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‘I thought crypto exchanges were safe’: The lesson for everyone in FTX’s collapse

STOCK PHOTO | Image by André François McKenzie from Unsplash

Anthony* (a friend) called a few weeks ago, deeply worried.

A deputy principal of a high school in Queensland, over the past year he spent hundreds of thousands of dollars buying cryptocurrencies, borrowing money using his home as equity.

But now all his assets, valued at A$600,000, were stuck in an account he couldn’t access.

He’d bought through FTX, the world’s third-biggest cryptocurrency exchange, endorsed by celebrities such as Seinfeld co-creator Larry David, basketball champions Steph Curry and Shaquille O’Neal, and tennis ace Naomi Osaka.

With FTX’s spectacular collapse, he’s now awaiting the outcome of the liquidation process that is likely to see him, 30,000 other Australians and more than 1.2 million customers worldwide lose everything.

“I thought these exchanges were safe,” Anthony said.

He was wrong.

Cryptocurrency exchanges are sometimes described as being like stock exchanges. But they are very different to the likes of the London or New York stock exchanges, institutions that have weathered multiple financial crises.

Stock exchanges are both highly regulated and help regulate share trading. Cryptocurrency exchanges, on the other hand, are virtually unregulated and serve no regulatory function.

They’re just private businesses that make money by helping “mum and dad” investors to get into crypto trading, profiting from the commission charged on each transaction.

Indeed, the crypto exchanges that have grown to dominate the market — such as Binance, Coinbase, and FTX — arguably undermine the whole vision that drove the creation of Bitcoin and blockchains — because they centralize control in a system meant to decentralize and liberate finance from the power of governments, banks, and other intermediaries.

These centralized exchanges are not needed to trade cryptocurrency, and are pretty much the least safe way to buy and hold crypto assets.

In the early days of Bitcoin (all the way back in 2008) the only way to acquire it was to “mine” it — earning new coins by performing the complex computations required to verify and record transactions on a digital ledger (called a blockchain).

The coins would be stored in a digital “wallet,” an application similar to a private bank account, accessible only by a password or “private key.”

A wallet can be virtual or physical, on a small portable device similar in appearance to a USB stick or small phone. Physical wallets are the safest because they can be unplugged from the internet when not being used, minimizing the risk of being hacked.

Before exchanges emerged, trading involved owners selling directly to buyers via online forums, transferring coins from one wallet to another like any electronic funds transfer.

All this, however, required some technical knowledge.

Cryptocurrency exchanges reduced the need for such knowledge. They made it easy for less tech-savvy investors to get into the market, in the same way web browsers have made it easy to navigate the internet.

Two types of exchanges emerged: decentralized (DEX) and centralized (CEX).

Decentralized exchanges are essentially online platforms to connect the orders of buyers and sellers of cryptocurrencies. They are just there to facilitate trading. You still need to hold cryptocurrencies in your own wallet (known as “self-custody”).

Centralized exchanges go much further, eliminating wallets by offering a one-stop shop service. They aren’t just an intermediary between buyers and sellers. Rather than self-custody, they act as custodian, holding cryptocurrency on customers’ behalf.

Centralized exchanges have proven most popular. Seven of the world’s 10 biggest crypto exchanges by trading volume are centralized.

But what customers gain in simplicity they lose in control.

You don’t give your money to a stock exchange, for example. You trade through a broker, who uses your trading account when you buy and deposits money back into your account when you sell.

A CEX, on the other hand, acts as an exchange, a brokerage (taking customers’ fiat money and converting it into crypto or vice versa), and as a bank (holding customer’s crypto assets as custodian).

This is why FTX was holding cash and crypto assets worth US$10-50 billion. It also acted like a bank by borrowing and lending cryptocurrencies — though without customers’ knowledge or agreement, and without any of the regulatory accountability imposed on banks.

Holding both wallets and keys, founder-owner Sam Bankman-Fried “borrowed” his customers’ funds to prop up his other businesses. Customers realized too late they had little control. When it ran into trouble, FTX simply stopped letting customers withdraw their assets.

Like stockbrokers, crypto exchanges make their money by charging a commission on every trade. They are therefore motivated to increase trading volumes.

FTX did this most through celebrity and sports marketing. Since it was founded in 2019 it has spent an estimated US$375 million on advertising and endorsements, including buying the naming rights to the stadium used by the Miami Heat basketball team.

Such marketing has helped to create the illusion that FTX and other exchanges were as safe as mainstream institutions. Without such marketing, it’s debatable the value of the cryptocurrency market would have risen from US$10 billion in 2014 to US$876 billion in 2022.

There’s an adage among crypto investors: “Not your key, not your coins, it’s that simple.”

What this means is that your crypto isn’t safe unless you have self-custody, storing your own coins in your own wallet to which you alone control the private key.

The bottom line: crypto exchanges are not like stock exchanges, and CEXs are not safe. If the worst eventuates, whether it be an exchange collapse or cyber-attack, you risk losing everything.

All investments carry risks, and the unregulated crypto market carries more risk than most. So, follow three golden rules.

