News round-up, June 16, 2023
Today…
" It appears that the future readers' souls had forewarned us about the dangers of Triton…
The international media reported this morning on a significant cybersecurity breach in the United States.
Yesterday, there was a significant discussion and warning regarding the Triton malware, which has been classified as the —world's most lethal—. The focus was on its capability to disable safety mechanisms in industrial facilities remotely. This subject has attracted significant attention from cybersecurity experts, particularly within the energy sector. Today's disclosure of a substantial cybersecurity breach in the United States, as reported by the international media, is a matter of great concern. The Energy Department, along with several other federal agencies, has been targeted by a global cyber-attack carried out by a Russian cyber-extortion group. This security breach specifically targeted a widely utilized file-transfer program that is highly favored by both corporate entities and governmental organizations. The potential ramifications could have been more severe; nevertheless, officials from the Department of Homeland Security have asserted that this campaign was promptly identified. According to Jen Easterly, the Director of the Cybersecurity and Infrastructure Security Agency, the nature of this attack is predominantly opportunistic, rather than being driven by the intention to gain broader access or steal high-value information. The revelation that a significant number of individuals, including professionals in various industries, higher education institutions, and state motor vehicle agencies, may have encountered unfavorable outcomes is deeply unsettling.
Most Read…
US Energy Department among federal agencies breached by Russian ransomware gang
Several American federal agencies were compromised on Thursday in a Russian cyber-extortion gang's global hack of a file-transfer program popular with corporations and governments.
Le Monde with AP, Published today at 6:03 am (Paris)ECB hikes rates to 22-year high and vows to keep going
While the US Federal Reserve is hitting pause on a series on interest rate hikes, the ECB has once again raised rates and says that more are on the way.
Le Monde with AFP, Published yesterday at 6:50 pm (Paris)
The Global Economy Looks Like It’s Out of Sync
As central banks go in different directions, most capital markets remain linked to the dollar
WSJ by James Mackintosh, June 16, 2023 Column: Key differences in government spending on the energy transition
Governments globally are investing billions to speed up the energy transition, reduce costs, and drive innovation in fuels and power technologies. However, there are significant differences in government funding priorities, with the United States heavily investing in low-carbon electricity and transportation systems. Private sector companies are investing in clean energy.
Reuters by Gavin Maguire, June 15, 2023, editing by Germán & CoOpinion | A Trump Pardon Could Drain Poison from the System
If Trump loses in 2024, sparing him jail time could ease our divided politics.
POLITICO USA, Opinion by RICH LOWRY, June 15, 2023 
The AES Corporation President Andrés Gluski, Dominican Republic Minister of Industry and Commerce Victor Bisonó, and Rolando González-Bunster, CEO of InterEnergy Group, spoke at the Latin American Cities Conferences panel on "Facilitating Sustainable Investment in Strategic Sectors" on April 12 in Santo Domingo, Dominican Republic.How can strategic investment achieve both economic growth and social progress?… What is the role of renewable energy and battery storage in achieving the goals of the low-carbon economy?…
Image: Germán & CoCooperate with objective and ethical thinking…
Image credit: by Germán & CoUS Energy Department among federal agencies breached by Russian ransomware gang
Several American federal agencies were compromised on Thursday in a Russian cyber-extortion gang's global hack of a file-transfer program popular with corporations and governments.
Le Monde with AP, Published today at 6:03 am (Paris)The Department of Energy and several other federal agencies were compromised in a Russian cyber-extortion gang's global hack of a file-transfer program popular with corporations and governments, but the impact was not expected to be great, Homeland Security officials said Thursday, June 15.
But for others among what could be hundreds of victims from industry to higher education – including patrons of at least two state motor vehicle agencies – the hack was beginning to show some serious impacts.
Jen Easterly, director of the Cybersecurity and Infrastructure Security Agency, told reporters that unlike the meticulous, stealthy SolarWinds hacking campaign attributed to state-backed Russian intelligence agents that was months in the making, this campaign was short, relatively superficial and caught quickly. "Based on discussions we have had with industry partners ... these intrusions are not being leveraged to gain broader access, to gain persistence into targeted systems, or to steal specific high value information— in sum, as we understand it, this attack is largely an opportunistic one," Easterly said.
