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The big surprise of the Venezuelan elections: Brazil still hasn’t recognised Maduro’s victory

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After President Nicolas Maduro was declared elected for the third time in Venezuela, the countries of the Americas were divided over the results.

While Latin American countries led by Argentina and Chile officially claimed that Maduro had ‘stolen the election’, countries such as Cuba and Nicaragua were quick to congratulate the Venezuelan leader on his victory.

This is not surprising, since it is no secret that Argentine leader Javier Milei has been speaking out against Maduro and Bolivarian Venezuela for months, as has the Cuban leadership’s support for Maduro.

What is surprising is that three countries known for their ‘left’ governments have still not recognised Maduro’s victory: Lula’s Brazil, Obrador’s Mexico and Petro’s Colombia.

Three countries are preparing a statement on the ‘lack of transparency’ of the elections

According to Bloomberg, Brazil is in talks with Mexico and Colombia to issue a joint statement demanding that Venezuela count all the votes and publish the results from each electoral district.

The foreign ministries of the three countries, led by leftist presidents with historically close ties to Venezuela’s Nicolas Maduro, refused on Monday to recognise the outcome of Sunday’s election until Caracas takes steps to ensure the transparency of the process.

President Luiz Inacio Lula da Silva is unhappy with the situation in Venezuela and believes that Maduro ‘systematically failed to fulfil his promises of transparency’ during the electoral process, officials told Bloomberg.

To underline its dissatisfaction, Brazil’s foreign ministry instructed the country’s ambassador in Caracas not to attend Monday’s ceremony organised by Venezuela’s electoral authority to certify the results.

Brazil and Colombia have been criticising the ‘election’ for months

Lula said last week that Maduro should learn that ‘when you lose an election, you have to go away and prepare for another one’.

Lula also warned that Venezuela’s economic future ‘depends on a clean election, recognised as legitimate by the international community’.

In March, Colombia and Brazil took the unusual step of criticising Venezuela after some members of the Venezuelan opposition said they had been prevented from registering as candidates for the 28 July elections.

In a statement at the time, Colombia’s foreign ministry warned the Maduro government that preventing opposition candidates from taking part in the vote could ‘undermine the confidence of the international community’.

Brazil’s foreign ministry also said it was following the process ‘with concern’, especially as Venezuela had yet to issue a statement on the blocking.

Both countries argued that the opposition’s problems had raised ‘concerns about free and fair elections.

In separate statements, Venezuelan Foreign Minister Yvan Gil accused Colombia and Brazil of interfering in his country’s internal affairs.

Opposition: We have proof we defeated Maduro

Venezuela’s opposition says it has proof that rival Edmundo González defeated Maduro in the presidential election.

González and opposition leader Maria Corina Machado told reporters on Monday that they had received more than 70 per cent of the vote tallies, which show that González received more than 6 million votes, compared with more than 2 million for Maduro.

González and Machado made their claims hours after Venezuela’s Maduro-controlled electoral council announced that the president had won the election with 51 per cent of the vote to González’s 44 per cent.

According to the opposition, the results did not include vote counts from individual polling stations, which election observers said were crucial to determining the accuracy of the vote count.

Opposition also takes to the streets

The announcement of Maduro’s victory just after midnight on Monday sparked angry protests in the capital Caracas and across Venezuela, with people banging pots and pans throughout the night and into the late morning.

Demonstrators clashed with police, who fired tear gas to disperse the crowds. At least one person was killed in the northern province of Yaracuy, according to Voice of America.

Machado called on opposition supporters to organise demonstrations in Caracas on Tuesday.

US ‘concerned’, Biden to meet Lula

We have serious concerns that the announced result does not reflect the will or the votes of the Venezuelan people,’ said US Secretary of State Antony Blinken.

On the other hand, the Biden administration said on Monday that ‘electoral manipulation’ had destroyed ‘any credibility’ of Venezuelan President Nicolas Maduro’s claim of re-election victory, leaving the door open to new sanctions against the country, Reuters reported.

US officials, speaking on condition of anonymity, said senior aides to President Joe Biden had demanded that Maduro release a detailed breakdown of the vote and that failure to do so would make the international community reluctant to accept the announced result.

The officials did not announce any new “punitive measures” but said Washington would review its sanctions policy against Caracas based on Maduro’s future actions.

“We may be facing a new scenario. We will take that into account as we look at where we can go with sanctions against Venezuela,” one official said.

They argued that the Maduro government had resorted to ‘repression and electoral manipulation’ and said that ‘any credibility of the so-called election results has been destroyed’.

