Chinese authorities have detained several people—including broker employees, a regulator, and a journalist—for possible insider trading and falsification of information, state-run media Xinhua reported.
Xu Gang, the formerly chairman of brokerage development and head of the research department at China's largest investment bank, CITIC Securities, was among the detainees, according to well-respected business magazine Caixin (link in Chinese).
Xu Gang is on the left.
Xu, a member of the executive committee who has been with the bank since 1998, oversaw the stock trading and equity underwriting operations of one of the most important players in China's stock market in recent years.
With about $667 billion in assets under management, CITIC's parent China Citic Banking ranks as the 50th largest bank in the world. But CITIC Securities' reach and influence in China is much wider than those figures might suggest—it is the top investment bank in China when ranked by revenues:
CITIC is also top in equity underwriting:
On these measures, CITIC beats out China's massive homegrown banks and Wall Street's biggest, most experienced players, according to Dealogic data. Xu's arrest comes as Beijing has tried to stem short-selling and censor negative information about the country's dropping stock markets.
Xu, who was also a managing director at the bank, created the banks research division and was responsible for running the brokerage for several years as it led the industry.
There are few details released yet about the detentions, and CITIC Securities only said in a statement to the Hong Kong Stock Exchange that it had received no notice of an investigation. On Aug. 18, Xu's brokerage responsibilities were handed to the head of the bank's asset management division, and Xu was put in charge of "back office and IT services" with no further explanation.
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Wednesday, August 26, 2015
One of China’s most powerful bankers is being investigated for illegal trading |#China
Are Turkish airbases the key to defeating the Islamic State? |#Turkish
Are Turkish airbases the key to defeating the Islamic State? |#Turkishby Commentary |
On July 22, after months of negotiations, Turkey finally agreed to allow the United States to use its bases, most importantly Incirlik Airbase, for manned and unmanned strike sorties against the self-declared Islamic State.
Prior to this, Turkey had only permitted that its sovereign territory be used for unarmed surveillance drone flights and (apparently) a combat search and rescue element. This latest development was characterized as a “game-changer” by a senior Obama administration official, in particular for more intensive bombing of the Islamic State in northern Syria. Rather than flying from carriers or Persian Gulf bases, flying out of Incirlik significantly increases the time that coalition strike aircraft can loiter above Islamic State-controlled territories and, potentially, provide close air support for coalition-backed opposition forces on the ground, including the Pentagon-trained rebels that enteredSyria on July 12.
On Aug. 5, the United States began conducting armed Reaper strikes from Incirlik into Syria. Four days later, six F-16s and three hundred support personnel were deployedfrom Aviano, Italy to Incirlik; there are also an unknown number of aerial refuelers. On Aug. 12, the United States began flying those F-16s out of Incirlik to attack Islamic State militants, fighting positions, and equipment in Syria. Late last week, brigadier general Kevin J. Killea, chief of staff of Combined Joint Task Force-Operation Inherent Resolve, described access to Incirlik as “a fantastic, strategic location for us to fly from to support anti-ISIL efforts in Syria and Iraq,” adding “the broader use of Incirlik for air operations in Syria is already proving to be a great effects multiplier on the battlefield. Armed [remotely piloted aircraft], strike fighters and aerial refueling tankers originating from Turkey have combined to produce devastating effects against ISIL targets.”
In the limited time since the United States has had expanded access to Incirlik, the devastating effects against the Islamic State have not been apparent. Turkey may be placing restrictions on which opposition force ground units the United States can support: the Turkish foreign minister spokesperson has said, “Support to People’s Protection Units (YPG) is not one of the elements of the agreement,” while the State Department spokesperson said the opposite two days earlier: “[YPG] have already benefited from coalition air support.” There also might be fewer readily available Islamic State targets that the F-16s and Reapers have been authorized to strike. Finally, after an initial limited number of strikes on July 23, Turkey itself has apparently not conducted any additional strikes against the Islamic State in Syria.
