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How Israelis justify genocide to themselves

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How Israelis justify genocide to themselves

Israel’s genocide in Gaza has now surpassed a year, and is quickly spiraling into a regional war that now includes a ground front in Lebanon. As the world reels from the horrors witnessed in the past year alone, how are members of Israeli society justifying those horrors to themselves? In part two of this two-part episode commemorating the solemn anniversary of Oct. 7, Canada-based Israeli filmmaker and journalist Lia Tarachansky joins The Marc Steiner Show to discuss the dark psychological forces shaping Israelis’ support for the occupation and ethnic cleansing of Palestinians.

Studio Production: Cameron Granadino
Post-Production: David Hebden


Transcript

Marc Steiner:  Welcome to The Marc Steiner Show. I’m Marc Steiner. It’s great to have you all with us.

And we are once again going to look at what’s happening in the war in Gaza, where we see now, how many people have been killed? Over 40,000 people have been killed in Gaza. 96,000 people have been wounded or hurt. At least 10,000 are missing. In Israel, 1,200 people have been killed. At least 8,700 are injured. And it’s escalating into Lebanon, and we don’t know where this is going to take us.

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But for many of us, it’s deeply personal, and it’s also a war that we have to work to end. I’m talking today with Lia Tarachansky, who has worked here at The Real News. She’s been a colleague for a long time, an incredible journalist and filmmaker, multimedia artist, born in the Soviet Union, lived in Israel, now lives in Canada. She produced this incredible film On The Side of the Road, among others, and joins us now.

Lia, welcome. Good to have you with us.

Lia Tarachansky:  Thanks, Marc. Thanks for having me back.

Marc Steiner:  It’s always good to talk to you, always. I want to start with this quote that I found on your webpage, and it was written before, but it just spoke to me so deeply about where we are now. And I just want to start there before we get into any political social analysis of where we’re going because it’s so deeply personal and upsetting, watching what’s going on.

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As I said to you before we went on the air, the kibbutzim that were attacked is where my family lives. Some are dead, some are hostages, from what I understand, people I don’t know. My best friend in the Palestinian world had his nephew shot and killed by settlers in the West Bank.

And this is what you wrote: “My rage is sadness. My rage is fear. My rage is fire. My rage is silence. I am so much rage. I don’t know what to do with the rage. I turn it into sadness, but the sadness feels endless. Bottomless. They can’t even call. They can’t even text their loved ones to tell them they’re still alive.”

There’s something, just for me, and I know it must be for you because you lived it, deeply troubling and emotional about this war. There’s something really different here.

Lia Tarachansky:  Yeah. We’ve never lived through anything like this.

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Marc Steiner:  Just talk for a moment just about you. All the stuff you’ve been through, the work you’ve done, standing up and saying what has to be said, living and growing up in Israel. Can you talk just for a moment about Lia Tarachansky and where you are at this moment?

Lia Tarachansky:  Well, I was a correspondent for The Real News for many years in Israel and Palestine. It was an experience that formed my understanding to a very deep level by being in the West Bank several times a week and then going home to Israel and back and forth over years, over many wars.

And then I started to work on a documentary that investigated a group of Israeli and American rabbis that were trying to bring back biblical Judaism and transform the political conflict into a religious conflict.

And it was part of an ongoing investigation, including a murder investigation I was covering for another film of seeing this rise of extreme ideas in Israel, what we nicknamed the Jewish ISIS, this group of people that are pushing towards regional war, pushing towards the return of a very kind of ancient, biblical, and very repressive understanding of Jewishness.

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And I remember thinking, wow, this is so crazy. These people are growing, but we are… There’s no way we’re going to go through what they’re advocating for.

But the confluence of the increase in the movement from a few little groups of people who even the Israeli police, at some point, sent to jail for their extreme views and for their attacks on Palestinians, some of them killed Palestinians. They had long track records with the police. Today, they’re a third of the Israeli Parliament.

The confluence of those ideologies becoming so mainstream that they entered the Parliament to such an extent with our prime minister’s absolute dedication to not go to jail for his corruption means that there’s a lot of very powerful people whose interest is to go deeper into war. And it’s not just on the Israeli side.

The last year has been shocking, unbelievable. The level of mourning that we are constantly in is unparalleled in our history, with the exception of, I think, maybe for Israelis, the time before the state was created.

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As a human being, I’m speechless. The idea that after a year of almost constant bombardment and attack on Gaza, the Israeli government is now escalating into Lebanon, and escalating the very fragile stalemate with Ira is horrifying. It’s terrifying. There’s no other words for it.

