Latest news with #post-ColdWar
Gulf Today
39 minutes ago
- Business
- Gulf Today
Billions for arms, rather than troops, won't make us safer
William D. Hartung, Tribune News Service The Pentagon got a whopping $150 billion increase in the budget bill passed by Congress and signed by the president July 4. That will push next year's proposed Pentagon budget to more than $1 trillion. Most of that enormous amount will go to weapons manufacturers. A new report by the Quincy Institute and the Costs of War Project at Brown University found that for the period from 2020 to 2024, more than half of the Pentagon budget — 54% — went to private companies. That figure has climbed considerably since the immediate post-Cold War period of the 1990s, when the contractor share was 41%. The surge of spending on the Pentagon and its primary weapons suppliers won't necessarily make us safer. It may just enrich military companies while subsidising overpriced, underperforming weapons systems, even as it promotes an accelerated arms race with China. While weapons firms will fare well if the new budget goes through as planned, military personnel and the veterans who have fought in America's wars in this century will not. The Donald Trump administration is seeking deep cuts in personnel, facilities and research at the Veterans Affairs, and tens of thousands of military families have to use food stamps, a program cut by 20% in the budget bill, to make ends meet. The $150 billion in add-ons for the Pentagon include tens of billions for the Trump administration's all-but-impossible dream of a leak-proof Golden Dome missile defense system, a goal that has been pursued for more than 40 years without success. Other big winners include the new F-47 combat aircraft, and the military shipbuilding industry, which is slated for a huge infusion of new funding. The question of how to allocate the Pentagon's orgy of weapons spending is complicated by the fact that there are now two powerful factions within the arms industry fighting over the department's budget, the traditional Big Five, composed of Lockheed Martin, RTX (formerly Raytheon), Boeing, General Dynamics and Northrop Grumman, and emerging military tech firms such as SpaceX, Palantir and Anduril. The Big Five currently get the bulk of Pentagon weapons spending, but the emerging tech firms are catching up, winning lucrative contracts for military-wide communications systems and antidrone technology. And there will be more such contracts. Even after the public falling out between Elon Musk and the president, the emerging tech firms have a decided advantage, with advocates such as Vice President JD Vance, who maintains close ties with his mentor and political supporter Peter Thiel of Palantir, and dozens of staff members from military tech firms who are now embedded in the national security and budget bureaucracies of the Trump administration. Meanwhile, the tech sector's promises of a new, revolutionary era of defense made possible by artificial-intelligence-driven weapons and other technologies are almost certainly overstated. If past practice tells us anything, it is that new, complex high-tech weapons will not save us. The history of Pentagon procurement is littered with 'miracle weapons,' from the electronic battlefield in Vietnam to Ronald Reagan's 'impenetrable' Star Wars missile shield to networked warfare and precision-guided bombs used in the Iraq and Afghan wars. When push came to shove, these highly touted systems either failed to work as advertised, or were irrelevant to the kinds of wars they were being used in. Just one example: Despite the fact that the Pentagon spent well over $10 billion to find a system that could neutralise improvised explosive devices in Iraq and Afghanistan, only modest progress was made. Even after the new technology was deployed, 40% of could not be cleared. Technology is a tool, but it is not the decisive factor in winning wars or deterring adversaries. An effective military should be based on well-trained, well-compensated and highly motivated troops. That means taking some of that 54% of the Pentagon budget that goes to contractors and investing in supporting the people who are actually tasked with fighting America's wars.
