Welcome back to a new edition of The Weekender….where Russia has escalated its war in Ukraine to the next level, while the U.S. Department of Justice has indicted nearly 50 people in its largest pandemic-related fraud scheme. Also, the supply chain is facing the threat of more issues and delays, while interest rates are facing another hike. Dive into these headlines and more in this week’s edition of The Weekender. Thanks for starting your weekend with us.
THE BIG FIVE
What Russia’s Nuclear Threats Really Mean
Russia’s war in Ukraine escalated to new levels this week. In an address to Russia, President Vladimir Putin announced an influx of Russian troops will be sent to Ukraine and said he won’t hesitate to use nuclear weapons to “protect Russian territory.” In his address, Putin also accused — without any evidence — the U.S. and its allies of “nuclear blackmail” and said North Atlantic Treaty Organization leaders made statements to use “nuclear weapons of mass destruction” against Russia. While this is not the first time Putin has threatened the use of nuclear weapons, the circumstances this time are different. The threats came about a week after Ukrainian forces had retaken nearly all of the Kharkiv region, the nation’s second-largest city, and forced Moscow to retreat. Some analysts say Putin’s threats are a sign that he knows the war is not going well. A recent study revealed Russia’s invasion has caused $108.3 billion in damage to Ukraine’s infrastructure. Moscow has also not hesitated to attack civilian areas across Ukraine, including schools, public transportation, and residential areas—and a nuclear attack would only intensify those attacks. In an address to the United Nations on Wednesday, U.S. President Joe Biden called Russia’s threats “reckless” and pledged to continue its support of Ukraine’s counter-offensive efforts. The world remains on high alert as Russia makes its next moves. While the future of Russia’s war is uncertain, we know one thing: it is far from over. Read more in Business Insider.
Interest Rates Take a Hike (Again)
To cool down the hottest inflation in 40 years, the Federal Reserve boosted interest rates by 0.75 percentage points, making it the fifth hike this year and the third consecutive increase of that size. The new rates will increase borrowing costs for businesses and consumers alike. The Fed’s hike will add an extra $75 of interest for every $10,000 in debt. Another ongoing rate hike will impact mortgage, credit card, and auto loan rates, which are already the highest they have ever been. The stock market and cryptocurrencies are highly impacted by the red-hot market as well. Since the Fed’s announcement, stocks have tumbled, with the Dow Jones Industrial Average losing 0.7% in trading Wednesday afternoon. Traditional forms of currency have become more attainable to investors as yields have increased, making risky assets like cryptocurrencies less appealing. Two major crypto firms have failed, and Bitcoin has fallen from around $68,000 to under $20,000 since the Fed began raising rates at the beginning of the year. While it is still possible for the economy to weaken enough to slow inflation, lowered interest rates do not seem to be on the forecast anytime soon. Read more in CBS News.
Pandemic “Aid” and Welfare Fraud
This week, The U.S. Department of Justice (DOJ) announced that it charged 48 people with running a fraud scheme through anti-hunger programs during the beginning of the pandemic. The defendants are accused of stealing $240 million by billing the government for meals they did not serve to children who do not exist. The DOJ said the Minnesota-based operation created fake receipts, with one defendant claiming he had fed 5,000 children a day out of his apartment. Other defendants are accused of using a random name generator to create a list of fake names of children, while others are charged with using a random number generator to create fake ages for children they claimed to feed. The DOJ says the case is the largest pandemic relief fraud scheme charged to date. The defendants are claimed to have received help from an insider, Aimee Bock, who is the founder of a non-profit group the State of Minnesota relied on as a watchdog to stop fraud at feeding sites. The indictments say Bock exploited her position to bring in nearly 200 new feeding operations she knew were submitting fake or inflated invoices. However, the DOJ’s indictment isn’t the only fraud scheme surfacing. Retired football star Brett Farve was recently accused of receiving $1.1 million from the state of Mississippi’s welfare funds, for motivational speeches he never gave. While Farve has repaid the fees, the state auditor claims he never repaid the $228,000 in interest fees. Farve has not been charged with any crime, but his lawyer has mentioned the Federal Bureau of Investigation has investigated the case. Read more in The New York Times.
Supply Chain Struggles
During the past two years, supply chain disruptions have caused problems for many industries, including dock workers, car factories, and global finance. Nearly three-quarters of global finance executives (72%) reported having “experienced disruptions or delays because of supply chain challenges, pandemic-related impacts, and the effects of inflation in the past year,” a new survey revealed. CFOs are now taking a different approach to their supply chain methods. Nearly half (45%) of the 1,064 global CFOs, vice presidents, directors, and managers of finance surveyed are transitioning to a revenue assurance model, which emphasizes flexibility and resilience rather than efficiency and low costs. Other top approaches include diversifying supply chains to multiple sources or incorporating environmental, social, and governance criteria into more sourcing decisions. Supply chain risk management and risk identification need a unified approach to focus on current and future risks for each organization’s short- and long-term operations. If these changes are not made, governments may step in. The European Commission has created the Single Market Emergency Instrument proposal, which gives the organization the power to regulate industries during crises. The CFO’s eventual adoption of a more reliable and secure supply chain is ideal for the future. Read more in CFO.
