor. Night shifts start at around three in the morning. The workers return home for breakfast at about nine, and head off to a second job, like seasonal farming or bricklaying. Here, as everywhere else, the state of exception has been a financial drain. More than a dozen men from one of the shrimp cooperatives were netted in the crackdown, and what normally takes the cooperative two weeks to accomplish now takes two or three months. Roxana, another one of the Rodriguezes' neighbors, was hit especially hard by the arrests. Her two sons, a daughter-in-law and a brother-in-law had all been rounded up, as well as her boyfriend Jeremias' two nephews. Now, she spends much of her time running endless arrest-related errands. Her youngest daughter, who's 12, had to leave school to help run the family's corner store and care for Roxana's 5-year-old grandchild. Within the first six weeks, the costs ballooned to around $1000 — a small fortune that's twice the amount Roxana spent to open and fully stock her shop. By the late summer, Jeremias, is usually out in the fields alongside Roxana's two boys and his two nephews, planting corn for the family to eat. With them in prison, he had to forgo the crop this year, because it's too much to handle alone.  The state of exception "has a human cost that we still can't fully see," said Noah Bullock, Executive Director of Cristosal. "There is the torture, the inhumane treatment, the more than eighty deaths in prisons, and that's only talking about the people who are detained. Life projects that people have built slowly over generations are suddenly paralyzed and collapsed. There's the loss of income and the simultaneous expenses. The social cost of being stigmatized as 'terrorists.'" The administration seems unperturbed by the volume of blameless people it has locked up. "There will always be victims in war," Vice President Felix Ulloa has said of the state of exception. Walber's father, Tomas, at home in Sisiguayo, on June 17, 2022.Fred Ramos for InsiderThe last time state security forces were targeting the people of the Bajo Lempa, en masse and without explanation, it was in the middle of a civil war. From late 1979 until 1992, vicious US-backed government forces clashed with a leftist guerrilla movement. More than 75,000 Salvadorans died and thousands more were disappeared. A United Nations truth commission later found that 85% of the war kidnapping, torture and murder were committed by the government forces, including police and military. Walber's parents were among those fighting on the side of the guerrillas. In 1992, when they dropped their rifles after U.N.-brokered peace talks, they were given land as a way to return to civilian life. Margarita, Tomas and their neighbors came to inhabit Sisiguayo, with its rich coastal tracts, generous for fishing and farming. For Margarita, her son's senseless arrest reminded her of the state-sponsored kidnappings that had led her to take up arms. "That's what most hurts," she told me. "Now we fear each other again."  A photo of Walber Rodriguez's father, Tomas, from when he was a member of a guerrilla group during the Salvadoran civil war, hangs in his house.Fred Ramos for InsiderThe Bajo Lempa is also a flood plain, a condition that was exacerbated by poor government management of the hydroelectric dams that line the river. During repeated devastating floods in the past three decades, the people of the region, the Rodriguez family among them, lobbied and protested, even marching about sixty miles on foot to the capital to demand better dam administration. For Walber and his older sister Glenda, who were children at the time, this was an early education in democracy. The Bajo Lempa won. San Salvador committed to building the levies needed to ameliorate the annual floods, and to communicating its plans to discharge water from the dams, so the communities in harms' way could evacuate in time.Now, they are again under siege. Surf City Outside El Salvador, Bukele is best known for two things. First, his announcement, at the Bitcoin 2021 conference in Miami, that his government would "push humanity at least a tiny bit in the right direction" by adopting Bitcoin as a national currency. Second, his "Surf City" initiative along El Salvador's 190-mile Pacific coastline, where consistent eight-to-ten-foot waves in prime spots makes it one of the best surfing spots in the Americas. Everyone knows that Surf City is his, and that Bukele's target audience is Bitcoin enthusiasts and international surfers. After the apparent breakdown in negotiations between the administration and MS-13, the gangs left a message for Bukele in the form of a mangled cadaver left on the highway that connects the beaches to the capital.By June 2022, Bloomberg estimated that Bukele's crypto gamble had cost El Salvador nearly $56 million. That same month, as thousands of Salvadorans were being locked up, Surf City was playing host to the World Surf League's Championship Tour at a beach called Punta Roca. "Eighty-two degree water, no wetsuits!" thundered from the sportscaster.Nearby, cameramen grumbled to a Salvadoran surfer that they couldn't pan without a uniformed man with a rifle coming into the image.  Locals, who in theory stand to benefit from all of this, were remarking that whitewashing the entrance wall to one beach, El Tunco, and stamping it with an English name left it looking like a drive-through bank. "It was good that he saw the potential in our waves," Enzo, who runs a couple of cafes in the area, told me one evening. And promised infrastructural improvements, like finally completing a waste-water treatment plant so that businesses aren't reliant on bottled water, haven't arrived. Meanwhile, new luxury apartments with a base price of $400,000 are being marketed to crypto enthusiasts, prompting worry that excessive development will smother the area's natural beauty and put everyone out of business. It's almost as if Surf City is Bukele's Potemkin Village, thrown up to boost his standing in a handful of elite circles as he loses legitimacy elsewhere. Bukele "wants to promote the country as a place that other people can buy," said Bullock of Cristosal. "But what is his plan for the middle-aged man who has sold coconuts in Punta Roca his whole life? El Tunco already has local commerce and its own identity. Why not honor that identity?"'Dad's not working, is he?'When Walber was jailed, Estefany told their six-year-old, Michelle, that Walber had gone out of town for a job. When Estefany and Glenda left for days camped outside the prison, she said they were studying. Michelle's questions became harder to escape. When he was away working, Walber usually sent a flood of adoring messages to his daughter on Estefany's phone, but this time, there were none to show. Before ten days had passed, Michelle cornered her mom: "Dad's not working, is he?"  