Airstrikes against the Islamic State before and after access to Incirlik Airbase
| July - Aug. 2015 | Iraq | Syria | Total |
|---|---|---|---|
| July 30 - Aug. 11 | 189 | 104 | 293 |
| Aug. 12 - Aug. 24 | 212 | 92 | 304 |
Whatever the reasons, the data shows that—like other purported incremental and tactical enhancements to the war against the Islamic State—access to Incirlik has not been a “game-changer.” For the anti-Islamic State airpower coalition, including the United States, there have been fewer airstrikes in Syria in the thirteen days after Incirlik was made available, than in the thirteen days before. The wholly unrealistic strategic objective of “destroying” the Islamic State is no closer to fruition.
This post originally appeared at Politics, Power, and Preventative Action, a Council on Foreign Relations blog. We welcome your comments at ideas@qz.com.
The American workplace bolsters the confidence of men, and destroys the ambition of women
The American workplace bolsters the confidence of men, and destroys the ambition of women |#Womanby Cassie Werber |
American women enter the corporate workforce with higher aspirations to reach the top than their male counterparts, and with the confidence that they can get there. But according to research by the management consulting firm Bain & Co., women's ambition reaches a cliff edge, and then falls off it, as early as two years into working life.
Moreover, the research found that the most common explanation for women’s slower and less certain rise through company ranks—motherhood—was irrelevant. Women are instead losing confidence in their ability to fit the stereotype of what “success” looks like at an American company.
Bain surveyed more than 1,000 woman and men and found that when starting a job, 43% of women aspired to reach top management, whereas only 34% of men saw themselves on course for the C-suite, in high-ranking roles like CEO and CFO. When asked whether they had the confidence to reach their goals, 27% of women and 28% of men answered “yes.”
But experienced employees—defined as anyone with more than two years in a firm—reported differently. Now, only 16% of women aspired to reach top management, versus 34% of men.
Women in more senior leadership positions had also lost confidence, though not as much, with 29% of senior women believing they still could make it to the top. But that was well shy of their male counterparts, 55% of whom now had the confidence they would get there.
The researchers identify two areas in which women are now better supported in their goals overall, namely the classroom—including at the university level—and in the boardroom, where many firms now have programs designed to help women in the upper-most layers of management.
But between the two poles is a void. Here, women find little encouragement and few female roles models.
“What’s not happening are discussions of goals, career strategies, job satisfaction, overall trajectory and—especially—the simple giving of real encouragement, all in a business culture that rarely celebrates women’s role models,” two Bain executives wrote in an article for Harvard Business Review.
That expanse between classroom and boardroom, where workers spend the majority of their careers, is also still dominated by a culture that excludes women, the researchers found. The golf-playing, boys’ club aspect is part of the problem. Women, far more than men, begin to feel that they “fit in” less and less as they stay at a firm. The other aspect is the long-hours culture of American firms, which glorify work above all.
“While companies may differ in many ways, there is broad acknowledgment of a deeply ingrained ideal worker model,” the researchers wrote. That ideal was someone who worked long and late, took on extra projects, was adept at self-promotion, and was always connected via phone and email. Here women judge themselves and are judged harshly: both women and men think it’s more difficult for women to conform to the ideal stereotype because of other commitments, like having families.
But men increasingly are becoming less willing to conform to an “ideal” as well. “Our study shows that 45% of those under the age of 30—more than any other age group—envision a career that allows for periodic breaks. This finding reinforces other research indicating a generational shift in how both men and women view work,” they write.
The responsibility for helping employees maintain ambition falls to frontline managers, and the researchers offer some detailed advice (pdf, p.10) on what they can do to help.
Good news! Big banks only have $65 billion in legal fines left to pay
Good news! Big banks only have $65 billion in legal fines left to pay |#Newsby Jason Karaian |
Seven years and $260 billion later, big banks are nearing the end of their long legal nightmare. From dodgy mortgages to duff insurance, rigged rates to skirted sanctions, lenders have been paying the price for a wide range of misdeeds, as regulators dig deeper into their activities both before and after the financial crisis.
Analysts at Morgan Stanley estimate that the 25 largest banks in the US and Europe have taken some $260 billion in litigation-related charges since 2009. Over the next two years, they face around $65 billion in additional penalties, the analysts reckon in a recent research note.
