Aluminum Heads for Further Supply Chaos as Biden Weighs Russia Ban
Aluminum Heads for Further Supply Chaos as Biden Weighs Russia Ban
A complete US ban on Russian aluminum threatens to upend a global market already reeling from multiple disruptions, throwing a spotlight on how China could fill any supply gap.
The Biden administration is considering options including sanctions on Russia’s top producer of the metal as the White House seeks to punish Moscow for its military escalations in Ukraine, according to people familiar with the deliberations. The measures would add to a tumultuous year of price swings, and changes in supply and demand turmoil in the wake of the Russian invasion in February.
“In a scenario of sanctions against Russian aluminum, the Western aluminum market would be exposed to extreme tightening,” Goldman Sachs Group Inc. wrote in an emailed note. Prices would rise much higher and China would export more semi-processed aluminum, the bank’s analysts, including Nicholas Snowdon, wrote.
Sanctions on United Co. Rusal International PJSC would be the most important of the options under consideration, which also include a U.S. import ban or punitive tariffs on Russian supplies. Russia is the world’s second-largest supplier of aluminum after China.
Aluminum prices rose to a record high in March immediately after Russia’s attack, but have retreated as the Russian metal has continued to flow largely into global markets. Europe’s energy crisis has also hit demand and closed smelters there, while the London Metal Exchange has opened separate discussions on banning the new Russian metal from its warehouses.
Worst-Case Scenario
“The worst-case scenario is that Europe and the United States will block Russian aluminum,” the Shanghai-based Chaos Ternary Research Institute wrote in an emailed note. “Stranded Russian aluminum will likely flow to China, India, and elsewhere, followed by Chinese exports of aluminum products to Europe and the United States to fill the gap.”
China is by far the world’s largest producer and consumer of aluminum. Under a reconfiguration of trade flows, Russia’s metal could be used by its domestic industries, with China boosting overseas sales of its metal along its well-established export routes.
There is precedent for restrictions in Rusal. In 2018, the United States imposed sanctions on the company as relations with Russia deteriorated, prompting so much turmoil in the market that the measures were reversed in early 2019. At the time, there was also a lot of speculation about whether Russian aluminum could flow into China, and Rusal’s billionaire founder Oleg Deripaska even visited Beijing to discuss cooperation.
“Eventually, China will ship discounted primary aluminum from Russia and then export aluminum products to the west,” Wei Lai, an analyst at TF Futures, said by phone from Shanghai. China’s aluminum exports have already reached record levels in May this year, amid a domestic slowdown in demand.
Aluminum fell 1% to $2,282 a tonne on the LME on Thursday, after posting one of its biggest spikes on record following the white house discussion report. Rusal’s shares in Hong Kong fell as much as 8.1%.
Mango Crypto Platform Hit by Latest Hack in Digital Asset Sector
Mango Crypto Platform Hit by Latest Hack in Digital Asset Sector
A security event hit the cryptocurrency sector on the decentralized finance platform Mango just days after a hacker took around $100 million in an exploit involving Binance Coin.
Mango said on Twitter that it is “investigating an incident in which a hacker was able to drain funds” and is disabling deposits. The platform added that it is taking steps to “have third parties freeze funds in flight.”
Mango also asked the hacker to get in touch to discuss a “bug bounty.”
This is the latest in a series of security incidents affecting the digital asset sector, which is also recovering from a drop in token prices. Some $2 billion has been lost in crypto hacks this year, many perpetrated by groups linked to North Korea.
Last week, a total of 2 million Binance coins, equivalent to nearly $570 million, were minted and taken by a hacker. About $100 million was not recovered, while the rest was frozen, according to a Binance statement.
Former Fed Chairman Ben Bernanke Wins Nobel Prize in Economic Sciences
Former Federal Reserve Chairman Ben Bernanke has been awarded the Nobel Prize in Economics. The Nobel Prize committee believes it “significantly improved our understanding of the role of banks in the economy, particularly during financial crises.” Many people, however, blame Bernanke for bringing us “to the brink of collapse and under a mountain of debt with quantitative easing.”
Former Fed Chairman Ben Bernanke Wins Nobel Prize in Economic Sciences
The Royal Swedish Academy of Sciences announced on Monday that it has decided to award the 2022 Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel to Ben S. Bernanke, Douglas W. Diamond, and Philip H. Dybvig “for research on banks and financial crises.” The Royal Swedish Academy of Sciences is responsible for selecting Nobel laureates in economic sciences.
The announcement details:
“This year’s laureates in Economic Sciences, Ben Bernanke, Douglas Diamond, and Philip Dybvig, have significantly improved our understanding of the role of banks in the economy, particularly during financial crises. An important finding in their research is why avoiding bank collapses is vital.”
Ben Bernanke analyzed the Great Depression of the 1930s, the worst economic crisis in modern history. Among other things, it showed how bank runs were a decisive factor in making the crisis so deep and prolonged,” the announcement adds.
Bernanke is currently a Senior Fellow in the Economic Studies program at the Brookings Institution. Diamond is the Merton H. Miller Distinguished Service Professor of Finance at the University Of Chicago Booth School Of Business. Dybvig is the Boatmen’s Bancshares Professor of Banking and Finance at Washington University’s Olin School of Business in St. Louis.
“Bernanke brought us to the brink of collapse”
Many people took to social media to mock the Nobel Prize committee for awarding Bernake.
Big Short investor Michael Burry tweeted: “Bernanke receives the Nobel Prize in Economics. It’s not a joke.” Alasdair Macleod, Goldmoney’s head of research, wrote: “If I hadn’t done it sooner, I think this shows that the Nobel Prize Committee has lost all credibility.”
