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Businesses Brace for Currency Chaos in Asia, a Region With a History of Crisis

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Businesses Brace for Currency Chaos in Asia, a Region With a History of Crisis

Tigun Wibisana and Sandra Kok, who personal the SiTigun cafe on Penang Island in Malaysia, are dealing with an excruciating determination that might make or break their enterprise of 14 years: Can they improve costs to cowl rising bills with out driving prospects into the arms of their greater rivals?

The price of the espresso beans that the couple, who’re married, purchase is spiraling as a result of they’re traded globally in U.S. {dollars}, and the Malaysian ringgit has fallen to a 24-year low. Compound that with an inflationary spike in costs for butter and flour, important components for its pastries, and the store’s income have plunged greater than 25 p.c this 12 months.

“Finally we could have to boost costs to outlive, however I don’t have the heart to do it now,” stated Mr. Wibisana, 65, who roasts the beans and makes the baked items.

SiTigun is one among many companies in Asia which are being squeezed by the energy of the greenback, which has soared to report ranges this 12 months. America’s foreign money is used extensively to purchase and promote items around the globe, and its hypervalue is exacerbating the ache of surging costs for power and different imports attributable to the conflict in Ukraine and the pandemic.

All through Asia, from the Vietnamese dong to the Philippine peso, currencies are tumbling to report lows, the kind of widespread foreign money weak spot not seen because the 1997 monetary disaster. That has unnerved companies and policymakers who recall how a string of Asian currencies folded underneath the stress of a powerful greenback.

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To reduce the chance of that form of calamity, policymakers are scrambling to stabilize their currencies. The State Financial institution of Vietnam raised rates of interest by a full proportion level final month after Prime Minister Pham Minh Chinh implored the central financial institution to behave. The dong had fallen for 9 straight days to a 29-year low.

The identical day Vietnam raised rates of interest, Japan, the place the yen has dropped round 25 p.c in opposition to the greenback this 12 months, introduced it will intervene to strengthen its foreign money for the primary time since 1998. In China, the place the renminbi is buying and selling close to 14-year lows, the central financial institution has taken a collection of measures to gradual the foreign money’s depreciation, together with warning speculators in opposition to making bets on it.

Heightening the alarm, the greenback — powered by essentially the most fast Federal Reserve rate of interest will increase in many years — exhibits no indicators of slowing. It’s up almost 20 p.c in opposition to a gaggle of main currencies from a 12 months in the past.

In Asia, the difficulty dealing with native currencies has resurfaced the collective trauma of 25 years in the past, when pleasure over the area’s dazzling progress turned a disaster seemingly in a single day.

The chaos began in Thailand when the nation’s central financial institution ran out of the {dollars} it was utilizing to maintain its personal foreign money steady and again its loans. It rapidly unfold to South Korea, Indonesia and different nations as they struggled to cushion their falling currencies. Speculators who had charged into the area en masse anticipating large returns retreated simply as rapidly.

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By the top of 1997, the Worldwide Financial Fund had organized greater than $100 billion price of assist for Thailand, Indonesia and South Korea to stop their monetary programs from collapsing. The subsequent 12 months, the economies of the nations on the coronary heart of the disaster retreated sharply: 13.7 p.c in Indonesia, 9.7 p.c in Thailand, 6.7 p.c in Malaysia and 5.8 p.c in South Korea. Governments struggled with company bankruptcies and political instability.

“It was very insulting, humiliating and devastating, and I feel the area will always remember it,” stated Hoe Ee Khor, chief economist at ASEAN+3 Macroeconomic Analysis Workplace, often known as AMRO, a gaggle that helps the Chiang Mai Initiative, an settlement amongst Asian nations to pool funds to assist each other in a money disaster. “However due to that, they have been decided to by no means let it occur once more, they usually took the painful medication to reform.”

Most economists and monetary market analysts imagine there’s little threat {that a} comparable disaster will unfold throughout the area. At the least not but. Asian economies are essentially stronger than earlier than, they are saying, and the painful classes discovered from the meltdown spurred them to construct monetary programs designed to stop future collapses.