Mortgage malpractice is the biggest source of legal trouble for the banks, both in the past ($94 billion in fines and provisions) and the future ($13 billion more to come). British banks have paid more than $40 billion for peddling a misleading form of personal insurance, the second-largest source of fines. The rest of the charges come from a mix of interest-rate manipulation, sanctions violations, tax evasion, and other transgressions.
Although Bank of America and JPMorgan are far ahead of the pack in terms of costs already incurred, the UK's Royal Bank of Scotland faces the biggest bill to come—nearly $11 billion between now and 2017, the bulk related to US mortgage misdeeds. The charges are worth more than RBS’s estimated operating profit in 2017; a dividend won’t likely be paid until 2018, a decade after long-suffering shareholders last received one from the bailed-out bank.
Given banks’ seemingly endless capacity for bad behavior, putting a price tag on future legal trouble is guesswork, the analysts admit, as some of their forecasts include “general provisions for issues not yet identified, given the ongoing focus of regulators on a broad spectrum of historic issues.”
Things seem to be moving in the right direction, the analysts note. Across the industry, executive pay has fallen by around 30% since 2006, with more emphasis on long-term incentives and non-financial targets. Banks are also hiring compliance and risk-management staff like crazy—compliance headcount has more than doubled at banks like JPMorgan and HSBC over the past few years.
But changing dysfunctional corporate cultures doesn't happen overnight: dealing with past transgressions is one thing, but are banks better prepared to stamp out wrongdoing in the future?
China’s largest weapons manufacturer is allegedly selling arms to South Sudan—again
China’s largest weapons manufacturer is allegedly selling arms to South Sudan—again |#Newsby Lily Kuo |
China's biggest arms manufacturer has been selling weapons to South Sudan's government, whose military has been accused of a "scorched earth" campaign of razing entire villages, burning people alive, and raping children.
According to a United Nations report released this week, the state-owned China North Industries, better known as Norinco, sold the South Sudan government $20 million worth of missiles, guided missile launchers, grenade launchers, almost 10,000 automatic rifles, and 24 million rounds of ammunition last year. China promised last year to halt all arms sales to South Sudan after it was discovered to have sold $38 million of small arms and lights weapons to the government. So far, Chinese officials have not responded to the report.
China's involvement in South Sudan is one place where its long-standing policy of political noninterference is being eroded by economic concerns. A consortium led by a Chinese state oil company, China National Petroleum Company has been funding a militia to guard an oil field in the Unity state, according to the Swiss research group Small Arms Survey earlier this year. China is one of South Sudan's largest oil buyers, along with India and Japan.
Norinco has also recently made headlines because of its new partnership with Chinese e-commerce giant Alibaba—the two have each taken a 50% stake in a Chinese satellite navigation system in a joint venture worth two billion yuan (about $310 million.)
East African leaders are gathering today, Aug. 26th, in the South Sudanese capital of Juba to discuss a potential peace deal to end almost two years of conflict. The United States is threatening to impose an arms embargo and sanctions if leaders don't meet a Sept 1 deadline to cease the violence that has killed tens of thousands and displaced more than 1.6 million people. Nigeria's ambassador to the United Nations said the UN Security Council is prepared to "act immediately" if no peace deal is signed.
This Danish power plant will poetically inform residents of how much carbon they’re using |#Environment
This Danish power plant will poetically inform residents of how much carbon they’re usingby Anne Quito |
In less than a decade, Copenhagen expects to become the first carbon-neutral city on the planet.
There are plenty of reminders around the Danish capital to will the locals towards achieving a zero-carbon future by 2025: a 20-turbine wind farm, half of its population zipping around in bikes (and an infamous 180% import tax on cars), a mandatory green roof policy, or anti-food waste reminders on paper napkins.
But among the most poetic interventions is a planned chimney atop Copenhagen's soon-to-be built power plant along its harbor. Like a SOS smoke-signal for the environment, the chimney will puff out a steady succession of steam rings into Copenhagen's skyline for every ton of carbon dioxide the plant produces. The smokestack will be at the apex of the Amager Bakke (Amager Slope), a revolutionary waste-treatment plant designed by the visionary architects at BIG.
