Focus on safe havens and unemployment

US President Donald Trump and his wife Melania have contracted COVID-19. (File/Reuters)
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Updated 02 October 2020
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Focus on safe havens and unemployment

The week that was:
US President Donald Trump and his wife Melania contracted COVID-19. This had an immediate impact on US futures. Markets turned risk off. Some of the immediate market action was likely triggered by algorithms responding sharply to the headlines.

This is an unprecedented situation with the presidential election due on Nov. 3. Its effect on the presidential race remains unknown. The initial assessment of some analysts is that it will improve the odds for Democrat candidate Joe Biden.
The Saudi economy contracted by 7 percent during the second quarter, with the non-oil sector shrinking by 8.2 percent and the oil sector by 5.3 percent. The non-oil private sector contracted by more than 10 percent, which is significant because it is usually the biggest contributor to jobs’ growth. The IMF predicts the Saudi economy will shrink by 6.8 percent this year and grow by 3.1 percent in 2021.
Unemployment hit record levels at 15.4 percent, despite the government supporting 60 percent of many wages. The Kingdom’s “youth bulge” will require the Saudi economy to generate around 150,000 jobs per annum. Crown Prince Mohammed bin Salman’s Vision 2020 program plays an integral part in achieving this goal. S&P affirmed KSA’s sovereign credit rating at A-/A-2 with a stable outlook.

The oil price fell for the second consecutive week amid the lukewarm economic outlook. At noon on Friday, Brent traded at $39.49 and WTI at $37.35 per barrel.
Shareholders voted to dissolve the UAE’s Arabtec Holding PJSC, putting 40,000 jobs at risk. The company and its subsidiaries racked up $216 million in losses during the first half of 2020. The Mubadala-backed group had 5 billion UAE dirhams ($1.4 billion) in receivables and 1.8 billion dirhams in debt. This is a sign of the difficulties the construction sector faces in the UAE and beyond amid shrinking GCC economies.
On Monday, Siemens Energy had a lacklustre start on the Frankfurt Stock Exchange. Shares initially slumped after its IPO valued the company’s equity at €16 billion ($18.8 billion), €5 billion lower than anticipated. This was the last puzzle in the strategy of outgoing CEO Joe Kaeser to unlock value in the conglomerate. The middling debut is an indication of how difficult it is for original equipment manufacturers to navigate energy transition, especially during an economic downturn.
The world’s third-largest equity market, the Tokyo Stock Exchange, resumed trading on Friday after an all-day outage due to technical glitches. This was the worst outage in its history and a sign of how dependent we have become on technology.
Focus:
News that the US president had contracted coronavirus precipitated a flight to safe havens. The dollar, the yen and gold did particularly well. Volatility was up, with the VIX rising to 29, which was below last week’s spike.

The question of how these investment categories can keep investors whole remains: Gold may look attractive, while other safe havens such as government bonds yield little, with interest rates near or below zero.
The dollar may benefit in the short run. However, downward pressure will remain in the long term, with further fiscal packages to follow and interest rates remaining low amid the Fed’s dovish stance.
Trump’s predicament is bound to have an impact on the stimulus negotiations between Speaker of the House of Representatives Nancy Pelosi and US Treasury Secretary Steven Mnuchin, which have resumed in person for the first time since August.
The two positions are still miles apart, with Pelosi demanding $2.2 trillion (the bill for which has passed the Democratic-controlled House) and Mnuchin’s offer of $1.6 trillion. The Democrats want to leave unemployment benefits at $600 a month, while the Republicans want to scale them down to $400. The Republicans have upped their offer of support for state and local governments by $100 billion to $250 billion. Talks are set to continue. Meanwhile, on Thursday, the president signed a stop-gap funding bill to avert a government shutdown.
Unemployment was the big theme of the week across the globe as economies slowed markedly in Europe and the US.
The hold-up on a rescue package in the US puts jobs at risk: United Airlines and American announced plans to shed 32,000 employees. Some of the redundancies could be reversed with sufficient government stimulus. US banks have fired 70,000 workers since the start of the pandemic. This week Allstate and Goldman Sachs announced a further 3,800 to 4,000 job cuts. Disney is slashing 28,000 jobs, two thirds of which are part-time roles.
Bayer announced plans to cut costs by €1.5 billion, which is bound to result in job losses, while Shell said it will slash 9,000 jobs. In Europe, many more jobs are expected to be lost as furlough schemes are trimmed.
Winter is on the doorstep in the northern hemisphere, and with the pandemic showing no sign of abating in Europe, the US and elsewhere, the effect on job markets is likely to be negative.
On Thursday, US first-time jobless claims came in at 837,000 for the week ending Sept. 26. This is 36,000 better than the preceding week, although the metric has never fallen below the 800,000 mark since March.
September non-farm payroll rose by 661,000, which was below forecasts. The unemployment rate came down to 7.9 percent, which was above expectations. Labor participation stood at 61.4 percent. This marks a downshift in the economic recovery. The question is how companies will calibrate staffing needs for 2021.
Where we go from here:
The EU summit threatened sanctions against Belarus, demanding President Alexander Lukashenko end a campaign of repression and free all political prisoners. It also threatened to “keep all options and instruments at its disposal” regarding Turkey, while offering a “positive” political EU-Turkey agenda, which indicates a double-tracked approach.
The EU issued a letter of notice to the UK in response to the House of Commons having passed the Internal Market Bill, which reneges on parts of the withdrawal agreement. Sterling fell 0.7 percent on the news.
The last round of Brexit negotiations made little headway. UK Prime Minister Boris Johnson will intervene directly for the first time since June, and is scheduled to call EU Commission President Ursula von der Leyen on Saturday.