"Although we are very concerned about this campaign and working on it with urgency, this is not a campaign like SolarWinds that presents a systemic risk to our national security or our nation’s networks," she added.
British Airways and the BBC also targeted
A senior CISA official said neither the US military nor intelligence community was affected. Energy Department spokesperson Chad Smith said two agency entities were compromised but did not provide more detail.
Known victims to date include Louisiana’s Office of Motor Vehicles, Oregon's Department of Transportation, the Nova Scotia provincial government, British Airways, the British Broadcasting Company and the UK drugstore chain Boots. The exploited program, MOVEit, is widely used by businesses to securely share files. Security experts say that can include sensitive financial and insurance data.
The Cl0p ransomware syndicate behind the hack announced last week on its dark web site that its victims, who it suggested numbered in the hundreds, had until Wednesday to get in touch to negotiate a ransom or risk having sensitive stolen data dumped online.
The gang, among the world’s most prolific cybercrime syndicates, also claimed it would delete any data stolen from governments, cities and police departments.
The senior CISA official told reporters a "small number" of federal agencies were hit – declining to name them – and said "this is not a widespread campaign affecting a large number of federal agencies." The official, speaking on condition of anonymity to discuss the breach, said no federal agencies had received extortion demands and no data from an affected federal agency had been leaked online by Cl0p. US officials "have no evidence to suggest coordination between Cl0p and the Russian government," the official said.
Seaboard: pioneers in power generation in the country…
…“More than 32 years ago, back in January 1990, Seaboard began operations as the first independent power producer (IPP) in the Dominican Republic. They became pioneers in the electricity market by way of the commercial operations of Estrella del Norte, a 40MW floating power generation plant and the first of three built for Seaboard by Wärtsilä.
Image editing by Germán & CoECB hikes rates to 22-year high and vows to keep going
While the US Federal Reserve is hitting pause on a series on interest rate hikes, the ECB has once again raised rates and says that more are on the way.
Le Monde with AFP, Published yesterday at 6:50 pm (Paris)
The European Central Bank hiked interest rates to a 22-year high Thursday and said another increase in July was "very likely", as it pushed ahead with its fight against inflation despite a darkening eurozone economy.
The ECB's governing council increased rates by a further 25 basis points, taking the closely-watched deposit rate to 3.50% – its highest level since 2001.
"Inflation has been coming down but is projected to remain too high for too long," ECB President Christine Lagarde said. The move comes a day after the US Federal Reserve held off from raising rates after 10 straight increases.
"We're not thinking about pausing," Lagarde said, adding that the ECB still has "ground to cover" on rates after the Frankfurt institution lifted its inflation outlook for 2023-2025 in fresh forecasts on Thursday. "Barring a material change to our baseline, it is very likely the case that we will continue to increase rates in July," she told reporters.
The ECB has lifted borrowing costs at the fastest rate ever to combat red-hot inflation after Russia's war in Ukraine sent food and energy prices soaring, raising its key rates by 4.00 percentage points since July.
Eurozone inflation slowed to 6.1% in May year-on-year, down from a peak of 10.6% in October, mainly thanks to rapidly falling energy costs. The ECB said its inflation-busting efforts were "gradually having an impact", with loan demand slowing sharply as higher borrowing costs take their toll on eurozone households and firms.
But inflation remains three times above the ECB's target while core inflation – which strips out volatile food and energy prices – eased only slightly to 5.3% in May, after 5.6% in April. Lagarde reiterated on Thursday that the ECB will "follow a data-dependent approach" as it charts the way forward.
"The ECB simply cannot afford to be wrong on inflation," said ING bank economist Carsten Brzeski. "The bank wants and has to be sure that it has slayed the inflation dragon before considering a policy change."
