Venezuela President Charged with Drug Trafficking by US

Maduro

The USA has declared a bounty of $55 million for information on connections of the President of Venezuela Nicolas Maduro and his associates in drug trafficking and narco-terrorism.

Crux of the Matter

Maduro has had topsy-turvy relations with the US since his re-election in the 2018 elections. The US accused Maduro of occupying the Presidential post unconstitutionally in the country. But Maduro, backed by Russia and China, continued serving as the President.

The US declared charges against Maduro after an investigation by US Federal services. The US said that strict steps are necessary to remove deeply rooted corruption in Venezuela that has resulted in the crippling of its democracy and democratic values. Allegations on Maduro are that he helped the Colombian revolutionary group, the FARC for drug trafficking and flooding the United States with Cocaine. He is also accused of facilitating drug trafficking routes through air and water via Venezuela along with running a drug cartel even though he is occupying a government office.

Thus amid escalating tension, US and US allies evacuated their embassies from Venezuela. Besides Maduro, the US has filed charges against more than a dozen others that include Venezuelan government and intelligence officials and members of the Colombian rebel group FARC.

Maduro defended himself by saying that Donald Trump is politically motivated to remove him from the office. He added that before the US Presidential election, such a move might give Donald Trump fame, and thus he is trying hard to make it more political. He further said that by hook or crook the US wants him to vacate his post.

Curiopedia

Nicolás Maduro Moros is a Venezuelan politician serving as president of Venezuela since 2013. His presidency has been disputed by Juan Guaidó since January 2019. Beginning his working life as a bus driver, Maduro rose to become a trade union leader before being elected to the National Assembly in 2000. He was appointed to a number of positions under President Hugo Chávez and was described in 2012 by the Wall Street Journal as the “most capable administrator and politician of Chávez’s inner circle”. He served as Minister of Foreign Affairs from 2006 to 2013 and as vice president of Venezuela from 2012 to 2013 under Chávez. After Chávez’s death was announced on 5 March 2013, Maduro assumed the presidency.

Shortages in Venezuela and decreased living standards led to protests beginning in 2014 that escalated into daily marches nationwide, repression of dissent and a decline in Maduro’s popularity. According to The New York Times, Maduro’s administration was held “responsible for grossly mismanaging the economy and plunging the country into a deep humanitarian crisis” and attempting to “crush the opposition by jailing or exiling critics, and using lethal force against anti-government protesters”. An opposition-led National Assembly was elected in 2015 and a movement toward recalling Maduro began in 2016. Maduro called for a rewrite of the constitution, and the Constituent Assembly of Venezuela was elected in 2017, under what many—including Venezuela’s chief prosecutor Luisa Ortega and Smartmatic, the company that ran the voting machines—considered irregular voting conditions; the majority of its members were pro-Maduro. On 20 May 2018, presidential elections were called prematurely, opposition leaders had been jailed, exiled or forbidden to run, there was no international observation, and tactics to suggest voters could lose their jobs or social welfare if they did not vote for Maduro were used. Multiple nations did not recognize the Constituent Assembly election or the validity of Maduro’s 2018 reelection;the Canadian, Panamanian, and the United States governments sanctioned Maduro. More Info

Pandemic Profiteering 2020: About US Senators’ Insider Trading & Chaotic Coronavirus Market

The American nonprofit organization ProPublica and US tabloid Daily Beast have reported that members of Congress sold equities after receiving briefings on the Dow Jones (DJIA) stock market dangers of COVID-19, much before the Trump administration announced it publicly. Two Senators, Richard Burr and Kelly Loeffler that came in the red limelight of insider trading, have conveniently denied the allegations.

Crux of the Matter

Public Servants by Day, Perpetrators by Night?
Senator Richard Burr, the chairman of the Senate Intelligence Committee downplayed the financial threat to the American citizens while he was hastily unloading between $628,000 and $1.72m of personal holdings. Next in the row, Senator Kelly Loeffler, wife of New York Stock Exchange’s chairman, sold a substantial amount of stock while buying shares in the teleworking company Citrix.