— Cornelia Meyer is a Ph.D.-level economist with 30 years of experience in investment banking and industry. She is chairperson and CEO of business consultancy Meyer Resources. Twitter: @MeyerResources


Pro-Palestinian protesters at Drexel ignore call to disband as arrests nationwide surpass 3,000

Updated 11 min 54 sec ago
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Pro-Palestinian protesters at Drexel ignore call to disband as arrests nationwide surpass 3,000

  • Israel has killed more than 35,000 Palestinians, according to Gaza’s Health Ministry
  • Students and others have set up tent encampments on campuses around the country to press colleges to cut financial ties with Israel

PHILADELPHIA: Pro-Palestinian protesters ignored a request by Drexel University’s president to disband their encampment on Monday as arrests linked to campus demonstrations against the Israel-Hamas war surpassed the 3,000 mark nationwide.
Drexel’s campus remained on lockdown, with classes being held virtually as police kept watch over the demonstration on the school’s Korman Quad. Many Drexel employees were told to work from home.
In a statement issued a day earlier, Drexel President John Fry said as many as 60 protesters were at the encampment, lambasting it as “intolerably disruptive to normal university operations.” He said there were “serious concerns about the conduct of some participants, including distressing reports and images of protesters subjecting passersby to antisemitic speech, signs and chants.” Fry threatened disciplinary action against Drexel students participating in the protest.
The Drexel Palestine Coalition responded on Instagram late Sunday that “it is slander to accuse the encampment of ‘hateful’ or ‘intimidating’ actions when we have done neither.” The group accused Drexel and city police of harassment and intimidation. A pro-Palestinian group of faculty and staff blasted Fry on Monday for shuttering campus facilities and said the encampment was “not disruptive to learning.”
The Drexel protesters’ demands ranged from the university administration calling for a ceasefire in Gaza and divesting from companies that do business with Israel, to abolition of the Drexel police department and termination of the school’s chapter of Hillel, the Jewish campus organization.
No arrests were reported.
Students and others have set up tent encampments on campuses around the country to press colleges to cut financial ties with Israel. Tensions over the war have been high on campuses since the fall but demonstrations spread quickly following an April 18 police crackdown on an encampment at Columbia University.
More than 3,000 people have been arrested on US campuses over the past month. Campuses have been calmer recently, with fewer arrests, as students leave for summer break. Still, colleges have been vigilant for disruptions to commencement ceremonies.
At the University of California, Santa Cruz, graduate students went on strike Monday as part of a rolling, systemwide protest over how administrators have responded to pro-Palestinian encampments, including arrests of protesters at the Los Angeles, San Diego and Irvine campuses.
The encampment at Drexel, which has about 22,000 students, was set up after several hundred demonstrators marched from Philadelphia’s City Hall to west Philadelphia on Saturday. Nearby, on the University of Pennsylvania campus, university and city police arrested 19 demonstrators Friday night, including six Penn students.
On Monday, Philadelphia District Attorney Larry Krasner declined to charge four of the Penn protesters, citing a lack of evidence submitted by campus police. Krasner’s office approved misdemeanor charges against three others. The remaining 12 arrested Friday night were given citations for failing to disperse.
Penn’s main commencement ceremony, meanwhile, was held under tightened security and a ban on flags and signs. There were no disruptions.
But dozens of students walked out of Yale University’s commencement ceremony Monday, some waving Palestinian flags. Yale said in a prepared statement that “a number of graduating students chose to peacefully walk out during the ceremony. University staff helped guide these individuals to an area outside the event space, and the ceremony continued as scheduled.”
Wesleyan University in Connecticut said it has reached agreement with student protesters to review possible divestment, with meetings scheduled for later this month and in the fall. Wesleyan President Michael Roth announced the deal over the weekend and disclosed that 1.7 percent of Wesleyan’s endowment was invested in aerospace and defense businesses, but that none were directly involved in the manufacture of weapons.
As part of the agreement, Wesleyan protesters cleared their encampment on Monday, according to a school spokesperson.
The Associated Press has recorded at least 82 incidents since April 18 where arrests were made at campus protests across the US At least 3,025 people have been arrested on the campuses of 61 colleges and universities. The figures are based on AP reporting and statements from universities and law enforcement agencies.
The latest Israel-Hamas war began when Hamas and other militants stormed into southern Israel on Oct. 7, killing around 1,200 people and taking an additional 250 hostage. Palestinian militants still hold about 100 captives, while Israel’s military has killed more than 35,000 people in Gaza, according to Gaza’s Health Ministry, which doesn’t distinguish between civilians and combatants.

