Aurelia Butler

NEW YORK (Reuters) – Violence and crime absorb almost 3.5% of Latin America and the Caribbean’s (LAC) economic output, depleting funds that could be used in education and assisting the vulnerable, a report by the Inter-American Development Bank (IDB) showed.Beyond the human toll, the cost of crime amounts to almost 80% of the region’s public budgets for education, twice as much as what is spent on social assistance, and 12 times the budget for research and development, the study, using data from 2022 and published on Monday (NASDAQ:MNDY), showed.Crime “limits growth, drives inequality, and diverts private and public investment. We must join and redouble efforts to change that reality,” IDB President Ilan Goldfajn said in a statement.The study calculates the direct cost of crime in three areas: loss of human capital as productive time, spending on crime mitigation by businesses, and public spending on crime prevention and criminal justice. In 2022, security expenses by private businesses accounted for 47% of the total cost of crime, while state spending on crime prevention represented 31% and the loss of human capital made up 22%.For comparison, a set of data from Poland, Ireland, the Czech Republic, Portugal, Netherlands, and Sweden showed their costs are 42% lower than in LAC. If the region got to the levels of its European counterparts, it would have near 1% of GDP to invest in social welfare and other programs, according to the IDB.A parallel study from the International Monetary Fund cites Latin America as accounting for a third of homicides globally despite holding less than 10% of the world’s population, with organized crime being especially costly.”The presence of gangs and drug trafficking amplify the costs of doing business,” the IMF report said. “A novel analysis of Mexican firms suggests that the damage costs of crime are four times higher for firms that report gangs operating in their vicinity.”The fiscal cost for governments is also considerable, according to the IMF, which states that spending on public order and safety in the region averages around 1.9% of GDP and over 7% of overall spending.”While spending more on security and deploying more police seems to contribute to lowering crime, other factors are likely more important in LAC, with spending efficiency playing a critical role. For example, despite a high proportion of spending on the judiciary, the courts’ ability to punish crimes remains weak.”Among policy proposals the IMF says LAC should establish a “regional knowledge platform” to collect, exchange, and analyze data, alongside the dissemination of best practices on effective economic and security policy responses. More

More than 220 people died after torrential rains on Oct. 29 triggered floods that swept through the suburbs south of the regional capital Valencia. The measures are on top of the 10.6 billion euros in aid announced last week.”There are still streets to be cleaned, there are garages to be drained, there are many infrastructures to be repaired and, above all, many lives, many homes and many businesses to be restored to normal,” Sanchez told reporters after the weekly cabinet meeting.The package, with 110 measures, extends aid to rental households and includes a 500 million-euro package to remove mud in the affected area and 200 million euros in aid to farmers.Sanchez said it includes an additional 12-months of mortgage relief for vulnerable households, in addition to the one-year moratorium announced last week.Sanchez also said the government will assign 150 houses or flats in or near the damaged areas to affected families and will earmark 25 million euros for buying houses. ($1 = 0.9380 euros) More

Leftist leader Luiz Inacio Lula da Silva told broadcaster RedeTV! “I beat them once and I will win again,” after market jitters over the sustainability of Brazil’s public finances sent the local currency tumbling and interest rate futures soaring.Brazil’s real has recently dropped to its weakest against the dollar since March 2021, piling pressure on the government to introduce spending cuts quickly to show it is committed to fiscal discipline.”I am in a very, very serious discussion process with the government… We can no longer play, every time we have to cut spending, on the shoulders of the people most in need,” Lula said.”It’s a responsibility of the executive, it’s a responsibility of the judiciary. I want to know if they are also willing to give up what is excessive, I want to know if Congress is also willing to cut spending,” Lula added. Lula’s has typically viewed spending on things like education and social security as investments rather than expenses, but many economists have warned the fiscal framework will become unsustainable unless changes are made.Even the central bank underscored the need for fiscal discipline to counter inflation as it accelerated the pace of monetary tightening at its last meeting.The fiscal framework combines primary budget targets with a cap for overall spending growth to a certain threshold above inflation. However, with many mandatory expenses – such as social benefits and pensions – growing at a faster rate, the framework restricts room for investments and operational spending. More

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LONDON (Reuters) – Hedge funds snapped up bank stocks at the quickest clip in three years while taking bets against renewable electricity producers last week, a Goldman Sachs note showed, as investors reacted to Donald Trump’s win in the U.S. presidential election. Financial stocks, such as banks and trading companies, were the most popular and most net bought sector on Goldman Sachs’ prime brokerage trading desk last week, the note from Friday and seen by Reuters on Monday (NASDAQ:MNDY) showed. While the note did not specify which region’s banks attracted the most attention, a second note also sent from Goldman Sachs’ prime brokerage the same day said U.S. banks would benefit.Financial stocks are expected to get a boost from a lighter regulatory touch which many believe will come with the new Trump term, the second note said.Finance companies were also seen benefiting from expected tax reform, it added. “There is scope for U.S. Financials positioning to rise further,” the second Goldman note said, adding that current hedge fund positioning in this stock sector remained on the lower side, historically. U.S. bank stocks rose as much as 11.1% on Nov. 6, from the previous day’s close after the news of Trump’s election win. Prime brokerage desks lend to and arrange trades for hedge funds. Long stock bets, expecting rising prices, were led by banks as well as companies offering consumer finance, capital markets and financial services, the first note said. Bullish bets centered on U.S. stocks but included equities in developing markets in Asia. In Europe, hedge funds exited short positions and added long ones. A short bet anticipates the value of an asset price will fall. Utilities companies were net sold for the first time in four weeks, “driven almost entirely by short sales,” Goldman Sachs’ first note said. Independent (LON:IOG) power and renewable electricity producers were the most sold, with hedge fund bets against U.S. utilities companies numbered at two shorts for every long position, the bank said. More