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What crisis? Billionaires rack up record fortunes, survey shows

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The coronavirus crisis may have driven millions of people out of work globally, but the rebound in stock and other asset prices from the depths of a steep plunge has pushed up the wealth of the richest to even more dizzying heights, a survey published on Wednesday shows.

While the authors of the survey say today’s newly minted billionaires – many of whom are involved in cutting-edge technology and healthcare – are making the world a better place, critics have argued that their surging wealth is a cause of growing social and political instability.

The combined wealth of the world’s billionaires reached $10.2 trillion at the end of July, surpassing the previous peak of $8.9 trillion at the end of 2017, the survey by Swiss bank UBS and consultancy giant PwC showed.

The total number of billionaires now stands at 2,189, up from 2,158 in 2017, it said.

The jump in their wealth is mostly due to the surge in asset prices from March, shortly after governments around the world started imposing lockdowns to curb the spread of the coronavirus.

The measures briefly sent stocks tumbling to their lowest levels in years, but central banks swiftly stepped in to provide trillions of dollars to support commercial banks and borrowers. Those moves encouraged investors to dive back into stocks.

From a nearly four-year low in March, the MSCI All-Country World Index of stocks has bounced by 41 percent.

The great polarisation

Most of the gains have been among technology and healthcare companies, as investors bet on the prospects of companies involved in developing vaccines and therapies against the coronavirus.

“Fortunes are polarising as business innovators and disruptors deploy technology to be among the leaders of today’s economic revolution,” the authors of the report say. “During 2018, 2019 and the first seven months of 2020, entrepreneurs in the tech, healthcare and industrials sectors pulled ahead. The COVID-19 storm accelerated the divergence.”

Billionaire entrepreneurs involved in technology saw their wealth surge by 41 percent, closely followed by a 37-percent jump in the fortunes of health industry leaders, according to the survey.

Geographically, mainland Chinese entrepreneurs have enjoyed the greatest surge in wealth, with a 1,146 percent explosion between 2009 and this year, far ahead of the second-biggest gain – in France – of 439 percent. Wealthy Americans became 170 percent richer.

And the world’s wealthiest have also been giving to charitable causes in record amounts, with 209 billionaires donating $7.2bn between March and June, the vast majority coming from the United States.

[Bloomberg]

UBS and PwC say a new generation of billionaires looks set to play a crucial role in repairing the damage of the coronavirus crisis.

“Using the growing repertoire of emerging technologies, tomorrow’s innovators will digitise, refresh and revolutionise the economy. Whether intentionally or not, this has the potential to help bridge financial, social and environmental deficits,” they said.

‘A rigged economic model’

But not everyone agrees that the growing number of billionaires is a force for good.

Global charity Oxfam, a leading campaigner against widening inequality, said in a report published last month that 32 of the world’s largest companies stand to see their profits jump by $109bn in 2020 “as the COVID-19 pandemic lays bare an economic model that delivers profits for the wealthiest on the back of the poorest”.

“COVID-19 has been tragic for the many but good for a privileged few,” Oxfam International’s executive director Jose María (Chema) Vera said.

“The economic crisis we are suffering because of the pandemic has been fuelled by a rigged economic model. The world’s largest corporations are making billions at the expense of low wage workers and funnelling profits to shareholders and billionaires – a small group of largely white men in rich nations,” Vera said.

And some have even criticised the growing amount of money that billionaires are giving away.

“Philanthropy is not the answer but is becoming another extension of private power and interests,” wrote Chuck Collins, director of the Program on Inequality and the Common Good at the Institute for Policy Studies, a progressive US-based think-tank, in a report published in August.

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Trump’s misleading tweet about changing your vote, briefly explained

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Searches for changing one’s vote did not trend following the recent presidential debate, and just a few states appear to have processes for changing an early vote. But that didn’t stop President Trump from wrongly saying otherwise on Tuesday.

In early morning posts, the president falsely claimed on Twitter and Facebook that many people had Googled “Can I change my vote?” after the second presidential debate and said those searching wanted to change their vote over to him. Trump also wrongly claimed that most states have a mechanism for changing one’s vote. Actually, just a few states appear to have the ability, and it’s rarely used.