Marc Steiner:  I understand what you said completely. I am not Israeli, but I feel the same. Watching this is just emotionally overwhelming.

And politically, the question, where do you think this goes? Where do you think this takes us? You have this very right-wing Israeli government with a huge religious fundamentalist faction in the government pushing these words you were just describing. It’s not so different, in some ways, on the Palestinian side with Hamas.

When you grew up Jewish, Masada is one of the things you talk about, when the Jews all committed suicide and the war that killed the Jews. And it feels like we are collectively, in Israel, committing that same suicide while we’re destroying everything around us.

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Lia Tarachansky:  I don’t know what happened in Masada. I only know the story of the people who got to tell the story, but we don’t know what happened there.

Marc Steiner:  No, not really. Right.

Lia Tarachansky:  I can tell you Israelis don’t want to commit suicide. The vast majority of Israelis don’t want what is happening, but they perceive this as the way to survive. Oct. 7 was a shocking event for Israelis. And while you’re reading the American and European news, we’re reading the Hebrew news. And at every war, Israelis don’t have coverage of what’s going on in Gaza, and they don’t really know.

And you can argue, well, they should know. But unfortunately, these kind of echo chambers that we are siloed in mean that we don’t listen across ethnicities, across nations, across political ideas, and certainly not across war.

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And so, as shocking as it is, the vast majority of Israelis don’t know what’s going on in Gaza, don’t understand, exactly, the impact of what is going on in Lebanon, a country that was already devastated by so many challenges, to now drag the country into this. Just like the hundreds of thousands of fleeing Lebanese, the average Israeli doesn’t want war, but there are political forces a lot stronger than us.

And with an entire country built on military service and on very censored media coverage and a very censored education in schools, this is what you get.

Marc Steiner:  Is it censorship? Is it the government? The military says, no, you can’t print this? Is it that the Israeli press doesn’t want to print it? I mean, why is that happening?

Lia Tarachansky:  Well, certainly the Israeli government is very deeply involved in what is covered in the Israeli press through a network of gag orders. There’s very little that is allowed to be printed in the Israeli press about how the war is actually going on.

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The truth is that the Israeli war in Gaza has been a failure for the Israeli military, which is shocking considering how powerful the Israeli military is, how many weapons it has, and how much surveillance it has of Gaza. It’s still not succeeding because the objective that is stated to the Israeli public is an unachievable objective.

And so there is no way to destroy Hamas. There’s no way to destroy a political party. The only thing that brutality is going to cause is more brutality. And so the war as presented to the Israeli public is very curated. The Israeli public very rarely looks at international press.

And anyway, the international press is not really covering what’s going on in Gaza anymore. They talk about casualties and they talk about access to water and food, but they don’t have people on the ground. And Palestinian journalists, so many of them have been killed that there’s very little accurate information coming out.

So yeah, there’s a lot of official censorship on behalf of the Israeli government, both through the military censor and through the gag orders. There’s even more self-censorship on behalf of Israeli journalists that are, at the end of the day, Israelis, and are keenly aware of the fact that their future as journalists is dependent on them not covering certain things.

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The vast majority of Israeli journalists don’t speak Arabic, don’t have contacts in Gaza. Khalil Abu Yahia who was a person who spoke quite a bit and was interviewed quite a bit was killed very shortly after Oct. 7. So many journalists have been killed that even if you had contacts, which most journalists don’t, there’s a good chance that they didn’t make it.

So it’s a mess. There’s no other way of putting it. It’s a complete mess, and it’s a train wreck that’s being driven by drunk and self-obsessed narcissists. And we are being dragged into this train wreck with them.

Marc Steiner:  We, being the entire world, or we being… Who’s the we?

Lia Tarachansky:  I mean, obviously, I’m looking at my community.

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Marc Steiner:  Yes, right, right.

Lia Tarachansky:  But it’s not just Israelis and Palestinians, and Lebanese and Iranians, it’s also now the entire region. The whole world is involved in arming and profiting from this fight. So you can say you as Americans are, I would say, even more implicated than Israelis and what’s going on. And if you were to stand up to your government, this war would end tomorrow. But when you have these kinds of periodic genocides, you lose your motivation for political action, and this is the result of it.

Marc Steiner:  What you just said I think is really critical, which is that the American government is key to this. It’s probably the only force on the earth at this moment that can stop the war.