Public Servants’ ‘Insider Edge’
Insider trading/dealing occurs when someone who has a fiduciary duty to another person, or to an institution, corporation, partnership, firm, or entity, makes a trade of stock based on information that’s not available to the general public. This can directly lead to the former’s unfair gain and the latter’s unfortunate loss. Just like in the aforementioned cases wherein Members of Congress are legally barred from buying and selling based on the information they get in classified briefings.

This practice wasn’t considered illegal at the beginning of the 20th century and a Supreme Court ruling once referred to it as a “perk” of being an executive. A whistleblower, while in conversation with a popular US Daily, once claimed that members of Congress and higher-ups in government jobs were not only trading on inside information they gleaned from their regular assignments, but were also being fed tips from agencies like the Internal Revenue Service on corporate takeovers.

Nonetheless, after feeling the negative shift in public opinion regarding the decade-old deleveraging, the U.S. Securities and Exchange Commission (SEC) became involved and the Securities Exchange Act was passed in 1934. Section 16 of this act requires that when an “insider“, defined as all officers, directors, and 10% owners, buys the corporation’s stock and sells it within six months, all of the profits must go to the company. Additionally, they ought to disclose the changes in the ownership of their positions, including all purchases and dispositions of shares. This aims to remove major trading activities when it’s impossible for insiders to personally gain from small moves.

STOCK v/s Private Moonlighting
The STOCK (Stop Trading on Congressional Knowledge) Act is a law that was passed during the Obama era, in 2012 and it clearly states that members of Congress and other government employees are not allowed to engage in insider trading based on information they learn through their jobs. Even the President, the Vice President, executive branch employees and judges were included in this law, making it a far stricter enforcement from the previous two trading laws.

However in 2013, it did get rid of a provision that the financial disclosures required by the law be posted online on official websites. Burr, who had opposed the bill passed for STOCK, said in his defence to this ongoing pandemic stock market wrongdoings that he relied solely on public news reports. He tried to offer alternate explanations for choosing to make money at a time when he should have been offering Americans the truth.

Can They ever be Tamed? SEC to the Rescue?

Make blind trusts mandatory for Members of Congress to end Congressional Insider Trading once and for all.

– Peter Schweizer, author of Profiles in Corruption: Abuse of Power by America’s Progressive Elite.

The first thing that pops in the mind now is that can these people be trusted to make laws neutrally, if they are financially invested in only the outcome of those laws? Is this simply an invitation for more corruption? After all, unethical behavior becomes especially more unacceptable in the midst of a deadly pandemic like COVID-19 that has infected more than 450,000 and killed more than 20,000 to date.

Can the eagle clear the current mess ?

SEC has officially announced the provision of conditional regulatory relief for certain publicly traded companies. The order, in an effort to address potential compliance issues, gives public companies an additional 45 days to file certain disclosure reports that would otherwise have been due between March 1 and April 30, 2020. Among other conditions, companies must provide a summary of why the relief is needed in their particular circumstances.

Stephanie Avakian and Steven Peikin, co-directors of the SEC’s division of enforcement, have urged public companies to be mindful of their disclosure controls and procedures, insider-trading prohibitions, codes of ethics and Regulation FD. This step has been rightfully taken to prevent improper dissemination and use of material non-public information.

Additionally, whistleblowers, including those who reside outside of the United States, can qualify for financial awards under the Dodd-Frank Act’s whistleblower provisions. In case they qualify SEC’s confidential filing procedures, they can file potential fraud violations to the Commission anonymously via the TCR (“tip, complaint, and referral”) form. They are even eligible for a reward once the SEC issues sanctions based on the whistleblower’s information of $1 million or more. The office says it has paid over $300 million to the anonymous tippers in the past.