Gold bug Peter Schiff tweeted:
How fitting that #BenBernanke would win a Nobel Prize in Economics for his research on the Financial Crisis that he helped Greenspan create. Ironically, the bigger financial crisis that awaits is mostly on him. Too bad the Nobel committee is as clueless on #economics as Bernanke.
Fiore Group CEO and Lionsgate Entertainment founder Frank Giustra said: “I’m speechless. A Nobel Prize for the individual who promised us in 2009 that the Fed’s monetary policy would return to its “normal” self, meaning the central bank would return to a modestly sized balance sheet. Instead, we have a historical bubble and inequality.”
Vaneck advisor Gabor Gurbacs noted:
The 2022 Nobel Prize in economics was awarded to fmr. Fed chair Ben Bernanke plus Douglas Diamond and Philip Dybvig for "research on banks and financial crises.” Can’t make this up! Bernanke got us to to the brink of collapse and under a mountain of debt with quantitative easing. pic.twitter.com/LOERr5oJGy
Russian President Vladimir Putin has threatened more attacks on Ukrainian infrastructure after his country’s missiles hit cities across Ukraine. In a call with Ukrainian President Volodymyr Zelenskiy, President Joe Biden pledged to “continue to provide Ukraine with the support necessary to defend itself, including advanced air defense systems.” Zelenskiy called that “the No. 1 priority in our defense cooperation.”
Infrastructure facilities in eight regions were hit by Russian missile strikes, the most intense since the early days of the invasion. European leaders said the Russian attacks amounted to “war crimes.”
Putin said they were in retaliation for an attack on a multibillion-dollar bridge connecting Russia to Crimea. Kyiv has not officially claimed responsibility for the episode, which further highlighted the problems of Putin’s army in the eighth month of his invasion.
Key developments
Senator Urges Freeze on Arms Sales to Saudis out of Russia Bias
A Visual Guide to the Russian Invasion of Ukraine
Biden Condemns “Absolute Brutality” of Russian Missile Attacks
Putin intensifies with civilian attacks as the army fights at the front
Ukraine’s allies can’t get weapons fast enough as stockpiles shrink
Russia loses 60% of its offshore crude market in Europe
Wheat soars as Kyiv explosions increase risks to Ukraine’s grain exports
On the ground
The Ukrainian General Staff said the cities affected by the Russian attacks include Kyiv, Lviv, Rivne, Zhytomyr, Ternopil, Khmelnytskyi, Ivano-Frankivsk, Vinnytsya, Kharkiv, Kremenchuk, Dnipro, Kryvyi Rih, Zaporizhzhia, Mykolayiv, and Odessa. Zelenskiy said 12 people were killed in the Russian airstrikes and 80 were wounded. Russia is moving reserve troops to areas where Ukrainian forces have advanced, the southern Ukraine operational command said on Facebook. To the east, Russian troops continue offensive operations on the axes of Bakhmut and Avdiyivka, the General Staff of Ukraine said.
Truss to pressure G-7 to stay the course of the war
UK Prime Minister Liz Truss will urge leaders of the group of seven nations to “not waver” in their support for Ukraine following Russia’s latest missile strikes on civilian targets, according to a statement from her office. Leaders are holding an emergency call Tuesday with Zelenskiy to discuss a response.
Truss will also call for an urgent meeting of NATO leaders, according to an emailed statement. G7 leaders are expected to discuss the global energy crisis and the work they are doing to implement an international cap on the price of Russian oil. to discuss an answer.
Truss will also call for an urgent meeting of NATO leaders, according to an emailed statement. G7 leaders are expected to discuss the global energy crisis and the work they are doing to implement an international cap on the price of Russian oil.
UK Spy Chief Says Russia’s Ammunition Runs Out (1 a.m.)
Jeremy Fleming, director of the UK’s intelligence, cyber, and security agency GCHQ, will say Russia’s military commanders in Ukraine know their munitions and supplies are running low, according to prepared comments.
In a speech in London on Tuesday, he added that Ukraine’s response to battle and cyberspace “is turning the tide” against “exhausted” Russian forces.
Biden Pledges to Continue Supporting Ukraine to Defend Itself (10:04 p.m.)
“President Biden pledged to continue to provide Ukraine with the support necessary to defend itself, including advanced air defense systems,” according to a White House statement in his phone call with Zelenskiy. “He also underlined his continued commitment to allies and partners to continue to impose costs on Russia, hold Russia accountable for its war crimes and atrocities, and provide Ukraine with security, economic and humanitarian assistance.”
In Zelenskiy’s daily statement, he said that “we are doing everything we can to obtain a modern air defense. And I thank our partners who are already speeding up deliveries.”
Biden did not specify what air defense systems the United States will provide. A U.S. weapons package announced in August included six Advanced National Surface-to-Air Missile Systems. NATO’s standard air defense system, produced by Raytheon Technologies Corp., is used to protect the Washington region, including the White House. Two NASAM systems were previously promised to Ukraine.
Zelenskiy says he spoke with Biden about air defenses (9:13 p.m.)
Zelenskiy said he had a “productive conversation” with his counterpart Biden that focused on the need to bolster Ukraine’s air defenses.
“Currently, this is the No. 1 priority in our defense cooperation,” Zelenskiy said on Telegram.
Steel plant accelerates production due to unstable electricity (9:09 p.m.)
ArcelorMittal’s Ukrainian steel plant in Kriya Rih is putting its most energy-intensive equipment into electricity-saving mode and will temporarily slow down steel production, the company said on Facebook. He said production will return to normal after Ukraine’s energy system stabilizes.
Angry Ukrainians Donate $5.6 Million for Killer Drones, Fund Says (8:01 p.m.)