'Not satisfactory'
Like all central banks, the ECB has to walk a fine line in raising interest rates sufficiently to dampen demand and contain inflation, without provoking a sharp economic slowdown in the process. But the eurozone economy has proved less resilient than initially thought.
Revised data last week showed that the economy in the 20-nation currency union shrank by 0.1% for two straight quarters at the end of 2022 and the start of 2023, meeting the technical definition of a recession. While still mild, the surprise winter slump has cast doubt on more optimistic economic forecasts for 2023.
In updated forecasts, the ECB now sees the eurozone economy growing by 0.9% in 2023 – down from 1.0% previously. Lagarde said the economy would "strengthen in the course of the year" as inflation slows, supply chains ease and the service sector remains resilient. But she stressed that the outlook remained "highly uncertain", citing Russia's war in Ukraine and potentially weak global growth among the risk factors.
'Tit-for-tat' price surges
Thursday's updated projections also showed inflation reaching 5.4% in 2023, 3.0% in 2024 and 2.2% in 2025 – a 0.1-percentage-point increase for each year from its last forecasts in March. With the ECB's 2% target still out of reach by 2025, Lagarde called the outlook "not satisfactory".
Wage pressures were becoming an "increasingly important source" of inflation, she said, as workers – boosted by record-low eurozone unemployment – push for pay rises to help compensate for the higher cost of living. She also expressed concern about high corporate profits, urging companies and employees to avoid a "tit-for-tat" where both sides sought full compensation for inflation – potentially creating an unwanted spiral of price rises.
The ECB was watching the discussions and developments between the different parties in the labour market closely, Lagarde said. The central bank "will take all necessary measures to return inflation to two percent. That they can count on," she said. "And we are confident that we will get there."
Image credit by Germán & CoThe Global Economy Looks Like It’s Out of Sync
As central banks go in different directions, most capital markets remain linked to the dollar
WSJ by James Mackintosh, June 16, 2023 While the Federal Reserve delivered a hawkish statement, Chair Jerome Powell held what markets viewed as a dovish press conference Wednesday. Photo: Sarah Silbiger
In just 24 hours this past week the central banks of the world’s three biggest economic blocs came to starkly different conclusions, with the eurozone raising rates, the U.S. on hold and the Chinese cutting. It’s getting harder for investors to understand the global economy—and potentially getting harder for the Federal Reserve to put a lid on inflation.
The conflicting moves are caused by economies increasingly moving to local rhythms. Europe is in a technical recession, but the central bank expects inflation to last. China has no inflation problem but is suffering from the aftermath of its extended lockdowns and property bubble. The U.S. economy is doing surprisingly well, and inflation has plunged, but underlying price increases remain stubbornly high.
The global divergence has already swung currencies. China’s yuan has weakened this year, which should make its exports more competitive, crimp imports and help its economy. Except when China goes for all-out stimulus or intervention as in 2009 or after its 2015 stock bubble burst, its markets have their own beat. Capital controls and fear of expropriation mean they aren’t tightly integrated into global portfolios.
More important for U.S. investors are the moves in Europe, where the European Central Bank and the Bank of England—which will decide on its rate next week—are now seen by investors as more hawkish than the Fed. That’s driving up their bond yields, and pushing down the dollar against the euro and sterling.
In itself, such moves are exactly what’s meant to happen. The whole point of having a floating currency is to free central banks to set rates according to the issues their own economies face. The problem comes from the sensitivity of investors to dollar weakness, and the knock-on boost to confidence it brings.
Americans aren’t used to thinking about their investments in other currencies. The dollar’s role as the world’s reserve currency makes it the standard for measuring value, as well as for global transactions. But the dollar still has a profound effect, just one that U.S. investors often miss.
It is potentially getting harder for the Federal Reserve to put a lid on inflation. PHOTO: NATHAN HOWARD/BLOOMBERG NEWS
When the dollar goes up, Americans are richer in that they can buy more foreign stuff with the same money. But recently they’re likely to feel poorer, because the dollar and stocks have been moving in opposite directions. Historically the two were closely linked only in crises, when the dollar was bought as a haven and stocks were dumped because of their risk. After 2008, the dollar-up, stocks-down relationship strengthened, and since the stock selloff began in 2022 the link has been even stronger, with weekly moves in the dollar explaining about half the move in the S&P 500.