Nations have undergone a number of main adjustments which have made their economies a lot much less inclined to a powerful greenback than they have been within the late Nineties. For one factor, they’ve a lot much less debt borrowed in {dollars}: The scale of native foreign money bond markets in 10 Southeast Asian nations, plus Japan, China and South Korea, is about 123 p.c of their collective gross home product, in contrast with 74 p.c in 2000, in response to AMRO.

Many Asian central banks that used to maintain their trade charges in step with the dollar now enable them to fluctuate with market forces. Whereas meaning extra unstable trade charges, it additionally relieves some pent-up stress that may set off a collapse.

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And most Asian nations have extra international foreign money coming in than going out, permitting them to sock away important reserves that they will deploy in an emergency to complement imports or defend their very own foreign money from depreciating.

Consequently, Asia right now is “in a lot better form than every other area on the planet,” stated Sayuri Shira, a professor of economics at Keio College and former member of the Financial institution of Japan’s coverage board.

Nonetheless, the robust greenback is testing the area’s defenses, forcing central banks to make use of their conflict chests to prop up their currencies — primarily by shopping for their very own currencies and promoting {dollars}. India and Thailand have spent greater than 10 p.c of their reserves on interventions this 12 months, spending $75 billion and $27 billion within the international trade markets, in response to estimates from Nomura Holdings.

Corporations are having to adapt as falling currencies blow up their provide chains and put stress on their income.

Suh Jin, an govt at Mirage Furnishings on the outskirts of Seoul, stated the corporate imports $15 million to $20 million price of dwelling furnishings in a mean 12 months. However Mirage Furnishings, which buys most of its merchandise from Vietnam with U.S. {dollars}, has needed to lower its imports by 10 p.c since Might due to the weakening gained, which is buying and selling close to 13-year lows in opposition to the U.S. greenback.

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Whereas South Korea was in a position to emerge from the 1997 monetary disaster pretty rapidly, Mr. Suh stated, he’s apprehensive that the corporate could have to put off employees if the robust greenback and excessive inflation persist.

“We concern that the present scenario will last more,” he stated.

The robust greenback has affected even companies that not often use it.

Traditional Japan, a flower importer in Tokyo, had lengthy paid its South East Asian distributors in yen. However sellers hungry for worthwhile {dollars} have begun providing their merchandise elsewhere, making it troublesome to acquire some uncommon flowers, corresponding to orchids.

“Home manufacturing is falling, so we wish to import extra,” stated Kio Nishio, the corporate’s president. However the present scenario has made that troublesome, he stated.

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Some firms, in fact, can profit from a powerful greenback, which might carry company backside traces in nations like South Korea which are closely export centered. In Japan, buying and selling firms and main producers like Toyota which have substantial abroad enterprise have gotten a wholesome revenue enhance from belongings and earnings held in {dollars}.

On the SiTigun cafe in Malaysia, the total affect of the weak ringgit won’t be felt till months from now, when the following crop of beans has labored its method by farmers and middlemen to their espresso pots.

“The pandemic has already affected many companies, after which inflation got here as one other problem,” stated Ms. Kok, who manages the store. “However inflation and foreign money hits everybody. How will we survive?”

Liani MK contributed reporting from Penang, Malaysia; Hisako Ueno from Tokyo; and Jin Yu Younger from Seoul.

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New Mexico weighs whether to toss Alec Baldwin criminal charges in 'Rust' shooting

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New Mexico weighs whether to toss Alec Baldwin criminal charges in 'Rust' shooting

A New Mexico judge is weighing whether to dismiss involuntary manslaughter charges against Alec Baldwin for his alleged role in the 2021 shooting death of the “Rust” movie cinematographer.

Baldwin’s attorneys argued during a court hearing Friday that special prosecutor Kari T. Morrissey had abused her power by allegedly withholding “significant evidence,” including witnesses favorable to Baldwin, during a January grand jury proceeding.

The 66-year-old actor‘s lawyers said he was a victim of an “overzealous prosecutor” who steered grand jury proceedings in an effort to win an indictment in the high-profile case. At issue is whether the grand jury had been fully advised that they could hear from Baldwin’s witnesses during the proceedings. The grand jurors spent a day and a half questioning witnesses who were introduced by the prosecutors.