"An art piece to completely change people's perceptions on what a power plant can be"
The project is bolstered by a thriving Kickstarter campaign that has already exceeded its target with almost a month left. “By sweeping nothing under the carpet, but rather projecting our carbon footprint onto the Copenhagen sky, we provide every single citizen intuitive information to help them inform the decisions they make for their lives and for the city that they want to live in,” declared the project's lead architects, Bjarke Ingels andJakob Lange, on their fundraising page.
The crowdsourced funds will support the development of the fifth and final prototype for the smoke stack (a.k.a. BIG Vortex), which was originally proposed to BIG by the Berlin-based studio, realities:united. Over the course of the development, the profile of the chimney has notably evolved since the original rendering in 2011, with the column now appearing to prominently stuck to the plant’s exterior based on the latest visualizations.
Design modifications, 2011 and 2015.
The mechanics behind the smokestack is being developed with in collaboration with scientists from the aerospace organization Peter Madsen Raketmadsens Rumlaboratorium (Racket-Madsen Space Lab) and the Danish Technical University.
Watch a perfect steam circle rise in this lab test video that BIG shared with Quartz.
(The jarring explosions should hopfeully be eliminated in the final version.)
The waste treatment facility, which is being erected between Copenhagen's largest yacht harbor and a water sports complex, has been called “one of the most radical representations of architecture as a means of public engagement of our time” by ArchDaily.
Prototypes.
The Amager Bakke waste treatment plant is scheduled to open in 2017.
Quartz Daily Brief—Americas edition—China sends stocks lower, Assad’s allies, robot chefs
What to watch for today
Boeing employees take the aircraft maker to court. A class-action lawsuit brought by 190,000 workers and retirees of Boeing accuses the US aerospace company of mismanaging their pension investments, resulting in high investment fees. Their federal court case opens today (paywall).
South Sudan flirts with a peace deal. President Salva Kiir said he may sign an agreement with rebel leader Riek Machar to demilitarize the capital of Juba and enable rebels to appoint two state governors. The UN Security Council has threatened to impose sanctions if Kiir doesn't sign by Sept. 1.
WPP's quarterly update. The world's largest advertising company, which owns agencies including Ogilvy & Mather, is expected to report a rise of 12% in profits. CEOMartin Sorrell says China will continue to be the most important global advertising market, despite its recent troubles.
US fashion brands report results. Abercrombie & Fitch will likely report another quarter of falling sales, its tenth in a row. PVH Corp, which owns the Tommy Hilfiger and Calvin Klein brands, is also expected to report lower than expected earnings. US investors will also be looking for an announcement on non-defense capital goods orders, excluding aircraft. It's used as a proxy for businesses' plans for spending.
While you were sleeping
China’s stocks reacted with confusion to an interest-rate cut... The Shanghai composite index rallied by about 3% in early trading, but ended 1.3% down after the Chinese central bank cut rates again overnight. The Shenzhen index also rose and fellseveral times in the morning, ending down 0.6%. The government’s failure to calm market volatility has raised questions (paywall) about whether prime minister Li Keqiang will be forced out of his position.
...but European markets just fell. Stock markets in the UK, Germany, and Francewere all more than 1% lower in mid-morning trading as the knock-on effect of China's tumbling stocks played out. That said, Japanese and Korean stocks bucked the trend and rallied; the Nikkei 225 rose 3.2% and the Seoul Composite was up 2.6%.
Syria's president said he was still confident in his allies. Bashar al-Assad told a Lebanese television station that he believed Russia and Iran, which have supported his government during the last four years of conflict in Syria, would continue to stand by him—even though relations between Iran and the rest of the world have begun to thaw. About 250,000 people have already died in the conflict.
South Korean retailers got a boost. Department store sales rose 0.7% in July (paywall) from a year earlier, a sign that things are returning to normal after a drop of 11.9% in June due to the MERS crisis; the respiratory disease killed 36 people in South Korea and damaged its valuable tourism industry.