What effects do you think will stem from an asynchronous global economy?Join the conversation below.
One way to think about this is that as the Fed raised rates, the dollar, up until the autumn, strengthened sharply, which hurt U.S. stocks. But then the ECB and Bank of England became serious about rate rises, the dollar began to weaken, and the bull market in U.S. stocks kicked off.
See American stocks as Europeans do, and in euros they never fell the 20% usually defined as a bear market, nor did they rebound so much as to be in a new bull market. The drama was in the currency, not stocks.
This might seem like a perverse outcome, and makes things harder for the Fed. In principle, higher rates in Europe should damp demand, including for U.S. exports to the region, while also pushing up U.S. yields, as some investors switch to higher-yielding European bonds. Both these things should be bad for the U.S. economy, and bad for U.S. stocks.
But as long as investors stick with the idea that the dollar and stocks move in opposite directions, the weaker dollar alone means American shareholders feel richer, even if they have the same purchasing power in foreign-currency terms. And investors who feel flush tend to borrow and spend more, supporting the economy—exactly the opposite of the slowdown the Fed wants. It also boosts the competitiveness of U.S. production, again supporting the economy. Without the Fed doing anything, rate rises elsewhere might give the U.S. a boost.
The weak dollar has a perverse effect elsewhere, too. Because capital markets are integrated, lots of countries and companies borrow in dollars, and many big global investors think in dollars, a weak dollar makes everyone feel positive. European stocks in local-currency terms and emerging markets excluding China have risen almost exactly as much as the S&P 500 as the dollar weakened.
Even as economies and central banks diverge, most capital markets remain tightly integrated and linked to a common global force: the dollar
Image: REUTERS/Stephane Mahe/ Editing by Germán & CoColumn: Key differences in government spending on the energy transition
Governments globally are investing billions to speed up the energy transition, reduce costs, and drive innovation in fuels and power technologies. However, there are significant differences in government funding priorities, with the United States heavily investing in low-carbon electricity and transportation systems. Private sector companies are investing in clean energy.
Reuters by Gavin Maguire, June 15, 2023, editing by Germán & CoLITTLETON, Colorado, June 14 (Reuters) - Governments across the world are doling out billions of dollars worth of investments and subsidies to help accelerate the energy transition, reduce energy costs for consumers, and spur innovation in fuels and power-sector technologies.
But while all authorities are spending big in the energy space in general, there are important differences in where key governments are focusing their funds, most starkly between the United States and the governments of Europe.
Both regions have shared aspirations in terms of emissions reduction goals, but have so far taken vastly different funding approaches that have potentially significant implications for the pace of energy sector decarbonisation efforts and the emergence of future industry champions.
Private sector players in the United States and Europe, as well as in Asia and the rest of the world, are also embarking on their own investment campaigns in the clean energy space, and stand to have an equally significant impact on the sector.
Government spending on clean energy, energy affordability & energy efficiency
But in all regions corporations rely on the government to provide critical funding in areas such as early-stage research and development, and in helping to set key goals for industries that can make or break individual companies.
As such, the scale and trajectory of government support in the clean energy space is of critical importance in all major economies.
US: SPURRING CHANGE
Fuelled in large part by the Inflation Reduction Act (IRA) of 2022, the United States has the world's largest government-funded war chest, estimated at $560 billion by the International Energy Agency (IEA), to be deployed on energy transition and energy efficiency measures.
More than $210 billion (37.6% of total) is earmarked for the development of low-carbon electricity and related efforts to aid the power sector's switch away from fossil fuels.
Companies engaged in the production of renewable energy equipment, in the deployment of clean energy supplies, and in the switching out of fossil fuel power for renewable systems are also eligible for tax breaks and other incentives.