Lia Tarachansky:  Yes. Well, the American government has always been lukewarm on stopping Israeli wars.

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Marc Steiner:  It’s true. Now, we’re in the midst of an election, which makes it even more difficult because people are afraid to take a position because they’re afraid to lose the election. So all that is complicating what’s happening at the moment.

Lia Tarachansky:  Completely, yes.

Marc Steiner:  The reason I was looking forward to talking to you is because I know all the things you’ve written, all the things that you’ve produced, this film, you have a deep sense of the place and what’s going on. And I think that what you’re saying now is that what we’re witnessing now in Gaza, in Israel, the attack in Lebanon, this could really affect the entire planet very shortly if it’s not stopped.

Lia Tarachansky:  It is affecting the entire planet right now. But I think that when you become complacent, maybe you need a gun in your face until you actually open your eyes.

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Marc Steiner:  Yes. I mean, it’s true. People don’t feel that yet.

Lia Tarachansky:  Oct. 7 was a wake-up call. An act of such brutality has a way of clarifying things. Gaza has been an open-air prison for many, many years. And in the minds of most Israelis, it is someplace over there where we don’t talk about it. It doesn’t matter. It’s just a bunch of terrorists. Out of sight, out of mind.

When Oct. 7 happened, the brutality of Oct. 7 breached those mechanisms of denial in a way that I don’t know if anything else could have. So call this our wake-up call. And when you have a system that is so brutal like the Israeli occupation, that’s what you get. This is what you get.

Marc Steiner:  Is there any light? Is there any hope? Is there any way this ends? I mean, it seems to me that the United States has to step in on some level to make it happen. The last, but I don’t know how that… Go ahead. I’m sorry.

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Lia Tarachansky:  And Kamala Harris will not get involved. She can’t afford in her first months and years of leadership to get involved. It’s not going to happen. Not with your American current political system.

Marc Steiner:  I mean, it just seems to me that however this ends in the next six months to a year, however long it is, that this is a critical turning point for the Middle East, for Europe, for the United States.

Lia Tarachansky:  The only way this can end is if through, even pure lies, you can convince Israelis that they have won and that they are safe. Like any small country, especially a country that’s been through so many wars and that has a self-narrative of being a victim of history, you have to act in extremely brutal ways in order to fight overwhelming enemies. We know this from basic military strategy.

Why does Daesh or ISIS, as you call it, why do they behead people? Because you have to appear to your enemy to be completely crazy and brutal to a point that they will not screw with you because you are actually much more powerless than you portray yourself.

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Israeli military, the Israeli policy towards Palestinians has always been to appear as brutal and insane and genocidal as you can so that everyone assumes that you’ll do whatever it takes to the end. That’s the military strategy if you are surrounded by Lebanon, and Syria, and Jordan, and Egypt, and we’ve had wars with all of them. And of course, Oct. 7 is just the latest in many, many, many decades of Palestinian resistance, or what Israelis would call attacks on civilians.

And in that kind of environment, your only option is to appear more crazy, more brutal, more willing to kill than the next guy. If you make Israelis feel or appear as though they have somehow succeeded in achieving some sense of safety, you can end this war tomorrow. But I think that the vast majority of people are either busy in reactionist condemnation that may be justified, but doesn’t lead to much on the ground. No real change on the ground or with the program.

So we’re seeing little bits here and there. In Canada, we did a little bit of an arms embargo, but it’s only partial, and it’s not a real arms embargo. The contemporary arms market is incredibly complex and decentralized, and so you would have to get basically the entire world on board to end it.

Marc Steiner:  Hearing both your deep understanding of the situation politically and historically, and also the pain I hear in your voice at the same time talking about where we are. I had a conversation the other day with a Palestinian who said in our conversation, all the Israelis have to leave for this to be over.

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Lia Tarachansky:  Yeah. There’s a very messy understanding of decolonization and anti-colonialism, in a lot of the pro-Palestinian left, unfortunately. There’s a very thin understanding of Israel and Israeli society. Where are the Israelis going to go?

Half the Israelis are descendants of refugees from the Arab world and the Muslim world. I don’t see Algerians and Egyptians and Iraqis offering the descendants of Jewish refugees their properties back. I don’t see the Moroccan government offering citizenship to Moroccan Jews. Not that they would go back at this point. A third of us, or sorry, excuse me, 20% of Israeli Jews are Soviet refugees, soviet immigrants.

Marc Steiner:  Like your family.