The Russian missile strikes “infuriated Ukrainians,” according to the Serhiy Prytula Fund, which said on Facebook that it had begun raising money for Ukrainian kamikaze drones that have been successfully tested on the battlefield.
Seven hours later, the Ukrainians had donated more than 206 million hryvnia ($5.6 million), according to the fund. He said his fundraising for Ukrainian army units fighting on the front lines so far has provided more than 2,386 drones, nearly 8,000 communication devices, 620 military vans, 4,000 tactical first aid kits, and other equipment.
Blinken Condemns Russian Attacks on Cities at Rush Hour (7:19 p.m.)
U.S. Secretary of State Antony Blinken called Ukrainian Foreign Minister Dmytro Kuleba to discuss “the Kremlin’s horrific attacks on Ukraine today, including the missile waves that hit the streets of several Ukrainian cities during rush hour,” State Department spokesman Ned Price said in a statement.
“The secretary praised Ukraine for not allowing President Putin to break the spirit of Ukraine and reaffirmed the United States determination to support Ukraine,” according to the statement.
Rescue Committee says bombing forced it to stop work (6:34 p.m.)
The International Rescue Committee said on Twitter that “shelling across Ukraine forced IRC staff to take refuge and temporarily suspend life-saving work.”
Don’t give Putin an exit ramp, says Finnish president (6:32 p.m.)
Finnish President Sauli Niinisto said the West should not be looking for an exit ramp for the Russian president, even when Putin is unable to concede defeat in Ukraine.
“I think he’s not capable of taking a defeat,” Niinisto told reporters during a state visit to Norway. “The West’s task is not to offer or seek an exit ramp for Putin. The end result should be that Ukraine is free. That’s an exit ramp to Ukraine.”
Biden says the attacks again show Putin’s “absolute brutality” (6:22 p.m.)
President Biden said the latest Russian strikes “killed and injured civilians and destroyed targets for no military purpose. They demonstrate once again the utter brutality of Mr. Putin’s illegal war against the Ukrainian people.”
“These attacks only further reinforce our commitment to stand with the people of Ukraine for as long as necessary,” Biden said in a statement.
Ukraine halts electricity exports to EU (6:02 p.m.)
Ukraine will halt electricity exports from Tuesday after Russian missile and drone strikes hit electrical installations, the Energy Ministry in Kyiv said in a statement.
The country had been exporting a maximum of 300 megawatts to Romania and Slovakia, a small fraction of the consumption of either country, to help “Europe replace Russian gas” and support “the stability of the European energy system,” he said.
Some of the major U.S. airports affected by cyber-attacks: ABC
Airports in U.S. cities such as New York, Chicago, Des Moines, Atlanta, and Los Angeles have been hit by cyber-attacks, ABC News reported, citing a senior official he did not name.
The attacks originated inside Russia and impacted public-facing web domains that report on airport wait times and congestion, ABC said.
India calls for a reduction in escalation after civilian deaths (5:50 p.m.)
India is “deeply concerned” about the escalation of the war, “including attacks on infrastructure and the death of civilians,” the Foreign Ministry said in a statement.
“We urge the immediate cessation of hostilities and the urgent return to the path of diplomacy and dialogue,” he said.
India, which depends on Russia as a supplier of energy and weapons, has sought to balance its ties with Moscow despite mounting pressure from the United States to reduce relations. Last month, Prime Minister Narendra Modi rebuked Putin at talks in Uzbekistan, saying “today’s era is not one for war.” Later, however, he abstained from a vote condemning the “annexation” of Ukrainian territory in the United Nations Security Council.
U.S., U.K. Pledge Continue U.K. Military Aid to Ukraine (5:20 p.m.)
U.S. Secretary of State Antony Blinken and U.K. Prime Minister Liz Truss spoke separately with Zelenskiy by phone, condemning the Russian attacks and promising more economic and military aid to Kyiv.
“Putin’s destructive rhetoric and behavior will not diminish our resolve,” a Downing Street spokesman said.
EU Michel condemns Russian strikes as “war crimes” (3:55 p.m.)
“These indiscriminate attacks on civilians are war crimes,” European Council President Charles Michel said in a tweet.
United Nations Secretary-General Antonio Guterres expressed shock, calling the attacks “another unacceptable escalation of the war,” his spokesman said.
Russia loses 60% of its offshore crude market in Europe (3:41 p.m.)
Russia has lost three-fifths of its sales of seaborne crude in Europe since Moscow sent troops to Ukraine in February. That market is going to disappear almost completely in eight weeks and the latest sanctions will make it very difficult to divert flows elsewhere.
Zelenskiy, G-7 leaders will discuss Russian strikes on Tuesday (11:27 a.m.)
Leaders of the Group of Seven countries will discuss Russia’s missile strike on Tuesday in an emergency video conference that Zelenskiy will also join, people familiar with the matter said. Leaders will get in touch about how to respond, the people said.
Zelenskiy said earlier he spoke with German Chancellor Olaf Scholz, whose country holds the G-7 presidency. The Ukrainian leader also spoke with Macron to discuss Ukraine’s air defense, with “the need for a tough international response” to the missile strikes.
Separately, Lithuanian President Gitanas Nauseda said of the attacks: “We must be ready, since Russia, the Kremlin realizes that its war is headed for a shameful defeat, it will aim to further destabilize the situation, it will take desperate measures.” He added: “That seriously increases the risks both in Ukraine and elsewhere.”
Electric Car Battery Maker CATL Sees Up To 200% Jump in Profits
Electric Car Battery Maker CATL Sees Up To 200% Jump in Profits
Contemporary Amperex Technology Co Ltd. expects its net income to rise to as much as 9.8 billion Yuan ($1.4 billion) in the third quarter, as the largest maker of electric vehicle batteries benefits from strong sales to the auto industry.