Complete coverage of the Global Coronavirus effect

Curiopedia

Stock market refers to the collection of markets and exchanges where regular activities of buying, selling, and issuance of shares of publicly-held companies take place. Such financial activities are conducted through institutionalized formal exchanges or over-the-counter (OTC) marketplaces which operate under a defined set of regulations. There can be multiple stock trading venues in a country or a region which allow transactions in stocks and other forms of securities. The leading stock exchanges in the U.S. include the New York Stock Exchange (NYSE), Nasdaq, and the Chicago Board Options Exchange (CBOE). These leading national exchanges, along with several other exchanges operating in the country, form the stock market of the U.S. More Info

The Dow Jones Industrial Average (DJIA), is a stock market index that measures the stock performance of 30 large companies listed on stock exchanges in the United States. The value of the index is the sum of the price of one share of stock for each component company divided by a factor which changes whenever one of the component stocks has a stock split or stock dividend, so as to generate a consistent value for the index. Investing in the DJIA is possible via index funds as well as via derivatives such as option contracts and futures contracts. More Info

US Speculated to Become New Epicentre of COVID-19

The number of Coronavirus cases in the US has been rising exponentially over the last few days. There are already more than 50,000 infected people in the US and it seems that it might overtake Italy if the virus is not stemmed. Despite a low number of deaths in the US (less than 1000) the World Health Organization (WHO) thinks that the US might become another hotspot for the pandemic.
Complete Coverage: Coronavirus

Crux of the Matter

No One Wants to Rank Higher in This Game
In a span of two weeks, US has seen a spike in the number of COVID-19 cases. The situation, that very much feels like Italy, could make the US the next epicenter of the pandemic, says WHO. US’s most densely populated city New York has seen a massive surge in the number of cases. With more than 26,000 cases, it constitutes nearly 45% of cases in US.

As of 25th March 2020, the US has more than 55,000 cases as compared to 1,301 cases on 11th March 2020 – a 4200% rise in two weeks! Italy is nearing 70,000 cases and has the highest fatality rate from COVID-19 of nearly 10%. As per WHO, Coronavirus epicentre shifted first from China to Europe, specifically Italy, and now it is shifting to the US.

Complacent US Government
US government was among the first nations to announce interest rate cuts and fiscal stimulus package to combat the impact of Coronavirus. However, the rising number of cases in New York has required hospital beds three times more than what is available. Meanwhile, Prez Trump was seen making an announcement that he wants targeted lockdowns only and does not want to hurt businesses unnecessarily. Trump said he would open the country by mid-April around Easter.

If you ask the American people to choose between public health and the economy, then it’s no contest. No American is going to say accelerate the economy at the cost of human life.

– Andrew Cuomo, New York Governor

In 2009, Swine Flu had emerged from the US, and during Week 16 it was much less spread and fatal than COVID-19. The doubling rate of Coronavirus is higher than that of Swine Flu. Therefore, before the complacent behavior of the US takes many lives of its citizens, strong measures to contain the virus would be necessary.

Curiopedia

Coronavirus in Italy
An ongoing worldwide pandemic of coronavirus disease 2019 was first confirmed to have spread to Italy on 31 January 2020, when two Chinese tourists in Rome tested positive for the virus. One week later an Italian man repatriated back to Italy from the city of Wuhan, China, was hospitalised and confirmed as the third case in Italy. A cluster of cases was later detected, starting with 16 confirmed cases in Lombardy on 21 February, and 60 additional cases and first deaths on 22 February. By the beginning of March, the virus had spread to all regions of Italy.

On 22 February, the government established a lockdown for eleven municipalities in Lombardy and Veneto. On 7 March, the government prepared to extend until 3 April the restricted zone to all of Lombardy, plus fourteen other provinces. The lockdown affects over 16 million people, roughly a quarter of Italy’s total population, and prevents people from entering or leaving the zone, except “for proven occupational needs or situations of need or for health reasons”, under threat of fines. The pandemic provoked large economic damage to the Italian economy. The sectors of tourism, accommodation and food services were among the hardest hit by foreign countries’ limitations to travel to Italy, and by the nationwide lockdown imposed by the government on 8 March. Multiple factories, like Fiat Chrysler, halted production in some of their plants. On 12 March, the Italian stock market was among the worst hit during Black Thursday, when the FTSE MIB index lost 17% of its value in one day. More Info

Russia and Saudi Weaponize Oil Prices

Russia, in a move to gain US oil share, dumped OPEC’s proposal for slashing oil production. In retaliation, Saudi began lowering oil prices by $8-$14 per barrel and proposed an increase in oil production. Global markets came tumbling down but opportunity lies ahead for India to buy cheap oil, reducing its import bill.