At six, Michelle is absorbing that her life is built on shifting sands — a father in prison, a mother who might withhold the truthcapable of deceiving her. Estefany tried to explain, saying, "The authorities make mistakes." But it's just another tectonic lesson for a child. Walber and Estefany have known each other since they were kids and they've been partners for years, but it was only last year that they finally got married. They were the first in the family to have a real wedding, and Glenda remembers how they both giggled when they asked her to save the date — Dec. 17. Graduation photos of Walber Rodriguez, left, and his sister, Glenda Rodriguez, right, at the family house in Sisiguayo.Fred Ramos for InsiderEstefany's dress, which Glenda and Margarita helped her choose, was the color of red wine and had a sparkling brooch at the bosom. Walber had splurged on a new oxford shirt, jeans, and white tennis shoes. He also surprised Estefany with a wedding ring, which he had secretly saved for months to buy. It was a luxury she had never imagined. The cake, a single-tier white sphere adorned with fruit, held the children rapt until it was time to dig in. When Glenda thinks about the politicians and the police who get to return home to their families at night, so easy in their freedom, it fills her with rage. They can't even begin to comprehend what they have stolen from their people.'No one else will defend him but us' The retreat center where the families met every week was a thirty-minute crawling drive down the potholed dirt road from where Walber was arrested. In late June, 54 days after Walber's arrest, three-dozen of them sat as they usually did, in a circle of plastic chairs in an open-air pavilion, roofed in ceramic tile and ringed in a garden of carefully-manicured green.Rossy stood in the middle of the circle, wearing flip-flops and a white tunic embroidered with flowers, calling on people to speak. Chamba kept a notebook propped between his thigh and the arm of his wheelchair. The families were debating: Should they stay the course, and pursue their habeas corpus claims in court? Or was it time to take to the streets? The habeas corpus route had been Rossy's idea. Back in 2020, right when COVID-19 upended global travel, Rossy was in Ecuador at a theological conference. Bukele was about to close the borders and implement some of the most restrictive pandemic measures in the world. She managed to get onto the last flight into the Salvadoran airport and ended up at a quarantine center for six weeks. Desperate for a way out, a lawyer friend advised her to file a habeas corpus claim. It worked – she was released. Now, it's a tactic that more than 1,800 other Salvadorans across the country have also used since March, but to little effect since the administration has wrenched the legal system into its orbit, forcing many judges to retire and intimidating the rest, along with flooding the system with many times more defendants than it can handle. Members of the group have been harassed by the police, and there was always concern that cops might show up in the middle of the meeting to arrest everyone. One woman who had started attending after her husband was arrested was then herself arrested. Now, the neighbors couldn't agree on what was best. The state of exception allowed the police to detain anyone for any reason. If they protested and ended up incarcerated alongside their loved ones, who would defend them then?  People clamored to speak. Rossy called on a gray-haired man in a cowboy hat. He was one of the many who had spent consecutive days and nights on the street outside Mariona, where his son was being held, and while there, he heard rumor that the guards take vengeance on prisoners whose families caused trouble out front. He rose slowly, and then stated his firm opposition to any public action. He reminded the group that it wasn't only themselves who would pay the price for protesting. When he took up arms in the civil war, he said, it was his own life he was putting at risk. But now, any action might put his son's life at risk. When he finished speaking, Glenda – who, at 28 years old, was among the youngest group members – raised her hand. "I may not have as much life experience as many of you. And I didn't live the war fighting in the mountains like many of you did," she began. But, she continued, she did know that all of El Salvador's civil rights victories, including democracy itself, were the product of struggles on the street. She too had camped outside Mariona, and she had learned that viral malicious rumors appeared on social media as part of an attempt to silence families. A meeting of the Bajo Lempa families on June 17, 2022.Fred Ramos for Insider"If the state is going to kill my brother, it will do so whether or not I speak out. If it will incarcerate me – the same is true," she reasoned. "No one else will defend him but us." Finally, there was simply the value of the truth: "The president wants to make this country look like a wonderland, like everything is Surf City," she said – but the world needed to know what was really happening in El Salvador.  The group ultimately decided that Glenda was right: it was time to take the streets. And just as each Bajo Lempa family had discovered that they were not alone when they found the group, now they saw there were hundreds of families around the country who, like them, were ready to march in San Salvador. They began regularly joining the others in the capital to protest and speak to the media, while continuing their habeas corpus petitions. Just before Christmas, the families of the Bajo Lempa packed a bridge on a main thoroughfare and demanded their loved ones be freed. For now, the Bukele administration remains unmoved. The group is now planning to sue their government in an international human rights court.One day last summer, before anyone comprehended how long this would last, Roxana told me something that multiple women in the Bajo Lempa echoed: Since her children were detained, she has been dreaming of them. In one dream, she was sitting at home in the dark, and one of her three sons walked through the front door. He paused in the threshold. She thought it was Cristian, the only one who has not yet been taken. But when he stepped out of the shadow, she saw that it was Javier, her youngest. He was dressed just as he had been on April 27, the night the police hauled him away. She called to him – and then the dream ended. "As a mother," she said, "you wake up to a nightmare."This reporting was supported by the International Women's Media Foundation's Howard G. Buffett Fund for Women Journalists.Read the original article on Business Insider.....»»