CATL, which is investing heavily in expanding its production capacity, predicted a profit jump of up to 200% in a stock filing on Monday. The Ningde, Fujian-based Company also said net income could exceed 18 billion Yuan in the nine months to September, up 132% from the same period last year.
CATL has made spending commitments in the region of $20 billion to build new, larger factories at home and abroad, including in Hungary with Mercedes-Benz AG, and also plans to leverage resource-rich Indonesia for expansion. In August, the manufacturer released half-year results that marked a recovery from a disastrous start to the year. Earnings for the six months to June rose 82% to 8.17 billion Yuan as CATL better coped with volatility in commodity costs.
South Korean battery maker LG Energy Solution Ltd. reported third-quarter earnings last week that comfortably beat expectations for profits and sales, driven by demand for electric vehicles and a weak Korean won offsetting high commodity prices.
CATL is expected to release third-quarter results on Oct. 21.
Japanese Gaming Giant Sega to Launch First Blockchain Game
Sega, one of the largest Japanese gaming companies, has announced that it will launch its first blockchain game in collaboration with Double Jump Tokyo, another Japanese development company. The game, which is based on Sega’s Sangokushi Taisen franchise, will be built using Oasys, a Japanese project focused on scaling, to support its blockchain elements.
Japanese Gaming Giant Sega to Launch First Blockchain Game
Sega to Launch First Blockchain Gaming Project
Sega, one of the most influential Japan-based gaming companies, has announced that it will build its first blockchain-based game. The project, which will be built by another game company, Double Jump Tokyo, will be based on the Sangokushi Taisen franchise, a popular arcade game in Japan.
The Sangokushi Taisen franchise is made up of a series of strategy games that allow its players to use virtual cards in the virtual field. The structure of the game lends itself to the implementation of blockchain elements, such as the tokenization of some of the game’s assets and the trading aspect of the cards. However, none of the companies have announced how these blockchain elements will be included as part of the game mechanics.
A tentative release date for the game has yet to be announced, but Sega has not announced the development of any similar projects.
Oasys Blockchain and Blockchain Gaming
Double Jump Tokyo also announced that the blockchain part of the game will use Oasys, a Japanese gaming project, as its vehicle. Oasys is a blockchain initiative that aims to be scalable enough to support a large number of simultaneous players using its services. The company hopes to make its entry into the AAA gaming circle with this and other planned releases.
Oasys is supported by traditional entertainment powerhouses and crypto companies, such as Bandai Namco, Sega, Jump Crypto, and even Square Enix, which became a validator of the chain and is currently exploring the launch of blockchain games using this technology.
Sega’s stance on non-fungible tokens (NFTs) and blockchain gaming have been ambiguous. In January, the company stated that it could abandon the implementation of these technologies in its games if they are considered money-taking by its customers. More recently, however, in April, Sega hinted at the possibility of including NFT and metaverse elements as part of its “Super Game” development strategy.
Other AAA game companies like Ubisoft have been clearer, launching their NFT markets and including NFT elements in games from leading franchises. Square Enix has also included blockchain as a key part of its business plan for the future.
How Pakistan’s Most Feared Power Broker Controlled a Violent Megacity From London
Accused of murder, money laundering, and terrorism, Altaf Hussain spent decades pulling the strings of Karachi from his British exile. Today it is down, but not outside.
How Pakistan’s Most Feared Power Broker Controlled a Violent Megacity From London (Image: Alexander Coggin)
The hunger strikers had been sitting for six hot days outside the Karachi Press Club, sheltering under a canvas tent as fans blew the sticky summer air. The Pile of Victorian sandstone in the heart of Pakistan’s commercial capital was an easy place to get media coverage, with some organizations or others holding a demonstration there almost every week. Few, however, could match the scale and reputation of the Muttahida Qaumi Movement, or MQM, the secular political party whose adherents were encamped in August 2016. Since coming to power in the 1980s, the MQM and its leader, Altaf Hussain, had been a dominant force in Karachi, a metropolis of 20 million people on the Arabian Sea. Everyone from CEOs to shopkeepers had felt his anger, manifested in aggressively imposed strikes that Hussain called whenever a high-ranking MQM figure was killed or arrested, or a political decision went against the party’s wishes. The ensuing turmoil could collapse Karachi’s stock market and disrupt almost every aspect of daily life. It didn’t seem to matter that the MQM was both a street gang and a political party, widely assumed to be funding its activities and the lifestyles of its leaders, extorting money from companies, and smuggling drugs. In Pakistan’s beheaded political scene, he has long had the power to make or break careers, most recently designing the overthrow of Prime Minister Imran Khan by retiring from the former cricketer’s government.
A Muttahida Qaumi Movement protest in 2016. Photographer: Sabir Mazhar/Anadolu Agency/Getty Images
But in the months leading up to the Press Club protest, the MQM had been under intense pressure. Pakistan’s military, the country’s most powerful institution, had locked up and allegedly “disappeared” dozens of MQM workers, part of a broader effort to make Karachi a safer environment for Chinese investment. A Lahore court had banned the press from publishing Hussain’s image or speeches, ruling that his tirades against the government were a form of treason. For the first time in decades, MQM seemed at risk of losing its grip.
Hussain was already in his early 60s, with his face drooping and a wide belly, but the shop was decorated with portraits of him at his best: a square-jawed young man with a bushy mustache and aviator sunglasses. It was a source of inspiration for those present. Amid cheers of “long live Altaf,” some vowed to lay down their lives for his Bhai, the Urdu word for brother. That afternoon, Hussain began launching a nearly 100-minute tirade against the army and government. He reserved some of his harshest words for the media that refused to cover the MQM.