A senior US official said the administration was in contact with Brazil and other Latin American governments about the political situation in Venezuela.

Biden will meet with Brazilian President Lula on Tuesday afternoon, the White House said in a statement.

EU officials meet to discuss Venezuela election

European diplomats will discuss Maduro’s victory in Venezuela’s presidential election today (30 July).

The Council of Europe’s working group on Latin America and the Caribbean will meet at 10.00 Brussels time.

Josep Borrell, the European Union’s top diplomat, wrote in a message on X: ‘The Venezuelan people voted peacefully and in large numbers for the future of their country. Their will must be respected,’ he said.

Borrell added that it was vital to ensure ‘full transparency in the electoral process’, including a detailed vote count and access to voting records at polling stations.

Simon Stano, spokesman for the EU’s diplomatic service, said: ‘We are assessing the election process and results in close contact with national, regional and international actors on the ground. However, we are concerned by allegations of flaws and shortcomings,’ said Simon Stano, spokesperson for the EU diplomatic service.

Elon Musk calls Maduro a ‘dictator’, Maduro responds

Following the presidential election in Venezuela, which saw Maduro and his allies triumph, X owner Elon Musk took to social media to accuse the Venezuelan leader of committing ‘massive electoral fraud’.

Shame on dictator Maduro,” Musk said on Monday.

Musk also retweeted a comment on X from Argentine President Javier Milei, whom he described as his ‘friend’. ‘The numbers have declared the victory of an overwhelming opposition and the world expects the government to concede defeat after years of socialism, misery, collapse and death,’ Milei had said.

Maduro responded by calling Musk ‘the arch-enemy of peace in Venezuela’.

Arguing that Elon Musk was ‘the representative of a fascist ideology, unnatural, anti-society’, Maduro said: ‘Elon Musk is desperate; control yourself. Whoever fights with me will dry up,” he replied, ‘You want to fight? Let’s do it. Elon Musk, I am ready. I’m not afraid of you, Elon Musk. Let’s fight wherever you want,” Maduro said, accusing Musk of wanting to “come with his rockets and his army and invade Venezuela’.

AMERICA

Fed cuts interest rates, dollar surges to two-year high

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The U.S. Federal Reserve reduced interest rates by a quarter percentage point but signaled a slower pace of easing next year. This move drove the U.S. dollar to its highest level in two years and triggered a sell-off in both domestic and international stock markets.

The Federal Open Market Committee (FOMC) voted on Wednesday to lower the benchmark interest rate to 4.25–4.5%, marking the third consecutive cut. The lone dissenting vote came from Cleveland Fed President Beth Hammack, who favored maintaining the current rates.

Officials highlighted concerns about persistent inflation, projecting fewer rate cuts for 2025 than previously expected. Reflecting these worries, policymakers also raised their inflation forecasts for the coming year. Following the announcement, Fed Chair Jay Powell remarked that the current policy settings were “significantly less restrictive,” indicating the Fed’s inclination to adopt a more cautious approach to further easing.

“This decision was a ‘closer call’ than prior meetings,” Powell noted, emphasizing that inflation trends remain “sideways” while risks to the labor market are “diminishing.”

Aditya Bhave, senior U.S. economist at Bank of America, described the Fed’s message as “unabashedly hawkish.” He pointed to the shift in officials’ 2025 forecasts, which now anticipate just two quarter-point rate cuts instead of three, calling it a “wholesale shift.”

JPMorgan Chase, a key player in U.S. bond markets, noted that money markets are pricing in only a 0.31 percentage point rate cut in 2025. This outlook, significantly tighter than the bank’s earlier 0.75-point forecast, underscores the magnitude of the Fed’s policy shift.

The decision triggered a sharp sell-off on Wall Street, with the S&P 500 falling 3% and the tech-heavy Nasdaq Composite dropping 3.6%. High-profile winners of the 2024 rally were hit hard, including: Tesla, down 8.3%; Meta (Facebook’s parent company), down 3.6%; Amazon, down 4.6%.

Smaller companies, often seen as more sensitive to US economic fluctuations, also suffered. The Russell 2000 index declined 4.4%.

In Asia, stocks fell in early Thursday trading. Benchmarks in South Korea and Taiwan dropped 1.8% and 1.6%, respectively. Meanwhile, U.S. government bond prices fell, driving the yield on two-year Treasuries—sensitive to Fed policy—up by 0.11 percentage points to 4.35%.