First, do some homework. Understand the process of trading crypto. Learn how to use a self-custody wallet. Until governments regulate crypto markets, especially exchanges, you’re largely on your own.

Second, if you’re going to use an exchange, a DEX is more secure. There is no evidence to date that any DEX has been hacked.

Lastly, in this world of volatility, only risk what you can afford to lose.

THE CONVERSATION VIA REUTERS CONNECT

* Name has been changed.

 

Paul Mazzola is a lecturer on Banking and Finance, in the Faculty of Business and Law, University of Wollongong, Australia. Mitchell Goroch is a cryptocurrency trader and researcher at the University of Wollongong.

Ukraine steps up diplomacy amid fighting, power outages

REUTERS

KYIV — The United States is prioritizing efforts to boost Ukraine’s air defenses, President Joseph R. Biden told his Ukrainian counterpart on Sunday, as President Volodymyr Zelensky stepped up efforts to secure international assistance over the Russian invasion that is dragging into a 10th month.

Heavy fighting in the country’s east and south continued unabated, while drone and missile strikes on key power infrastructure, notably in the Black Sea port city of Odesa, kept many Ukrainians in the cold and dark.

There are no peace talks and no end in sight to the deadliest conflict in Europe since World War II, which Moscow describes as a “special military operation” and Ukraine and its allies call an unprovoked act of aggression.

“We are constantly working with partners,” Mr. Zelensky said after talking to Mr. Biden and the leaders of France and Turkey, adding that he expects some “important results” next week from a series of international events that will tackle the situation in Ukraine.

German Chancellor Olaf Scholz will hold on Monday an online meeting with G7 leaders and the European Union foreign ministers will to try to agree on further sanctions on Russia and Iran and on additional aid or arms deliveries to Ukraine.

While Mr. Zelensky has held numerous talks with Mr. Biden, French President Emmanuel Macron and Turkish President Tayyip Erdogan since Russian forces invaded in late February, the accumulation of discussions in just one day is not a regular event.

Mr. Zelensky said he had thanked Mr. Biden for “unprecedented defense and financial” help the United States has provided and talked with the US president about Ukraine’s need for effective anti-aircraft defence systems to protect the population.

Mr. Biden “reaffirmed the US commitment to continue providing Ukraine with security, economic, and humanitarian assistance, holding Russia accountable for its war crimes and atrocities, and imposing costs on Russia for its aggression,” the White House said.

US Treasury Secretary Janet Yellen told CBS’s 60 Minutes Washington’s support for Ukraine’s military and economy — more than $50 billion and counting — would continue “for as long as it takes” and reiterated that ending the war was the single best thing the United States could do for the global economy.

TURKEY TALKS
Earlier, Mr. Zelensky said he held “a very meaningful” conversation with Mr. Macron on “defense, energy, economy, diplomacy” that lasted more than an hour and “very specific” talks with Erdogan on assuring Ukraine’s grain exports.

Turkey, which acted as a mediator in peace talks in the early months of the war, also worked alongside the United Nations in a grain deal, which opened up Ukrainian ports for exports in July after a six-month de facto Russian blockade.

Mr. Erdogan’s office said the Turkish leader had a call with Russian President Vladimir Putin on Sunday, in which he had called for a quick end to the conflict.

Mr. Putin said last week that Moscow’s near-total loss of trust in the West would make an eventual settlement over Ukraine much harder to reach and warned of a protracted war.

Moscow shows no signs of being ready to respect Ukraine’s sovereignty and pre-war borders, saying the four regions it claims to have annexed from Ukraine in September are part of Russia “forever.” The government in Kyiv has ruled out conceding any land to Russia in return for peace.

HEAVY FIGHTING
On the ground in Ukraine, the entire eastern front line has been continuously shelled with heavy fighting taking place.

Russian forces continued with attempts to break through Ukrainian defenses, training tank and artillery fire on 26 settlements near Avdiivka and Bakhmut, the General Staff of the Ukrainian Armed Forces said in a Sunday evening update.

Serhiy Gaidai, the exiled governor of the Russian-occupied Luhansk region, told Ukrainian television local forces had attacked a hotel in the town of Kadiivka where members of Russia’s private Wagner military group were based, killing many of them.

Photos posted on Telegram channels showed a building largely reduced to rubble.

“They had a little pop there, just where Wagner headquarters was located,” he said. “A huge number of those who were there died.”

The claims could not be verified by Reuters and Russia’s defense ministry was not immediately available for comment.

Moscow is also targeting Ukraine’s energy infrastructure with waves of missile and drone strikes, at times cutting off electricity for millions of civilians in winter, when temperatures often fall below zero Celsius.

Russian forces used Iranian-made drones to hit two energy plants in the Black Sea port of Odesa on Saturday, knocking out power to about 1.5 million people — virtually all non-critical infrastructure in and around the port.