“Why,” he asked the audience, “haven’t you gone and finished your broadcasts?”
Someone responded immediately. “We will break your cameras right now, Bhai. Give us the order.”
Around the corner, a mob soon broke through the reception doors of the local channel ARY News and began smashing furniture, chasing security guards, and beating them with sticks. The burst of gunfire could be heard outside, and soon several vehicles were on fire. At the end of the day, one person was dead and more injured, including a policeman who was beaten unconscious. ARY and another station were off the air.
Pakistani paramilitary troops at a demolished MQM protest camp. Photographer: Asif Hassan/AFP/Getty Images
Hussain was not around to witness the damage. He delivered his speech by phone from London, where he has lived in exile for 30 years despite allegations ranging from money laundering to murder. For most of that time, he has maintained firm control of the MQM, directing its operations from the leafy suburb of Mill Hill. Pakistani officials and some British lawmakers have repeatedly complained about their presence, demanding that the UK government act prevent what they see as a ruthless militant force from operating from its territory.
But for the most part, he has been able to operate freely, remaining little known to the British public while commanding a huge network of lieutenants through phone calls throughout the day. Even in London, long a home for political exiles of all stripes, Hussain’s case is exceptional. Instead of planning a return to power like many of those émigrés, he exercised it, keeping one of the world’s largest cities and often the balance of national power in Pakistan in its enslavement. “How can you run a big city, or lead a party that runs a big city, sitting in London?” asked Anne Patterson, the U.S. ambassador to Pakistan from 2007 to 2010. “It was still a question in my mind.”
This story of how Karachi’s top power broker came to pull his strings from some 4,000 miles away is based on government documents, court evidence, and interviews with two dozen people involved, many of whom asked not to be identified due to legal sensitivities or concerns for their safety. Hussain has repeatedly denied engaging in criminal activity and publicly apologized for his role in the TV station attacks, saying his incendiary speech was the product of mental anguish.
However, there is little doubt that the event served Hussain, as did other turbulence he has fostered during his long career. “I wouldn’t call it violence,” Nadeem Nusrat, then one of Hussain’s top lieutenants, said in an interview shortly after at the Grandly Named International Secretariat of MQM, an office in Edgware on the northern outskirts of London. “It’s called realpolitik.”
Even by the standards of South Asian megacities, Karachi is a complicated place. Home to barely a million people in 1950, its population increased with refugees from India, who fled their homes after their partition of what became the Islamic Republic of Pakistan, and later millions of rural migrants. Growth quickly overwhelmed Karachi’s infrastructure, and there is no organized mass transit system, no real city center, and no green space. Countless percent of the population lives in slums.
Although born in Karachi in 1953, Hussain has always been identified as a Mohajir, a term that refers to those, like his parents, who left India after the partition. In Agra, about 140 miles south of Delhi, Hussain’s father had a prestigious job as a railway station manager. In Karachi, he was only able to find work in a textile factory and then died when Hussain was just 13, leaving his 11 children dependent on Hussain’s brother’s civil service salary, as well as what his mother earned sewing clothes. Such downward mobility was common among the Mohajirs, who were subject to discrimination by native residents of Sindh, the Pakistani state of which Karachi is the capital. Hussain was enraged by the plight of his community. He and a group of other Mohajir students founded the MQM in 1984, and Hussain gained a reputation for intense devotion to the cause. After a protest, when he was 26, he was imprisoned for nine months and given five lashes.
Hussain in 1988.Photographer: Chip Hires/Gamma-Rapho/Getty Images
Religiously moderate and focused on reversing discriminatory measures, the MQM built a large following in Karachi, winning seats in national and provincial parliaments. It did not hurt, according to diplomatic cables from the United Kingdom and two former Pakistani officials, that he received support from the military, which saw the party as a useful bulwark against other political factions. Although Hussain never ran for elected office, he was the inescapable face of the MQM, his portrait was glued in all the areas he dominated.
From the beginning, MQM’s operations went far beyond the political organization. As communal violence between ethnic Mohajirs, Sindhis, and Pashtuns worsened in the mid-1980s, Hussain urged his followers at a rally to “buy weapons and Kalashnikovs” for self-defense. “When they come to kill you,” he asked, “how will you protect yourself?” The party set up weapons caches around Karachi, stocked with assault rifles for its large militant wing. Meanwhile, Hussain was solidifying his control over the organization, lashing out at anyone who challenged his leadership. In a February 1991 cable, a British diplomat named Patrick Wogan described how, according to a high-level MQM contact, Hussain passed the names of dissidents to police commanders, with instructions to “deal severely with them.” (Hussain denies giving instructions to injure or kill anyone.)
Even the privileged were under direct threat. An elite Pakistani, who asked not to be identified for fear of reprisals, recalled angering the party by arresting the thieving manager of his family textile factory, unaware that the employee was an MQM donor. One afternoon in 1991, four men with guns got into the rich man’s car, driving him to a farm on the outskirts of town. There, they cut him with razor blades and nailed an electric drill to his legs. The MQM denied being behind the kidnapping, but when the victim’s family asked political contacts to lean on the party, he was released, arriving home in blood-soaked clothes.
A civilian caught in the crossfire between the MQM and police in 1995. Photographer: Robert Nickelsberg/The Chronicle Collection/Getty Images
In 1992, with Karachi becoming increasingly unstable, the military sent a large force to the city, which soon entered open battles with MQM gunmen. Thousands of people would eventually be killed, including Hussain’s nephew and older brother. Hussain left for the UK, claiming to have been the target of a failed assassination attempt, and was granted asylum. Thereafter he would run the MQM by phone and fax from a dilapidated townhouse on a quiet street on Mill Hill, which was crowded with other exiles. Across the line in Pakistan, his voice was squeezed into rallies of huge speakers.