“The fix was in,” Baldwin attorney Alex Spiro told the judge Friday.

The grand jury indicted Baldwin on an involuntary manslaughter charge in the shooting death of Halyna Hutchins, the 42-year-old cinematographer, who was rehearsing a scene with Baldwin on Oct. 21, 2021. Baldwin has pleaded not guilty.

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At the conclusion of Friday’s hearing, New Mexico First Judicial District Judge Mary Marlowe Sommer said she would issue her ruling next week. Should she dismiss the case, it would mark the second time that the felony charges against Baldwin were dropped.

Marlowe Sommer’s decision is expected less than two months before Baldwin is scheduled to go on trial in a Santa Fe courtroom.

During the hearing, which was conducted virtually, Morrissey denied that she had acted in bad faith. She said she didn’t prevent jurors from getting answers to their questions or from seeking additional information. She told the judge that grand jurors had been given written instructions that outlined their ability to quiz other witnesses, including those favorable to the defense.

But because the jurors didn’t ask to hear from the witnesses who were on a list supplied by Baldwin’s lawyers, several key figures in the tragedy, including film director Joel Souza, property master Sarah Zachry and assistant director David Halls, were not called to testify. Instead, jurors heard from police officers, a crew member who was in the church and expert witnesses hired by prosecutors.

On the day of the shooting, Hutchins, Baldwin, Souza and about a dozen other crew members were gathered in an old wooden church at Bonanza Creek Ranch, south of Santa Fe, preparing for a scene. Hutchins, according to the actor, told him to pull his Colt .45 revolver from his holster and point it at the camera for an extreme close-up view. That’s when the gun went off.

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Hutchins died from her wounds. Souza was injured and recovered.

Last month, Marlowe Sommer sentenced the film’s armorer, Hannah Gutierrez, to 18 months in a New Mexico women’s prison for her role in the shooting. Morrissey argued that Gutierrez was criminally negligent by allegedly bringing the live ammunition to the movie production and unwittingly loading one of the lead bullets into Baldwin’s gun. Gutierrez denies bringing the ammunition on set.

Baldwin’s prosecution has long been fraught.

Morrissey and her law partner Jason J. Lewis joined the case last year after the first team of prosecutors was forced to step down due to missteps, including trying to charge Baldwin on a penalty enhancement that wasn’t in effect at the time of the tragedy.

“The government looked a little sophomoric and unprofessional when they charged him for a crime that wasn’t a crime at the time,” said Los Angeles litigator Tre Lovell, who is not involved in the “Rust” shooting matter. “That was embarrassing.”

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The original prosecutors also displayed bluster in media interviews, making statements about the need to hold Baldwin responsible for his actions. Defense attorneys have argued that such commentary was out of line and prejudicial against the actor.

Shortly after Morrissey and Lewis joined the case, they dropped the charges against Baldwin. At the time, they said they needed more time to review evidence and address issues raised by Baldwin’s team. Morrissey and Lewis reserved the right to refile the charges.

Immediately after the charges were dropped, Baldwin traveled to Montana to finish the filming of “Rust.”

On Friday, Morrissey said last year’s decision to drop the charges was made at the request of Baldwin’s lead attorney, Luke Nikas, who had presented evidence that the gun Baldwin was using had been modified. Subsequent tests showed the gun was functional that day, but during FBI testing in 2022, the gun was broken by forensic analysts who wanted to see how much pressure needed to be applied for the hammer to drop.

The damaged gun is one of several complications that prosecutors are facing. Legal experts have said that winning a conviction in Baldwin’s case is expected to be more difficult than in the trial of Gutierrez, whose job was to make sure the weapons were safe.

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Baldwin was handed the prop gun that day and was told that it was “cold,” meaning there was no ammunition inside. In reality, the chamber of the revolver contained six rounds — five so-called dummies and the lead bullet that killed Hutchins.

