Ever Given drama grips the world
Sailors often talk of being at the mercy of the winds and the tides, but few could have predicted the drama that unfolded when a powerful southerly wind drove the 400m-long Ever Given container ship into a sandy bank of the Suez Canal in late March.
The Panama-flagged vessel was headed for Rotterdam when it became jammed in the single-lane stretch of the canal about 6km north of the southern entrance, and brought international shipping in one of the world’s busiest waterways to a standstill.
For six days, billions of dollars worth of international commerce sat paralysed at either end of the canal.
Many ship captains headed off to take the hard way around the Cape of Good Hope, requiring additional fuel and accruing other costs, while hundreds more were left waiting for a resolution that at times seemed like it would never arrive.
Salvage teams alternated between dredging and tugging to dislodge the massive vessel, while efforts were complicated by rocks under the ship’s bow.
They deployed diggers, front-end loaders and specialised dredgers to guzzle sand and mud from where the ship was lodged at both ends. They called in Dutch experts from the world’s most respected maritime salvage team.
There were fears it might take weeks to dislodge the vessel but, day and night, with international pressure bearing down, the dredgers dredged and the tugboats tugged, before an unusually high tide enabled the ship to wriggle free with one last heave.
But the story didn’t end there. When it was finally freed, the Ever Given was held for more than three months amid a financial dispute over the blockage with the vessels’ owners and insurers.
It was finally freed to continue its voyage after the ship’s Japanese owner, Shoei Kisen Kaisha, reached a compensation settlement with canal authorities following weeks of negotiations and a court stand-off.
The money, according to canal authorities, would cover the salvage operation, costs of stalled canal traffic, and lost transit fees for the week the Ever Given had blocked the canal.
The shutdown, which raised worries of supply shortages and rising costs for consumers, added strain on the shipping industry, already under pressure from the Covid-19 pandemic.
It was July before the ship finally reached the port of Rotterdam in the Netherlands to begin unloading its cargo.
China’s Lehman moment?
One of the biggest international stories of the year concerned indebted Chinese property developer Evergrande, and fears it might lead to China’s “Lehman moment”, a reference to when the collapse of the Lehman Brothers investment bank in 2008 kicked off the global financial crisis.
The property boom enjoyed by China for the guts of the past two decades was coming to an end, and Evergrande, based in Shenzhen in southern China and the country’s largest real estate company, was in a hole to the tune of $300 billion.
The company was in danger of default, leading to fears of a wider global crash. Its mounting credit woes coincided with a Chinese government regulatory drive against big technology groups, the real estate industry, and other sectors.
To reduce its debts, Evergrande sought to slash costs and sell assets including stakes in an electric vehicles business and a property services group, as well as a flagship property.
It hired restructuring advisers and warned that its liquidity was under “tremendous pressure” from collapsing sales as it faced protests by home buyers and retail investors. Chinese State media remained largely silent in relation to the crisis.
By September, Evergrande admitted it could fail to make good on its financial obligations, and investors were forced to confront the growing possibility it would default, a debacle that could cascade across global markets and expose the perilous state of China’s vast property sector.
This dealt a severe blow to Evergrande’s bonds and triggered trading suspensions in Shenzhen and Shanghai.
Fitch became the latest group to issue a warning, slashing Evergrande’s foreign currency credit rating saying that a default of some kind “appears probable”. Moody’s downgraded the company for the third time in as many months.
Evergrande inched closer to potential default later when it missed a deadline for paying $83.5 million in bond interest. International bond sales by Chinese developers all but halted.
The missed payment triggered a 30-day grace period, but fears were eased temporarily when Evergrande repaid the missed interest payment just days ahead of the fresh deadline that would have forced a formal default.
After lurching from deadline to deadline, Evergrande once again found itself on the brink of default as the year neared its close, and pessimistic comments from the company raised expectations of direct state involvement and a managed debt restructuring.
Having made three 11th-hour payments in the previous two months, Evergrande again faced the end of a 30-day grace period with dues this time at $82.5 million.
After it failed to meet the deadline, Fitch became the first rating agency to declare its overseas bonds in default. Later, the picture worsened again as it was labelled a defaulter by S&P Global Ratings. This story will go on.
Theranos chief goes on trial in Silicon Valley reckoning
Nearly 20 years after the launch of US start-up Theranos, its CEO, Elizabeth Holmes, headed to trial in August charged with defrauding clients and investors, in a case that captured the attention of millions and prompted a reckoning with the Silicon Valley hype machine.
Theranos was founded in 2003 by a then 19-year-old Holmes, who was a Stanford University student. She had promised to upend the vast medical testing industry with a technology that could perform a range of health tests on just a small drop of blood.
The company reached its pinnacle about 10 years later, valued at a staggering $10 billion, before the claims were found to be largely fabricated and it all came tumbling down.
The US Department of Justice accused Holmes and her former boyfriend and co-president Ramesh Balwani of defrauding both consumers who purchased and used the tests and investors who were convinced it would become profitable.