Category: topSource: businessinsiderDec 27th, 2022

Struggling Peloton Discounts Bikes Even More By Selling Refurbished Ones

Struggling Peloton Discounts Bikes Even More By Selling Refurbished Ones Peloton Interactive was on top of the world in the early days of the virus pandemic. Now the fitness equipment manufacturer is struggling to keep its business afloat, announced Monday it would begin to sell refurbished bikes for a discount.  Refurbished Peloton Bikes range between $1,145 to $1,995, which includes delivery and setup fees. That's a $300 savings for the base Peloton Bike and $500 savings for Peloton Bike+.  Add refurbished bikes to Peloton's lineup of attempting to turn the sinking ship around. The company recently announced a national rental program for both models of the bikes, allowing consumers month-to-month options rather than outright buying the bikes or financing.  The refurbished bikes come as the company faces several challenging quarters, even as it shifts its hardware-heavy focused business model to a subscription revenue one. It also faces a perfect storm of demand headwinds because the once insanely popular overpriced exercise bikes won't likely ever experience 2020-21 demand again.  Shares of Peloton have crashed 75% this year as rational investors see no signs that demand trouble will abate anytime soon.  CEO Barry McCarthy, who took the helm earlier this year, recently said the company's turnaround is a “work in progress.” Tyler Durden Mon, 12/26/2022 - 21:00.....»»