Mint
a day ago
- Business
- Mint
EM Hedge Funds Eye Safeguards as World-Beating Rally Blooms
(Bloomberg) -- Hedge funds dedicated to emerging-market debt are increasingly turning to risk-mitigating strategies to ensure they lock in double digit gains as a broad rally in developing nation assets deepens. After a banner first half of the year, hedge funds targeting EM debt have returned nearly 13% on an annual basis — more than their peers positioned in any other asset class, according to data based on Bloomberg indexes. The latest global financial flows data shows the asset class remains thriving and the extra yield investors demand to hold the sovereign debt of developing nations over US Treasuries just hit a 15-year low. Such tight pricing, along with uncertainty over US policies and global conflicts, is pushing hedge funds to curb risks as they ride the historic rally. The funds do this by swapping longer-maturity bonds in their portfolios for less risky shorter-dated ones. They also focus on higher-rated debt and the most-liquid securities while keeping an ample cash pile. 'Do you just want to be massively long on credit on these valuations? I'd say probably not,' said Anthony Kettle, who co-manages BlueBay Emerging Market Unconstrained Bond Fund with Polina Kurdyavko and Brent David. 'Having a little bit of dry powder evidently makes sense, and also running elevated cash levels.' To be clear, Kettle said, there's still a 'decent environment' to gain additional returns as funds become more selective and can profit from both rising and falling asset prices, unlike index-based investors. The $784-million BlueBay fund has returned 17% over the past 12 months. Investors have taken advantage of EM inflows stoked by increased interest for alternative assets amid US policy unpredictability, which has also weakened the dollar. While many developing countries have come out of distressed debt levels as sentiment improved, further risks include another Iran-Israel flare up and potential additional increases in US tariffs, including on the buyers of Russian energy. President Donald Trump's administration has caused a 'breakdown of the traditional safe haven correlations' by shaking up the post-Cold War world order, creating an 'unusual and unpredictable' environment, said Demetris Efstathiou, the chief investment officer of Blue Diagonal EM Fixed Income Fund. 'It is very hard to predict what they will do next with tariffs, and on top of that you have ongoing wars,' Efstathiou said. His fund is 'very conservatively' positioned with shorter-maturity bonds and he avoids weak credits to protect the portfolio in the event of a global slowdown and market downturn. He has increased holdings of AAA- and AA-rated EM sovereigns along with less-indebted countries with large domestic markets like Brazil, Turkey and Mexico. EM-dedicated bond funds have received $31 billion in inflows year-to-date, with positioning increased in each of the last 14 weeks as global markets recalibrate after an era of US dominance. A near-record $5.7 billion piled into the asset class in the week though July 23, according to EPFR Global data provided by economists at Bank of America Corp. For some, flows of such a magnitude signal that EM debt is already predicting the best-case scenario. The US and European Union agreed on a deal that will see the EU face 15% tariffs on most of its exports, including automobiles, to stave off a trade war. Following the deal announced on Sunday, EM debt mostly strengthened with local yields in emerging European nations such as Poland, the Czech Republic and Hungary declining. 'The market is now priced for a Goldilocks scenario with the risk of a severe recession receding significantly and expectations' of one or more rate cuts by the Federal Reserve, the $847 million Enko Africa Debt Fund said in a letter to clients. Managed by Alain Nkontchou, the Africa-specific hedge fund has returned 24% over the past year. Nevertheless, the expected volatility means that traditional buy-to-hold trades may not necessarily succeed and that hedge funds will prioritize holding more liquid assets to ensure an easier exit in case sentiment turns, according to ProMeritum Investment Management LLP, a $700-million fund that invests in developing markets outside China. 'Liquidity management will be critical in the second half of the year because of an unpredictable environment and geopolitical risks,' said Evgueni Konovalenko, managing partner and head of strategy at the firm. Such a focus is needed 'to take advantage of both short and long positions with sudden policy changes and a daily barrage of headlines.' --With assistance from Jorgelina do Rosario. (Updates with EU-US trade deal in the 13th paragraph.) More stories like this are available on
Economic Times
2 days ago
- Business
- Economic Times
EM debt hedge funds play safe amid rally