 


What is the ICC and why it is considering arrest warrants for Israeli and Hamas leaders

Updated 22 min 24 sec ago
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What is the ICC and why it is considering arrest warrants for Israeli and Hamas leaders

  • Israel has killed more than 35,000 Palestinians, according to Gaza’s Health Ministry

THE HAGUE, Netherlands: The International Criminal Court could soon issue arrest warrants for Israeli and Hamas leaders, including Israeli Prime Minister Benjamin Netanyahu, more than seven months into the war between the two sides, based on a request by the court’s chief prosecutor.
Karim Khan said that he believes Netanyahu, Defense Minister Yoav Gallant and three Hamas leaders — Yehia Sinwar, Mohammed Deif and Ismail Haniyeh — are responsible for war crimes and crimes against humanity in the Gaza Strip and Israel.
The ICC was established in 2002 as the permanent court of last resort to prosecute individuals responsible for the world’s most heinous atrocities — war crimes, crimes against humanity, genocide and the crime of aggression.
The Rome Statute creating the ICC was adopted in 1998 and took effect when it got 60 ratifications on July 1, 2002. The UN General Assembly endorsed the ICC, but the court is independent.
Without a police force, the ICC relies on member states to arrest suspects, which has proven to be a major obstacle to prosecutions.
Netanyahu said last month that Israel “will never accept any attempt by the ICC to undermine its inherent right of self-defense.” He said that while the ICC won’t affect Israel’s actions, it would “set a dangerous precedent.”
WHAT IS THE ICC?
The ICC’s 124 member states have signed on to the Rome Statute. Dozens of countries didn’t sign and don’t accept the court’s jurisdiction over war crimes, genocide and other crimes. They include Israel, the United States, Russia and China.
The ICC becomes involved when nations are unable or unwilling to prosecute crimes on their territory. Israel argues that it has a functioning court system, and disputes over a nation’s ability or willingness to prosecute have fueled past disputes between the court and individual countries.
In 2020, then US President Donald Trump authorized economic and travel sanctions on the ICC prosecutor and another senior prosecution office staffer. The ICC staff were looking into US and allies’ troops and intelligence officials for possible war crimes in Afghanistan.
US President Joe Biden, whose administration has provided crucial military and political support for the Gaza offensive, lifted the sanctions in 2021.
The ICC has 17 ongoing investigations, issued a total of 42 arrest warrants and taken 21 suspects into custody. Its judges have convicted 10 suspects and acquitted four.
In its early years, the court was criticized for focusing on crimes in Africa, but now it has investigations in Asia, Europe, the Middle East and Latin America.
WHAT IS THE ICC’S RELATIONSHIP TO ISRAEL AND PALESTINIAN TERRITORIES?
The UN General Assembly raised the Palestinians’ status in 2012 from a UN observer to a nonmember observer state. That opened the door for the Palestinian territories to join international organizations, including the ICC.
The ICC accepted “The State of Palestine” as a member in 2015, a year after the Palestinians accepted the court’s jurisdiction.
The court’s chief prosecutor at the time announced in 2021 that she was opening an investigation into possible crimes on Palestinian territory. Israel often levies accusations of bias at UN and international bodies, and Netanyahu condemned the decision as hypocritical and antisemitic.
Khan, the current ICC prosecutor, visited Ramallah and Israel in December, meeting Palestinian officials and families of Israelis killed or taken hostage by Hamas militants in the Oct. 7 attack that sparked the Israel-Hamas war.
Khan called Hamas’ actions “some of the most serious international crimes that shock the conscience of humanity, crimes which the ICC was established to address,” and called for the immediate and unconditional release of all hostages.
Khan said “international humanitarian law must still apply” in the Israel-Hamas war and “the Israeli military knows the law that must be applied.” After the visit, Khan said that an ICC investigation into possible crimes by Hamas militants and Israeli forces “is a priority for my office.”
WHO ELSE HAS THE ICC CHARGED?
Last year, the court issued a warrant for Russian President Vladimir Putin on charges of responsibility for the abductions of children from Ukraine. Russia responded by issuing its own arrest warrants for Khan and ICC judges.
Other high-profile leaders charged by the court include ousted Sudanese strongman Omar Al-Bashir on allegations including genocide in his country’s Darfur region. Former Libyan leader Muammar Qaddafi was captured and killed by rebels shortly after the ICC issued a warrant for his arrest on charges linked to the brutal suppression of anti-government protests in 2011.
 