The U.S. dollar surged 1.2% against a basket of six major currencies, reaching its strongest level since November 2022. According to Wells Fargo senior economist Mike Pugliese, the currency had already been rising on expectations of inflationary pressures following Donald Trump’s election victory last month. However, Wednesday’s Fed decision “poured more petrol on the fire.”

The South Korean won dropped to a 15-year low against the dollar, while the Japanese yen weakened 0.5%.

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AMERICA

Amazon pledges $1 billion to Trump inauguration fund

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Amazon confirmed on Thursday that it will contribute $1 million to Donald Trump’s inauguration fund, a move mirroring similar actions by other major tech companies, including Meta, the parent company of Facebook and Instagram. Amazon also plans to broadcast Trump’s inauguration via its Prime Video service.

This announcement comes as major tech executives seek to establish ties with the incoming U.S. president, despite Trump’s longstanding criticisms of Big Tech. Trump has frequently accused technology companies of censorship and bias against conservative media.

Jeff Bezos, Amazon’s founder and CEO, is reportedly planning to meet Trump at his Mar-a-Lago resort next week, according to The Wall Street Journal, which first reported Amazon’s donation. Similarly, Google CEO Sundar Pichai and Apple CEO Tim Cook have expressed their congratulations to Trump since his election victory in November.

Trump’s relationship with Amazon has been fraught with challenges. During his first term, he accused the company of undercutting competition and criticized its tax policies. In 2018, Trump ordered a review of U.S. Postal Service package pricing, claiming the agency acted as Amazon’s “courier.”

Apple, meanwhile, faces potential risks from Trump’s proposed tariff policies, which could disrupt critical supply chains in China. However, during Trump’s first term, Cook secured exemptions for certain Apple products.

Meta’s CEO, Mark Zuckerberg, and other tech leaders have also engaged with Trump. According to The Information, Zuckerberg dined with Trump after the election. Pichai is also expected to meet Trump this week.

While Trump scrutinized Big Tech during his presidency, Amazon now faces mounting regulatory pressure under President Joe Biden. The U.S. Federal Trade Commission (FTC), led by Lina Khan, has been investigating Amazon for alleged monopoly practices, with several states filing lawsuits last year. The FTC is also examining major cloud service providers, including Amazon, over partnerships in artificial intelligence.

Despite earlier conflicts, Bezos recently praised Trump for his “tremendous grace and courage under real fire” in a post on X (formerly Twitter) following an assassination attempt. Bezos, who also owns The Washington Post, reportedly prevented the newspaper from endorsing Trump’s Democratic opponent Kamala Harris in the 2024 election.

Speculation about a tacit agreement between Bezos and Trump has surfaced, allegedly tied to Blue Origin, Bezos’s rocket company competing with Elon Musk’s SpaceX.

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AMERICA

Investors poured $140 billion into U.S. equities following Trump’s victory

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Nearly $140 billion has flowed into U.S. equity funds since last month’s election, as investors anticipate Donald Trump’s administration will implement sweeping tax cuts and regulatory reforms.

According to the Financial Times (FT), which cites data from EPFR, U.S. equity funds have seen inflows totaling $139.5 billion since Trump’s victory on November 5. This surge in investment made November the busiest month for equity inflows since records began in 2000.

The massive influx of funds has driven major U.S. stock indexes to a series of record highs, as investors appeared to shrug off concerns about potential economic risks, including inflation and its implications for the Federal Reserve’s interest rate policy.

“The growth agenda that Trump has put on the table is being fully embraced,” said Dec Mullarkey, Chief Executive of SLC Management. He added that Trump’s picks for top administration posts have been seen as “very market friendly.”

Trump has promised to fill his administration with financial experts, including Scott Bessent as Treasury Secretary, and Paul Atkins, a cryptocurrency advocate, as Chairman of the Securities and Exchange Commission (SEC).

The president-elect has outlined a pro-growth agenda, emphasizing reduced taxes, deregulation, and economic expansion. These proposals have spurred optimism among investors, fueling a rally in the market.

The S&P 500, Wall Street’s primary stock market indicator, has risen 5.3% since Election Day, bringing its total gains for the year to 28%. Smaller companies, which are often seen as more responsive to changes in the U.S. economy, have outperformed larger firms during this period. The Russell 2000 index recently hit a record high for the first time in three years.

While U.S. equity funds have enjoyed record inflows, other global markets have experienced outflows emerging market funds have seen net withdrawals of $8 billion, with China-focused funds accounting for $4 billion; funds investing in Western Europe have lost $14 billion; and Japan-focused funds have seen outflows of approximately $6 billion.

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