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EU Unveils €43 Billion European Chips Act

The EU has unveiled the European Chips Act and plans to spend €43 billion (£36 billion) to increase chip manufacturing in the region.  It comes after the bloc announced last year that it is targeting a 20% share of worldwide semiconductor manufacturing by 2030.

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The EU today unveiled the European Chips Act and plans to spend €43 billion (£36 billion) to increase chip manufacturing in the region.  It comes after the bloc announced last year that it is targeting a 20% share of worldwide semiconductor manufacturing by 2030.

The funding, comprised of public and private investment, will be used to put in place the necessary frameworks, coordination, research and development and no doubt incentives, to help achieve the ambitious target. 

The past two years have seen an unprecedented shortage of chips, with supply chains and raw materials heavily disrupted by the pandemic, regional droughts (making chips requires a lot of water) and other factors, with everything from computers and games consoles to washing machines and cars being affected and even causing factories to close down temporarily.

EU wants 20% of Global Chip Manufacturing by 2030

Today’s announcement is the first tangible step towards achieving the 20% target and could be the start of a global arms race in chip manufacturing, with the US also in the process of stepping up efforts in the country, while Asia, particularly China, currently remains the dominant force in the market.  Increased diversification in this vital supply chain can only be a good thing and it will be interesting to see which companies get involved in what will undoubtedly be a high-stakes race for the industry.

All views expressed in this editorial are solely that of the author, and are not expressed on behalf of The Analyst, its affiliates, or staff.

Business

Elon Musk Acquires Twitter for $40 Billion

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Elon Musk’s offer to buy Twitter has been accepted by the company this Monday for over $40 billion. “The Twitter Board conducted a thoughtful and comprehensive process to assess Elon’s proposal with a deliberate focus on value, certainty, and financing. The proposed transaction will deliver a substantial cash premium, and we believe it is the best path forward for Twitter’s stockholders,” representative Bret Taylor of the Independent Board Chair released in a statement. Stockholders of Twitter will now receive $54.50 for each stake in the company. 

Musk had previously stated a $46.5 billion set aside to acquire Twitter, prompting the company to look into his offer. Twitter’s board has already accepted the deal, which is expected to become concrete by the end of the year following approval from Twitter stockholders and regulators. 

As a frequent user with over 84 million followers on the social media site, the CEO of Tesla Motors holds a controversial platform, ranging from discussing business to criticizing politics and making insulting remarks. He has already been under investigation from the SEC in 2018 for fraudulent claims. Some users fear a rise of dissent following the transition of power.

In response to this, Musk stated: “Free speech is the bedrock of a functioning democracy, and Twitter is the digital town square where matters vital to the future of humanity are debated.” He also stated his hope to “make Twitter better than ever by enhancing the product with new features, making the algorithms open source to increase trust, defeating the spam bots, and authenticating all humans. Twitter has tremendous potential.”

The drive for free speech comes with its own concerns, however, as critics fear it may allow for hateful speech, misinformation, and other harmful content which Twitter has been working to silence.  Musk had also previously commented on preferring the company enforce “time-outs” over permanent bans, indicating future decisions which may allow the return of users such as Donald Trump. Decisions such as these could greatly affect politics and future elections. 

If the deal is fully approved, one of the world’s wealthiest individuals will be owning the company. The future is unclear for current CEO Parag Aragwal, who was appointed just last year in place of Jack Dorsey in a slew of CEOs over the years. With the news, Aragwal stated that he was “Deeply proud of our teams” and “inspired by the work that has never been more important.” 

All views expressed in this editorial are solely that of the author, and are not expressed on behalf of The Analyst, its affiliates, or staff.

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Business

Russia Looks to Brazil for Support to Prevent Expulsion from IMF

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The Kremlin has requested Brazil’s support in the International Monetary Fund, G20 group, and World Bank to help it counter crippling sanctions from invading Ukraine. Russian Finance Minister Anton Siluanov wrote to Brazil’s Economy Minister Paulo Guedes claiming that, “behind the scenes work is underway in the IMF and World Bank to limit or even expel Russia from the decision-making process”. Siluanov then went on to request support from Brazil “to prevent political accusations and discrimination attempts in international financial institutions”.

Russia is facing immense backlash for its actions against Ukraine, especially from the US and its allies. According to Siluanov, Russia is facing financial difficulties and economic turbulence due to international sanctions which have frozen almost half of the Kremlin’s international reserves and foreign trade transactions. The Russian minister added that the US is attempting to isolate Moscow from the international community. 