 


Amal Clooney helped ICC weigh Gaza war crimes evidence

Updated 38 min 35 sec ago
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Amal Clooney helped ICC weigh Gaza war crimes evidence

  • Clooney said she was asked by prosecutor Karim Khan to join an expert panel

WASHINGTON: Amal Clooney helped the International Criminal Court weigh evidence that led to the decision to seek arrest warrants for top Israeli and Hamas leaders, the human rights lawyer said Monday.
The high-profile British-Lebanese barrister posted a statement on the website of the Clooney Foundation for Justice, which she founded with her husband, American actor George Clooney.
Both she and the foundation had previously been criticized on social media for not speaking out over the civilian death toll in Gaza.
Clooney said she was asked by prosecutor Karim Khan to join an expert panel to “evaluate evidence of suspected war crimes and crimes against humanity in Israel and Gaza.”
The statement came the same day Khan said he was seeking arrest warrants against Israeli Prime Minister Benjamin Netanyahu and Defense Minister Yoav Gallant, as well as top Hamas leaders.
“Despite our diverse personal backgrounds, our legal findings are unanimous,” Clooney said, adding there were “reasonable grounds to believe” that Hamas’ Yahya Sinwar, Mohammed Deif and Ismail Haniyeh engaged in “hostage-taking, murder and crimes of sexual violence.”
With Netanyahu and Gallant, meanwhile, there are “reasonable grounds to believe” the two have engaged in “starvation as a method of warfare, murder, persecution and extermination.”
Khan thanked Clooney in his statement announcing the decision to seek the arrest warrants.
Clooney and other members of the panel also wrote an opinion piece in the Financial Times on Monday supporting ICC prosecutions for war crimes in the conflict.
As Hamas, Israel and top ally the United States all denounced the move, the experts wrote that they “unanimously agree that the prosecutor’s work was rigorous, fair and grounded in the law and the facts.”
Clooney, in her statement, said that “my approach is not to provide a running commentary of my work but to let the work speak for itself.”
“I served on this panel because I believe in the rule of law and the need to protect civilian lives,” she added.
“The law that protects civilians in war was developed more than 100 years ago and it applies in every country in the world regardless of the reasons for a conflict.”


Israel says retrieved bodies of hostages were in Gaza tunnels

Updated 47 min 1 sec ago
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Israel says retrieved bodies of hostages were in Gaza tunnels

  • Israel has killed more than 35,000 Palestinians, according to Gaza’s Health Ministry