Twitter did not attach a label to Trump’s recent tweet.
Twitter

Trump’s claim about what was trending on Google after the debate doesn’t hold up. Searches for changing one’s vote were not among Google’s top trending searches for the day of the debate (October 22) or the day after. Searches for “Can I change my vote?” did increase slightly around the time of the debate, but there is no way to know whether the bump was related to the debate or whether the people searching were doing so in support of Trump.

It was only after Trump’s posts that searches about changing your vote spiked significantly. It’s worth noting that people were also searching for “Can I change my vote?” during a similar period before the 2016 presidential election.

Google declined to comment on the accuracy of Trump’s post.

Trump also claimed that these results indicate that most of the people who were searching for how to change their vote support him. But the Google Trends tool for the searches he mentioned does not provide that specific information.

Perhaps the most egregiously false claim in Trump’s recent posts is about “most states” having processes for changing your early vote. In fact, only a few states have such processes, and they can come with certain conditions. For instance, in Michigan, voters who vote absentee can ask for a new ballot by mail or in person until the day before the election.

The Center for Election Innovation’s David Becker told the Associated Press that changing one’s vote is “extremely rare.” Becker explained, “It’s hard enough to get people to vote once — it’s highly unlikely anybody will go through this process twice.”

Trump’s post on Facebook was accompanied by a link to Facebook’s Voting Information Center.
Facebook

At the time of publication, Trump’s false claims had drawn about 84,000 and 187,000 “Likes” on Twitter and Facebook, respectively. Trump’s posts accelerated searches about changing your vote in places like the swing state of Florida, where changing one’s vote after casting it is not possible. Those numbers are a reminder of the president’s capacity to spread misinformation quickly.

On Facebook, the president’s post came with a label directing people to Facebook’s Voting Information Center, but no fact-checking label. Twitter had no annotation on the president’s post. Neither company responded to a request for comment.

That Trump is willing to spread misinformation to benefit himself and his campaign isn’t a surprise. He does that a lot. Still, just days before a presidential election in which millions have already voted, this latest episode demonstrates that the president has no qualms about using false claims about voting to cause confusion and sow doubt in the electoral process.

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Nearly 6,000 civilian casualties in Afghanistan so far this year

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From January to September, 5,939 civilians – 2,117 people killed and 3,822 wounded – were casualties of the fighting, the UN says.

Nearly 6,000 Afghan civilians were killed or wounded in the first nine months of the year as heavy fighting between government forces and Taliban fighters rages on despite efforts to find peace, the United Nations has said.

From January to September, there were 5,939 civilian casualties in the fighting – 2,117 people killed and 3,822 wounded, the UN Assistance Mission in Afghanistan (UNAMA) said in a quarterly report on Tuesday.

“High levels of violence continue with a devastating impact on civilians, with Afghanistan remaining among the deadliest places in the world to be a civilian,” the report said.

Civilian casualties were 30 percent lower than in the same period last year but UNAMA said violence has failed to slow since the beginning of talks between government negotiators and the Taliban that began in Qatar’s capital, Doha, last month.

An injured girl receives treatment at a hospital after an attack in Khost province [Anwarullah/Reuters]

The Taliban was responsible for 45 percent of civilian casualties while government troops caused 23 percent, it said. United States-led international forces were responsible for two percent.

Most of the remainder occurred in crossfire, or were caused by ISIL (ISIS) or “undetermined” anti-government or pro-government elements, according to the report.

Ground fighting caused the most casualties followed by suicide and roadside bomb attacks, targeted killings by the Taliban and air raids by Afghan troops, the UN mission said.

Fighting has sharply increased in several parts of the country in recent weeks as government negotiators and the Taliban have failed to make progress in the peace talks.

At least 24 people , mostly teens, were killed in a suicide bomb attack at an education centre in Kabul [Mohammad Ismail/Reuters]

The Taliban has been fighting the Afghan government since it was toppled from power in a US-led invasion in 2001.

Washington blamed the then-Taliban rulers for harbouring al-Qaeda leaders, including Osama bin Laden. Al-Qaeda was accused of plotting the 9/11 attacks.

Calls for urgent reduction of violence

Meanwhile, the US envoy for Afghanistan, Zalmay Khalilzad, said on Tuesday that the level of violence in the country was still too high and the Kabul government and Taliban fighters must work harder towards forging a ceasefire at the Doha talks.