Mr. Zelensky said other areas experiencing “very difficult” conditions with power supplies included the capital Kyiv and Kyiv region and four regions in western Ukraine and Dnipropetrovsk region in the centre of the country. — Reuters

Investors eye golden visas as Portugal considers program’s end

Augusta street is pictured during partial lockdown as part of state of emergency to combat the coronavirus disease (COVID-19) outbreak in Lisbon, Portugal March 30, 2020. — REUTERS/RAFAEL MARCHANTE/FILE PHOTO

LISBON — Investments through Portugal’s “golden visa,” which gives wealthy foreigners residence rights, jumped nearly 50% last month, data showed on Sunday, as the government considers whether to scrap the controversial scheme.

The golden visa has been heavily criticized at home for sending house prices and rents up, and the European Commission has called for the end of such national programs.

In Portugal, it has attracted 6.6 billion euros ($6.95 billion) in investment over the past decade, mainly from China, Brazil and Turkey, with the bulk of the money going into real estate.

To apply, non-EU nationals must make a significant investment in Portugal, such as buying real estate. They are then given residency rights and are allowed visa-free travel throughout Europe’s Schengen area.

But Prime Minister Antonio Costa said on Nov. 2 his government was going to evaluate the 10-year-old scheme, questioning whether the program could still be justified.

Murat Coskun, Get Golden Visa CEO, said Mr. Costa’s comments had had a “significant impact on the appetite” for the measure, with his company seeing a five-fold increase in inquiries.

Data from border agency SEF on Sunday showed investment through golden visas increased 48% in November from October to 65 million euros, and was up 41% from a year earlier.

Vasco Silva, the CEO of Kleya, which helps foreigners move to Portugal, said his company had received many queries about what was going on, adding that some investors had rushed their decision just in case the program was altered or binned.

“If there is no residence by investment program, (investors) will simply ignore the country,” Mr. Silva warned, arguing the more than 10,000 visas issued since 2012 had put Portugal “on the map”.

The Portuguese branch of anti-corruption group Transparency International (TI) has said the program could be used for money laundering, while the European Commission has said it considers such schemes a potential security risk.

Mr. Silva said that was not the case because those involved in the process, from banks to lawyers, had to comply with “very strict rules”.

“We are not allowing entrance to criminals or money for which we do not know the source,” Mr. Silva said. “Exceptions can happen but it will be one in 10,000 or two in 10,000 and of course those are the ones that go public.”

Britain scrapped golden visas in February following the Russian invasion of Ukraine amid concerns about the inflow of illicit Russian money. Portugal suspended golden visas for Russians, but 431 had already benefited from the scheme since the time of its launch, according to SEF. — Reuters

Canada prepares to expand assisted death amid debate

A PERSON stands in front of a Canadian flag in Montreal, Quebec, Canada, Sept. 20, 2022. — REUTERS

TORONTO — Canada is preparing to expand its medically assisted death framework to become one of the broadest in the world, a change some want to delay due to concerns vulnerable people have easier access to death than to a life without suffering.

Starting in March, people whose sole underlying condition is mental illness will be able to access assisted death. Mental illness was excluded when the most recent medical assistance in dying (MAiD) law was passed in 2021.

That will make Canada one of six countries in the world where a person suffering from mental illness alone who is not near their natural death can get a doctor to help them die.

People will still need to apply and be deemed eligible by two clinicians who must determine whether they have an irremediable condition causing them intolerable suffering and whether they have capacity – whether they understand and appreciate their condition, the decision and its consequences.

“Tired-of-life cases in Canada are happening,” said Madeline Li, a cancer psychiatrist specializing in palliative care who put together an assisted death framework for her Toronto hospital network.

“I’ve become very comfortable with MAiD for people who are dying. I am less comfortable for expanding indications. … We’ve made MAiD so open you can request it for basically any reason.”

More than 30,000 Canadians have died with medical assistance since it became legal in 2016 — more than 10,000 of them in 2021, accounting for 3.3% of Canadian deaths that year, according to official data. The vast majority were deemed close to their “natural” death. Last year 4.5% of deaths in the Netherlands and 2.4% of deaths in Belgium were medically assisted.

Clinicians and experts are working on a model MAiD standard of care for mental illness for groups regulating clinicians.

But some are calling for the expansion to be delayed; others say the existing system is flawed because people suffering for lack of treatment or supports may access assisted death.

Some individuals have come forward in local news reports saying they are seeking assisted death because they lack appropriate housing or other supports.

The federal agency serving veterans says at least one employee suggested assisted death unprompted to at least four veterans between 2019 and 2022. It is investigating another such allegation, a spokesperson said in an email, adding advice on assisted death is not a department service. Some have pointed to this as an example of system misuse.

Some psychiatrists opposed to the expansion say it is impossible to determine whether a mental illness is “irremediable.”

A spokesperson for Health Minister Jean-Yves Duclos said the government is working with its counterparts to ensure “a strong framework is in place” when assisted death becomes available for mental illness.

A delay would mean “people who are currently suffering intolerably … would have to continue suffering,” said Toronto doctor Justine Dembo, who assesses patients for assisted death and was on an expert panel on the topic.

Dembo expects shortages of assessors and providers due to the stigma and demand attached to the job.

Jocelyn Downie, who is part of the group establishing practice standards, said while some people suffering intolerably might suffer less if they had timely access to treatment or supports, denying them assisted death does not solve the problem: It just means they keep suffering.

