The $2tr enterprise

The flights between London’s Heathrow Airport and Dubai in the United Arab Emirates have two big money-laundering features: One airport doesn’t scan outbound luggage for cash, and the other welcomes sacks of it. Most airports worldwide don’t scan passenger luggage for cash, which is a costly undertaking in equipment and personnel. Countries where all money is welcome have no obligation to report about suitcases full of cash arriving from abroad. The loopholes allow billions of dollars worth of cash to fly to countries with fewer rules, law-enforcement officials said. Money launderers surreptitiously introduce more than $2tr in proceeds from illegal enterprises to global financial systems every year, according to estimates. International aeroplane passengers likely ferry hundreds of billions of dollars worth of that in cash, according to figures from the United Nations Office on Drugs and Crime and the Financial Action Task Force, an intergovernmental agency that develops anti-money-laundering standards for countries.

(Adapted from “Billions in Dirty Money Flies Under the Radar at World’s Busiest Airports,” by Margot Patrick, published on April 21, 2024, by The Wall Street Journal)

Greenhushing moment

First came the greenwashing movement, with climate and sustainability activists calling out organisations for marketing themselves as environmentally friendly while continuing to engage in damaging practices. Then — in the US, at least — came a political backlash against environmental, social, and governance principles, with officials in West Virginia, Louisiana, Florida, and other states condemning ESG investing. Caught between these competing forces, some companies are engaging in greenhushing — deliberately going quiet on net-zero and other carbon-reducing goals they may previously have touted to their stakeholders and the public. Greenhushing is not new, said MIT Sloan Sustainability Initiative director Jason Jay. Large companies in particular have, at times, felt the need to turn down the volume on their sustainability focus, Jay told the World Economic Forum. “Making claims ratchets up people’s expectations, expectations lead to greater scrutiny, [and] that scrutiny can lead to a kind of ‘gotcha’ phenomenon,” he said.

(Adapted from “What Is ‘Greenhushing’ And Is It Really A Cause For Concern?” by John Letzing, published on November 18, 2022, by the World Economic Forum)

Falling US stock market

The sound of alarm bells is becoming harder to ignore. America’s stock market finished the first quarter of 2024 on an astonishing tear, with its benchmark S&P 500 index having risen in 18 out of the preceding 22 weeks. Things have been more difficult in April, however. Look at individual stocks, and it is clear just how far investors have swung from euphoria to twitchiness. Nvidia had been the poster child of the winning streak. On April 19 it fell by a gut-churning 10pc over the course of a single day, wiping more than $200bn from the company’s market value. The awful news that precipitated the plunge? There wasn’t any. If there is a reason for this attack of the vapours, it is that the prospect of cheaper money is receding into the distance. American consumer prices rose by 3.5pc in the year to March. That is far too high for the Federal Reserve to consider cutting interest rates.

(Adapted from “How Far Could America’s Stockmarket Fall?” by The Economist, published on April 25, 2024)

Surging Immigration

The rich world is in the midst of an unprecedented migration boom. Last year 3.3m more people moved to America than left, almost four times typical levels in the 2010s. Canada took in 1.9m immigrants. Britain welcomed 1.2m people and Australia 740,000. In each country, the number was greater than ever before. For Australia and Canada net migration is more than double pre-Covid levels. In Britain the intake is 3.5 times that of 2019. Big movements of people have big economic consequences. According to the IMF, the foreign-born labour force in America is 9pc higher than at the start of 2019. In Britain, Canada and the Euro zone it is around a fifth higher. America’s immigration surge means that its economy will be 2pc larger over the next decade than had been forecast. The influx of workers also helps explain the country’s strong economic growth.

(Adapted from “Immigration Is Surging, With Big Economic Consequences,” by The Economist, published on April 30, 2024)

Published in Dawn, The Business and Finance Weekly, May 6th, 2024