An additional $140 billion (25%) is tied to reducing the carbon footprint of the country's transportation systems, including $66 billion for high-speed rail systems and around $40 billion in grants for public transport system upgrades.
Subsidies are also available for manufacturers of electric vehicles and batteries, and U.S. consumers can qualify for tax credits for electric vehicle purchases.
Nearly $80 billion (14%) is available for the development of clean fuels and for innovation in fuel technology, with the intention of creating a virtuous circle of production and consumption of green energy products within the United States.
EUROPE: SHIELDING CONSUMERS
While the United States is deploying over 60% of its government funding on low-carbon electricity and transport system overhauls, energy affordability has been by far the single largest focus of government spending in Europe.
Germany, Europe's largest economy, has the largest government spending total in the region ($339 billion), and has earmarked over $240 billion (72.6% of total) for an array of energy affordability measures.
Price caps on electricity and heating costs, capital injections into ailing utilities, and relief packages for cash-strapped households and businesses shell shocked by the surge in power costs account for nearly three quarters of the government spending on clean energy seen so far, IEA data shows.
France, Britain, Poland, Czechia, Croatia, Finland, Portugal and Greece, among others, have also spent over half of all clean energy related government spending on affordability measures.
Low carbon and efficient transport accounts for the next largest share of government spending in Europe (around 21%), followed by energy efficient buildings (14%), according to the IEA's data.
ASIA: SEEKING BALANCE
Major Asian nations including China, Japan and India are also spending heavily on energy affordability measures, which have so far accounted for roughly 50% of the region's government spending in the clean energy and energy efficiency areas.
However, Asian governments are also deploying major funding on low carbon electricity (roughly 16% of total spending), low carbon transport (around 12%) and on electricity network upgrades and expansions (7%), in an effort to develop positive momentum among carbon reduction and green energy supply efforts.
Several nations across Africa, Latin America and the Middle East have split spending allocations in a similar way.
However, as with most European nations, the heavy price tag associated with energy affordability measures means there is less funding available to be deployed on other areas associated with accelerating the energy transition.
That means that the United States' higher levels of government spending on low carbon electricity generation and transportation compared to other major economies may enable the country to build up development leads in those areas, and in time give the U.S. a competitive advantage over other nations as those investments bear fruit.
The bind represented by former President Donald Trump’s indictment is that, based on the evidence we have now, he appears to be caught dead to rights. | Alex Brandon/AP Photo / Editing by Germán & CoOpinion | A Trump Pardon Could Drain Poison from the System
If Trump loses in 2024, sparing him jail time could ease our divided politics.
POLITICO USA, Opinion by RICH LOWRY, June 15, 2023 Rich Lowry is editor in chief of National Review and a contributing writer with Politico Magazine.
It’s an idea whose time is inevitably coming for Republican presidential candidates — pardoning former President Donald J. Trump.
With the former president facing 37 counts in a federal indictment alleging violations of the Espionage Act and obstruction of justice, his fellow Republicans began discussing clemency even before Trump had entered a plea in the case in Miami.
Vivek Ramaswamy has led the way, making a pledge to pardon Trump his calling card. He is swaddling his case in selfless principle, saying that it’d be easier for him if Trump were out of the race, yet his commitment to justice forces him to act against his own interest … and say something that many Republican voters obviously want to hear.
Nikki Haley is inclined toward a pardon, too.
The middle of a primary campaign is not the best place to carefully think through the various equities involved in the criminal case against Trump and potential clemency, but the idea of pardoning Trump is a sensible one that, depending on the exact circumstances, truly could serve the public interest.
The bind represented by Trump’s indictment is that, based on the evidence we have now, he appears to be caught dead to rights; at the same time, nothing good is going to come from the political and legal warfare inevitable with the prosecution by the U.S. government of the leader of the opposition party.
The presidential pardon power is sweeping. The Supreme Court called it “unlimited” in the 1886 case Ex parte Garland. It extends to “every offence known to the law, and may be exercised at any time after its commission, either before legal proceedings are taken or during their pendency, or after conviction and judgment.”