L.P., who suffers from anorexia and asked to be identified by her initials, hopes to access assisted death when it is available. Without it, she said, she will keep suffering until the illness or suicide kills her.

“This would just be more dignified.” — Reuters

[B-SIDE Podcast] PWDs and the rise of remote work

Follow us on Spotify BusinessWorld B-Side

Persons with disabilities (PWDs) benefited from the rise of remote work over the pandemic, according to ATRIEV (Adaptive Technology for Rehabilitation, Integration and Empowerment of the Visually Impaired), an organization that helps PWDs find tech-oriented jobs. 

In this B-Side episode, BusinessWorld reporter Justine Irish D. Tabile talks to ATRIEV executive director Antonio D. Llanes, Jr., and ATRIEV chief of operations Carolina C. Catacutan-Sam about the impact of online jobs on the stigma faced by PWDs in the job market.  

“Persons with disabilities are not asking for special treatment, what we want is accommodation that is reasonable,” said Ms. Catacutan-Sam, who is totally blind. 

TAKEAWAYS 

Technology is an equalizer. 

“During the level of recruitment and going through the hiring processes, we are already looked down upon. They don’t see our potentials; they just look at our disabilities and not our abilities,” said Mr. Llanes. 

Pandemic-induced lockdowns and the subsequent boom in work-from-home setups were beneficial to PWDs, who used to have to contend with the lack of accessible transportation. 

“Going to a job or to an office is hard for people with disabilities,” he said. “If it is online, it would be a lesser problem, except for the accessibility of the platform that they are using to do the job.”  

“Now that we have jobs online … it’s an equalizing factor,” added Ms. Catacutan-Sam. “It’s really something that the government and private institutions may very well look into. If they can offer online jobs to persons with disabilities, it would really be a great help for us.” 

‘We can do what most people can do—but in a different way.’

“What we request is the opportunity to be ourselves and the right to be different. We are persons, first and foremost. And the disability—it’s just a condition. And because of that disability, we can do what most people can do—but in a different way,” said Ms. Catacutan-Sam.

 

Recorded remotely in November 2022. Produced by Joseph Emmanuel L. Garcia and Sam L. Marcelo.

Pag-IBIG posts record-high P38.06-B net income in Jan.-Oct. 2022; up 39%

Pag-IBIG Fund netted a record-high income of P38.06 billion from January to October 2022, the agency’s top executives announced on Dec. 12.

“I am happy to report that Pag-IBIG Fund continues its strong performance this year. Our P38.06 billion net income in just the first ten months of the year has already surpassed the P34.73 billion we posted in all of 2021. Our performance shows how excellently we are managing the funds that our members have saved with us. This places us in a strong position to continue providing social services and help more Filipinos gain better lives, in line with the directive of President Ferdinand Marcos, Jr.,” said Secretary Jose Rizalino L. Acuzar of the Department of Human Settlements and Urban Development (DHSUD), who serves as chairperson of the 11-member Pag-IBIG Fund Board of Trustees.

Pag-IBIG Fund Chief Executive Officer Marilene C. Acosta, meanwhile, stated that the agency’s total assets have now reached P810.07 billion, gaining nearly 10% or P65.49 billion from the yearend 2021 level. She added that even with still two months left before the year ends, the agency’s accomplishments as of October already show that it shall have its best-performing year yet.

“We thank our members and stakeholders for their unwavering trust and support, which has allowed us to gain another banner year. From our accredited developers in building and delivering quality housing projects and accounts, to the business community for the timely remittance of their employees’ monthly savings and loan payments, to our members who continue to save more with us and choose our loan programs, and to our borrowers for their prompt payment on their loans. The sum of all these parts is a stronger-than-ever Pag-IBIG. We count on their continued support so that we can maintain our remarkable growth and help even more Filipino workers uplift their lives through savings and by gaining homes of their own,” Acosta said.

 

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China’s rules for ‘deepfakes’ to take effect from Jan. 10

PIXABAY

SHANGHAI — China’s new rules for content providers that alter facial and voice data will take effect from Jan. 10, its cyberspace regulator said, as it looks to more tightly scrutinize so-called “deepfake” technology and services.

The regulations from the Cyberspace Administration of China (CAC) issued late on Sunday provide for people to be protected from being impersonated without their consent by deepfakes — images that are virtually indistinguishable from the original, and easily used for manipulation or misinformation. 

The CAC said the move was aimed at curbing risks that might arise from activities provided by such platforms that use deep learning or virtual reality to alter any online content, what the regulator calls “deep synthesis service providers,” and to also promote the industry’s healthy development. — Reuters

 

US inflation will be much lower by end of 2023 — Yellen

US one hundred dollar notes are seen in this picture illustration taken in Seoul, Feb. 7, 2011. — REUTERS

US Treasury Secretary Janet Yellen on Sunday forecast a substantial reduction in US inflation in 2023, barring an unexpected shock.

“I believe by the end of next year you will see much lower inflation if there’s not … an unanticipated shock,” she told CBS’ 60 Minutes in an interview released Sunday. 