“Four men with guns forced themselves into the rich man’s car, taking him to a farm. They cut him with razor blades and drilled into his legs.”
He sought help anywhere he could find her. Meeting Wogan, an MQM official reminded the Briton with disgust that Hussain had asked for help in arranging a “clandestine meeting” with a senior diplomat from India, Pakistan’s archrival. Shortly after the 9/11 attacks, Hussain sent a formal letter to Prime Minister Tony Blair, offering to help in the fight against al Qaeda in exchange for protection from the ISI, Pakistan’s feared intelligence agency. He had received British citizenship in early 2001, prompting speculation in Pakistan and beyond that, he was being rewarded for helping the UK government. In Parliament, left-wing MP George Galloway demanded to know why Hussain was being “allowed from a sofa in Edgware to carry out a terrorist campaign and a campaign of extortion of businesses and citizens” in Pakistan. According to two former British officials, the decision to accept their naturalization application was a processing error on the part of immigration staff, rather than a reflection of its usefulness. Still, his passport was never revoked, and Hussain remains a UK citizen today. The Foreign, Commonwealth and Development Office declined to comment, as did the Home Office, which handles immigration matters.
Despite attempts by the military to shut it down, the MQM maintained firm control over much of Karachi, particularly after General Pervez Musharraf took control of Pakistan in a coup in 1999. A Mohajir himself, Musharraf took a hands-off approach to MQM. But allegations that the party engaged in extortion and other illegal activities never stopped, and whatever their source, MQM funds flowed into London. Over the years he acquired at least seven British properties, including a large red-brick house for Hussain, bought for more than 1 million pounds ($1.2 million) in 2001. He seemed untouchable, safe enough in London that the MQM could hold a dazzling 25th-anniversary party there in 2009. “It was a colorful and happy night,” recalled one attendee. “There were no cracks in the MQM then.”
On September 16, 2010, a founding member of MQM named Imran Farooq left the Edgware subway station with a bag of groceries, heading home with his wife and two young children. Farooq had gone into hiding during the military crackdown of the 1990s, reappearing in London just before the turn of the millennium. Initially, Hussain greeted him like a long-lost brother, hugging Farooq tightly in front of the cameras. But subsequent court documents in Pakistan alleged that Hussain saw Farooq as a threat to his leadership. Their relationship soon withered, and Farooq was suspended from the MQM.
Farooq with Hussain at a press conference in London. Photographer: Jonathan Utz/AFP/Getty Images
Two Pakistani men, Kashif Khan Kamran and Mohsin Ali Syed were watching Farooq and followed him as he left the station. When he was just a few steps from his house, Syed ran towards Farooq, holding him in place as Kamran hit his head with a brick, and then stabbed his chest and belly. The two men dropped Farooq’s body and went straight to Heathrow Airport, where they boarded a flight to Sri Lanka. Along the way, Kamran made a brief call to Karachi, which Syed would later describe to the police. The job was done, Syed remembered saying.
London has seen more than its share of violence motivated by distant political vendettas. The murder still crossed a line. Eventually, British police raided several properties linked to the MQM, finding hundreds of thousands of pounds in cash. In addition to piles of money, at Hussain’s house, they discovered what appeared to be a shopping list of weapons and other weapons, named, curiously, in Indian rupees.
According to people with knowledge of the investigation, as well as transcripts of interviews reviewed by Bloomberg News, Metropolitan Police detectives believed some of the funds could have come from the Research and Analysis Wing, the Indian intelligence service, allegations that would prove explosive when aired in Pakistan. (The Indian prime minister’s office, which RAW reports to, did not respond to a request for comment; the Met declined to comment.) Even if that weren’t true, the cash was clearly of uncertain origin, and the police opened a money laundering investigation.
The financial investigation never led to a prosecution, nor was Hussain charged in connection with Farooq’s death, prompting another MP, Naz Shah, to ask the Met commissioner at a hearing whether British police were “taking the matter seriously”. The commissioner resisted, saying only that investigations were ongoing.
But events in Pakistan were beginning to turn against Hussain. In 2013, China’s new leader Xi Jinping unveiled the Belt and Road Initiative, a $1 trillion infrastructure plan in Asia and beyond. As a traditional Chinese ally, Pakistan would receive up to $60 billion. Spending all that money productively would require more stability in Karachi, and an MQM could no longer stop trading. The subsequent military crackdown, which prompted Hussain’s calls in 2016 for his followers to attack TV studios, led the party into a political nadir. His senior officials in Karachi resigned from Hussain’s leadership, leaving it unclear who was really in charge: those bosses on the ground, or an émigré who still had considerable loyalty from the rank and file. The Karachi wing sought control of the party’s British assets, alleging in a lawsuit that Hussain had diverted millions of pounds of MQM funds into his pocket. (Hussain denied wrongdoing.) Amid infighting, the MQM won just seven seats in the 2018 national elections, its lowest total in history. Without Hussain’s involvement, the Karachi estranged wing entered Imran Khan’s coalition government.
Meanwhile, Hussain was back on the radar of the British police. In June 2019, officers broke into his home, arresting him and then charging him with “fomenting terrorism” for his role in the TV station’s violence.
Hussain in 2021.Alexander Coggin for Bloomberg Businessweek
Late on a cloudy afternoon in the summer of 2021, Hussain was waiting inside his Mill Hill property with a small phalanx of followers, dressed in a dark suit and his signature airmen. Arranging a meeting with him had not been easy. He had repeatedly rescheduled, citing the demands of his court cases, as well as a Covid-19 attack. During the long postponements, Hussain’s aides had mailed loads of literature: books on his early life, philosophy, and reflections on love, along with pamphlets showing bloody photos of alleged military atrocities against MQM members.