Lia Tarachansky:  Yeah. We came to Israel, we didn’t even have status because we fled the Soviet Union. We have nowhere to go back to. What, am I going to go back to the middle of another war in Ukraine?

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The vast majority of us have nowhere else to go. And when you corner someone, they fight by any means necessary. The Ashkenazi elites that have roots in the founding fathers and all that shit, they have another citizenship. They could go to Germany. They could go to Portugal. They could go elsewhere. I got very lucky. I ended up in Canada and I have options. But the vast majority of Jews in Israel don’t have those options, don’t have another home to go to.

The history of decolonization has to do with a metropole, a European country that goes into another country, colonizes, and sends its settlers to that country to take over.

This is a different story with Israel. I’m not saying settler colonialism is not a major part of what led to the current fight. Absolutely it is. But there’s many different things as well. There is no metropole. The people that founded the state may have had some colonial ideas, but the people who made up the bulk of the state are refugees.

This is the reality. We are not going to solve this by living in the what-if world of 1947 of what if we abandon Zionism? What if we think about decolonization? Okay, Israel exists. This is where we are. Israel exists. Israel has existed for four generations. There is now an Israeli culture, a Hebrew language that’s spoken. There’s a way of life. It is. Deal with the reality as is.

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You want all the Israelis to go somewhere else? [Inaudible], give them a piece of whatever other place, and then we can do the intellectual and cultural and psychological war of convincing them. That’s not going to happen. So in the reality of today, what do we do to end this? This is the only question we should be thinking about.

Marc Steiner:  So before we close out here, what you just said, just to ponder what you just said, how do we end this? It makes me think of what happened that I covered intensely in South Africa. At the end of Apartheid, everybody stayed in South Africa. Very few people left.

Lia Tarachansky:  As they succeeded to convince the white people that the end of Apartheid will not bring about their media death, [inaudible] did in other parts of Africa. In Zimbabwe, after the revolution, there was a systemic killing of white settlers. We can sit here and debate the morality of decolonization until the cows come home but you’re not going to create change until you make people feel safe, until you make them understand. You are in the Middle East, Israelis. Be part of the Middle East.

Marc Steiner:  It feels intractable, but I can’t believe it is intractable, that there’s got to be…

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Lia Tarachansky:  Well, people like us, Marc, don’t have the luxury of hopelessness.

Marc Steiner:  [Laughs] it’s true. It’s true. But people like us, even inside the Jewish world, that group is growing.

Lia Tarachansky:  Sure. Yeah. I mean, at the end of the day, we’re the only ones who are going to be able to convince the Israelis that they are safe.

Marc Steiner:  To me, it’s always deeply important to talk with you about these things because you have a deep analysis laced with serious passion about what’s going on at the moment. And I think it needs to be heard, which is one of the reasons I called you and said, would you come on today? Because I think you need to be heard.

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Lia Tarachansky:  I feel like I have nothing to say anymore. Those words that I wrote a year ago when we still thought that Vivian Silver was alive, and before I knew the Hayim Katsman was dead, and before we knew that Haya Bokchev was dead, and before Khalil Abu Yahia was dead, those words, I have nothing left to say. There’s nothing to be said. It is so big. The level of destruction and violence and brutality and cruelty is so enormous.

The fact that tens of thousands of Israelis in the middle of a war are still protesting this corrupt government is a miracle. The fact that people still go out on the streets in Germany where it’s essentially illegal to be pro-Palestinian at this point, it’s… You’re seeing bravery in moments like these, and we need to hold each other up in these moments of uncertainty because people like us don’t have the luxury of hopelessness.

But if you want a kernel of hope, and I’m very cautious of optimism. As a political journalist, I think optimism is a very dangerous thing to have. Optimism is an emotion. Optimism is a feeling. Optimism is an outlook on life. And it’s destructive in situations like these where we are struggling so hard to see the reality.

Because let’s not fool ourselves, this war is going on because we are not seeing reality, because we are not tackling our denials and because we are not allowing ourselves to see. So hope, to me, is a different animal. Hope is a set of actions. You don’t hope out of optimism, you hope out of necessity.

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And there’s this incredible Ugandan scholar, world-class scholar, Mahmood Mamdani. And he’s a scholar also, amongst other things, of colonialism. He wrote a remarkable book called Neither [Settler nor Native].

Marc Steiner:  Called what?