Crux of the Matter

The Domino Effect
Russia and the Organization of Petroleum Exporting Countries (OPEC) have been in alliance since 2017 for jointly deciding oil prices. They held a meeting to cut down on oil supply amidst the slowing demand due to Coronavirus. The deal collapsed and Russia denied any subsequent supply cuts before assessing the complete impact of the virus. In retaliation, Saudi Arabia, the highest oil producer among OPEC nations, began offering oil to Asia, US, and Europe at an unprecedented low price. Shocking the oil market across the globe, financial markets toppled in response to Saudi’s rate cut.

Oil price here means the price of a barrel of crude oil. With oil prices plummeting nearly 30%, US oil benchmarkWest Texas Intermediate (WTI) plunged by $10.15 to hit $31.13 per barrel, and Brent Crude Oil benchmark plunged by $10.91 to touch $34.36 per barrel. Brent Crude Oil soared at around $68 at the beginning of the year. As the scare of Coronavirus grew, global trade and travel began to slip. So did the oil prices because of the tepid demand.

Saudi Wants to Show Muscle
Saudi’s retaliation displays that it has enough capacity to increase oil production more quickly than any other country. Some years ago, Saudi had decided that it will not increase oil production beyond 12 million barrels per day (bpd). However, Aramco said that it has been directed by the Ministry to increase oil production to 13 million bpd. Russia’s Energy Minister, Alexander Novak also hinted at another increase of 500,000 bpd. It remains to be seen how will Russia sustain the increment because unlike Saudi which had created reserves for a situation like this to quickly increase oil production in a week or fortnight, Russia does not have that much capacity.

Saudi Arabia’s show of muscle will also come at a cost. The oil-dependent kingdom was expected to have a wider deficit in 2020. With the addition of the price war and anticipation that the crude prices will hover around $35, Saudi’s economic output of 2020 may fall by nearly 15%.

Russia Aims for the Top Spot
US Shale Oil Industries have been thriving since the 2014-16 oil price skid, making US the world’s largest producer of Crude Oil. It produced the world’s 18% oil in 2018. However, the key parameter that drives the growth of American Shale companies is the high price of crude oil. A cheaper crude means that US shale entities would be forced to slash production to sustain.

Russia’s move can be seen in the light of burgeoning American Shale Oil share, which as per Russia, is replaceable. This could also be in retaliation to the US sanction on Nord Stream 2 pipeline that enables Russia to supply gas to Germany at first, and eventually to Europe. Another US sanction on Rosneft subsidiary’s support of the Maduro government in Venezuela may have triggered the Russian price war to capture the share of American shale oil companies.

US oil majors like Chevron and ExxonMobil saw its stock plummet by 12%. Whereas stocks of Pioneer Natural Resources and Occidental Petroleum lost 37% and 52%.

“State actors” are attempting to “manipulate and shock” oil markets…the United States can and will withstand this volatility.

– US Energy Department

Oil Loses, India Wins
Saudi’s retaliation to bring Russia on the negotiation table can benefit India, which is the world’s fourth-largest oil importer. With Saudi Arabia offering oil at $8-$14 less and also increasing its production by 2.5 million barrels per day, India has the opportunity to procure crude oil cheaply. One dollar fall in the price of crude oil reduces India’s import expense by an estimated Rs. 3,000 crores. This could have a large impact on India’s Current Account Deficit (CAD). Inflation in India could also get adjusted as transport expenses gradually come down with cheap crude oil.

Other OPEC and non-OPEC nations that are dependent on oil such as Iran and Venezuela may be worse hit due to the price slash. Oil-dependent emerging economies like Brazil and Nigeria may see a cut in their oil revenue. However, China has stockpiled oil at low prices so that it can avoid buying during times when prices soar. This could also be an opportunity for the second-largest oil consumer China to start stockpiling oil at a cheap rate.