During the four-hour hearing that followed, Hussain swayed generously between the complaints, arguing that his legal troubles were caused by shady actors, most notably the military and the ISI. “For the last 30 years, I’ve been in exile,” he said, pausing to the effect. “I’m paying the price.” The charge of terrorism, the police investigations, and the demand of his estranged comrades: he planned to fight all of them to the end. “I would rather die in jail than beg and surrender,” he said.
When asked about allegations of murder, extortion, and other crimes attributed over the years to MQM and Hussain himself, he asked his followers to bring a Quran. Two of them stepped forward to swear on the holy book. “Mr. Hussain never, ever uttered a single word to attack any locality, to loot, to surrender, to order any person to kill,” said one of them, Qasim Ali Raza.
“Mr. Hussain never uttered a single word to attack any locality, loot, surrender, order anyone to kill.”
Hussain elaborated, rejecting each accusation in turn. Suggestions of money laundering and funding from Indian intelligence were “all rubbish,” he said, while cash found by police in his home was simply there for safekeeping. In particular, Hussain denied any responsibility for Farooq’s murder. The killers had eventually been arrested in Pakistan, where they told investigators that MQM leaders had instructed them to commit the crime. Although they later retracted those statements, an Islamabad court ruled in 2020 that they had been acting on Hussain’s orders. “I don’t know them,” Hussain said sternly. Instead, he said Farooq’s death was the work of Pakistani intelligence, like so many other things. (Pakistan’s military did not respond to requests for comment.)
Hussain’s denials came just weeks after another incident in which someone who crossed him found himself in danger. Nusrat, Hussain’s former assistant, had moved to the United States in 2017 after becoming disillusioned with Hussain’s leadership, establishing a separate Mohajir advocacy group. In July of last year, he traveled to Houston to give a speech. On the way back to his hotel, Nusrat’s driver suddenly stepped on the brakes. A black sport utility vehicle had stopped. Someone inside fired several rounds before speeding away. Nusrat was unharmed. He wasn’t sure if the gunman missed, or if the shots were meant only to serve as a warning.
Hussain’s terrorism trial began in January at Crown Court in Kingston-upon-Thames, southwest London. There, prosecutors reproduced the angry jury speeches Hussain had delivered before the attacks on the TV station and presented transcripts of his heated discussions with MQM comrades, captured by a system the party used to record phone calls. In his closing remarks, prosecutor Mark Heywood argued that the evidence showed that what Hussain “asked for and ordered were acts of terrorism.” Hussain’s lawyer, Rupert Bowers, asked the jury to evaluate Hussain’s words against the “yardstick” of Pakistan’s violent political culture, noting that his client had apologized for what followed. Hussain, he said, “did not intend serious violence to come from his speeches at all.” After deliberating for three days, most jurors agreed that Hussain was not guilty. He walked out of the courtroom jubilantly, blowing kisses at the small crowd of supporters.
Hussain arrives at Kingston Crown Court on Jan. 31.Photographer: Niklas Halle’n/AFP/Getty Images
With another court battle just a month or so away, this time a civil lawsuit filed by some of his former MQM allies, Hussain’s future still looks bleak. Divided by infighting and under pressure from the military, the party that once dominated Pakistan’s economic heartland seems severely weakened. But MQM has recovered before. In April, Hussain’s London faction tentatively revived its operations in Karachi, appointing two Pakistan-based leaders to serve as its lieutenants. A supporter is also asking a Pakistani court to remove the ban on his speeches.
Before getting into a chauffeured Range Rover to drive home from court, Hussain made it clear that he wasn’t done trying to shape events in the city of his birth. “Inflation has skyrocketed,” he declared, and poor Pakistanis cannot afford fuel or electricity. “Today, I appeal to all institutions as well as to the politicians of Pakistan who, for God’s sake, think of poor people.” –with Ismail Dilawar.
Suicide bomber kills at least 19 people in School Explosion in Afghanistan
Suicide bomber kills at least 19 people in School Explosion in Afghanistan
A suicide bomber attacked an educational institute in the Afghan capital, killing at least 19 people.
As many as 27 other people were injured in the early Friday blast, which occurred in the Dasht-e-Barchi neighborhood of western Kabul, a predominantly Shiite-Muslim area that is home to the minority Hazara community, according to police spokesman Khalid Zadran.
“Students were preparing for an exam when a suicide bomber attacked this school. Unfortunately, 19 people have been martyred and another 27 injured,” he said.
Videos posted online and photos posted by local media showed bloodied victims being taken away from the scene.
Among the victims were high school graduates, both girls, and boys, who were taking a practice college entrance examination at the Kaj educational center when the explosion broke out, Zadran said. Schools are usually closed in Afghanistan on Fridays.
“Attacking civilian targets demonstrates the inhumane cruelty of the enemy and the lack of moral standards,” he said, without specifying who was believed to be behind the attack.
No group immediately claimed responsibility.
Families rushed to hospitals in the area where ambulances with casualties arrived and lists of confirmed dead and injured were posted on the walls.
“We didn’t find her here,” said a distraught woman looking for her sister at one of the hospitals. “I was 19 years old.”
Resident Ghulam Sadiq said he was at home when he heard a loud sound. He came out to see smoke coming out of the school where he and his neighbors rushed to help.
“My friends and I were able to move around 15 wounded and nine bodies from the blast site… Other bodies lay under chairs and tables inside the classroom,” he said.
No further details on the attack were immediately available, although the official death toll was expected to rise.
The Hazara ethnic group has alleged years of persecution by the ruling Taliban, who returned to power in the country following the withdrawal of US-led forces in August 2021, and have been the victims of several attacks claimed by the rival group ISIL (ISIS).
