Corporate Profits Responsible for ⅔ of Inflation

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Earlier this week, Tim Macklem—the Governor of the Bank of Canada—spoke to a parliamentary committee about new pricing behaviour in the corporate sector. Over the past decades, when inflation was “overall pretty low,” Macklem stated that “[companies] were very reluctant to increase prices because they’re going to lose customers.” But in recent years with high inflation, “companies were much more willing to pass through higher input costs into final prices.” However, this is not the full story. Christine Lagarde, President of the European Central Bank, gave a speech during the summer and cited a new pattern in corporate pricing. For the 20 years leading up to 2022, profits were the cause of one-third of inflation, but last year this ratio skyrocketed to two-thirds. Consumers in the United Kingdom have taken notice of this trend as indicated by the price discounts on their groceries. While Canada hasn’t had the same reaction, profitability has dropped significantly in the past two quarters, returning closer to normal levels.

[CBC News] [Justin Wei]

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Short-Selling Forbidden in South Korea Until June 2024

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In order for regulators to investigate and improve the South Korean markets, investors will not be able to trade companies in the Kospi 200 Index and Kosdaq 150 using borrowed shares, and hence short-selling will be forbidden. “Amidst market turmoil, we’ve discovered massive illegal naked short-selling by global investment banks and circumstances of additional illegal activities. It’s a grave situation where illegal short-selling undermines fair price formation and hurts market confidence,” said Financial Services Commission Chairman Kim Joo-hyun. This pause will be used to construct a “fundamental improvement” and strike down on illegal short-selling more heavily. South Korea previously had a ban on short-selling dating back to the pandemic — short-selling companies in the two indexes above were allowed only in May 2021, while over 2,000 equities remained banned. Smartkarma Holdings analyst Brian Freitas said, “The short-sell ban will further jeopardize Korea’s chances of moving from Emerging Market to Developed Market.”

[Yahoo! Finance] [Grace Pu]

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Wild Beavers Brought Back To West London After 400 Years

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A family of 5 Eurasian Beavers and a pair and 3 offspring have been transported from Scotland to London’s Ealing district. This was done with the help of the Ealing Beaver project, which hopes that beavers would reduce the risk of flooding. Sean McCormack, chair of Ealing Wildlife Group, one of the groups behind the Beaver project, states that “Greenford is a high flood risk zone, and that’s only going to be exacerbated by climate change. The beavers should build a series of dams through the site and create wetlands … this acts as a giant sponge.” 400 years ago, wild beavers were hunted to extinction for beaver meat and furs. In recent years, they have been gradually reintroduced to England. In 2022, beavers were officially declared a protected species. In March of the same year, beavers were introduced to Enfield, north London, and it was announced that the newborn baby beaver was the first baby born in 400 years in London. The beaver habitat in Ealing will be closed to the public for 1 year, after which, the public will be free to enjoy the beavers.

[CNN] [Yolanda Zhou]

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13.2 billion year old Black Hole Discovered 

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On 6 November 2023, findings from NASA’s James Webb Space Telescope and Chandra X-Ray Observatory were published confirming the existence of a 13.2 billion year black hole. 

The black hole, located in a galaxy called UHZ1, was spotted by both the Webb and Chandra telescope using a technique called gravitational lensing. This technique uses a closer celestial body that has a strong enough gravity to cause a curvature of spacetime so that the light around it is visibly bent, as if by a lens. In this case, the Webb and Chandra telescopes used a closer cluster of galaxies to bend and magnify UHZ1 and its blackhole. 

Researchers currently believe the black hole formed from colossal clouds of gas that collapsed in on a neighboring galaxy next door. When they merged, a black hole 10 times larger than the one at the center of the Milky Way galaxy formed. It is estimated that the UHZ1 black hole weighs 10% to 100% of the mass of all the stars in the UHZ1 galaxy. In the Milky Way and other nearby galaxies, the black holes only weigh an estimated 0.1% of all the stars in the galaxy which puts into perspective how large the UHZ1 black hole is. [NBC] [Michael Yang]

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60% of Cobalt Mines in The Democratic Republic of Congo Tied to Child Labor: Tech Giants Respond

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Apple had declared that they would put a temporary pause on purchases of cobalt from DRC as the mineral is currently being unethically sourced by children in cobalt mines. The rechargeability of lithium batteries used within millions of products produced by large technology companies depends heavily on cobalt. 

Multinational companies such as Tesla, Microsoft, and Dell purchase cobalt from large mining businesses. These businesses unethically source the cobalt by paying workers low wages to work under dangerous conditions. Siddarth Kara, a lecturer at Harvard’s T.H. Chan School of Public Health researches human trafficking and child labour in third-world countries, the situations which are manipulated by Western media concealing the truth of how the extraction of cobalt is 

“There’s complete cross-contamination between industrial excavator-derived cobalt and cobalt dug by women and children with their bare hands,” says Kara.

Given that Congo is among the world’s poorest and most unstable nations, these wealthy mining companies easily get access to substantial quantities of cobalt. They underpay their workers, subject them to harsh working conditions, and fail to provide necessary working conditions. The workers conduct the mining and collect cobalt using pickaxes, shovels, and stretchers. The work life of the cobalt miners in Congo is not solely the definition of physical labor, but modern-day slavery. 

[TheGuardian] [Salena Fatima]

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