Category: personnelSource: nytDec 26th, 2022

3 Retail Shares To Watch This Christmas

Currys PLC (LON:CURY) profits could dwindle if household incomes fall ASOS plc (LON:ASC) returns in need of strong Christmas performance J Sainsbury plc (LON:SBRY) competitive pricing affects profits The run-up to Christmas is typically the golden period for retailers, where they enjoy a flurry of activity which helps to sustain them throughout the quieter periods […] Currys PLC (LON:CURY) profits could dwindle if household incomes fall ASOS plc (LON:ASC) returns in need of strong Christmas performance J Sainsbury plc (LON:SBRY) competitive pricing affects profits The run-up to Christmas is typically the golden period for retailers, where they enjoy a flurry of activity which helps to sustain them throughout the quieter periods of the year. 2021 spending soared well above pre-pandemic levels, though cost-of-living concerns might result in a different experience for retailers this year. if (typeof jQuery == 'undefined') { document.write(''); } .first{clear:both;margin-left:0}.one-third{width:31.034482758621%;float:left;margin-left:3.448275862069%}.two-thirds{width:65.51724137931%;float:left}form.ebook-styles .af-element input{border:0;border-radius:0;padding:8px}form.ebook-styles .af-element{width:220px;float:left}form.ebook-styles .af-element.buttonContainer{width:115px;float:left;margin-left: 6px;}form.ebook-styles .af-element.buttonContainer input.submit{width:115px;padding:10px 6px 8px;text-transform:uppercase;border-radius:0;border:0;font-size:15px}form.ebook-styles .af-body.af-standards input.submit{width:115px}form.ebook-styles .af-element.privacyPolicy{width:100%;font-size:12px;margin:10px auto 0}form.ebook-styles .af-element.privacyPolicy p{font-size:11px;margin-bottom:0}form.ebook-styles .af-body input.text{height:40px;padding:2px 10px !important} form.ebook-styles .error, form.ebook-styles #error { color:#d00; } form.ebook-styles .formfields h1, form.ebook-styles .formfields #mg-logo, form.ebook-styles .formfields #mg-footer { display: none; } form.ebook-styles .formfields { font-size: 12px; } form.ebook-styles .formfields p { margin: 4px 0; } Get The Full Walter Schloss Series in PDF Get the entire 10-part series on Walter Schloss in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues. (function($) {window.fnames = new Array(); window.ftypes = new Array();fnames[0]='EMAIL';ftypes[0]='email';}(jQuery));var $mcj = jQuery.noConflict(true); Q3 2022 hedge fund letters, conferences and more   Currys Matt Britzman, Equity Analyst, Hargreaves Lansdown: “As the UK’s leading retailer of tech products and services, Currys is an excellent barometer for the tech side of the retail sector. Currys sells a lot of big-ticket items like TVs, laptops, and mobile phones – just the sort of items that are found under the tree on Christmas day. But because these items are expensive, demand could be on the chopping block if household incomes fall. To make matters worse, tech tends to have short product cycles. Think of the iPhone for example – a new model comes out every year. If cash-strapped consumers decide not to upgrade their model this Christmas, Currys will be left with a surplus of new iPhones. It’s a cycle that leads to higher inventories and ultimately discounting, which would put pressure on already thin margins. Back in July, operating margin guidance was downgraded for 2023/24, from 4% to 3%. Because of recent developments, that target had to be pushed back a year. There are some positives though. One of the group's main attractions is its omnichannel model. You can enter a store and have access to the entire online shopping range, or speak to an in-store expert in the comfort of your own house. These services help attract and retain customers once they've made contact, and that's helping the group to retain its market share. Currys’ business is highly seasonal, with a substantial proportion of its revenues, and any profits or losses, generated in the second half of its financial year. A quiet Christmas could spell trouble for the big-ticket retailer. If consumers aren’t willing to spend big at Christmas, they might just keep their wallets closed for a while. The group’s valuation is some way below the long-term average, reflecting the short-term difficulties. While this could mark a good entry point for investors willing to accept the immediate risks, keep in mind that things could still get worse before they get better.” ASOS Matt Britzman, Equity Analyst, Hargreaves Lansdown: “ASOS is an online fashion retailer, selling a wide range of clothing, cosmetic products, and accessories. Just two years ago, the pandemic and its associated lockdowns played right into the hands of the group’s online-only business model. Fast-forward to today and the story looks very different. Full-year underlying profit before tax fell to £22m, down from £194m the previous year. And as a result, the company’s valuation has fallen around 78% over 2022. In part, the decline in profits is due to cash-strapped customers returning more items this year, which caused higher operating costs and elevated stock levels. In a bid to reduce these stock levels, ASOS began discounting goods which was a big driver of the decrease in gross margin. The group also expects to write-off roughly £115m in stock during the first half of this financial year, which will be a further dent to the bottom line. These problems aren’t going to be solved by a strong Christmas performance, but it would certainly soften the blow. The group sells products all along the price scale, meaning it’s set up well to offer something for everyone. At a time where consumers are becoming increasingly cost conscious, this should be an advantage relative to other fashion retailers, who typically only target one price-point. There’s also the group’s Premier programme, which offers free delivery for a year. This service grew its customer base by an impressive 12% last year. Given that the average Premier customer ordered 3.5 times as often as a regular customer, this programme will be a key driver of both customer loyalty and profitability moving forward. The group’s balance sheet is looking in better shape thanks to freshly negotiated terms on credit facilities. That at least offers some breathing room while ASOS tries to get cashflow back into positive territory, something management expect to deliver next year. Though we remain cautious. One thing’s for sure, if ASOS is going to turn its fortunes around then a strong Christmas period would be the perfect present.” Sainsburys Sophie Lund-Yates, Equity Analyst, Hargreaves Lansdown “It goes without saying that Christmas is a crucial time of year for supermarkets. It’s a time of consumer excess, including on more lucrative items like alcohol. We’re cautiously optimistic that the grocery sector could report some bright results this festive season. Despite an unexpected fall in overall UK retail sales in November, food sales rose strongly as customers stocked up for Christmas. That suggests consumer behaviour could be working in the grocers’ favour. That said, we’ll have a particular eye on Sainsburys, who now owns Argos which gives it increased exposure to general merchandise. General merchandise is a riskier area of the market when real wages are falling (after inflation). Buying a new gadget isn’t as important as putting dinner on the table. General Merchandise and Clothing saw sales fall 6.1% and 6.0% respectively in the first half of Sainsbury’s financial year. While we’re cautious of Argos’ performance, recent figures show that department store and homeware sales are holding up slightly better than expected. This could mean that Argos puts in a more resilient showing than we’re expecting. That’s not the only potential source of Christmas cheer for the group. In response to customers tightening their purse strings, Sainsburys is taking aggressive action. A fresh round of investment in keeping prices low means the group's been able to raise prices after its competitors, offering its strongest value proposition in years. The focus on price is working. Compared to key competitors like Tesco, Asda and Morrisons, Sainsburys is the only one to grow volume share since pre-pandemic times. While this is the right move from a competitive angle, it’s affecting profits. Together with the group’s own soaring cost inflation, it meant underlying operating profit fell 8% to £496m in the first half. No matter what happens this Christmas, Sainsburys has a stronger balance sheet than previous times and free cashflow is expected to run into the hundreds of millions. That gives crucial breathing room to stomach ups and downs and helps underpin the prospective dividend yield of 5.5%.”.....»»