"It is very hard to predict what they will do next with tariffs, and on top of that you have ongoing wars," Efstathiou said. Live Events (You can now subscribe to our (You can now subscribe to our ETMarkets WhatsApp channel Hedge funds dedicated to emerging-market debt are increasingly turning to risk-mitigating strategies to ensure they lock in double digit gains as a broad rally in developing nation assets a banner first half of the year, hedge funds targeting EM debt have returned nearly 13% on an annual basis-more than their peers positioned in any other asset class, according to data based on Bloomberg latest global financial flows data shows the asset class remains thriving and the extra yield investors demand to hold the sovereign debt of developing nations over US Treasuries just hit a 15-year low. Such tight pricing, along with uncertainty over US policies and global conflicts, is pushing hedge funds to curb risks as they ride the historic rally. The funds do this by swapping longer-maturity bonds in their portfolios for less risky shorter-dated ones. They also focus on higher-rated debt and the most-liquid securities while keeping an ample cash pile."Do you just want to be massively long on credit on these valuations? I'd say probably not," said Anthony Kettle, who co-manages BlueBay Emerging Market Unconstrained Bond Fund with Polina Kurdyavko and Brent David. "Having a little bit of dry powder evidently makes sense, and also running elevated cash levels."To be clear, Kettle said, there's still a "decent environment" to gain additional returns as funds become more selective and can profit from both rising and falling asset prices, unlike index-based investors. The $784-million BlueBay fund has returned 17% over the past 12 have taken advantage of EM inflows stoked by increased interest for alternative assets amid US policy unpredictability, which has also weakened the dollar. While many developing countries have come out of distressed debt levels as sentiment improved, further risks include another Iran-Israel flare up and potential additional increases in US tariffs, including on the buyers of Russian Donald Trump's administration has caused a "breakdown of the traditional safe haven correlations" by shaking up the post-Cold War world order, creating an "unusual and unpredictable" environment, said Demetris Efstathiou, the chief investment officer of Blue Diagonal EM Fixed Income Fund."It is very hard to predict what they will do next with tariffs, and on top of that you have ongoing wars," Efstathiou said.
Time of India
2 days ago
- Business
- Time of India
EM debt hedge funds play safe amid rally
"It is very hard to predict what they will do next with tariffs, and on top of that you have ongoing wars," Efstathiou said. Emerging-market debt hedge funds, boasting impressive double-digit returns this year, are strategically mitigating risks amidst a deepening rally. Funds are swapping longer-maturity bonds for shorter-dated ones, prioritizing higher-rated, liquid securities, and increasing cash reserves. This cautious approach addresses uncertainties stemming from US policies, global conflicts, and tight pricing, while still seeking selective opportunities for further gains. Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads Popular in Markets 1. India's ESG bond market picks up as global and domestic push align: Vineet Agrawal of Jiraaf Hedge funds dedicated to emerging-market debt are increasingly turning to risk-mitigating strategies to ensure they lock in double digit gains as a broad rally in developing nation assets a banner first half of the year, hedge funds targeting EM debt have returned nearly 13% on an annual basis-more than their peers positioned in any other asset class, according to data based on Bloomberg latest global financial flows data shows the asset class remains thriving and the extra yield investors demand to hold the sovereign debt of developing nations over US Treasuries just hit a 15-year low. Such tight pricing, along with uncertainty over US policies and global conflicts, is pushing hedge funds to curb risks as they ride the historic rally. The funds do this by swapping longer-maturity bonds in their portfolios for less risky shorter-dated ones. They also focus on higher-rated debt and the most-liquid securities while keeping an ample cash pile."Do you just want to be massively long on credit on these valuations? I'd say probably not," said Anthony Kettle, who co-manages BlueBay Emerging Market Unconstrained Bond Fund with Polina Kurdyavko and Brent David. "Having a little bit of dry powder evidently makes sense, and also running elevated cash levels."To be clear, Kettle said, there's still a "decent environment" to gain additional returns as funds become more selective and can profit from both rising and falling asset prices, unlike index-based investors. The $784-million BlueBay fund has returned 17% over the past 12 have taken advantage of EM inflows stoked by increased interest for alternative assets amid US policy unpredictability, which has also weakened the dollar. While many developing countries have come out of distressed debt levels as sentiment improved, further risks include another Iran-Israel flare up and potential additional increases in US tariffs, including on the buyers of Russian Donald Trump's administration has caused a "breakdown of the traditional safe haven correlations" by shaking up the post-Cold War world order, creating an "unusual and unpredictable" environment, said Demetris Efstathiou, the chief investment officer of Blue Diagonal EM Fixed Income Fund."It is very hard to predict what they will do next with tariffs, and on top of that you have ongoing wars," Efstathiou said.