Asked about the likelihood of recession, the former Federal Reserve chair said, “There’s a risk of a recession. But … it certainly isn’t, in my view, something that is necessary to bring inflation down.” 

Ms. Yellen’s comment came days before the Fed is expected to slow the aggressive pace of interest rate increases it has pursued this year. Fed Chair Jerome Powell has telegraphed a smaller, half-of-a-percentage point increase in the policy rate, to a range of 4.25%–4.5%, after four 75-basis point hikes this year. 

Ms. Yellen told CBS that economic growth was slowing substantially, inflation was easing and she remained hopeful that the labor market would remain healthy. 

She said she hoped the spike in inflation seen this year would be short-lived, and said the US government had learned “a lotta lessons” about the need to curtail inflation after high prices seen in the 1970s. 

Shipping costs had come down and long delivery lags had eased, while gasoline prices at the pump were “way down.” 

“I think we’ll see a substantial reduction in inflation in the year ahead,” she said. — Reuters

 

Waning trust: China shadow banks pivot away from property to survive

REUTERS

SHANGHAI/HONG KONG — For more than a decade, Chinese developers’ debt-fueled construction boom enriched the country’s shadow banks, who were eager to capitalize on the needs of an industry desperate for credit and too risky for traditional lenders.

Now, in the wake of a government clampdown on real estate firms’ debt binge, that credit demand has collapsed — and so too has the single biggest revenue stream for shadow banks, also known as trust firms. 

China’s shadow banking industry — worth about $3 trillion, roughly the size of Britain’s economy — is scrambling for new business, including direct investment in companies, family offices, and asset management. 

It is also shrinking, with once-well-paid employees leaving for other jobs after scavenging for new deals. The industry’s plight is a sharp contrast to China’s main street financial firms, which the crisis has not yet seriously affected. 

“Everyone was eating a mouthful of rice, surviving another day,” said Jason Hao, who left his job this year at a Shanghai trust firm after his pay plunged from as much as 4 million yuan ($570,000) a year to about 240,000 yuan ($34,000). 

He is now working at an asset management company. 

Data from industry-tracking website Yanglee.com shows 1,483 real estate-related trust products were sold in 2022 through the end of September, down 69.7% from 4,891 during the same period last year. 

The value of the 2022 deals was 117.2 billion yuan, down 77.9% from 531.3 billion yuan. Real estate products accounted for 8.7% of all trust products in September, compared with about 30% in the same month the last two years. 

The National Audit Office and China’s banking regulator have both been reviewing trust firm accounts and deals this year for risk, said three people with knowledge of the matter. 

The National Audit Office and the CBIRC did not respond to requests for comment. 

In an internal meeting in October, an executive at Shanghai Trust, a state-owned firm that once focused on property, said revenue was down by almost half this year compared with the year before, according to two people with direct knowledge of the meeting. 

The firm plans to focus on asset management and family offices to shore up its finances while pivoting away from lending to developers, once its core business, one of the people said. 

Shanghai Trust did not respond to requests for comment. 

The top priority for all trust companies now is “how to transition, what will let you survive,” said another trust firm employee, who like the other current employees interviewed for this article declined to be named because of the sensitivity of the matter. 

CONTAGION RISK 

Trust firms were dubbed “shadow banks” because of how they operated outside many of the rules that govern commercial banks. Banks in China sell wealth management products, the proceeds of which are channeled by trust firms to property developers and other sectors that are unable to tap bank funding directly. 

Because of the risk, shadow banks could charge interest rates of up to 18%, far higher than the typical 2% to 6% seen at banks at the height of the boom. 

Concerns about outsized exposure to property developers have grown this year as the embattled sector in the world’s second-largest economy has slowed rapidly. 

Beijing has stepped up support in recent weeks to undo a liquidity squeeze that has stifled the real estate market, which makes up a quarter of the Chinese economy and has been a key driver of growth. 

OUT OF OPTIONS 

At the trust unit of state-owned China Construction Bank (CCB) and Zhongrong International Trust, previously one of China’s largest shadow bankers, investing like private equity and venture capital funds has become more common, two people with direct knowledge of the companies said. 

CCB Trust wants to invest in leading companies in niche fields; it recently invested in Beijing Tianyishangjia New Material Corp, which manufactures materials used in train brakes, said one person who works at the company. 

Zhongrong International Trust has been working with local governments, including Qingdao provincial authorities, to source early-stage deals in intelligent manufacturing, an executive there said. 

Jiangxi-based Avic Trust has been investing in waste-processing firms, including funding photovoltaic power stations that it then rents out, said a person with direct knowledge. 

CCB Trust, Zhongrong International Trust and Avic Trust did not respond to requests for comment. 

In some cases, trust firms are buying projects from struggling developers and hiring new managers to recoup their losses, according to corporate records and three people in trust firms who are aware of such acquisitions. 

Ping An Trust, Zhongrong International Trust, Everbright Xinglong Trust, and Minmetals International Trust have all bought project companies from struggling developers in the last few months, corporate records and company announcements showed. 