Khalilzad made the comments before heading to the Qatari capital to hold meetings with the two sides.

“I return to the region disappointed that despite commitments to lower violence, it has not happened. The window to achieve a political settlement will not stay open forever,” he said in a tweet.

There needs to be “an agreement on a reduction of violence leading to a permanent and comprehensive ceasefire”, added Khalilzad.

A deal in February between the US and the Taliban paved the way for foreign forces to leave Afghanistan by May 2021 in exchange for counterterrorism guarantees from the Taliban, which agreed to sit with the Afghan government to negotiate a permanent ceasefire and a power-sharing formula.

But progress at the intra-Afghan talks has been slow since their start in mid-September and diplomats and officials have warned that rising violence back home is sapping trust.

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Classic toy tie-up: Etch A Sketch maker to acquire Rubik’s Cube

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Spin Master Corp., the company behind the Etch A Sketch and Paw Patrol brands, has agreed to acquire Rubik’s Brand Ltd. for about $50 million, tying together two of the world’s most iconic toy brands.

The merger comes at a boom time for classic toymakers, as parents turn to familiar products to entertain kids stuck in lockdown. Like sales of Uno, Monopoly and Barbie dolls, Rubik’s Cube purchases have spiked during the pandemic, according to the puzzle maker’s chief executive officer, Christoph Bettin. He expects sales to jump 15% to 20% in 2020, compared with a normal year, when people purchase between 5 million and 10 million cubes.

By acquiring Rubik’s, Toronto-based Spin Master can better compete with its larger rivals, Hasbro Inc. and Mattel Inc. All three companies have pivoted to become less reliant on actual product sales, diversifying into television shows, films and broader entertainment properties based on their toys. Spin Master CEO Anton Rabie said he wouldn’t rule out films or TV shows based on Rubik’s Cubes, but he was focused for now on creating more cube-solving competitions and crossmarketing it with the company’s other products, like the Perplexus.

“Whoever you are, it really has a broad appeal from a consumer standpoint,” Rabie said in an interview. “It’s actually going to become the crown jewel; it will be the most important part of our portfolio worldwide.”

Hungarian inventor Erno Rubik created the Rubik’s Cube in 1974, a solid block featuring squares with colored stickers that users could twist and turn without it falling apart. It gained popularity in the 1980s and has remained one of the best-selling toys of all time, spawning spinoff versions, international competitions of puzzle solvers, books and documentaries.

The toy has been particularly well-suited to pandemic conditions. During lockdowns, parents have sought to give kids puzzles that boost problem-solving skills useful in math and science careers. Normally, toys tied to major film franchises are among the most popular products headed into the holidays, but studios have delayed the release of major new movies because of coronavirus. So classic products are experiencing a mini-renaissance.

“The whole pandemic has really increased games and puzzles,” Rabie said. “But whether the pandemic existed or didn’t exist, we’d still buy Rubik’s. It’s had such steady sales for decades.”

Rubik’s CEO Bettin said it was the right time to sell the company, with the founding families behind it ready to move on. London-based Rubik’s Brand was formed out of a partnership between Erno Rubik and the late entrepreneur Tom Kremer, while private equity firm Bancroft Investment holds a minority stake in the company.

Early on, Bettin felt Spin Master was the right home for the puzzle toy, he said. Spin Master, which was started by a group of three friends in 1994, has expanded through the purchase of well-known brands, including Erector sets and Etch A Sketch. Rabie says he works to honor the “legacy” of those products, which Bettin cited as a key reason to sell the brand to Spin Master over larger companies that were interested.

“It was important for us to not be lost in the crowd, and to be sufficiently important and cared for,” Bettin said. “And there’s a balance between being with someone large enough to invest, and agile enough to ensure you are key part of their plans.”

Spin Master won’t own Rubik’s Cubes in time for the holiday season – the transaction is expected to close on Jan. 4. At that time, the company will move Rubik’s operations from a small office in London’s Notting Hill neighborhood to Spin Master’s new games operations center in Long Island.

Some of Rubik’s Brand’s 10 employees will be part of the transition, but they won’t stay permanently, Bettin said.

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