Quartz obsession interlude
Jake Flanagin on what ending birthright citizenship would mean in the US."Repealing birthright citizenship sends a powerful message: The kind of immigrant who received birthright citizenship in the past (mainly from Europe) was adding to the national equation; the kind of immigrant arriving today (mainly from Latin America) will not." Read more here.
Matters of debate
Stop checking your stocks. The more you look at them, the more likely they are to be down.
Is your summer reading assignment offensive? Too bad. Higher education requires exposure to new ideas, even if they make you uncomfortable.
Black holes aren't inescapable after all. Stephen Hawking has a theory about how a particle's properties can leak out.
All European countries should follow Germany's lead on migrants. It has offered all Syrian migrants who made it to the country the right to claim asylum.
Jimmy Carter's legacy has been vastly underrated. The former US presidentdeserves more credit for his actions in his office, not just afterwards.
Surprising discoveries
Robots are learning how to cook us breakfast. They can parse how-to websites to figure out how best to make pancakes, for example.
The Middle East is a bright spot for air quality. It's the only region in Asia wherepollution is decreasing.
Public birthday celebrations are illegal in Tajikistan. One man got busted afterposting party photos on social media.
South Africans found humor in a hashtag when their currency tanked. Lots of things are #StrongerThanTheRand.
The US and Russia can't agree on how to handle outer-space pee. The International Space Station has two different purification systems.
Our best wishes for a productive day. Please send any news, comments, Tajikistani birthday invites, and how we deal with interstellar human waste to hi@qz.com. You can follow us on Twitter for updates throughout the day.
Sign up for the Quartz Daily Brief here, tailored for morning delivery in Asia, Europe & Africa, and the Americas. |
Sweden’s oceans ambassador fights for a sustainable blue economy
Sweden’s oceans ambassador fights for a sustainable blue economyby calderngrist |
To risk a truism: The oceans do a lot for us. The currents drive the climate and the monsoons, ocean water absorbs carbon and heat from that pesky atmosphere, aquatic vistas are gorgeous when they’re not filled with trash, and healthy marine ecosystems nurture a valuable food source. The emphasis, here, is on “valuable.”
Some of the newest economic thought suggests that putting a price on these ecosystem services -- this natural capital, as it’s called -- is the key to embedding conservation into capitalism. (Think “carbon tax.”) If we valuate the oceans, the argument goes, we’ll actually value them. Resources like oil and gas, of course, are easy to price; but in the international ocean policy landscape, pricing and regulating most ecoservices is largelyuncharted territory. After all, 50 percent of all saltwater is beyond national jurisdictions. And besides, how would we put a market value on the on the oceans? Should we? And if so, how can we connect this value to economic policymaking? Welcome to the blue economy.
The idea is a nascent one -- and plenty of geopolitical and ethical details still need to be ironed out -- but some policymakers are confident that pricing our natural capital is the key to a sustainable, peaceful future.
“Oceans do not divide nations; they unite them," said Lisa Emelia Svensson at the Ocean Summit on Marine Debris in May, in a melodic Swedish lilt. Svensson is Sweden’s ambassador for Oceans, Seas, and Freshwater. As far as I can tell, it’s a position that exists only in Sweden. (The U.S. has a deputy assistant secretary for Oceans and Fisheries in the State Department, but the purview is slightly different.) A diplomat by training, Svensson now works to ensure that international ocean conservation and economic development go hand in hand. Her contention is that valuing ecosystem services is crucial for environmentalism and for good ocean governance. If the ocean has a dollar value, maybe we won’t keep throwing it away.
It’s not exactly a surprise that Sweden produced this ocean advocate. Sixty percent of Sweden’s national border is coastline; World Water Week is held in Stockholm. Ninety-eight percent of Swedes have visited the coast, said Svensson in an interview with UBrainTV -- a number that far surpasses that of other countries. Basically, the country likes its water. It’s one of the reasons that Svensson, like many Swedes, says she feels so close to the outdoors.