The Dasht-e-Barchi neighborhood has witnessed some of the worst attacks in Afghanistan in recent years.
In 2021, before the Taliban takeover, at least 85 people, mostly students, were killed and another 300 injured when three bombs exploded near their school in Dasht-e-Barchi.
No group claimed responsibility for that attack, but a year earlier, ISIL claimed responsibility for a suicide attack on an educational center in the same area that killed 24 people, including students.
In April this year, two deadly bomb blasts at separate schools in the area killed six people and injured 20 others.
Since taking control, the Taliban government has emphasized that they are securing the nation after decades of war, but a series of attacks on mosques and civilian areas in recent months have challenged that narrative.
US has agreed Pacific Islands deal, offering ‘big dollar numbers’
The United States is looking to re-engage in a region where China has been steadily expanding its influence.
US has agreed Pacific Islands deal, offering ‘big dollar numbers’
The United States says it has agreed to a partnership with the Pacific Islands that offers the prospect of “big dollar” aid to a region where China has been expanding its influence.
U.S. President Joe Biden will host leaders and representatives from 14 island nations for a two-day summit at the White House, as the country intensifies its engagement in the region.
He added that all visiting leaders, including Solomon Islands President Manasseh Sogavare, had accepted the 11-point statement. Wednesday’s reports suggested that Sogavare, who has reached out to China in recent months, was not prepared to sign.
The White House did not immediately comment on the funding figure, but a U.S. official told Reuters news agency the report was accurate.
The United States is courting Pacific island nations at a time when Beijing has been increasingly active in the region, offering new investment and, in the case of the Solomon Islands, a security pact. Some of the leaders distrust China, but also that they will be caught in the middle of the two superpowers.
An official who briefed reporters ahead of the meeting acknowledged that Washington had not paid enough attention to the Pacific and would come up with new initiatives with “large numbers of dollars.”
Among the measures, the United States plans to expand its diplomatic presence in the region, opening three new missions and creating a new ambassadorial post at the Pacific Islands Forum, the key regional body. It also plans to re-establish a U.S. Agency for International Development mission in Fiji.
The leaders are being feted in Washington, D.C., and on Thursday they will have lunch at the U.S. Congress and dine with the president at the White House.
Speaking to Pacific Island leaders before the summit began, U.S. Secretary of State Antony Blinken said they had “coalesced around a declaration of the U.S.-Pacific partnership,” which would provide a “roadmap” for their future relationship.
Holding to a document, he said it showed that the United States and the Pacific Islands have a “shared vision for the future and the determination to build that future together.”
Blinken said the shared vision “recognizes that only by working together can we address the greatest challenges of our time, which all of our citizens face.”
He cited the climate crisis, health emergencies, the promotion of economic opportunity, and the preservation of a “free and open Indo-Pacific” where every nation, regardless of its size, “has the right to choose its path.”
Strategic competition in the Pacific Islands intensified dramatically this year after China signed the security agreement with the Solomon Islands. The Pacific island nation changed formal diplomatic relations from Taipei to Beijing in 2019 in a move that has also deepened internal divisions.
For Pacific leaders, climate change is a crucial issue and the talks in Washington, D.C., included a session hosted by John Kerry, the special presidential envoy for the climate.
Kerry praised regional leaders for a more ambitious global climate goal than the one agreed upon at the 2015 Paris climate summit.
“It came from their persistence and commitment, so I want to thank them for that. It made a difference for the world,” he said.
A source familiar with the discussions told Reuters that a deal on submarine cables was also likely.
Apple Ditches Increase in iPhone Production After Demand Falters
Apple Ditches Increase in iPhone Production After Demand Falters
Apple is backtracking on its plans to ramp up production of its new iPhones this year. An anticipated spike in demand failed to materialize, according to people familiar with the matter.
The US tech giant has told suppliers to pull out of efforts to increase the assembly of the iPhone 14 product family. Efforts to increase has up to six million units in the second half of this year, the people said. Instead, the company will aim to produce 90 million phones for the period. It is the same level as the previous year and in line with Apple’s original forecast for this summer, the people said.
Demand for higher-priced iPhone 14 Pro models is stronger than for entry-level versions, according to some people. In at least one case, they added that an Apple vendor is shifting production capacity from lower-priced iPhones to premium models.
US stock index futures fell after the news, with contracts on the Nasdaq 100 falling as much as 1.3 percent. Key chipmaker Taiwan Semiconductor Manufacturing Company fell as much as 1.8 percent. Apple’s biggest iPhone assembler Hon Hai Precision Industry fell as much as 2.4 percent. Specialty producers Largan Precision and LG Innotek plunged more than 7 percent.
Apple had updated its sales projections in the weeks leading up to the launch of the iPhone 14. Some of its suppliers had begun preparing for a 7 percent increase in orders.
An Apple spokesman declined to comment.
China, the world’s largest smartphone market, is in an economic recession. China has hit its domestic mobile device makers and also hurt iPhone sales. Purchases of the iPhone 14 series during its first three days of availability in China were 11 percent lower than those of its predecessor the previous year, according to a note from Jefferies on Monday.
Global demand for personal electronics suppresses by rising inflation, recession fears, and the disruption of the war in Ukraine. The smartphone market expects to contract 6.5 percent this year to 1.27 billion units, according to data from market tracker IDC.
“The supply constraints that have been reduced in the market since last year have been eased. The industry has shifted to a market with limited demand,” said research director Nabila Popal of IDC. “High inventory in the channels and low demand with no signs of immediate recovery have caused OEMs (OEMs). It raises panic and drastically reduces their orders by 2022.”