“The state has not even alleged that Baldwin had a subjective awareness of a substantial risk that the firearm held live ammunition,” Nikas argued in the motion to dismiss the charges. “Without a subjective awareness, he could not have committed the crime of involuntary manslaughter, which requires that the defendant consciously disregarded a substantial and unjustifiable risk that his actions could cause another person’s death.”

Baldwin has argued, with support from Hollywood’s performers’ union SAG-AFTRA, that it wasn’t his job to be the gun safety officer on set.

The actor has said he was relying on other professionals to do their jobs to ensure a safe production.

Prosecutors have an obligation to present evidence in a “fair and impartial manner,” Baldwin’s attorneys said.

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The judge grilled Morrissey on her thinking at the time, including an instance when she had interrupted a sheriff’s deputy and prevented her from answering a question about gun safety measures on set. Morrissey said that deputy was not an expert in film set protocols and that she instead wanted jurors to get “the most accurate information,” which would come from a veteran film crew member who was an expert witness.

Baldwin’s attorneys were also sharply critical of Morrissey for divulging during a media interview the date the grand jury was expected to meet. Morrissey said she took responsibility for providing to a reporter the initial date, which had been scheduled for mid-November. However, the matter was postponed, and the case wasn’t brought before the grand jury until two months later, in mid-January.

Lovell, the L.A. entertainment attorney, said he believes the case will go to trial and that efforts to throw out the indictment will be unsuccessful.

“Courts are really reluctant to dismiss cases brought by a grand jury,” Lovell said. “Courts have limited ability to review what goes to a grand jury unless it was provided in bad faith.”

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Troubled EV maker Fisker closing Manhattan Beach headquarters

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Troubled EV maker Fisker closing Manhattan Beach headquarters

In an effort to stave off bankruptcy, electric-vehicle maker Fisker Inc. is closing its Manhattan Beach headquarters and has secured a $3.5-million lifeline as it continues to explore an acquisition or other strategic alternative.

The troubled company, which had about 300 employees in the 72,000-square-foot offices at the end of March, is moving its remaining workers to an engineering and distribution facility in La Palma in Orange County, said a person familiar with Fisker’s operations who was not authorized to comment.

In all, the company had roughly 1,135 employees as of mid-April, following an announced 15% cut to its workforce.

Fisker has been attempting to avoid bankruptcy since March, when it announced that talks over a strategic alliance with a major automaker had ended, squelching a deal that would have given it $150 million in new financing.

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That caused its shares to collapse to pennies, prompting the New York Stock Exchange to delist the stock, which violated another debt agreement the company struck with an investor last year, according to a regulatory filing.

A major automaker, said to be Nissan, was reportedly in talks to invest in Fisker. Nissan was considering making the Fisker Alaska truck at a U.S. plant — a deal that would come with a $400-million investment, Reuters first reported. Fisker did not confirm the reports.

Fisker announced this week that it secured a $3.5 million short-term loan, as it continues to operate and sell its midsize Ocean SUV. The note is due June 24 and has the potential to increase to $7.5 million.

The Ocean, a competitor to Tesla’s Model Y, was released last year to mixed reviews; some praised its build and styling, but the car has been plagued by software glitches.

The National Highway Traffic Safety Administration has four investigations into the vehicle, including one opened this month after complaints that the SUV’s automatic emergency braking system randomly triggered.

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Other probes are looking into reports that a door on the Ocean will not open and complaints about a loss of braking performance. The company has said it is working with the regulator.

Fisker said this week that it had added three dealers to its networks in California and New Jersey, which it began building after a plan to sell direct to consumers — like Tesla does — didn’t pan out. It also announced additional price cuts on some Ocean models.

In March, Fisker slashed the price on its entire lineup of 2023 Oceans by more than 30%. The company also said that it had paused production at its contract manufacturing plant in Austria, which produced about 10,200 Oceans last year.

Fisker was founded in 2016 by noted car designer Henrik Fisker, who has said the Ocean was inspired by California. The SUV features a full-length solar roof, an interior composed of “vegan” recycled plastic and a drop-down rear window that can fit a surf board.

Fisker is not the only startup that has been struggling amid a slowdown in the domestic market for electric vehicles and a rise in interest rates.