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Business Standard
2 days ago
- Business
- Business Standard
EM debt hedge funds eye safeguards as world-beating rally blooms
Hedge funds dedicated to emerging-market debt are increasingly turning to risk-mitigating strategies to ensure they lock in double digit gains as a broad rally in developing nation assets deepens. After a banner first half of the year, hedge funds targeting EM debt have returned nearly 13 per cent on an annual basis — more than their peers positioned in any other asset class, according to data based on Bloomberg indexes. The latest global financial flows data shows the asset class remains thriving and the extra yield investors demand to hold the sovereign debt of developing nations over US Treasuries just hit a 15-year low. Such tight pricing, along with uncertainty over US policies and global conflicts, is pushing hedge funds to curb risks as they ride the historic rally. The funds do this by swapping longer-maturity bonds in their portfolios for less risky shorter-dated ones. They also focus on higher-rated debt and the most-liquid securities while keeping an ample cash pile. 'Do you just want to be massively long on credit on these valuations? I'd say probably not,' said Anthony Kettle, who co-manages BlueBay Emerging Market Unconstrained Bond Fund with Polina Kurdyavko and Brent David. 'Having a little bit of dry powder evidently makes sense, and also running elevated cash levels.' To be clear, Kettle said, there's still a 'decent environment' to gain additional returns as funds become more selective and can profit from both rising and falling asset prices, unlike index-based investors. The $784-million BlueBay fund has returned 17 per cent over the past 12 months. Investors have taken advantage of EM inflows stoked by increased interest for alternative assets amid US policy unpredictability, which has also weakened the dollar. While many developing countries have come out of distressed debt levels as sentiment improved, further risks include another Iran-Israel flare up and potential additional increases in US tariffs, including on the buyers of Russian energy. President Donald Trump's administration has caused a 'breakdown of the traditional safe haven correlations' by shaking up the post-Cold War world order, creating an 'unusual and unpredictable' environment, said Demetris Efstathiou, the chief investment officer of Blue Diagonal EM Fixed Income Fund. 'It is very hard to predict what they will do next with tariffs, and on top of that you have ongoing wars,' Efstathiou said. His fund is 'very conservatively' positioned with shorter-maturity bonds and he avoids weak credits to protect the portfolio in the event of a global slowdown and market downturn. He has increased holdings of AAA- and AA-rated EM sovereigns along with less-indebted countries with large domestic markets like Brazil, Turkey and Mexico. EM-dedicated bond funds have received $31 billion in inflows year-to-date, with positioning increased in each of the last 14 weeks as global markets recalibrate after an era of US dominance. A near-record $5.7 billion piled into the asset class in the week though July 23, according to EPFR Global data provided by economists at Bank of America Corp. For some, flows of such a magnitude signal that EM debt is alrdy predicting the best-case scenario. 'The market is now priced for a Goldilocks scenario with the risk of a severe recession receding significantly and expectations' of one or more rate cuts by the Federal Reserve, the $847 million Enko Africa Debt Fund said in a letter to clients. Managed by Alain Nkontchou, the Africa-specific hedge fund has returned 24 per cent over the past year. Nevertheless, the expected volatility means that traditional buy-to-hold trades may not necessarily succeed and that hedge funds will prioritize holding more liquid assets to ensure an easier exit in case sentiment turns, according to ProMeritum Investment Management LLP, a $700-million fund that invests in developing markets outside China. 'Liquidity management will be critical in the second half of the year because of an unpredictable environment and geopolitical risks,' said Evgueni Konovalenko, managing partner and head of strategy at the firm. Such a focus is needed 'to take advantage of both short and long positions with sudden policy changes and a daily barrage of headlines.' What to Watch: Markets will look out for any trade talks with the US ahead of the Aug 1 deadline for Trump's latest tariffs to take effect China manufacturing and non-manufacturing PMI; second-quarter GDP data for Taiwan and Mexico, South Korea export data Brazil, Chile and South Africa central bank meetings on benchmark interest rates; South Africa may cut rates by another 25 basis points to 7 per cent, despite the likely rise in inflation later this year. (With assistance from Jorgelina do Rosario)