Lia Tarachansky:  Neither [Settler nor Native]. And this is the latest book in many, many, many years. He was in Rwanda and he was in South Africa in 1984. And he was covering and looking at all these peace initiatives in Rwanda about reconciliation in 1984. And in 1984, it looked like South Africa was going to descend into total civil war and chaos, and it looked like Rwanda was moving towards [crosstalk].

Marc Steiner:  Right.

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Lia Tarachansky:  And as we know, 10 years later in 1994, there was a genocidal civil war in Rwanda that had colonial roots that left so many people dead, and South Africa ended Apartheid.

So the way things look does not often have bearing on the future. Many, many, many people have tried to predict what’s going to go on in Israel and Palestine, and then something happens and it all goes sideways. All of us were saying the escalation with Iran is going to lead to a nuclear war, nuclear winter. And then when it actually led to escalation to the point where Iran and Israel were lobbing weapons at each other, it led to nothing because there are other factors at play, and we as outsiders to those factors can only see a small fraction of the surface.

So you don’t know what the impact of your work is, you don’t know how you are connected to other people, and you don’t know what is actually happening on the ground unless you’re fighting it on the ground.

So considering our limited access, I think, just do what you can do that you can live with. I can’t ignore what’s going on. I feel a deep responsibility to be involved, to be informed, to sponsor refugees to Canada out of this place, to do anything that is going to make this even a tiny little fraction better. And I know that you do the same, and I hope that your audience does too.

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Marc Steiner:  Lia Tarachansky, A, let me just, again, thank you for everything you do, and I appreciate you taking the time today. I really thought this was a very important conversation, and a very difficult one. And I want to thank you for being willing to take the time and joining us here today at The Real News on The Marc Steiner Show. It’s always a pleasure to talk to you.

Lia Tarachansky:  Thanks, Marc.

Marc Steiner:  Once again, thank you to Lia Tarachansky for joining us today. And thank you to all of you for listening. And thanks to Dave Hebden for running and editing the program, our producer, Rosette Sewali, and the tireless Kayla Rivara for making it all work behind the scenes, and everyone here at The Real News for making the show possible. So for the crew here at The Real News, I’m Marc Steiner. Stay involved, keep listening, and take care.

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House prices rise for first time in two years but pressures on renters grow

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BIRMINGHAM, UNITED KINGDOM - OCTOBER 14: An array of To Let and For Sale signs protrude from houses in the Selly Oak area of Birmingham on October 14, 2014 in Birmingham, United Kingdom. The ONS (Office for National Statistics) have released details of it's findings showing the north-south divide in house prices is the biggest in history. Properties in the London area are nearly 3.5 times more expensive than homes in the north-east of England. (Photo by Christopher Furlong/Getty Images)

House prices across the country are rising in England and Wales overall for the first time in two years, according to a survey.

Property professionals reported prices increasing in September, the first positive reading since October 2022. Demand, sales and new listings all grew in September, the Royal Institution of Chartered Surveyors (RICS) said.

The survey reported demand from buyers rose in September and sales increased, with many expecting further rises in the next three months and 45 per cent predicting an increase over the next 12 months. Just over a fifth (22 per cent) of professionals reported a rise in new listings.

The positive outlook for homebuyers was contrasted by a bleak outlook for renters with demand continuing to grow and outstrip supply. September saw 22 per cent of respondents showing growing demand, but a further drop in properties listed for rent, with a 29 per cent retreat. 

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RICS says this trend is further influenced by some landlords listing their properties for sale before potential Capital Gains Tax rises. Unfortunately for renters, the continuing squeeze on supply will likely mean further rent rises and difficulties finding property.

Tarrant Parsons, of RICS, said: “The latest survey results convey a brighter picture for housing market activity, with the recent easing in mortgage interest rates continuing to support a recovery in buyer demand.

“Critical for the outlook, a further unwinding in monetary policy is anticipated, which should create a more favourable backdrop for the market.”

Growing demand for rental properties and limited supply of homes to rent is likely to put still more pressure on tenants.

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Tina Paillet, President of RICS, said: “The survey results continue to highlight the pressures on renters, with demand consistently outstripping supply.

“While the Renters’ Rights Bill aims to improve standards and offer better protections for tenants, we must ensure that these reforms do not discourage responsible landlords from remaining in the market.

“Most importantly, the planned changes in the private rental sector fall short of tackling the core issue: increasing supply and making housing more affordable for tenants.”

Private rents rose 8.4 per cent in the year to August, with tenants typically paying £1,286 a
month, according to the Office for National Statistics. Rents in London rose by 9.6 per cent.