Category: blogSource: valuewalkDec 23rd, 2022

Trump"s campaign rollout has been terrible and his hold on the GOP is weakening, outgoing Republican senator says

Sen. Pat Toomey said the "unbelievably terrible rollout" of Trump's 2024 election campaign is "not helping him," Donald Trump speaks during a rally at the Dayton International Airport on November 7, 2022 in Vandalia, Ohio.Drew Angerer/Getty Images Outgoing GOP Sen. Pat Toomey says Trump's influence over the Republican Party is waning. Toomey attributed Trump's weakened influence to the GOP's bad midterm performance.  Toomey also said it might have to do with Trump's "unbelievably terrible" 2024 campaign rollout. Outgoing Sen. Pat Toomey says former President Donald Trump's hold on the Republican Party is finally waning. "The election outcome from last month I think dramatically accelerates the waning. And frankly, his unbelievably terrible rollout of his election campaign is also not helping him," Toomey said on CNN on Sunday. The outgoing Republican senator added that he thought Trump's influence was already declining, albeit "not as quickly" as he hoped it would. He added that it is a sign of Trump's weakness that other Republican candidates are expressing an intention to run even after Trump announced his campaign. Arkansas Gov. Asa Hutchinson, for one, has expressed interest in a presidential bid of his own. —CNN (@CNN) December 18, 2022 "In my travels after the election around Pennsylvania, I've heard from many, many formerly very pro-Trump voters that they think it's time for our party to move on," Toomey said. Toomey also called Trump out during his Senate farewell speech on December 15, warning his GOP colleagues that the party "can't be about or beholden to any one man." "We're much bigger than that. Our party is much bigger than that," Toomey said. "And I hope we resist the temptation to adopt the protectionist nativist isolationist redistributive policies that some are suggesting we embrace," he added.Trump's losing friends and allies after announcing his 2024 bidEver since announcing his 2024 campaign in November, Trump has raged against Florida Gov. Ron DeSantis, a popular, would-be rival in the next election.He launched a sale of non-fungible tokens which were even mocked by Trump loyalist Steve Bannon. However, Trump might not be doing so badly for himself — Coin Desk reported on Friday that the 45,000 cards were already sold on that day, and may have raked in over a million dollars for Trump. Toomey made the comments on the same day that former GOP congressman Carlos Curbelo told MSNBC he thinks Trump is in "deep trouble" due to a potential criminal referral from the House Select Committee for the Justice Department to prosecute Trump over the Capitol riot.The January 6 panel is set to vote on the referral on Monday, per NPR. "Donald Trump is in deep trouble. I don't think anything can rescue him. I do think that he can use these criminal referrals as a way to rally his base, but the end is near for Donald Trump," Curbelo told MSNBC. "His next bankruptcy is looming, you can see it coming on the horizon, and I don't even think this would save him."Representatives for Toomey and Trump did not immediately respond to Insider's request for comment.Read the original article on Business Insider.....»»

Category: topSource: businessinsiderDec 19th, 2022

El Paso Mayor Finally Declares State Of Emergency After Mass Invasion Of Migrants

El Paso Mayor Finally Declares State Of Emergency After Mass Invasion Of Migrants Better late than never?  Democrat Mayor of El Paso, Oscar Leeser, has been refusing to declare a state of emergency in El Paso for weeks as illegal migrant caravans flood into the city across the southern border, but it would seem that he has finally seen the light.  Leeser's announcement comes at the same time as a declaration of emergency from Denver Mayor (and Democrat) Michael Hancock, who now admits that the city cannot continue to support migrants transported there from El Paso. El Paso has run out of funding to accommodate the 2400+ people entering the city every day from Mexico and is asking for outside assistance to deal with the influx of “asylum seekers.”  While the Biden Administration continues to ignore and even obscure the crisis on the southern border, leaked videos of enormous migrant groups lining up for entry at El Paso gates are beginning to circulate, debunking the claim that the White House is taking action. Biden's Press Secretary, Karen Jean-Pierre, was recently mocked for her assertion that Biden has been “doing the work from day one” to secure the border.  Clearly, the evidence shows that she is lying: The refusal of the White House and Democrat run cities to act honestly when it comes to the migrant crisis suggests a desire to avoid political accountability (either that, or an agenda to deliberately destabilize the country).  If they admit to the crisis, they then have to admit that their immigration policies are a failure.  So, they attempt to gaslight the American public and hide the truth.  Karen Jean-Pierre even attempted to blame Republicans for the situation instead of taking responsibility.   The unprecedented wave of illegal immigrants has resulted in a historic number of apprehensions (at least 2.4 million in the past year) as well as fiscal disaster in the cities that accommodate migrants instead of arresting them and sending them back across the border.  The impending end of Title 42 this month has accelerated the threat.  The law requires migrants to be transported back to Mexico immediately after being stopped by Border Patrol, instead of allowing them to remain in the US for months or even years while waiting for courts to decide their citizenship status.   Migrants in many cases are able to collect extensive welfare if designated as asylum seekers or refugees, and Census Bureau data shows that at least 63% of them do in fact try to obtain benefits.  Biden is also pressing for a general amnesty for millions of migrants that are already residing in the US, which is encouraging even more border crossings. In 2017, multiple Democrat controlled cities in Texas including El Paso sought to obstruct Texas law SB 4, which was designed to prevent sanctuary city status from being used within the state.  The law was passed, but El Paso has continued to encourage an endless river of migrants into Texas anyway.  Now, the city leadership finally acknowledges they are in trouble, with an Arctic front bearing down on Texas and thousands of migrants on the streets with no available shelter. Texas Governor Greg Abbott faced a flurry of attacks from progressive politicians after he initiated a program to bus migrants out of Texas and leave them on the doorsteps of leftist cities like New York, Washington DC and Chicago.  Democrat “strongholds” for illegal migrants are being quickly exposed as unprepared and hypocritical; they expect border states to absorb the invasion of millions of migrants while they are incapable of dealing with a mere handful.   The busing controversy culminated with Florida Governor Ron DeSantis transporting nearly 50 migrants to the elitist vacation island of Martha's Vineyard.  The move created a firestorm of outrage from leftists and accusations of “human exploitation” against conservative state leaders.   Hilariously, the "humanitarian" progressives of Martha's Vineyard were quick to buy the migrants cheap lunches in a highly publicized PR stunt, and then they quietly loaded them onto a bus the next day.  They were shipped off the island to a camp on a military base.  None of them were allowed to stay, none of them were offered housing and none of them were offered jobs by officials or residents at Martha's Vineyard.    The “do as we say, not as we do” ideology of the political left when it comes to illegal immigration has been revealed, and economic reality is becoming undeniable.  The US simply cannot continue to allow millions of non-citizens to enter our nation unchecked.  It is not practical from an economic standpoint nor is it practical from a social and cultural standpoint.  If the trend continues the crisis will turn into outright disaster.    Tyler Durden Sun, 12/18/2022 - 16:00.....»»