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Rivian Automotive, an Irvine maker of electric trucks, has informed state officials it will lay off more than 120 employees beginning in June. In February, the company announced it was cutting 10% of its workforce. The company’s shares have lost more than half of their value since last year.

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Las Vegas' Mirage Resort to close after 34-year run. Volcano to go dormant

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Las Vegas' Mirage Resort to close after 34-year run. Volcano to go dormant

Once hailed as “Las Vegas’ first 21 Century resort,” The Mirage Hotel & Casino confirmed Wednesday that its iconic volcano outside of its front entrance is going dormant less than a quarter of a century into the new millennium.

Owner Hard Rock International announced the hotel will cease operations on July 17, with bookings being accepted until July 14. The iconic resort — sporting a jungle-fantasy theme —was perhaps best known for its exploding 54-foot man-made volcano, magicians Siegfried and Roy, and its white tigers and dolphins.

“We’d like to thank the Las Vegas community and team members for warmly welcoming Hard Rock after enjoying 34 years at The Mirage,” said Jim Allen, Chairman of Hard Rock International in a statement.

The resort is expected to be redeveloped into the Hard Rock Hotel & Casino and Guitar Hotel Las Vegas, with the volcano giving way to a nearly 700-foot guitar-shaped hotel. The project is expected to open in spring 2027. A similar 638-room hotel stands in Hollywood, Fla.

The Associated Press reported that more than 3,000 employees will be laid off. Hard Rock acknowledged it would pay roughly $80 million in severance packages for union and nonunion labor.

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The Culinary and Bartenders Union accounts for about 1,700 Mirage workers. It announced Wednesday that its workers have two options.

The first was a severance package of $2,000 for every year of service plus six months of pension and health benefits. The second option gives employees a lesser, undisclosed amount while maintaining seniority rights for the duration of the property’s closure along with 36 months of recall rights for jobs at the new hotel.

“Culinary Union members at The Mirage have a strong union contract, ensuring that workers are protected, even as the property closes its doors entirely for three years from July 2024 – May 2027,” said Ted Pappageorge, Culinary Union secretary-treasurer, in a statement Wednesday.

The new hotel is projected to employ nearly 7,000 employees, according to Hard Rock management, while 2,500 construction jobs are expected during the rebuilding process.

Hard Rock said that all reservations beyond July 14 would be canceled and that guests should contact the guest services department or booking agency for a refund.

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The Mirage’s closure is the second on the strip this year.

In April, the 66-year-old Tropicana closed its doors to make way for a 30,000-seat stadium that is expected to serve as the home of the Oakland A’s.

The Mirage’s opening by casino tycoon Stephen A. Wynn in 1989 was hailed as the ushering of a new era of resorts. It was the first strip hotel to open since the MGM Grand in 1973.

Wynn shelled out $600 million, then the most expensive casino project, for the sprawling 103-acre property.

The Mirage was the first fully integrated hotel, according to Alan Feldman, a Distinguished Fellow at UNLV’s International Gaming Institute.

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Integration meant operating and treating all facets of the resort, including casino, food and beverage, retail, entertainment and convention space, with equal importance, according to Feldman, who rose to become an executive with the Mirage and stayed from 1989 to 2019.

Feldman said hotel owners previously cared first about the casino and “everything else was last.”

“They gave away entertainment, food and rooms as long as someone came and played,” said Feldman. “The Mirage was the first to believe you could actually make money in these areas if you invested enough.”

Its glistening 30-story white-and-gold towers were said to make neighboring Caesars Palace look “retiring by comparison.” Traffic occasionally backed up on the strip as engineers tested gas-flared flames 40 feet into the air every few minutes.

“People just got out of the cars and went over to see what was going on,” one limousine driver said at the time.

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The hotel included a 20,000-gallon fish tank at its reception desk and 3,049 rooms.

Its animals — and its white tiger habitat — brought the resort fame and infamy, including in 2003 when a tiger critically injured magician Roy Horn.

The Mirage’s opening kicked off a resort building and remodeling spree that included the debut of the Circus Circus’ Excalibur in June 1990, the $250-million renovation of Caesars Palace and the opening of Treasure Island in 1994.

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