“Some people say the religion in Sweden is in the nature. I think it’s a foundation of our culture,” she said, in the same UBrainTV interview. (Grist attempted to reach Svensson for an interview, but she did not respond to requests, leaving this reporter to scavenge for op-eds and Swedish conference proceedings. She appears to be perfectly pleasant. Perhaps she was on vacation. Or maybe life is just busy for a toppdiplomaten.)
[grist-related-series]
Sketches for a sustainable blue economy look something like this: Since any productive ocean-based industry needs a healthy ocean to survive, it makes sense to work environmentalism into the equation. By turning things like biodiversity or water quality into tradable goods, the public and private sectors can effectively spin conservation as a profit source -- and one that helps out other industries. Then units of, say, ocean acidification might become commensurate with units of GDP. (Or maybe not. As Svensson suggests in a 2015 conference paper, the ocean’s value is “not necessarily a monetary one.”)
The World Wildlife Fund recently pegged the value of ocean assets at some $24 trillion in April 2015. It’s a hefty, largely arbitrary sum, and the group noted that the oceans were better conceptualized as “a global savings account from which we keep making only withdrawals.” Just like any savings account, it's worth thinking about the seas in the long term. Things can move pretty quickly in the ocean world (consider the melting Arctic), and planning ahead can help us avoid a “Wild West mentality,” in which, for example, countries indiscriminately claim undersea oil reserves as their own.
“This does not mean that economic analyses and assessments of the value of nature are an end in themselves,” wrote Svensson in a 2013 op-ed. The point, rather, is to make sure they’re part of the discussion. Companies already protect raw materials that make it into their supply chains. What’s missing is the safeguarding of the ecosystem services that make the raw materials possible in the first place.
“Actually, it’s simple,” she wrote. “If the supply chain is broken, production will stop. The same rules apply in nature -- if we destroy nature’s ability to produce, for example, food, water, wood, fibers, etc., or its ability to break down waste, pollinate crops, or carry out photosynthesis, then natural production will stop.”
Developing the tools that will hold the private sector accountable for its actions, however, isn’t so simple, especially in a policy space already rife with regulation. Treaties and international agreements, for example, are already a big, exceptionally bureaucratic part of ocean governance. The United Nations Convention on the Law of the Sea, for example, is just one strand in a policy web containing 567 conventions related to oceans, claims Svensson. And different ecosystem services will naturally have different values. It’s all a bit piecemeal right now, which is why she describes a central pillar of her job as ensuring “policy coherence.” Policy coherence is where the high-level discussions meet the nitty gritty.
At the international level, the nitty gets particularly gritty, since the world, quite literally, is connected by the oceans -- and measures adopted by one country are likely to affect another. Thankfully, Svensson has experience getting international actors to play green with each other: Before joining the Swedish government, Svensson was at the Directorate General for Trade of the European Commission, where she led the negotiations for the sustainable development chapters in the E.U. Free Trade Agreements.
Despite the challenges, the idea of a sustainable blue economy is already starting to enter the geopolitical mainstream. Early last year, the U.N. released a concept paperthat conceptualizes “oceans as ‘Development Spaces’ where spatial planning integrates conservation, sustainable use, oil and mineral wealth extraction, bioprospecting, sustainable energy production and marine transport.” And September 2015 will bring theadoption of the U.N.’s Sustainable Development Goals, the 14th of which focuses on oceans. “Conserve and sustainably use the oceans, seas and marine resources for sustainable development,” proclaims the draft agenda. This balance, between conservation and development, is a hint that the concepts core to a blue economy are taking off. But a full buy-in to valuing the oceans’ ecosystem services will take much more than concept papers.
In order to get to that paradigm shift, Svensson suggests that we need to crack what she calls the environmental paradox: “Why is environmental policy considered a cost?” sheasked at the Economics of the Oceans Summit in 2013. “Why isn’t it seen as an investment?”
Some will argue that as soon as we start thinking of the oceans in terms of productivity, we’ll have lost something sacred. Maybe. But it might be more radical to do exactly that -- a 'change comes from within' kind of argument. Sweden, for its own part, will integratethe value of ecosystem services into financial and political decisions by 2018. But Sweden is a singular case. They're the only ones with an oceans ambassador like Svensson.
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