Category: worldSource: nytDec 18th, 2022

ETFs Set to Soar on Fed 50 Bps Rate Hike, Hawkish Tone

The Fed raised interest rates by 50 bps as expected and revealed a hawkish view for next year. This marks the seventh rate hike this year in an unprecedented move to reign in inflation. In its FOMC meeting concluded yesterday, the Federal Reserve raised interest rates by 50 bps as expected and revealed a hawkish view for next year. This marks the seventh rate hike this year in an unprecedented move to reign in inflation.Amid this backdrop, investors should consider products that could prove extremely beneficial in a rising rate environment. Some of these ETFs like SPDR S&P Regional Banking ETF KRE, Vanguard Consumer Discretionary ETF VCR, iShares US Technology ETF IYW and iShares Core S&P U.S. Value ETF IUSV from different corners of the market seem compelling picks.The rate hike brings the benchmark interest rate, the federal funds rate, to 4.25-4.50%, the highest level in 15 years. The central bank now projects at least 75 bps of rate hike, peaking at 5.1% by the end of 2023, 50 bps higher than the previously projected 4.6% back in September. The rate will then be cut to 4.1% in 2024.The increase in interest rates has made borrowing expensive, pushed up the cost of buying a new car or house, increased the cost of carrying credit card debt and thus slowed down economic growth (read: Low-Beta ETFs to Counter Market Volatility).However, higher interest rates usually indicate a healthy economy, thereby benefiting cyclical sectors like financials, technology, industrials and consumer discretionary. Banks are in the most advantageous position as they seek to borrow money at short-term rates and lend at long-term rates. If interest rates rise, banks would earn more on lending and pay less on deposits. This would expand net margins and bolster banks’ profits. Also, insurance companies will be able to earn higher returns on their investment portfolio of longer-duration bonds.A healthy economy also leads to greater consumer power and increased IT spending. Further, technology seems one of the safest sectors in a tight policy era as most companies are sitting on a huge cash pile. The cash reserves will ensure that these companies are not plagued by any financial trouble, even in a rising interest rate environment.We have detailed four of the ETFs below:SPDR S&P Regional Banking ETF (KRE)SPDR S&P Regional Banking ETF provides exposure to the regional banks’ segment by tracking the S&P Regional Banks Select Industry Index. It holds 143 stocks in its basket, with each accounting for no more than 2.4% of the assets (read: ETFs to Gain on Cooling U.S. Inflation Data).SPDR S&P Regional Banking ETF has AUM of $3 billion and charges 35 bps in annual fees. It trades in an average daily volume of 7.2 million shares and has a Zacks ETF Rank #1 (Strong Buy) with a High-risk outlook.   Vanguard Consumer Discretionary ETF (VCR)Vanguard Consumer Discretionary ETF follows the MSCI U.S. Investable Market Consumer Discretionary 25/50 Index and holds 315 stocks in its basket. In terms of industrial exposure, Internet & direct marketing retail and automobile manufacturers occupy the top spots with double-digit exposure each.Vanguard Consumer Discretionary ETF is the low-cost choice in the space, charging investors 10 bps in annual fees while volume is good at nearly 87,000 shares a day. The fund has managed $4.1 billion in its asset base so far. Vanguard Consumer Discretionary ETF has a Zacks ETF Rank #2 (Buy) with a Medium risk outlook.iShares US Technology ETF (IYW)iShares Dow Jones US Technology ETF tracks the Russell 1000 Technology RIC 22.5/45 Capped Index, giving investors exposure to 141 U.S. electronics, computer software and hardware, and informational technology companies.iShares Dow Jones US Technology ETF has AUM of $8.4 billion and charges 39 bps in fees and expenses. Volume is good as it exchanges nearly 1.1 million shares a day. IYW has a  Zacks ETF Rank #2 with a Medium risk outlook.iShares Core S&P U.S. Value ETF (IUSV)iShares Core S&P U.S. Value ETF offers exposure to large- and mid-cap U.S. equities that exhibit value characteristics by tracking the S&P 900 Value Index. It holds 739 stocks in its basket, with each accounting for no more than a 3% share. iShares Core S&P U.S. Value ETF is widely spread across sectors, with health care, financials, industrials, consumer staples and information technology occupying double-digit exposure each (read: How S&P 500 ETFs Fared in 2022; What's Waiting for 2023?).iShares Core S&P U.S. Value ETF has AUM of $13 billion and trades in an average daily volume of 857,000 shares. It charges 4 bps in annual fees and has a Zacks ETF Rank #1 with a Medium risk outlook. Want key ETF info delivered straight to your inbox? Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week.Get it free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report SPDR S&P Regional Banking ETF (KRE): ETF Research Reports Vanguard Consumer Discretionary ETF (VCR): ETF Research Reports iShares U.S. Technology ETF (IYW): ETF Research Reports iShares Core S&P U.S. Value ETF (IUSV): ETF Research ReportsTo read this article on Zacks.com click here.Zacks Investment Research.....»»

