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Dirty Brazil, Brexit Surge, Kiwis & Avocados

SPOTLIGHT: BRAZIL, THE LONG ARM OF PETROBRAS PROBE

Five weeks. That’s all it took for Brazil’s interim President Michel Temer to become directly implicated in the far-reaching Petrobras corruption scandal. Of course, there had been warning signs. First the resignation of two of his ministers amid allegations they were trying to subvert the ongoing probe. Then, Brazil’s prosecutor general sought the arrest of four members of Temer’s party for the same reason. And now Sergio Machado, a former Petrobras executive, is accusing Temer of having asked him for illegal campaign contributions for his own party back in 2012, allegations that Temer denies.


While many in Brazil had hoped that Temer would put a drifting economy back on track, others, including Rio de Janeiro-based American reporter Glenn Greenwald, had warned that it would come to this, that Temer was bound to be no cleaner than his predecessors. But the real lesson from the Petrobras investigation, now in its third-year, is even more difficult to face: it may be nearly impossible to find any senior figure in Brazilian politics who is clean.



WHAT TO LOOK FOR TODAY



14 HOURS 50 MINUTES

U.S. Democratic Senator Chris Murphy of Connecticut led a nearly 15-hour filibuster on gun control following the Orlando terror attack. “I've had enough. I've had enough of the ongoing slaughter of innocents, and I've had enough of inaction in this body,” Murphy said. NBC is reporting that GOP leaders have agreed to allow votes on two proposed gun control measures.


TWO-DAY CEASEFIRE BEGINS IN ALEPPO

Russia has announced a two-day “regime of calmness” in the Syrian city of Aleppo starting today. Battles over the past few days had been particularly deadly with 70 killed between Tuesday and Wednesday.


â€" ON THIS DAY

Habemus papam â€" and the longest-serving in History! That, and more, in our June 16 On This Day.


EURO 2016 VIOLENCE CONTINUES

French police in Lille have arrested 37 soccer fans after more violence and overnight clashes that left 66 people injured. “Drunk English louts and suspected Russian "ultras"” are among those arrested, The Daily Telegraph reports. The UEFA, European soccer’s governing body, had threatened to expel England and Russia from the competition should the violence continue. Three Russians arrested last weekend in Marseille will face trial, and 20 others are expected to be deported back to Russia.


â€" WORLDCRUNCH-TO-GO

Can’t we really get no satisfaction? For Rue Amelot, Worldcrunch's international collection of essays, Québec-based programmer Martin Comeau writes about that nagging feeling that happiness is never meant to last: “Let's face it: A new television will at some point cease to function, that shiny new car will get its first scratch, your son will grow up, women will leave you, you will lose well-paid jobs, your reputation will be tarnished. In short, everything that brings you a certain joy is beyond your control and is bound to change, without forewarning or asking for your consent. And yet, there's no shortage of occasions for lasting and sincere happiness.”

Read the full essay, Overcoming The Fear Of Fleeting Happiness.


SURGE IN SUPPORT FOR BREXIT

An poll published today in the London Evening Standard shows support for Britain to leave the European Union rising to a six-point advantage with 53% of those who have made up their minds ready to vote for “Brexit.” The survey does not factor in undecided voters, who are likely determine the final result in next week’s referendum.


FBI’S FACIAL RECOGNITION MASSIVE DATABASE

A report from the U.S. Government Accountability Office reveals that the FBI has built a massive facial recognition database, containing close to 412 million pictures of Americans and foreigners. Read more from TechCrunch.


MY GRAND-PERE’S WORLD

Holy Business â€" Anuradhapura, 1992


EGYPTAIR WRECKAGE FOUND

Egyptian investigators have located wreckage of the EgyptAir flight MS804 that crashed on May 19 on its way from Paris to Cairo, Reuters reports.


SHANGHAI DISNEYLAND OPENS

The $5.5 billion Shanghai Disney Resort opened its gates for the first time today. It’s the company’s biggest theme park outside of the U.S. See how the Chinese press covered the event in our Extra! item.


â€" MORE STORIES, EXCLUSIVELY IN ENGLISH BY WORLDCRUNCH

AVOCADO SHORTAGE

Kiwis love their avocados, so much in fact that a current shortage of the fruit has lead to a surge in crime in New Zealand.

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Society

Debt Trap: Why South Korean Economics Explains Squid Game

Crunching the numbers of South Korea's personal and household debt offers a glimpse into what drives the win-or-die plot of the Netflix hit produced in the Asian country.

In the Netflix series, losers of the game face death

Yip Wing Sum

-Analysis-

SEOUL — The South Korean series Squid Game has become the most viewed series on Netflix, watched by over 111 million viewers and counting. It has also generated a wave of debate online and off about its provocative message about contemporary life.

The plot follows the story of a desperate man in debt, who receives a mysterious invitation to play a game in which the contestants gamble their lives on six childhood games, with the winner awarded a prize of 45.6 billion won ($38 million)... while the losers face death.


It's a plot that many have noted is not quite as surreal as it sounds, a reflection of the reality of Korean society today mired in personal debt.

Seoul housing prices top London and New York

In the polished streets of downtown Seoul, one sees endless cards and coupons advertising loans scattered on the ground. Since the outbreak of the pandemic, as the demand for loans in South Korea has exploded, lax lending policies have led to a rapid increase in personal debt.

According to the South Korean Central Bank's "Monetary Credit Policy Report," household debt reached 105% of GDP in the first quarter of this year, equivalent to approximately $1.5 trillion at the end of March, with a major share tied up in home mortgages.

Average home loans are equivalent to 270% of annual income.

One reason behind the debts is the soaring housing prices. In Seoul, home to nearly half of the country's population, housing prices are now among the highest in the world. The price to income ratio (PIR), which weighs the average price of a home to the average annual household income, is 12.04 in Seoul, compared to 8.4 in San Francisco, 8.2 in London and 5.4 in New York.

According to the Korea Real Estate Commission, 42.1% of all home purchases in January 2021 were by young Koreans in their 20s and 30s. For those in their 30s, the average amount borrowed is equivalent to 270% of their annual income.

Playing the stock market

At the same time, the South Korean stock market is booming. The increased demand to buy stocks has led to an increase in other loans such as credit. The ratio for Korean shareholders conducting credit financing, i.e. borrowing from securities companies to secure stock holdings, had reached 21.4 trillion won ($17.7 billion), further increasing the indebtedness of households.

A 30-year-old Seoul office worker who bought stocks through various forms of borrowing was interviewed by Reuters this year, and said he was "very foolish not to take advantage of the rebound."

In addition to his 100 million won ($84,000) overdraft account, he also took out a 100 million won loan against his house in Seoul, and a 50 million won stock pledge. All of these demands on the stock market have further exacerbated the problem of household debt.

42.1% of all home purchases in January 2021 were by young Koreans in their 20s and 30s

Simon Shin/SOPA Images/ZUMA

Game of survival

In response to the accumulating financial risks, the Bank of Korea has restricted the release of loans and has announced its first interest rate hike in three years at the end of August.

But experts believe that even if banks cut loans or raise interest rates, those who need money will look for other ways to borrow, often turning to more costly institutions and mechanisms.

This all risks leading to what one can call a "debt trap," one loan piling on top of another. That brings us back to the plot of Squid Game, "Either you live or I do." South Korean society has turned into a game of survival.

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