Ping An Trust, Zhongrong International Trust, Everbright Xinglong Trust and Minmetals International Trust did not respond to requests for comment. 

For Mr. Hao and other former trust employees, the companies’ search for stability feels familiar. 

“My situation now is better than it was when I left the trust, but will never be as good as it was at the height of the boom when I was there,” Mr. Hao said. — Reuters

 

NASA’s Orion capsule returns to Earth, capping Artemis I flight around moon

On Nov. 28, NASA’s Orion spacecraft reached its maximum distance from Earth during the Artemis I mission—268,563 miles away from our home planet, farther than any spacecraft designed to send humans to space and back has gone before. In this image, Orion captures a unique view of Earth and the Moon, seen from a camera mounted on one of the spacecraft’s solar arrays. — NASA

NASA’s Orion capsule barreled through Earth’s atmosphere and splashed down in the Pacific ocean on Sunday after making an uncrewed voyage around the moon, winding up the inaugural mission of the US agency’s new Artemis lunar program 50 years to the day after Apollo’s final moon landing.

The gumdrop-shaped Orion capsule, carrying a simulated crew of three mannequins wired with sensors, plunked down in the ocean at 9:40 a.m. PST (1740 GMT) off Mexico’s Baja California peninsula, demonstrating a high-stakes homecoming before NASA flies its first crew of Artemis astronauts around the moon in the next few years.

“This was a challenging mission, and this is what mission success looks like,” NASA’s Artemis I mission manager Mike Sarafin told reporters after splashdown, adding that his team didn’t immediately notice any issues with Orion’s return from space.

A US military helicopter and a group of fast boats approached the capsule after splashdown for about five hours of inspections before Orion is hoisted aboard a US Naval vessel for a trip to San Diego, California.

The splashdown capped a 25-day mission less than a week after passing about 79 miles (127 km) above the moon in a lunar fly-by, and came about two weeks after reaching its farthest point in space, nearly 270,000 miles (434,500 km) from Earth.

Roughly 30 minutes before splashing down, the capsule committed to a fiery, 20-minute plunge into Earth’s atmosphere when it shedded its service module in space, exposing a heatshield that reached peak temperatures of nearly 5,000 degrees Fahrenheit (2,760 degrees Celsius) during its blazing-fast descent.

Atmospheric friction slowed the capsule from 24,500 miles per hour (39,400 kph) to 325 mph, followed by two sets of parachutes that helped brake its speed to an expected 20 mph at splashdown. The capsule showed a “perfect” descent rate, Navias said.

The capsule blasted off on Nov. 16 from the Kennedy Space Center at Cape Canaveral, Florida, atop NASA’s towering next-generation Space Launch System (SLS), now the world’s most powerful rocket and the biggest NASA has built since the Saturn V of the Apollo era.

The debut SLS-Orion voyage kicked off Apollo’s successor program, Artemis, aimed at returning astronauts to the lunar surface this decade and establishing a sustainable base there as a stepping stone to future human exploration of Mars.

Mission engineers will spend months examining data from the Artemis I mission. A crewed Artemis II flight around the moon and back could come as early as 2024, followed within a few more years by the program’s first lunar landing of astronauts, one of them a woman, with Artemis III.

NASA expects to name its crew of astronauts for the Artemis II mission in early 2023, NASA’s Johnson Space Center director Vanessa Wyche told reporters.

Though Orion encountered some unexpected communication blackouts and an electrical issue during its voyage around the moon, NASA has given high marks to the performance of both SLS and Orion so far, boasting that they exceeded the US space agency’s expectations.

“This has been an extraordinarily successful mission,” NASA administrator Bill Nelson told reporters.

By coincidence, the return to Earth of Artemis I unfolded on the 50th anniversary of the Apollo 17 moon landing of Gene Cernan and Harrison Schmitt on Dec. 11, 1972. They were the last of 12 NASA astronauts to walk on the moon during a total of six Apollo missions starting in 1969.

The Artemis program, named after the twin sister of Apollo, marks a major turning point for NASA, redirecting its human spaceflight program beyond low-Earth orbit after decades focused on space shuttles and the ISS.

NASA considered re-entry the single most critical phase of Orion’s journey, testing whether its newly designed heat shield can withstand atmospheric friction and safely protect astronauts that would be on board.

“It is our priority-one objective,” Mr. Sarafin said at a briefing last week. “There is no arc-jet or aerothermal facility here on Earth capable of replicating hypersonic re-entry with a heat shield of this size.”

NASA officials have stressed the experimental nature of the Artemis I mission, marking the first launch of the Boeing Co-built SLS and the first combined with Orion, which previously flew a brief two-orbit test launched on a smaller Delta IV rocket in 2014. The capsule was built by Lockheed Martin.

Compared with Apollo, born of the Cold War-era US-Soviet space race, Artemis is more science driven and broad-based, enlisting other countries and commercial partners such as Elon Musk’s SpaceX and the space agencies of Europe, Canada, and Japan.

Orion’s European Space Agency-supplied service module, a housing for its propulsion system that was jettisoned before the capsule’s descent into Earth’s atmosphere, “performed beautifully,” ESA’s mission manager Philippe Deloo said in a statement.

