US Business

FBI Director Christopher Wray said Thursday the agency is investigating several cases in which people sought to fly drones equipped with home-made bombs within the United States.

“We are investigating, even as we speak, several instances within the US of attempts to weaponize drones with homemade IEDs,” Wray told a Senate hearing, referring to improvised explosive devices.

Wray said the threat of widely available drones has risen quickly with rapid technological advances “in terms of their visibility, the speed with which they can move, the distance with which they can move, and also the loads that they can carry.”

“These are extraordinarily sophisticated tools that can carry drugs that can launch weaponry, and we must be able to counter it,” he said. 

Wray, speaking in a hearing on domestic threats by the Senate Homeland Security Committee, did not provide any detail on the armed drone cases.

But the rapid increase in the use of armed unmanned aerial vehicles in the Ukraine war, including cheap hobbyist drones jury-rigged with grenades and mortar shells, has demonstrated how easy they are to make and deploy.

“That is the future that is here now,” Wray said, urging legislation to expand the powers of the FBI and other authorities to counter the security threat of private drones.

Leaving 10 Downing Street was a political hammer blow for Boris Johnson but is doing no harm to his depleted bank balance.

The former prime minister was paid more than $325,000 for just one speech at a US insurance industry event, according to an updated list of British MPs’ register of interests released Thursday.

When he became Britain’s leader in 2019, the former journalist was forced to give up a lucrative round of newspaper articles and after-dinner speeches, and got into more than one financial scrape as prime minister.

Forced out in September, Johnson used his new-found freedom to address the Council of Insurance Agents and Brokers in Colorado Springs on October 14.

The speaking fee organised by the Harry Walker Agency in New York came to £276,130 ($325,150), while Johnson and two members of staff also received transport and accommodation expenses.

Just before Colorado, over October 11-12, Johnson was paid £11,559.84 by Rupert Murdoch to fly to a “business meeting” in Montana, where the media mogul owns a cattle ranch.

The US trip interrupted a post-premiership Caribbean holiday for Johnson.

The register showed that on the way out, he, his wife Carrie and their two small children were given luxury lounge space as guests of Gatwick Airport on October 7.

The London airport did the same for them on their return on October 22, when Johnson rushed back from the Dominican Republic to take part in an unexpected new race for the Conservative leadership after the implosion of Liz Truss’s premiership.

He gave up the bid the next day, and accepted family accommodation until November 11 from Lord Anthony Bamford, a pro-Brexit businessman who also bankrolled Boris and Carrie Johnson’s wedding reception at his country manor house in July.

The ousted prime minister is doing some things for free.

As of October 3, Johnson declared that he is serving in the unpaid role of president of “Conservative Friends of Ukraine”, building on his outspoken support as premier against Russia’s invasion.

There was nothing listed on the new register for Rishi Sunak, who succeeded Truss last month.

Truss declared a donation of £33,265.48 “to cover winding up costs for my leadership campaign” in July and August. She is now freer to earn outside politics.

A British austerity budget hit the pound and gilts on Thursday, with stocks suffering worldwide on the glum economic outlook and the prospect of painfully high interest rates to curb inflation.

Britain unveiled a painful budget with £55 billion ($65 billion) of tax hikes and spending cuts despite confirming its economy was already in recession.

Finance minister Jeremy Hunt said the measures were needed to bring financial stability after recent turmoil in the markets, insisting they would alleviate rather than aggravate the downturn.

But the measures didn’t reassure British markets, with the pound falling and government borrowing costs rising. The drop in the pound helped the multinationals on the blue-chip FTSE 100 index, but the wider FTSE 250 index dominated by British firms fell 1.8 percent. 

CMC Markets analyst Michael Hewson said upheaval in markets in September over the profligate fiscal policies of the previous government had largely subsided, meaning a budget that makes Britain a worse place to do business was no longer necessary.

“Today’s budget should have walked the line between pushing inflation lower, without completely crushing demand in the economy with too many tax rises, and spending cuts,” Hewson said in a note to investors. 

“Initial analysis of today’s package suggests that we’ve got a lot of the former, and not too much of the latter, which is bad news if you’re looking to get businesses to invest,” he added.

The pound was down more than one percent against the dollar and also fell against the euro. 

Traders fear the budget will worsen Britain’s cost-of-living crisis after inflation spiked to a 1981 peak of 11.1 percent, and the government confirmed that the British economy was already in a recession that could last two years.

Wall Street stocks moved lower as investors worried the US Federal Reserve will continue to aggressively raise interest rates to lower rampant inflation, even if it means pushing the economy in recession.

Investors have been reassured by some data suggesting inflationary pressures are diminishing, as well as the overall economy is holding up well, but statements by some Fed policymakers spooked traders. 