Disastrous Storms Hit North America
On opposite sides of the world, Alaska and Puerto Rico were both hit with historic and disastrous storms this week. Alaska was hit by the remnants of Pacific Typhoon Merbok, which brought hurricane-force winds and a 10-foot storm surge. In Puerto Rico, Hurricane Fiona hit the island with up to 30 inches of rain, triggering flooding, mudslides, and destruction. Around 80% of the island was without power early Tuesday, and water service was cut to more than two-thirds of the island. The Dominican Republic was also hit hard, leaving 12,000 residents displaced and more than one million people without running water. The storm is now slamming Turks and Caicos, with the government imposing a curfew and urging people to flee its flood-prone areas. With maximum sustained winds of 125 mph, the storm may strengthen into a Category 4 hurricane as it approaches Bermuda. Recovery efforts for Puerto Rico and Alaska will be challenging as Puerto Rico’s road network was mainly made impassable by flooding and isolated villages in Alaska have no access to roads outside of town. Experts say residents and government officials of Alaska will need to act quickly to repair the damage as winter will freeze up the region. U.S. President Joe Biden issued a disaster proclamation for Puerto Rico and is promising more federal aid to come. To help Alaskans recover, you can donate to the Alaska Community Foundation or the American Red Cross of Alaska. To help Puerto Ricans and others in the Caribbean recover, here is a list of non-profits and mutual funds to support. Read more in The Washington Post.
Amid a pandemic, international protests, and increasing global conflict, Tuesday marked the start of the United Nations General Assembly’s yearly meeting. In his opening address, United Nations Secretary-General Antonio Guterres said, “our world is in peril” and is “gridlocked in colossal global dysfunction.” The meeting kicked off with speeches from global leaders, including U.S. President Joe Biden, who criticized Iran and China for their recent human rights records. The conversation around global conflict did not slow on Wednesday, starting with Russian President Vladimir Putin announcing Russia’s plans to increase mobilized troops and threatening the use of nuclear weapons in Ukraine. In response, President Biden addressed the General Assembly, saying the world’s “blood should run cold” over Russia’s invasion and said Russia is looking to “extinguish Ukraine’s right to exist as a whole.” Ukraine President Volodymyr Zelenskyy spoke virtually at the meeting to address Russia’s atrocities committed against Ukraine’s civilians in grueling detail and urged the United Nations to recognize Russia as “a state sponsor of terrorism.” As the assembly looks to switch gears to discuss other ongoing issues, President Biden has decided to skip all informal climate talks, claiming it has taken “the back burner” to other pressing issues. United Nations General Assembly President Csaba Kőrösi said in his address that while the “world’s complex challenges are great, they are not insurmountable.” Read more in The Associated Press.
- 1 million: The number of people who visited London for The Queen’s funeral. It was one of the largest diplomatic gatherings in decades, with leaders of almost 200 countries and territories flying in to attend.
- $250 million: The cost of a triplex penthouse in New York City’s Central Park Tower. If the estate is sold at that price, it will be the most expensive home sale in U.S. history.
- 1 million: The number of people in Puerto Rico without power after Hurricane Fiona’s heavy rain and life-threatening flooding hit the island.
- 200,000: The number of Nissan Frontiers and Titans facing a recall due to a risk that the vehicles could roll away while parked. The cars created from 2020 through 2023 are affected.
- 300,000: The number of households across southwestern Japan that were left without power after Typhoon Nanmadol made landfall. Close to 10 million people have been advised to seek shelter in sturdy buildings or move to higher ground.
- 1,600: The number of book titles that were banned throughout the 2021-22 school year. At least 50 groups working at local, state, and national levels advocate for books to be removed from school curriculums and library shelves.
- 2 million: The number of migrants that U.S. Customs and Border Protection encountered along the U.S.-Mexico border this fiscal year from across the country. Migration from Venezuela, Nicaragua, and Cuba are driving numbers up.
- 17: The number of people dead from protests in Iran after a 22-year-old woman was arrested and later announced dead by the nation’s morality police. Iran has faced a wave of protests, resulting in civilian and police deaths.
First Salvadoran-American astronaut heading to International Space Station https://t.co/CfW041XAsb
— ABC7 Eyewitness News (@ABC7) September 20, 2022