Israel's inconclusive election, unblocking the Suez Canal and Wall Street's gruelling hours
22 - 28 March 2021
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A POLITICAL DILEMMA
It’s back to the negotiating table for Israel’s leading politicians after the country’s fourth election in two years failed to break a deadlock. The final count, released on Thursday, shows that Benjamin Netanyahu and his right-wing allies have once again fallen short of a governing majority.
Netanyahu’s Likud party won the most parliamentary seats (30 out of 120), while his coalition partners secured another 22. But their total of 52 is nowhere near the 61-seat tally needed to take control of the Knesset.
Although the opposition camp scored 57 seats, those parties generally share an anti-Netanyahu position rather than being on the same ideological wavelength.
According to Israel watchers, this poll was widely seen as a referendum on Netanyahu’s track record and his fitness to rule. ‘Bibi’, as the prime minister is often called, was banking on his successful Covid vaccine rollout, tough stance on Iran, and normalisation of ties with several Arab states to gain broader support.
On the flip side, the PM’s critics argue that he authorised unnecessarily harsh lockdowns in response to the coronavirus - and, of course, Netanyahu is on trial on multiple corruption and fraud charges (which he vehemently denies). They claim Bibi keeps sending voters to the ballot box in a bid to grant himself immunity from prosecution.
So what next? Netanyahu has a few weeks to reach across the aisle and form a bigger coalition; however, he is likely to end up with unusual bedfellows. In a strange turn of events, there’s now chatter about an Arab Islamist party acting as kingmaker. Needless to say, Likud’s Orthodox Jewish partners are against that arrangement.
If Netanyahu and the opposition struggle to build stronger blocs, Israel could very well face a fifth election later in 2021. But with turnout at its lowest in over a decade, it’s clear the Israeli electorate are frustrated with the fragmented system. The question is: can anyone really replace Bibi, the country’s longest-serving prime minister?
CLOGGED TRADE ARTERY
International news outlets - as well as meme makers - have been captivated by the fate of the Ever Given, a giant ship currently blocking the Suez Canal.
On Tuesday, high winds and a dust storm apparently pushed the ship into the canal’s wall, trapping the bow in a very sandy and muddy bank. Since then, a Mission: Impossible-style effort has been underway to dislodge the Ever Given and free the critical waterway.
Given the size of the so-called megaship, the dredging operation could take days, or possibly an entire week. The 400-metre (1,300-foot) long Ever Given is one of the biggest container ships at sea. It falls under the category of ultra-large container ships (ULCS), some of which are too gigantic for the Panama Canal in Latin America.
In the meantime, various analysts have been throwing out eye-popping stats on the impact of a clogged Suez Canal. For example:
More than 150 vessels remain trapped on either end of the link and about 300 vessels are in a holding pattern outside the canal
The “traffic jam” is tying up an estimated US$9.6 billion worth of goods each day, according to Lloyd’s List
If the route stays closed, many ships will be diverted and go around the horn of Africa, which significantly increases delays and costs
On a deeper level, the Ever Given fiasco shines a light on the fragility of global supply chains. Some 80% of traded goods are transported by sea, and the growing e-commerce boom continues to heighten pressure on shipping activity. The Suez, in particular, has evolved from an oil tanker shortcut to a vital cargo passage between Asia and Europe.
Secondly, the rise of the just-in-time model means there’s almost no slack in delivery schedules. Manufacturers, suppliers and retailers rely on receiving items as and when they’re needed [remember, inventory and storage are expensive]. Therefore, if the Suez blockage drags on, various firms will be sweating over their missing raw materials and products.
Another important factor is the labour disruption caused by Covid-19. While the likes of Amazon, Samsung and Nintendo race to meet pandemic-fuelled demand, thousands of seafarers have been stuck onboard vessels for months and months due to quarantine rules. And at the ports, there’s still limited availability of dockworkers and truck drivers.
Lastly, despite the swelling size of cargo ships (the Ever Given is carrying 20,000 containers), maritime organisations have yet to update regulations on crew numbers and technological requirements. However, the economies of scale are too lucrative for companies to resist. Two major Korean shipbuilders actually announced fresh orders for megaships this week.
MONEY NEVER SLEEPS
Wall Street is a famously cutthroat place, which is why opinions are divided on the grievances of a cohort of first-year Goldman Sachs employees.
A slide deck, based on a survey of 13 young analysts, went viral this month as a result of their personal complaints and comments. The survey reported an average work week of 95+ hours, with five hours of sleep per night. One person even said, “The sleep deprivation, the treatment by senior bankers, the mental and physical stress...I’ve been through foster care and this is arguably worse.”
According to veterans in the industry, gruelling hours are inevitable in entry-level investment banking and client advisory services. They say the sector’s relentless pace is legendary, so college graduates shouldn’t be surprised by the challenging environment.
Nonetheless, 2020 was a blockbuster year for Wall Street’s top institutions (in spite of virtual offices), so Goldman’s PR team recognises it needs to do damage control.
In a recent voice memo, Goldman CEO David Solomon told employees he’ll try to give them Saturdays off, and he also said the company would allocate resources to busier units to prevent burnout.
In the wake of the Goldman exposé, Citigroup’s new boss Jane Fraser said her bank will introduce “Zoom-free Fridays”. The idea is to give workers a break from staring at screens for video conferences. However, that guidance only applies to internal meetings. Citi still expects its staff to join Zoom calls with clients and regulators if those are in the diary at the end of the week.
Credit Suisse is taking a different approach. The Swiss lender is going to offer junior members of its capital markets and deal businesses a US$20,000 “lifestyle” allowance to improve morale.
Overall, the consensus from CNBC’s talking heads seems to be: if you can’t handle the heat, then get out of the kitchen.
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Stay curious, Sara x