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Chinese stocks rebound in anticipation of finance minister briefing

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Chinese stocks rose on Thursday in volatile trading ahead of a weekend press briefing from the country’s finance minister, as the central bank launched a facility to make it easier to buy shares.

The benchmark CSI 300 index rose almost 3 per cent on Thursday after closing down 7 per cent on Wednesday in its first loss in 11 consecutive sessions. Hong Kong’s Hang Seng index was up 4.2 per cent after posting its worst daily loss since 2008 on Tuesday and falling further on Wednesday.

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The CSI 300 has surged by more than 30 per cent since late September after the Chinese government unveiled a stimulus package to revive economic confidence. The rally started to fade this week as investors began to question the government’s plan to boost the economy and its capital markets.

“Buy everything China-related was what we observed over the past two weeks,” said Richard Tang, China strategist and head of research Hong Kong at Julius Baer.

After a few days of heavy profit-taking, Tsang said the offshore market was moving on to a second phase of the rally, “which features slower gains, higher volatility but with the basics — earnings and valuations — back in focus.”

Thursday’s rebound came a day after Beijing announced a Saturday press briefing with finance minister Lan Fo’an, fuelling expectations that the government would announce more stimulus measures.

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“The market is certainly looking for hints of more policy support coming”, said Jason Lui, head of Asia-Pacific equities and derivatives strategy at BNP Paribas.

China’s central bank moved forward on Thursday with a scheme to enable domestic financial companies to buy more stocks, a tool designed to stabilise the market and shore up liquidity.

The facility allows non-bank financial companies to borrow from the People’s Bank of China to buy equities, with bonds, stocks or exchange traded funds serving as collateral.

The bank said it was accepting applications from eligible securities groups, funds and insurance companies to pledge ETFs, bonds or constituent shares of the CSI 300 index for more liquid assets such as sovereign bonds and central bank notes.

The funds had to be invested in th stock market, the PBoC has said.

The size of the Rmb500bn ($70bn) tool “can by expanded depending on market conditions”, said the bank. The mechanism is designed to “enhance the inherent stability” and “promote healthy development” of the capital markets, it said.

Experts said the tool was similar to the US Federal Reserve’s Term Securities Lending Facility, which allowed dealers to borrow liquid assets such as Treasuries for financing by pledging illiquid collateral such as corporate bonds.

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It was created during the 2008 financial crisis and revived in 2020 during the pandemic.

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Bageri Form partners with Grandmother Coffee Roastery for omakase experience

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Bageri Form partners with Grandmother Coffee Roastery for omakase experience

Small batch bakery Bageri Form is collaborating with Grandmother Coffee Roastery, a speciality coffee roastery that provides coffee trainings on barista, brewing, and cupping skills, as well as consultations for businesses looking to launch or develop high-quality coffee concepts, for an omakase experience

Continue reading Bageri Form partners with Grandmother Coffee Roastery for omakase experience at Business Traveller.

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The true story of All Creatures vet Richard Carmody who left imprint on James Herriott

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The true story of All Creatures vet Richard Carmody who left imprint on James Herriott


All Creatures Great and Small is back on Channel 5 and as fans continue to tune in to the modern re-telling of the classic series, many have been left wondering if Richard Carmody is based on a real person

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Will Google become Al Pha Bet?

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One major potential private credit deal to start: HPS Investment Partners is talking to potential buyers, including BlackRock, as the top leadership of the private credit firm looks towards a deal that could value the business at more than $10bn, according to people familiar with the process.

And an obituary: Ratan Tata, who was one of India’s best known businesspeople and led his family conglomerate on a bold international expansion, has died aged 86.

Welcome to Due Diligence, your briefing on dealmaking, private equity and corporate finance. This article is an on-site version of the newsletter. Premium subscribers can sign up here to get the newsletter delivered every Tuesday to Friday. Standard subscribers can upgrade to Premium here, or explore all FT newsletters. Get in touch with us anytime: Due.Diligence@ft.com

In today’s newsletter:

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  • US weighs splitting up a tech giant

  • Rio Tinto revs up its battery business

  • OpenAI’s new model to fend off hostile takeovers

Has the end of US monopolies arrived?

It’s no secret that antitrust regulators in the US have ramped up their scrutiny in the past few years. They’ve gone after (with varying success) Microsoft’s bid for Activision Blizzard, Coach owner Tapestry’s proposed tie-up with Capri and just last month, Visa.