“This is a great day not only for America, but it’s a great day for all of our international partners — that’s the difference from 50 years ago,” Mr. Nelson said. — Reuters

Air India nears historic order for up to 500 jets — sources

Air India Boeing 787-8 Dreamliner. — WIKIMEDIA COMMONS

PARIS/NEW DELHI — Air India is close to placing landmark orders for as many as 500 jetliners worth tens of billions of dollars from both Airbus and Boeing as it carves out an ambitious renaissance under the Tata Group conglomerate, industry sources said on Sunday.

The orders include as many as 400 narrow-body jets and 100 or more wide-bodies, including dozens of Airbus A350s and Boeing 787s and 777s, they said, speaking on condition of anonymity as finishing touches are placed on the mammoth deal in coming days.

Such a deal could top $100 billion dollars at list prices, including any options, and rank among the biggest by a single airline in volume terms, overshadowing a combined order for 460 Airbus and Boeing jets from American Airlines over a decade ago.

Even after significant expected discounts, the deal would be worth tens of billions of dollars and cap a volatile year for plane giants whose jets are again in demand after the pandemic, but who face mounting industrial and environmental pressures.

It would also allow Airbus to secure a home for some A350 production slots initially earmarked for Russia’s Aeroflot and now left open because of war-related sanctions against Moscow.

Airbus and Boeing declined to comment. Tata Group-owned Air India did not respond to a request for comment.

China last week delivered its first C919 jetliner but is at least a decade away from competing on such a scale, experts say.

The potential blockbuster order comes days after Tata announced the merger of Air India with Vistara, a joint-venture with Singapore Airlines, to create a bigger full-service carrier and strengthen its presence in domestic and international skies.

That deal gives Tata a fleet of 218 aircraft, cementing Air India as the country’s largest international carrier and second largest in the domestic market after leader IndiGo

Buying debt-ridden Air India has also given Tata access to valuable flying rights and landing slots, especially to destinations in the United States and Europe.

HURDLES TO GROWTH
Air India’s maharajah mascot was once synonymous with lavishly decorated planes and stellar service but its reputation declined in the mid-2000s as financial troubles mounted.

Founded by JRD Tata in 1932, Air India was nationalized in 1953. Tata regained control in January and has since been working to revive its reputation as a world-class airline.

The order reflects a strategy to recapture a solid share of trips between India’s large overseas diaspora and cities such as Delhi and Mumbai, dominated by foreign rivals such as Emirates.

Air India also wants to win a bigger share of regional international traffic and the domestic market, setting up a battle on both fronts with IndiGo.

Delivered over the next decade, the 500 jets would replace and expand fleets in the world’s fastest-growing air travel market, while contributing to Prime Minister Narendra Modi’s goal of expanding the economy to $5 trillion.

But experts warn many hurdles stand in the way of Air India’s ambition to recover a strong global position, including frail domestic infrastructure, pilot shortages and the threat of tough competition with established Gulf and other carriers.

It may also struggle to get the medium-haul Airbus A321neos being ordered for the Air India-Vistara tie-up as quickly as it would like, with the European planemaker sold out until 2028 or beyond.

One industry source said new Boeing 737 MAXs will most likely go to Air India Express, the company’s budget operator which could be renamed.

Insiders say plane and engine makers have been clamoring at Air India’s door for months, with new Chief Executive Campbell Wilson refusing to rush the make-or-break fleet decision.

Reuters reported in July that Air India was taking more time to study Airbus A350s and Boeing wide-body 787 and 777 models, on top of a probable mixed order for smaller single-aisle jets.

Last month, Mr. Wilson confirmed talks to “greatly expand” Air India’s fleet over the next five years and said, “At the risk of gross understatement, the investment will be substantial.” — Reuters

A new chapter begins for 2022’s ‘MAP Management Man of the Year’

Isidro A. Consunji (second from left) receives this year’s MAP Management Man of the Year award in a ceremony last Nov. 28. — www.facebook.com/map.org.ph

When he was first nominated for the Management Association of the Philippines’ (MAP) prestigious award of “MAP Management Man of the Year 2022,” Isidro A. Consunji, chairman, president, and chief executive officer of DMCI Holdings, Inc., thought to ask to be withdrawn from consideration.

“I don’t think I’ve done anything extraordinary to deserve a nomination,” Mr. Consunji said in his acceptance speech during MAP’s awards ceremony last Nov. 28. He instead offered up a list of other names he thought were more deserving, including his father, the late Engr. David M. Consunji, who founded the company he now leads.

MAP confers the “Management Man of the Year” award to individuals in business or government, MAP member or not, who have attained clear and inarguable distinction in management, in addition to making valuable contributions to the country’s development and shaping its national values.

“If my father was here today, I’m sure he would laugh and say ‘Kamote ’yan eh’ (He’s a dimwit). Dad, wherever you are today, I hope this kamote made you and mom proud,” he said.

Mr. Consunji took D. M. Consunji, Inc.’s (DMCI) reins from his father, David “DM” Consunji, a civil engineer who started the construction company before it grew into the conglomerate it is today.