US Treasury Secretary Janet Yellen stated last week that the US will not participate in any G20 meetings in which Russia is present, citing the Ukraine wa as the reason. Brazilian Foreign Minister Carlos Franca has previously stated that Brazil opposes the expulsion of Russia from the G20 group. Franca further explained that, “The most important thing at this time is to have all international forums, the G20, WTO, FAO, functioning fully, and for that all countries need to be present, including Russia”.

As reports of Russian war crimes make headlines and the economic consequences of the Ukraine War begin to pile up, more countries appear to be standing against the Kremlin’s involvement in international affairs. The US is the main proponent for Russia’s expulsion, however this could partly be due to the personal benefit the White House would receive from the removal of Moscow’s influence from global politics and economics. Russia’s actions in Ukraine warrant severe consequences and Moscow’s removal from international financial groups could serve as a warning for other countries against initiating offensive military action.

All views expressed in this editorial are solely that of the author, and are not expressed on behalf of The Analyst, its affiliates, or staff.

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Saira is a Muslim American with a passion for writing, economics, and justice.  With a background as a UC Berkeley graduate with a bachelors in economics allows her to quantitatively analyze critical developments from around the globe as well as their long term impacts on financial systems and social welfare. She is dedicated to reporting in an investigative, honest and compassionate manner to give voice to those who need it most.

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Business

Could the Covid-19 Pandemic Bring an End to Supply Chain Capitalism?

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The global economy has long depended on supply chains to fuel profits through low prices, fast service, and cross-country inequality. These chains of production have extended across borders and seas to unify the global economy. However if supply chains are meant to lower prices and connect production across the globe, why are we now seeing some of the worst shipping backlogs, product shortages and inflation rates in decades?

Several reports place the blame for these economic shocks on the coronavirus pandemic or war in the East, however the true culprit is the supply chain itself. The White House Council of Economic Advisers released a report on Thursday supporting this view. The report argues that recent shocks have not created supply chain failures rather they have exposed the overall frailty of the current production process. 

In essence, supply chains separate product manufacturing into distinct steps which are then outsourced to the regions that can complete the steps at the lowest price. Outsourcing allows firms to shift work to companies in different countries and thereby lower labor costs. Companies in the chain have their own legal autonomy, however they work together as a whole to lower production costs and maximize profits. In exchange for decreased production costs, the supply chain sacrifices security. Crises in any region of the world can halt the entire chain and cause backlogs which lead to product shortages and inflation. 

The coronavirus pandemic sent ripples through the global supply chain as several companies struggled to manufacture and sell under strict government lockdowns. Factories and docks also suffered from labor shortages brought on by high death tolls, social distancing practices and union strikes demanding better compensation and benefits for working through the pandemic. While these may seem like temporary shocks to the system, they will likely influence future rhetoric concerning global manufacturing and trade. Now that the global economy has experienced extreme supply chain failures, individual countries will likely look for methods that will protect them from such economic vulnerability in the future. Even the United States has warned that frailty in the supply chain will not go away once the pandemic has ended. The world’s largest capitalist economy admitting such a critical flaw in the commodity manufacturing system definitely begs the question, will the Covid-19 pandemic bring an end to the era of global supply chain capitalism?

All views expressed in this editorial are solely that of the author, and are not expressed on behalf of The Analyst, its affiliates, or staff.

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Saira is a Muslim American with a passion for writing, economics, and justice.  With a background as a UC Berkeley graduate with a bachelors in economics allows her to quantitatively analyze critical developments from around the globe as well as their long term impacts on financial systems and social welfare. She is dedicated to reporting in an investigative, honest and compassionate manner to give voice to those who need it most.

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Business

Multinational Gas and Oil Company Shell to Face $5 Billion Writedown of Assets as They Leave Russia

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  • Shell is expected to announce their earnings report on May 5th, and they promise that post-tax impairments will not impact their earnings.
  • Russia’s invasion of Ukraine pushed gas and oil companies out of Moscow causing the opening of the 2022 trading year to be one of the most turbulent ever seen.
  • Fear of what will become of Shell and other gas companies as they exit a major financial support like Russia has left many in doubt.

Despite oil and gas prices skyrocketing during the first quarter of trading activities, Shell is still expected to write down up to $5 billion due to its decision to exit Russia. Shell is expected to announce its earnings report on May 5th, and they promise that post-tax impairments will not impact its earnings. Shell’s initial $3.4 billion write-down was driven up by credit losses in Russia, writedowns of receivables, and other factors. 