But one company has borne the brunt of regulators’ ire: Alphabet’s Google. Now the Department of Justice is ratcheting up the stakes.

This week, the agency said it was considering asking a judge to break up the tech giant to end its monopoly in online search. If it does pursue a split, the enforcement action would be the boldest effort in more than two decades to rein in a tech giant, since it (unsuccessfully) tried to split up Microsoft in 2000.

This isn’t the DoJ’s first time attempting to break up a conglomerate in recent months. In May, the agency said Ticketmaster’s parent, Live Nation Entertainment, “suffocates its competition”.

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It was blunt: “It is time to break up Live Nation-Ticketmaster”, US attorney-general Merrick Garland said at the time.

Now the DoJ is pivoting its sights to Google, the FT’s Stefania Palma and Stephen Morris report. The agency laid out its case on Tuesday in a court document that detailed the sanctions it might seek from Amit Mehta, the judge presiding over the case in Washington, DC.

A smaller Google would have tremendous implications for not just the business of online search, but also the broader corporate world. Alphabet accounts for more than 4 per cent of the S&P 500 stock market index.

The DoJ weighing a split-up shows how far the government is willing to go to shift the balance of corporate power, the FT’s Elaine Moore writes. If these big antitrust fights start to yield results, the US tech industry will start to look very different. Big Tech could become Medium Tech.

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Google was quick to respond with its own press release on Wednesday. It wasn’t pleased.

“Government over-reach in a fast-moving industry may have negative unintended consequences for American innovation and America’s consumers,” the company wrote. “We look forward to making our arguments in court.”

However, even if the DoJ gets Mehta’s backing to break up the company, change is not imminent. Google has vowed to appeal all the way up to the Supreme Court, a process that could take years.

Mining giant Rio Tinto repositions for EVs

Mining companies all over the world have come to realise future growth lies in producing the materials needed for electric vehicles.

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Rio Tinto is making inroads into that market with a $6.7bn cash deal for Arcadium Lithium, in what is the biggest-ever lithium acquisition. It will catapult Rio Tinto to becoming the third-largest producer, the FT’s Leslie Hook writes.

Even though lithium prices have plummeted recently, the group is paying $5.85 per share — a 90 per cent premium to Arcadium’s closing price on October 4 — for the company.

“What we are doing today is saying: we are committed to lithium,” Rio’s chief executive Jakob Stausholm said in an interview. The deal was “not transformative in terms of size, but it is more transformative in terms of how it shapes our portfolio”, he added.

The deal isn’t a bargain, Lex writes. Timing M&A with volatile metals markets can be tricky. Memories of Rio Tinto’s disastrous $38bn takeover of Canadian aluminium group Alcan in 2007 still loom large, and Arcadium is its biggest acquisition since.

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Lithium’s price has dropped 55 per cent in China in the past year, largely because of a glut in the market and lower than expected demand from EVs. The acquisition will add to Rio Tinto’s array of major production lines, which include copper, aluminium and iron ore.

Some are sceptical of the sticker price. Richard Hatch, analyst at Berenberg, said the deal was “sensible” but that the price would “raise eyebrows”.

Now, the question is whether the deal can get past Arcadium’s shareholders. At least one, Blackwattle, has come out against the proposed tie-up, saying the company should consider walking.

OpenAI: public benefit meets poison pill

“Dear ChatGPT: Is there a way to fend off unwanted investors and look cool doing it?”

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For Sam Altman’s OpenAI, the answer might be yes.

OpenAI is considering transitioning to a public benefit corporation, a new and largely untested corporate structure, which legally requires a company to consider the shareholders’ interests as much as other stakeholders, such as employees or society.

As the FT’s Cristina Criddle and Patrick Temple-West report, a PBC’s multipronged requirement gives OpenAI power to say “go away” to an aggressive investor that might want to squeeze more profits out of the company.

Notably, AI rivals Anthropic and Elon Musk’s xAI are already PBCs.

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In 2020, Delaware revised its PBC rules to encourage more businesses to adopt the structure. During the 2021 stock market mania, several companies went public as PBCs, including Allbirds, Coursera and Warby Parker. Most of the public PBC companies are young, consumer discretionary businesses eager to look hip with their customers.

So the PBC model also gives businesses a bit of a marketing boost. That could be handy if AI executives are hauled before Congress to testify. A legally required social benefit might spare AI executives some heat as they are already under fire from Senator Elizabeth Warren and others over safety concerns.