Category: topSource: zacksDec 16th, 2022

Hate Elon Musk all you want, but he"s got one management trick that every boss should emulate

Musk is right: Managers have become alarmingly distanced from average workers. They should be able to do the same work as the employees they manage. Elon Musk has seriously bungled his takeover of Twitter. But despite the chaos, he did get one thing right: managers need to be in the trenches with their employees.Britta Pedersen-Pool/Getty; Marianne Ayala/InsiderElon Musk is not a good boss. His wild demands and questionable managerial practices have shown him to be a capricious, unreliable leader of employees. But amid all the abusive micromanaging and Stone Age mandates during his time as CEO of Twitter, he did make one valuable statement about managing that I think is worthwhile for other, nonchaotic bosses to consider.In an email sent just before Thanksgiving, Musk told employees that "all managers are expected to write a meaningful amount of software themselves" and equated one's inability to code as an engineering manager to not being able to ride a horse as a cavalry captain. Musk's point is salient, and one I've made before: Managers need to be able to do the same work as those they are managing.Managers have become alarmingly distanced from the average worker, making calls based on guesses that aren't informed by actual labor. This frustrating separation has poisoned most of modern management, creating a class system within organizations where a bloated sect of detached traffic cops extract labor without participating in or properly valuing it.While Musk's edict has a ring of truth to it, his idea of what constitutes a manager's contribution to the company's end product is wildly off base, and, of course, there's the problem of the messenger himself: a preeminent example of the out-of-touch boss who demands exorbitant dedication from employees, while providing little value himself. But despite the problems with both the messenger and the message, there's a gem of valuable insight to be mined here. The right messageThere is a rot at the core of today's management culture: Managers have stopped doing actual work — the kind of labor required to create an end product that earns a company money. Instead of being in a position where respect is earned through execution and actual labor, managers have become figureheads rather than executors, mired in endless busywork that a cottage industry of "advisors" claims is necessary to prove their value. The job of a manager has increasingly become "quarterback that only calls audibles."This is why Musk is somewhat correct: A manager should be an active participant in the process that they're managing, and have a full understanding of the work that is being created. A person who manages coders should be able to contribute to and review that code, just as a person who manages cooks should be able to prepare the food alongside them. A truly "useful" manager is someone operating on practical experience — making calls for the larger organization from a place of respect for both the laborers and the labor they are creating. This sort of practical knowledge engenders goodwill between employee and manager, creating a culture of mutual respect that can increase communication and facilitate better performance.Balancing management ability and technical expertise is an active debate in the software industry, where, depending on whom you ask, an engineering manager's interest or ability to code is dependent on whether the team is able to operate without them. Scott Berkun, the author of "Making Things Happen: Mastering Project Management," told SD Times he believed the two disciplines were somewhat oppositional: "Coding requires intense uninterrupted concentration, while management requires dealing with constant interruptions and context switching.""Being able to do both is not something that a lot of people can do in practice."Berkun isn't wrong — the incredible focus and discipline one must have to constantly write, test, and execute code in production are very different attributes to those of a manager. And just because someone is a high-performing employee doesn't mean they can or should become a manager. Being in charge of employees is a unique skill that requires its own form of training and knowledge. Switching between producing valuable work for the company and leading a team of employees is not for everyone. As I've suggested before, the ratio of managers to the people they manage should be much larger if the manager isn't doing the actual labor — but even then, the lack of practical experience will make it harder for them to be effective. But because the managerial class has become the only avenue for real advancement at many companies, many organizations end up with a jumble of disconnected or micromanaging bosses who aren't right for the job. Asking managers to do a bit of work just to "prove" themselves would be busywork by another name. What I'm saying is that great managers need to be a part of the process. It is critical that managers understand and respect the labor of those they manage to have the empathy necessary to both make the right calls and create conditions for their employees' success.The wrong messengerThe irony of Musk's call for managers to be more involved in the work of their teams is that Musk himself is the exact kind of manager he claims to loathe — disconnected from the process, exterior to the company's culture, and clearly confused about how his own product works. Musk has demanded that managers are able to create "good code" yet does not appear to be much of a coder himself. Jackson Palmer, a cocreator of dogecoin, said Musk was a "grifter" who "had trouble running basic code" in their interactions. Musk has