Her defence sought to portray Holmes not as a villain but rather as a hard-working, young and naive businesswoman whose company simply failed, while the prosecution accused her of “lying and cheating” to attain wealth and fame at the expense of investors and patients.
Over the course of the trial, jurors heard testimony from more than two dozen witnesses, including patients and investors whom prosecutors said Holmes had deceived.
Just hours after the prosecution rested its case, Holmes took the stand in her own defence in a bombshell development that was categorised as a highly risky move by her legal team.
Court reporters relayed that Holmes walked slowly to the stand before a rapt courtroom filled with spectators and jurors, all wearing masks. She made eye contact with jurors and tilted her head to the side while making her case.
She said she could not have intentionally deceived anyone about Theranos’s technology, and presented herself as a naive and ambitious founder who believed her company’s technology worked.
She tried to frame past incidents as misunderstandings about her intentions. She implied that her board of directors should have given her better counsel, and suggested she had been too trusting of the doctors, scientists and engineers who worked at Theranos.
Holmes would also accuse her former boyfriend and business partner Ramesh Balwani of repeated rape during testimony, casting him as an abusive partner who strongly influenced her management of the company.
Lawyers recently laid out their closing arguments and a verdict is awaited.
Cold War vibes in Russian energy crisis
The year also saw the emergence of an energy war of sorts that would not have been out of place in the Cold War. It centred on claims Russian president Vladimir Putin sought to exert political influence over Europe via his control of a significant portion of its gas supply.
Energy prices across the continent soared during the year, and many observers were vocal in relation to suspicions that the Kremlin sought leverage on a range of issues by directing state-run monopoly Gazprom to limit gas supplies to the continent to drive up prices.
Gazprom, the world’s largest gas producer, typically supplies more than a third of the needs of countries across the European Union, but in November flows dropped to a six-year low. The development coincided with Russian aggression towards its neighbours in Ukraine.
Putin consistently and vehemently dismissed the suggestions and said the country was meeting all requests for gas supplies from Europe.
There were also suggestions Gazprom was using energy as a “weapon” to speed up approval of the recently built Nord Stream 2 pipeline which bypasses Ukraine to supply gas to Germany.
Putin told an energy conference in Moscow those accusations were “politically motivated blather”. He said the pipeline would help “significantly relieve tensions on the energy market, and that would have an effect on prices” if it were approved by German regulators.
However, he complained the project was being held up by EU “red tape”, including a requirement that Gazprom surrender its monopoly on Russian gas exports and give third parties access to 50 per cent of the pipeline.
Most recently, Germany’s energy regulator said it had “temporarily suspended” certification of the Nord Stream 2 pipeline, dealing a setback to the project and sparking a rise in UK and continental European gas prices.
Meanwhile, Gazprom reported a record net income of 582 billion rubles (€6.9 billion) from July to September compared with a net loss a year ago, raising further suspicions that the energy giant was profiting from the crisis.
As European Union finance ministers confronted the “unprecedented” spike in energy prices and the dependence on Russian gas, French finance minister Bruno Le Maire said gas prices had increased “massively and brutally”.
“It is clearly a matter of huge concern for all of us,” he said. “The situation that we are facing today is unbearable. Unbearable for our citizens, unbearable for the private companies. So there is a need to change.”
Facebook in crisis
Social media giant Facebook had an eventful year to say the least as it was first plunged into crisis when a whistleblower accused it of placing “profit over safety”, before it later underwent a significant rebrand.
Speaking on the US news programme 60 Minutes, .
Haugen suggested Facebook had lied to the public, exaggerating the progress it had made tackling hate, violence, and misinformation on its platform, presenting tens of thousands of pages of documents as evidence.
“There were conflicts of interest between what was good for the public and what was good for Facebook,” she said. “And Facebook, over and over again, chose to optimise for its own interests, like making more money.”
Among her claims were that Facebook had prematurely disbanded its civic integrity team – responsible for protecting the democratic process and tackling misinformation – after the 2020 US election, which contributed to the January 6th storming of Capitol Hill.
Haugen said her lawyers filed “at least eight complaints” with the Securities and Exchange Commission.
The revelations sparked a firestorm of criticism of Facebook from regulators and lawmakers across the political spectrum, who demanded more transparency from its executives and information about how it plans to address its myriad challenges.
Facebook chief executive Mark Zuckerberg hit back at Haugen’s testimony, and said her claims the company puts profit over people’s safety were “just not true”.
Meanwhile, Facebook’s profits topped $9 billion (€7.75 billion) in its most recent financial quarter, clearing investor predictions even as the company faced an onslaught of negative publicity over Haugen’s claims.
Later, Facebook changed its corporate brand to Meta, and announced plans for the company to target a new future built around an immersive digital world known as the metaverse.
“Today we are seen as a social media company but in our DNA we are a company that builds technology to connect people,” said Zuckerberg. “The metaverse is the next frontier, just like social networking was when we got started.”
Unfortunately for Zuckerberg, the rebrand was met with widespread derision by observers.