DMCI started small, from constructing chicken houses for the Bureau of Animal Industry, until it has gradually built up a reputation for its punctuality and quality work. Since then, the company moved on to major projects such as the Tacloban Coca-Cola Plant and Bacnotan Cement Plant.

“When DMCI was founded in 1954, my father’s ultimate objective was to build not only an enterprise, but an institution. By that he meant a business that could provide service to the community, stability and protection to his people. Fast-forward 30 years, we’re still nowhere near that,” Mr. Consunji recounted.

He said that as a contractor, they were beholden to the projects of prospective clients and winning bids for those projects. Thus, their growth was limited, and they could not plan the long-term strategies that could bring their vision of the company to reality.

Mr. Consunji had an engineering background, but he admitted to have been more interested in the business management side of running a business. He spent a lot of time with his father on construction sites, and it was through such experiences that he learned how to deal with “difficult employees, angry suppliers, and tough customers,” as well as the importance of productivity, efficiency, and cash flow.

With a newly discovered passion for business, he had grand ideas about how he could grow DMCI, and in 1995, DMCI Holdings was incorporated as a holding company to consolidate all construction business, construction component companies, and related interests of the Consunji family.

The rest was history. In only a few years after incorporation, they expanded their reach to include five major subsidiaries, namely: D.M. Consunji, Inc.; DMCI Project Developers, Inc.; Semirara Mining and Power Corp.; DMCI Power Corp.; and DMCI Mining Corp. DMCI Holdings and its subsidiaries are engaged in construction, real estate, coal and nickel mining, power generation, and water distribution.

The company also has an indirect ownership in Maynilad Water Services, Inc. through a 27% stake in Maynilad Water Holding Co., Inc., which owns 93% of the water concessionaire.

With more than five decades of solid track record in the construction business, DMCI enjoyed the continued patronage of institutional clients such as the Ayala Group; SM Group; Kuok Group; Robinson’s Group; San Miguel Corp.; banking institutions such as the Citibank, N.A., Bank of the Philippine Islands, Equitable and Urban Bank; educational institutions such as the University of the Philippines, and De La Salle University; and multinationals such as the John Laing, Obayashi, Mitsubishi Heavy, Oriken, and Nippon Steel. Also, industrial companies and some government agencies have sought the expertise and services of DMCI and still maintain partnerships with the company to this day.

Mr. Consunji has held the position of the company’s director for 25 years. A graduate of B.S. Civil Engineering at the University of the Philippines like his father, Mr. Consunji then obtained his Master’s degree in Business Economics from the Center for Research and Communication and Masters in Business Management from the Asian Institute of Management, and attended the Advanced Management Program at Instituto de Estudios Superiores de la Empresa (IESE) in Barcelona, Spain.

For the past five years, he has been the president of DMCI-HI, Dacon Corp. and Asia Industries, Inc. He is also the chairman of the board of directors of DMCI Mining Corp., D.M. Consunji, Inc., DMCI Homes, and Beta Electric Corp. He is the vice-chairman of Maynilad Water Services, Inc., and director of Semirara Mining and Power Corp., DMCI/MPIC Water Co., Inc., Crown Equities, Inc., Atlas Consolidated Mining and Development Corp., Carmen Copper Corp., Sem-Calaca Power Corp., Berong Nickel Corp., Toledo Mining Corp. and ENK PLC (London).

He was also the former president of the Philippine Constructors Association and Philippine Chamber of Coal Mines, Inc. At present, he is the chairman of the board of the Philippine Overseas Construction Board and a board member of Construction Industry Authority of the Philippines.

Awarding him with the “MAP Management Man of the Year 2022,” MAP recognized Mr. Consunji’s “personal contributions to shaping national values and inspiring others through his track record of integrity, managerial competence and professional leadership.”

“Some people see life as a series of moments. For me, being an avid reader, I see it as a book with blank chapters. You pen your own story and hope in the end it’s one worth reading and retelling,” Mr. Consunji said in his speech.

“My story is not yet done. I think I have enough gas in the tank to start a second career, and in a few years, I may surprise all of you. With more idle time, I hope to foray into agriculture and create sustainable value in the countryside,” he continued, hinting a possible new venture for his conglomerate.

Closing his speech, Mr. Consunji also addressed the leaders and managers of the next generation to give them advice.

“Play to your team’s strengths. When we were building our business portfolio, we did not have much financial strength. I had to be cautious with our investments. I always asked myself, ‘Do we have the organizational competence to make up for our small balance sheet?’. As leaders and business managers, we need to have a clear understanding of our organization and our people. I believe that self-knowledge and humility lead to better decision-making,” he said.

Mr. Consunji thanked economist Dr. Bernardo “Bernie” M. Villegas for teaching him such lessons.

“He was responsible for instilling a spiritual character in my work. Through him, I realized that making a profit is not the sole objective of business. Instead, business should be a catalyst for shared prosperity, that we should do what we can to bring sunshine into the lives of our fellow Filipinos,” he said.

“I don’t consider myself a religious man, but I do believe your work can be your prayer.” — Bjorn Biel M. Beltran

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