Among other things, it allows for the consideration of factors that the law alone might not take into account.
The most famous example from high politics is, of course, Gerald Ford pardoning Richard Nixon for offenses related to Watergate, although that episode dates from a different era when politics was a more serious business for more serious people. Ford didn’t go around bragging that he’d pardon Nixon to garner attention and curry favor with Nixon supporters, while Nixon, for all his desperate flaws, was a man of considerable substance and achievement.
Ford, of course, justified his act of clemency on grounds of moving on from, as he put it in his national address, “a tragedy in which we all have played a part. It could go on and on and on, or someone must write the end to it. I have concluded that only I can do that, and if I can, I must.”
We are still far away from getting to anything like this place. First, Trump would have to lose the Republican nomination, and he’s currently the strong favorite. Then, some other Republican would have to win the presidency, or President Joe Biden would have to see the wisdom of potentially keeping the vanquished Trump out of jail, either after beating him again or defeating another Republican.
All this is very speculative, and who knows where the documents case will stand in a year or two? It looks formidable now, but Trump has yet to mount a legal defense.
That said, the case for a pardon is straightforward.
The conventional wisdom is that our politics is over-heated. The worry over this is often exaggerated (things have been as or more feverish before), but having a former president stand trial in a federal criminal case, and potentially spend the rest of his life in jail, is only going to make things more intense and the country more divided. A pardon itself would be a flash point, as the Ford pardon of Nixon was, but it would at least take the unprecedented possibility of a former president behind bars off the table.
There is some significant plurality of the country that simply isn’t going to accept the legitimacy of the charges. Maybe this shouldn’t matter — the law is the law. If the shoe were on the other foot, though, and if it were the Ron DeSantis Department of Justice prosecuting a Democrat with a significant chance of running against him, there’d be an outcry from the same people now dismissing any doubts about the Trump prosecution.
Those doubts are based on more than the typical partisan suspicions of the other side. The Trump prosecution comes against the backdrop of the years-long Russia investigation by the FBI and special counsel Robert Mueller that cast a pall over Trump’s campaign and early presidency and that was based on gossamer thin, politically motivated information.
It comes after Hillary Clinton got a prosecutorial pass over her “home brew” email set-up as secretary of State that was designed to evade government record-keeping rules and that transmitted and stored classified information and sensitive discussions, putting their security at risk.
It comes as the Hunter Biden investigation has dragged on since 2018, with an IRS whistleblower now alleging a cover-up.
It comes at the same time as the Department of Justice has failed to appoint a special counsel to probe whether the Biden family has used its influence to enrich itself.
What we should want to avoid is a pattern of legal retribution and counter-retribution. That would distort our legal process beyond anything that’s happened to this point, further subordinating it to politics and undermining public trust in it. Perhaps this prosecutorial tribal warfare has already been unleashed, but a Trump pardon has a chance of sapping some of the poison out of the system.
It’s also worth emphasizing that in any of these pardon scenarios, Trump has lost his latest bid for the presidency, either in the primary or the general election. This means he’d presumably be a much-reduced figure, whether he’d been rejected by Republican primary voters or lost a national election a second time (although I thought the same thing after the 2020 election). We aren’t talking about a pardon clearing the way for another White House bid, but rather as a consolation prize for someone who is vastly diminished and looking at potentially losing his freedom, too.
There are reasonable objections to all this. Pardoning Trump would mean entrenching a norm that high-flying political figures don’t have to play by the same rules around the handling of classified documents that everyone else does. Also, usually someone asks for a pardon, and expresses remorse for their wrongdoing. It’s impossible to imagine Trump doing that. Finally, we don’t know what 2024 will look like, and it may be that by the end of it, Trump looks more unsympathetic to a Republican president and more loathsome to Joe Biden.
At the end of the day, a Trump pardon would be about book-ending the Trump era, trying to get beyond a noxious chapter that both he and his often unscrupulous, overzealous pursuers contributed to. If Trump is a Nixon, it’d be best for the country if he found his Gerald Ford.