obsessed over reviewing code, asking workers for "up to 10 screenshots of their most salient lines of code," which developers who reached out to me equated to "an aerospace engineer being asked for their most important airplane parts" or "asking a car mechanic to show you their 10 best screws." While Musk may claim to want Twitter to be "lean" and "efficient," he is directly bogging down his valuable engineering teams by asking them to prove themselves using component elements that make no sense, an incredibly wasteful thing to do to teams that are already stretched to the limit.And it's not just his bizarre requests for code that have exposed Musk as a miserable boss: By attempting to prove he knows how to "fix" Twitter, he has managed to commit almost every sin a manager can. He has isolated himself, fired many longtime members of the company, and surrounded himself with sycophants and family members with no real knowledge of the company. He's targeted critical teams at Twitter and pushed others to quit, which have resulted in a huge upswing in hate speech on the platform. He has failed to show any respect for his workers and has fired employees who critique his slash-and-burn approach. When Musk took over Twitter, he declared all employees would have to submit to an "extremely hardcore" culture that included "working long hours at high intensity," adding: "Only exceptional performance will constitute a passing grade." Following this threatening bloviating, Musk laid off thousands of people days before Thanksgiving in an attempt to instill fear and order in anyone "lucky" enough to still work at the company. He has instituted "code reviews" that last until the early hours of the morning. And he has forced Twitter workers to put in unreasonable and abusive hours at the company, to the point that Musk has (potentially illegally) turned several rooms in Twitter's headquarters into bedrooms. He's using one of the oldest (and worst) forms of management: indicating beatings will continue until morale improves and that the best work is obtained from overt intimidation of workers.But setting aside, if you can, Musk's decisions to make the platform he bought more noxious and dangerous, these moves prove he doesn't understand what produces good work. He is pushing long, grueling hours, despite the massive amounts of evidence that this process grinds workers down and produces inferior labor. Musk, who is supposedly someone obsessed with "productivity," seemingly has no interest in the evidence that working more than 40 hours a week detracts from people's ability to perform — he just wants more hours and more work from fewer people so that he can save money and pay off Twitter's swelling debt.Instead of instilling a culture of trust that allows employees to manage their own schedule in order to produce the best product they can, Musk has become the poster boy for a new guard of anti-remote-work culture warriors who believe "entitled" workers have had it too easy and that the office is the only way to make sure they're "putting in the time," despite the evidence that many workers are more productive from home. Of course, these notions are usually pushed by extremely well-off executives who feel they're losing control of their company, largely in part because they never really understood or participated in the labor that enriched them. Their only means for evaluating the quality of the work that employees are putting in is the time spent on completing tasks — the product must be better if it took more time and visible effort to produce. But this myopic focus on hours spent ignores that time is only one input to produce something valuable. Workers are independent creatures that use their skills to create something, and evaluating the end product itself, rather than the time it took to create, is the sign of a good manager or executive.Musk was right that managers should produce value for their company, but what's most galling about that message coming from Musk is that it is not obvious what he contributes to the companies he runs. In fact, if anything, Musk has been a clear liability to Twitter — the company's ad revenue has dropped 15% year over year in the Middle East and Africa, weekly bookings are down 49%, and 50 of its top 100 advertisers have departed from the platform since Musk took over. He is being sued for what one former Twitter engineer called his "clumsy and inhumane" layoffs, and his poorly planned launch of a subscription service for verification on Twitter led to several brands getting humiliated at the hands of the world's finest posters. And as Musk continues to demand more from his workers, we'll see his executive vision continue to falter, because he fundamentally doesn't respect the people who keep his companies alive. This is the ironic thing about Musk's insight about managers. In some sense, he understands that status and pecking order do not determine a person's value to the company. He clearly knows that a good manager is one who has empathy for their employees and is not only willing to get into the trenches with workers but also actively does so. But he lacks the self-reflection to recognize his own shortcomings in this regard. It's genuinely rare to get such insight into an executive's ability to run and manage a company, and Musk has proved that being rich and successful does not mean you're good at being a leader. In fact, by his own logic of how managers can contribute to the company, Musk should be summarily firing himself any day now.Ed Zitron is the CEO of EZPR, a national tech and business public-relations agency. He is also the author of the tech and culture newsletter Where's Your Ed At.Read the original article on Business Insider.....»»

Category: topSource: businessinsiderDec 13th, 2022