Oil prices hit an average of $100 a barrel, the most since 2014. The United Kingdom also hit record numbers for gas prices following Russia’s aggression and the consequential sanctions. 

Shell’s shares have been down nearly 2% since the start of London trading. Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, stated “Despite the eye-watering costs, the share price should continue to stay reasonably resilient given the divestment far outweighs the reputational damage which could be caused had it not pulled out.”

Multi-Billion dollar businesses are now watched as closely as ever before, with the accessibility provided by social media and online news agencies. Reputation and activism are heavily scrutinized, pushing companies to act in the most ‘humanitarian’ ways possible. Economic powerhouses such as gas companies are likely to continue down the most ‘politically correct’ way until profits show otherwise. 

All views expressed in this editorial are solely that of the author, and are not expressed on behalf of The Analyst, its affiliates, or staff.

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Health

Skin-lightening & anti-ageing creams sold online may contain dangerous levels of mercury

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The Zero Mercury Working Group (ZMWG), an international coalition of non-governmental organisations from over 55 countries, working to eliminate mercury exposure, has found extremely high mercury levels in skin-lightening and anti-ageing products sold on platforms including Amazon, Ebay and Flipkart amongst others.

With the legal limit of mercury concentration in the US being 1 part per million (ppm), levels as high as 65,000ppm were detected in about half of the 271 online products that were purchased and tested from 40 e-commerce sites.

Michael Bender, director and co-founder of the Mercury Policy Project and co-coordinator of the ZMWG, said: “We’re not finding 1 ppm – we’re finding products that are hundreds or thousands or tens of thousands of times above [1 ppm]. These levels are astronomical.”

Although this is the third report by the ZMWG to reveal the global availability of skin products containing high and toxic levels of mercury, this most recent analysis is the first to solely focus on the online sale of these products.

“Despite being illegal, our findings show the same high mercury skin lighteners continued to be offered for sale on the internet,” Bender elaborated. “What’s illegal domestically should be illegal online. E-Commerce must be held to the same standards.”

Products tested were mostly manufactured by brands from Pakistan, Thailand, China and Taiwan.

“These hazardous and illegal products pose a serious mercury exposure risk, especially to repeat users and their children,” said Dr. Shahriar Hossein, a member of the ZMWG. “We welcome the opportunity to work collaboratively with the authorities to stop the toxic trade in high mercury skin lightening creams.”

Mercury is classified by the World Health Organization (WHO) as one of the top ten chemicals of major public health concern. This metal element is known to result in lighter skin as it inhibits melanin pigment production. Above safe levels, mercury is highly toxic to humans, particularly to the nervous system. The developing nervous system before birth is especially susceptible to mercury poisoning, and this makes its exposure a hazardous threat to the developing child in pregnancy. Compounds of mercury are also possibly carcinogenic according to the International Agency for Research on Cancer. Mercury poisoning can lead to tremors, memory loss, neuromuscular changes, insomnia and headaches, as well as adverse effects on the kidneys and lungs which can be fatal. Some mercury compounds are also corrosive to the skin, eyes and the digestive system.

Following a lawsuit against Amazon, the California Court of Appeals ruled the company must warn consumers when selling mercury-contaminated products or other toxin-containing products.

Michael Bender noted that the ruling only affects products sold in California and that there is a need for global strategies. He therefore welcomed the Minamata Convention – a recent global treaty to ban the manufacture and trade of cosmetics containing more than 1 ppm of mercury.

“We really need international cooperation,” he said. 137 countries have committed to ‘phase out and limit mercury’ under the treaty, perhaps paving a potential pathway to progress in this specific mission of the ZMWG – ‘to eliminate where feasible, and otherwise minimise, the global supply and trade of mercury.’



All views expressed in this editorial are solely that of the author, and are not expressed on behalf of The Analyst, its affiliates, or staff.

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Daily Brief

First Union Forms at Online Retail Giant Amazon

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  • Multinational tech giant Amazon Inc reached another milestone today when workers at its New York warehouse formed the company’s first ever union.
  • 2,654 workers voted in favor of unionization, and 2,131 opposed the action.
  • Amazon is considering various legal options to challenge the results, priding itself on direct communication between the company and employees, versus negotiating through a bargaining unit.
  • Meanwhile, labor advocates celebrated Friday’s vote, excited for what it may portend for other aspects of operations at Amazon.
  • Amazon Inc is the country’s second largest private employer.

All views expressed in this editorial are solely that of the author, and are not expressed on behalf of The Analyst, its affiliates, or staff.

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