Curiopedia

What are Shale Companies?
The oil shale industry is an industry of mining and processing of oil shale—a fine-grained sedimentary rock, containing significant amounts of kerogen (a solid mixture of organic chemical compounds), from which liquid hydrocarbons can be manufactured. The industry has developed in Brazil, China, Estonia and to some extent in Germany and Russia. The major shale oil producers are China and Estonia, with Brazil a distant third, while Australia, USA, Canada and Jordan have planned to set up or restart shale oil production. More Info

What is WTI?
West Texas Intermediate (WTI), also known as Texas light sweet, is a grade of crude oil used as a benchmark in oil pricing. This grade is described as light crude oil because of its relatively low density, and sweet because of its low sulfur content. It is the underlying commodity of New York Mercantile Exchange’s oil futures contracts. More Info

What is Brent Crude?
Brent Crude is a major trading classification of sweet light crude oil that serves as one of the two main benchmark prices for purchases of oil worldwide, the other being West Texas Intermediate. This grade is described as light because of its relatively low density, and sweet because of its low sulphur content. Brent Crude is extracted from the North Sea and comprises Brent Blend, Forties Blend, Oseberg and Ekofisk crudes. The Brent Crude oil marker is also known as Brent Blend, London Brent and Brent petroleum. Brent is the leading global price benchmark for Atlantic basin crude oils. It is used to price two thirds of the world’s internationally traded crude oil supplies. More Info

North Korea Fires Unidentified Projectiles Amidst COVID-19 Scare

North Korea Supreme Leader

According to US and South Korean officials, North Korea for the 2nd time in two weeks fired at least three unidentified projectiles on March 9. Kim Jong Un reportedly oversaw the testing of this long-ranged artillery.

Crux of the Matter

The projectiles with a maximum flight distance of 200 kilometers (124 miles) and a maximum altitude of 50 kilometers (31 miles) South Korea’s Defense Ministry detected different types of short-range projectiles fired from the Sondok area on North Korea’s east coast into the waters between the Korean Peninsula and Japan.

The launches have violated 2018 Pyongyang agreements. Currently, our military is monitoring related movement in case of an additional launch while maintaining thorough preparedness.

– Japan Defence Ministry

The South Korean Defense Ministry also said this could be a part of Pyongyang’s winter military drills. North Korean state media says it carried out military exercises from February 28 till March 2, when Pyongyang fired two unidentified short-range projectiles from an area near the coastal city of Wonsan.

A spokesperson for the US State Department said, “We continue to call on North Korea to avoid provocations, abide by obligations under UN Security Council Resolutions, and return to sustained and substantive negotiations to do its part to achieve complete denuclearization‎.”

Previous Incidents
The recent launches come after a nearly two-month pause in similar activities by North Korea. North Korea test-fired missiles 13 times in 2019 amidst derailed talks with the United States. However, it did not fire the intercontinental-range missiles which are a major cause of worry to US administration. 

In 2019, Kim warned the US that it had until the end of the year to jump-start the stalled denuclearization talks. When that deadline came and no developments were seen, Kim announced during a New Year’s Day message that he would bolster its nuclear deterrent and no longer be held to a self-imposed moratorium on major weapons testing.

North Korea’s military moves are often timed for maximum political impact both at home and abroad. Launches are often an attempt to be on the global radar. While both South Korea and North Korea face the deadly coronavirus outbreak, North Korea has sealed its borders and quarantined all foreigners to prevent an outbreak inside the country.

Curiopedia

The 2019 North Korea–United States Hanoi Summit was a two-day summit meeting between North Korean Chairman Kim Jong-un and U.S. President Donald Trump, held at the Metropole Hotel in Hanoi, Vietnam, on February 27–28, 2019. This was the second meeting between the leaders of the DPRK and the United States, following their first meeting in Singapore the previous year. On February 28, 2019, the White House announced that the summit was cut short and that no agreement was reached. Trump later clarified that it was due to North Korea’s request to end to all sanctions. North Korean Foreign Minister Ri Yong-ho asserted that the country only sought a partial lifting of the five United Nations sanctions placed on North Korea between 2016 and 2017. More Info