“Concerns that the Fed will overtighten and force the U.S. economy into a hard landing were partly behind yesterday’s selling and widening inversion of the yield curve,” said Patrick O’Hare at Briefing.com

“Those concerns remain in place today and have been heightened by remarks made this morning by some voting” members of the Fed’s monetary policymaking committee, he added.

The Fed’s main interest rate is currently at 3.75 to 4.0 percent, but one Fed member said it may need to go as high as 7.0 percent. Another said a contraction in the economy may be needed.

Oil prices fell back on worries about Chinese demand.

“China remains a downside risk for oil in the near term, despite its recent relaxation of certain Covid curbs,” said Craig Erlam at OANDA online trading platform.

“A surge in cases in major cities, mass testing, and restrictions will hit economic activity despite recent measures which will weigh on demand in the world’s second-largest economy,” he added.

– Key figures around 1530 GMT –

New York – Dow: DOWN 0.7 percent at 33,335.18 points

EURO STOXX 50: DOWN 0.1 percent at 3,878.42

London – FTSE 100: DOWN less than 0.1 percent at 7,346.54 (close) 

Paris – CAC 40: DOWN 0.5 percent at 6,576.12 (close)

Frankfurt – DAX: UP 0.2 percent at 14,266.38 (close)

Tokyo – Nikkei 225: DOWN 0.4 percent at 27,930.57 (close)

Hong Kong – Hang Seng Index: DOWN 1.2 percent at 18,045.66 (close)

Shanghai – Composite: DOWN 0.2 percent at 3,115.43 (close)

Pound/dollar: DOWN at $1.1777 from $1.1914 on Wednesday

Euro/dollar: DOWN at $1.0325 from $1.0395

Dollar/yen: UP at 140.62 yen from 139.54 yen

Euro/pound: UP at 87.68 from 87.21 pence

Brent North Sea crude: DOWN 2.7 percent at $90.38 per barrel

West Texas Intermediate: DOWN 4.0 percent at $82.20 per barrel

burs-rl/bp

Britain’s government Thursday unveiled a painful budget with £55 billion ($65 billion) of tax hikes and spending cuts despite confirming the country was in recession.

Finance minister Jeremy Hunt said the measures were needed to bring financial stability and shore up public finances after recent markets turmoil, insisting they would alleviate rather than aggravate the downturn. 

Market were not entirely convinced, however, with sterling trading down more than one percent against the dollar.

A day after official data showed UK inflation rocketing to a 41-year high above 11 percent, Hunt triggered a fresh era of austerity following the calamitous and short-lived tenure of former prime minister Liz Truss.

– ‘UK in recession’ –

Britain’s Office for Budget Responsibility (OBR) judged “that the UK, like other countries, is now in recession”, Chancellor of the Exchequer Hunt told parliament Thursday.

Despite the downturn, Hunt and Prime Minister Rishi Sunak insist tough action is needed after Truss unleashed a package of unfunded tax cuts that caused panic on financial markets.

The pound had hit a record-low close to parity against the dollar in late September after Truss failed to reveal the impact of her tax cuts on growth and inflation.

Her budget also triggered temporary purchases of UK government bonds by the Bank of England (BoE) to stabilise the market.

Pantheon Macroeconomics analyst Samuel Tombs warned the budget risked “amplifying the recession already underway”, while other experts said the pound’s slide Thursday was owing to the bleak economic outlook.

Hunt said the UK economy was set to shrink 1.4 percent next year.

The BoE, which is raising interest rates to combat sky-high inflation, has warned the UK economy may experience a record-long recession until mid-2024.

Despite this, Hunt confirmed tax rises for workers alongside spending cutbacks.

He pledged, however, to increased outlay on the cherished National Health Service amid a severe backlog in patient operations.

The chancellor added that benefits for the unemployed and pensioners would increase close to the inflation rate, and the minimum wage would climb.

At the same time, the government prolonged a freeze on its international aid budget introduced during the coronavirus pandemic in a move condemned by charities.

Hunt also ramped up a windfall tax on oil and gas giants, whose profits have surged on fallout from the Ukraine war, to help fund support for consumers hit by rocketing energy bills.

Energy giants such as BP and Shell will face an exceptional tax on profits of 35 percent, up from 25 percent, lasting an additional three years to 2028.

The government will also impose a new temporary levy on electricity generation companies.

The conflict in Ukraine has helped push worldwide inflation to its highest levels in decades. Prices are also up on supply constraints fuelled by Covid.

Britain’s economy is additionally being impacted by Brexit, the OBR said a day after similar comments by BoE governor Andrew Bailey.

– Scrooge –

Hunt at the weekend likened himself to the penny-pinching miser Ebenezer Scrooge in Charles Dickens’ festive favourite “A Christmas Carol”, but argued his plan would “make sure Christmas is never cancelled”.