It’s been decades since Martin Lipton, co-founder of New York law firm Wachtell, Lipton, Rosen & Katz, invented the poison pill shareholder defence to fend off activists.

Now, with the AI companies, cutting-edge technology is combining with cutting-edge corporate governance to churn out whole new corporate playbooks.

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Job moves

  • I Squared Capital has hired Guillaume Pepy as a senior policy adviser. He was previously the chief executive of French national rail group SNCF.

  • Match Group has appointed Steven Bailey to replace Gary Swidler as the company’s chief financial officer starting in March. Bailey has been the company’s senior vice-president for financial planning and business operations since 2022.

Smart reads

Mittelstand shrugs While Berlin has expressed stiff opposition to a potential bid by UniCredit to buy Commerzbank, Germany’s family-owned businesses aren’t sure it would be such a bad thing, the FT reports.

Thwarting a takeover Alimentation Couche-Tard has come back to 7-Eleven with a higher offer worth about $47bn, the FT reports. Can the beloved convenience store chain mount a tougher defence?

Changing of the guard As Credit Suisse collapsed, Apollo Global Management seized on the opportunity to snatch Atlas SP Partners, one of the firm’s most lucrative businesses, Bloomberg reveals. The tie-up hasn’t been so seamless.

News round-up

Seven & i shares jump after Couche-Tard says it is ready to pay $47bn (FT)

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Europastry’s ‘frozen croissant’ IPO delayed a second time (FT)

Boeing withdraws pay offer to striking factory workers (FT)

KPMG US chief calls for urgent reform to halt slide in accounting ranks (FT)

China’s AI start-ups race to crack US market (FT)

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Hays Travel hunts for deals to expand presence on UK high street (FT)

Hurricane Milton could cost $60bn in insurance losses (FT)

Due Diligence is written by Arash Massoudi, Ivan Levingston, Ortenca Aliaj, and Robert Smith in London, James Fontanella-Khan, Sujeet Indap, Eric Platt, Antoine Gara, Amelia Pollard and Maria Heeter in New York, Kaye Wiggins in Hong Kong, George Hammond and Tabby Kinder in San Francisco, and Javier Espinoza in Brussels. Please send feedback to due.diligence@ft.com

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Trump’s Big Rally Boast Painfully Falls Apart In Real Time

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Supporters listen in near-empty arena sections as Republican presidential nominee Donald Trump speaks at a campaign rally Wednesday in Reading, Pennsylvania.

Donald Trump’s latest boast about his crowd size fell apart in a hurry as he was fact-checked in real-time while he was still speaking.

“We do a lot of these beautiful rallies, and it’s so great,” the former president said in Reading, Pennsylvania, on Wednesday. “We never have an empty seat, never have, look at it.”

Just one problem: While the sections closest to the stage were packed with MAGA faithful, there were plenty of empty seats toward the back of the venue ― and observers began sharing images of them on social media almost immediately.

An Associated Press photo also shows some of the empty seats:

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Supporters listen in near-empty arena sections as Republican presidential nominee Donald Trump speaks at a campaign rally Wednesday in Reading, Pennsylvania.

Supporters listen in near-empty arena sections as Republican presidential nominee Donald Trump speaks at a campaign rally Wednesday in Reading, Pennsylvania. Alex Brandon/Associated Press

NewsNation’s Libbey Dean shared footage of empty seats:

Columnist Dana Milbank also tweeted footage and images from the event showing the empty seats that Trump insisted he never has:

NBC’s Jake Traylor wrote on X, formerly Twitter, that the empty seats were “notable and unusual” for a Trump rally.

However, it’s also becoming increasingly common as observers at Trump’s rallies have noted both empty seats and people departing early, often while he’s carrying on about sharkswindmills and Hannibal Lecter.

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His Democratic rival, Vice President Kamala Harris, also brought it up at their debate last month.

“He talks about fictional characters, like Hannibal Lecter. He will talk about how windmills cause cancer,” she said. “What you will also notice is that people start leaving his rallies early out of exhaustion and boredom.”

The comment triggered Trump, who erupted over it during the debate and has been bringing it up ever since.

During his event in Reading, Trump bragged that he had 100,000 people in attendance in Butler, Pennsylvania, over the weekend, a number that is more than quadruple the estimate of about 24,000 from CBS station KDKA.

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The capacity of Santander Arena in Reading, where Trump spoke Wednesday, is between 7,200 and 8,800, depending on the configuration.

Trump’s critics on social media fired back at Trump’s boast of “never” having an empty seat:

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