1 IMF says bribery eats up 2% of global economy (The
Times of India) The International Monetary Fund has said that bribery sucks up
between $1.5 and $2.0 trillion dollars annually around the world, dragging down
economies and worsening social services for the poor. IMF Managing Director
Christine Lagarde said more and more leaders are openly seeking help to fight
the scourge.
Lagarde dismissed the idea that corruption is a
stubborn cultural phenomenon in many countries. In fact, it is common across
cultures, and countries with diverse backgrounds have found ways to address it,
she said. The late Singapore leader Lee Kuan Yew "was very effective in
both signalling a zero-tolerance policy towards corruption and building
competent institutions at a time when corruption was pervasive in
Singapore," she noted.
The cost of bribery alone tops more than two percent
of global gross domestic product -- a broad measure of economic output -- and
because it is tainted, that money is often sucked out of economies to offshore
havens, meaning it does not contribute to growth. Corruption perpetuates
economic inefficiency, undermines public policy, and exacerbates inequality,
the report says. It also scares off both domestic and foreign investors.
2 Tesla’s Elon Musk conquers Wall Street (Matthew
DeBord in San Francisco Chronicle) Tesla banked almost $1.5 billion last week,
selling new shares — to fund the launch of its now hotly anticipated Model 3 —
at a healthy $215 per share. The ease with which it raised the funds (and the
fact that its shares rose 5% the week of the sale), shows how easily Tesla is
able to use Wall Street to do its bidding.
Plenty of people in the auto industry are astounded
that a profitless company, one that struggled to build 50,000 cars in 2015, can
tap the equity markets so easily. Unlike Tesla, traditional automakers have
seen their shares flatline for the better part of a decade and have to turn to
debt markets for cash.
Worse yet, CEO Elon Musk does it even after making
the jaw-dropping promise that Tesla will ramp up production to 500,000 vehicles
in just over two years. The car maker did a capital raise last year, to the
tune of over $700 million, when shares were trading above $240.
It's all kind of predictable: Tesla will lack
market-moving news, or face up to its own substantial challenges, and the stock
will tank below $200, sometimes falling below $150 (remember, this is a company
that went public in 2010 at $17 per share).
Then something like the massive Model 3 pre-orders
will hit, and the stock will lurch higher, prompting Musk and his team to access
the easiest money they can: the well of risk-loving capital represented by
Tesla's market cap.
If you look around, the only other companies working
the investment market in this manner are Silicon Valley "unicorns,"
the $1-billion-and-up valuation startups like Uber whose worth is tied up in
the highly illiquid private markets.
3 Venezuela crisis escalates (Sibyilla Bordzinsky in
San Francisco Chronicle) Venezuela is rich in oil, but dogged by chronic
shortages of basic goods and essential medicines, electricity and water
rationing, spiraling inflation and rampant crime.
Unrest has spread throughout a city of 200,000 just
outside the capital, Caracas. Protesters shouted “We want food” as they blocked
intersections with burning tyres and clashed with security forces.
The protests
were not related to marches in Caracas and other major cities, which were
called this week by opposition leaders seeking to cut short the term of
President Nicolás Maduro who they say has driven the country into the ground
through mismanagement.
The opposition won control of parliament in December
elections, but Maduro has blocked all attempts at reforms passed in the
legislature though the government-controlled supreme court. Maduro blames the
country’s woes on an “economic war” against his government by right-wingers and
foreign interests. Last week Maduro decreed a 60-day state of emergency because
of the “threat” against his government.
Venezuelans have been living with shortages of food
and essential items for nearly three years as the oil-dependent economy began
to buckle. And patience is wearing thin. “We are like a bomb going tick-tock,
tick-tock,” said Zenovia Villegas, a 54-year-old housewife.
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