JERUSALEM: The Israeli army said Monday that the bodies of four hostages retrieved from Gaza last week were found in tunnels under Jabalia, where troops have been engaged in fierce fighting in recent days.
The army said last week it had recovered the bodies of Ron Benjamin, Yitzhak Gelerenter, Shani Louk, and Amit Buskila, all of whom it said had been killed in Hamas’s October 7 attack on southern Israel.
Their remains were recovered “from underground tunnels in Jabalia in northern Gaza,” the army said late Monday in a statement.
During a military operation, Israeli soldiers searched a suspected building in which a tunnel shaft was located, the army said.
“Soldiers then entered the underground tunnel route in a night operation and inside it conducted combat,” it said.
During the fighting the soldiers “located the bodies of the hostages and rescued them from the tunnels,” the army said.
Gelerenter, Louk, and Buskila were killed and abducted from the Nova music festival, while Benjamin was killed at the Mefalsim intersection from where his body was taken to Gaza, the army said last week.
Thousands of young people had gathered on October 6 and 7 to dance to electronic music at the Nova festival event held near Re’im kibbutz, close to the Gaza border.
Fighters from Hamas crossed over from Gaza and killed more than 360 people at the festival, Israeli officials have said.
The Nova festival victims accounted for nearly a third of the more than 1,170 people killed in the October 7 attack, most of them civilians, according to an AFP tally based on Israeli figures.
Out of the 252 people taken hostage that day, 124 are still being held inside the Gaza Strip, including 37 the army says are dead.
Israel’s retaliatory offensive against Hamas has killed at least 35,562 people in Gaza, also mostly civilians, according to data provided by the Hamas-run territory’s health ministry.
Since early May the Israeli military has been engaged in renewed street battles in northern and central Gaza.
On Friday, the army told AFP that the fighting in the northern town of Jalalia was “perhaps the fiercest” in over seven months of war.
Fighting in north and central Gaza erupted again when the military began its assault in the far-southern city of Rafah on May 7.
 

 


Biden: What’s happening in Gaza is not genocide

Updated 10 min 45 sec ago
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Biden: What’s happening in Gaza is not genocide

Washington: US President Joe Biden denied Monday that Israel’s war in Gaza was genocide, as he slammed an “outrageous” request by the International Criminal Court’s prosecutor for an arrest warrant for Israeli leaders.
“What’s happening is not genocide,” Biden told a Jewish American Heritage Month event at the White House as he discussed the conflict sparked by Hamas’s October 7 attack on Israel.
His remarks referred specifically to a case at a different tribunal, the UN International Court of Justice (ICJ), which is dealing with allegations by South Africa that Israel’s war in Gaza is genocidal.
But he also amped up his criticism of the ICC, a separate war crimes court, saying that “we reject” ICC Prosecutor Karim Khan’s bid to arrest Israel’s Prime Minister Benjamin Netanyahu and its defense minister.
Khan also sought the arrest of top Hamas figures including the Palestinian militant group’s leader in Gaza, Yahya Sinwar, and political chief Ismail Haniyeh.
“Whatever these warrants may imply, there is no equivalence between Israel and Hamas,” Biden told the audience in the Rose Garden of the White House.
Biden pledged “ironclad” support for Israel, adding that “we stand with Israel to take out Sinwar and the rest of the butchers of Hamas.”
The US president further vowed to free hostages taken by Hamas during the October 7 attack “come hell or high water.”
Hours earlier, he had issued a written statement saying that the ICC warrants were “outrageous.”

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Biden’s expression of support comes despite recent tensions over Israel’s war in Gaza. Washington recently withheld a shipment of bombs to Israel in a bid to warn it off an offensive in the southern city of Rafah.
US Secretary of State Antony Blinken warned separately that the ICC prosecutor’s move “could jeopardize” ceasefire talks to end the Gaza conflict.
“We reject the prosecutor’s equivalence of Israel with Hamas. It is shameful,” Blinken said in a statement.
US lawmakers were reportedly considering a legislative response punishing the ICC amid bipartisan fury among Republicans and Democrats.
Republican House Speaker Mike Johnson slammed the court’s “baseless and illegitimate” decision.
He accused Biden of a “pressure campaign” against Israel, saying the country was “fighting a just war for survival.”
Biden faces political pressure on both sides ahead of a November election clash with Donald Trump, with pro-Gaza student protests roiling US campuses while Republicans accuse him of failing to fully back Israel.
The White House refused to comment on whether the United States could take retaliatory action, including sanctions, against the ICC if it targeted Israel.
In 2020, the administration of then-president Donald Trump targeted the ICC with sanctions over its investigation in Afghanistan, but the Biden administration later lifted them.
However Washington’s ambiguous position over the court is reflected in the fact that it has backed the ICC’s attempt to prosecute Russian President Vladimir Putin over the invasion of Ukraine.
Defense Secretary Lloyd Austin said Monday that the United States “will continue” to assist the ICC in its investigation into alleged war crimes in Ukraine, despite denouncing the Israel move.