He told MPs on Thursday: “In the face of unprecedented global headwinds, families, pensioners, businesses, teachers, nurses and many others are worried about the future.

“So today we deliver a plan to tackle the cost-of-living crisis and rebuild our economy.”

It comes as UK workers across various sectors have gone on strike this year to demand pay rises to compensate for surging inflation.

State-employed nurses and firefighters could be the latest groups to carry out industrial action, joining further walkouts this winter by rail workers and postal staff.

Rachel Reeves, economy spokeswoman for the main opposition Labour party, slammed the budget.

“The Conservatives have crashed our economy, given up on growth and sent inflation through the roof.

“As usual, it is ordinary working people who are paying the price,” she added.

The government added that a cap on average annual household fuel bills would rise by a fifth to £3,000.

President Nayib Bukele of El Salvador, the first country to make bitcoin legal tender, said Thursday the nation would buy one unit of the currency every day, doubling down in the face of public criticism of his embrace of the crypto money. 

“We are buying one #Bitcoin every day starting tomorrow,” the president tweeted. 

Bitcoin traded at about $16,500 per unit on Thursday, down from $45,000 in September 2021 when El Salvador adopted the cryptocurrency, and some $68,000 two months later — its highest historic value. 

Bukele’s idea was to give more Salvadorans access to banking services and to promote crypto money transfers from some three million expats, mainly in the United States, to relatives back home.  

Remittances make up more than a quarter of El Salvador’s gross domestic product.  

But according to data from the Salvadoran Central Bank a year after the introduction of bitcoin, “less than two percent” of remittances were made using the cryptocurrency. 

The measure has been questioned by International Monetary Fund and World Bank due, among other things, to the currency’s notorious volatility. 

Taking advantage of the plummeting prices, Bukele bought 80 bitcoin with public funds for $19,000 each in July, bringing the Central American country’s total reserves to 2,381 units. 

But an opinion poll last month showed more than three-quarters of Salvadorans thought Bukele’s adoption of the coin was a “failure,” and fewer than a quarter used it.

The study, conducted by the University of Central America, found that nearly 80 percent of Salvadorans believe their president “should not continue to spend public money to buy bitcoin.”  

On Wednesday, El Salvador’s ambassador in Washington Milena Mayorga, a Bitcoin promotor, told state TV Canal 10 its use “is a process, first we have to get to know it, education is the key.” 

Collapsed cryptocurrency exchange FTX suffered a “complete failure of corporate controls” under founder Sam Bankman-Fried, the company’s new chief executive said Thursday, calling the situation “unprecedented.”

The scathing condemnation came in a filing in US bankruptcy court from John J. Ray — an executive with 40 years of experience in corporate restructurings including the infamous implosion of Enron in 2001.

Ray lambasted the failures of oversight, incomplete records, missing and unreliable financial statements and “potentially compromised” leadership at FTX, which declared bankruptcy last week — a stunning downfall for a firm recently valued at $32 billion.

“Never in my career have I seen such a complete failure of corporate controls and such a complete absence of trustworthy financial information as occurred here,” Ray said in the filing. 

“From compromised systems integrity and faulty regulatory oversight abroad, to the concentration of control in the hands of a very small group of inexperienced, unsophisticated and potentially compromised individuals, this situation is unprecedented,” he said.

The downfall of FTX came amid growing doubts over its financial stability, with attention focused on the relationship between the exchange and Alameda Research, a trading house also owned by Bankman-Fried, and reports he shifted funds out of the exchange, even as he tried to fill a $7 billion financing gap.

Binance, the world’s biggest cryptocurrency platform, backed out of a buyout deal that could have stemmed the fall amid reports about mismanagement of client funds and potential investigations by regulators.

US officials are now calling for more oversight of the industry, and Congress plans to hold hearings to investigate.

Ray said he has “substantial concerns” about the reliability of financial statements and related entities, and noted that there were “at least $372 million of unauthorized transfers.”

Executives at the firm — many of whom Ray said “were not aware of the shortfalls or potential commingling of digital assets” –“have located and secured only a fraction of the digital assets of the FTX Group that they hope to recover.”

The implosion was a spectacular reversal of fortune for the founder and one-time cryptocurrency wunderkind Bankman-Fried.

Ray slammed the former CEO saying he “often communicated by using applications that were set to auto-delete,” and making clear he no longer speaks for FTX notwithstanding his frequent public declarations.

Bankman-Fried “continues to make erratic and misleading public statements,” Ray said, pointing to comments published by Vox on Thursday in which the disgraced executive said he regretted filing for bankruptcy.

“F*** regulators they make everything worse,” Bankman-Fried said in a direct message on Twitter to the Vox reporter.

He later tweeted that he was “venting” and his comments were meant to remain private.