Saturday, October 31, 2015
Falling oil clips 7,000 jobs at Chevron; How mergers damage the economy; India intellectuals alarmed at intolerance
1 Falling oil clips 7,000 jobs at Chevron (Sam Thielman in The Guardian) The plummeting price of oil has ripped into the once booming US energy industry so dramatically that the oil sector has laid off 87,000 people so far this year. Chevron became the latest company to dismiss workers, announcing that it would lose between 6,000 and 7,000 jobs – the second four-figure round of dismissals at the company since July.
The company is cutting investment by a fourth. “With the lower investment, we anticipate reducing our employee workforce by 6,000-7,000,” the chairman and CEO, John Watson, said in a statement.
Oil prices have fallen from $115 just over a year ago to under $50 this month causing woes across a once-booming industry. Cheaper energy prices fuelled a 64% drop in third-quarter profit at Chevron, the US’s second-biggest oil company behind Exxon Mobil. Earlier this week Royal Dutch Shell announced an $8bn loss, caused in part by lower energy prices.
2 How mergers damage the economy (The New York Times editorial) In many industries, like airlines, telecommunications, health care and beer, mergers and acquisitions have increased the market power of big corporations in the last several decades. That has hurt consumers and is probably exacerbating income inequality, new research shows.
A paper by two economists, Jason Furman and Peter Orszag, says that consolidation might have contributed to the trend of some businesses earning “super-normal returns” that are about 10 times as large as the median returns, up from three times in the early 1990s. This trend may have driven the rise in income inequality by increasing the income of executives and shareholders of those businesses relative to everybody else.
The George W. Bush administration, for example, allowed Whirlpool to acquire Maytag even though the two companies controlled three-quarters of the market for some home appliances. The Obama administration has also waved through some big mergers. Officials approved two big airlines mergers — United and Continental, and American and US Airways. Just four national airlines now carry the vast majority of domestic passenger traffic, down from six when Mr. Obama came into office.
With fewer competitors to worry about, consolidated businesses can raise prices more easily without worrying about losing customers. Mergers tend to lead to more mergers. In the health care industry, big insurers like Anthem and Aetna say they need to get bigger to have more leverage in negotiations with hospitals and doctors’ practices that have become bigger through acquisitions in recent years.
The presence of a few dominant companies in an industry also makes it harder for entrepreneurs to start new businesses in that sector. The rate at which new businesses are created in the economy as a whole has been steadily falling since the 1970s, according to the Census Bureau. In 2013, the growth rate was 10.2 percent, down from 17.1 percent in 1977.
Given the already high consolidation in many industries, government officials have to be vigilant about investigating businesses that abuse their dominant position. In extreme cases, antitrust laws allow officials to seek the breakup of businesses, as the Justice Department did with the old AT&T monopoly in 1974. Markets work best when there is healthy competition among businesses. In too many industries, that competition just doesn’t exist anymore.
3 India intellectuals alarmed at intolerance (San Francisco Chronicle) First writers then artists, followed by filmmakers, historians and scientists. The chorus of Indian intellectuals protesting religious bigotry and communal violence grows louder by the week with a single message for Prime Minister Narendra Modi: protect India's tradition of secularism and diversity.
Those protesting are angry and worried by a spate of deadly attacks against atheist thinkers and minorities, and by Modi's relative silence through it all. That silence appears to have encouraged some of his party colleagues to make comments asserting Hindu pride and superiority.
Last week, more than 100 scientists, including some of India's top nuclear physicists, space scientists and mathematicians, expressed their anguish at the ways in which they said "science and reason were being eroded in the country." The protest by scientists is significant, given that most work for the government or in state-funded organizations and so could risk being punished for speaking out.
The uproar among intellectuals began in late September, when a village mob beat a Muslim man to death and put his son in critical condition over rumors that their family was eating cow meat. In fact, it had been a goat. There have been other incidents in recent years, including the killings of three atheist scholars who had campaigned against religious superstition, and more mob killings over rumors of cow slaughter or smuggling.
Many Hindus, who make up more than 80 percent of India's population of 1.25 billion, consider cows to be sacred, and many states ban the slaughtering of the animals. India has still largely been seen as overwhelmingly tolerant, with a cacophony of cultures that have lived side by side for centuries. Secularism is enshrined in its constitution.
Since taking office, however, Modi has said very little on the subject of tolerance and diversity, even questioning why his government should be called on to comment on local matters. Indian Culture Minister Mahesh Sharma suggested that unhappy writers could stop writing if they found the country's cultural climate not conducive to their work.
Thursday, October 29, 2015
US economic growth slows sharply; After $6.6bn loss, Deutsche Bank to cut 15,000 jobs; China ends one-child policy after 35 years
1 US economic growth slows sharply (Andrew Walker on BBC) US economic growth slowed sharply in the third quarter of the year. Gross domestic product grew at an annualised pace of 1.5% between July and September, according to the Department of Commerce, down from a rate of 3.9% in the second quarter. The slowdown was partly due to companies running down stockpiles of goods in their warehouses.
It is a sharp slowdown compared with the previous three months. But the biggest reason for it was companies running down stocks - meeting demand by selling stuff they already have in the warehouse. That is a process that has a limit. Sooner or later, they will feel they have sold enough and may want to start replenishing those stocks.
Consumer spending remained fairly robust. Yes, it too did slow, but not by all that much. It grew by 0.8% in the three-month period, or 3.2% in the annualised terms that the US official statisticians prefer.
The big question for markets is, when will the Federal Reserve raise interest rates? Will the central bank think the economy is strong enough to take it? The markets seem to think the new figures have, if anything slightly increased the chances that the Fed will move at its next policy meeting in December.
Low oil prices have hit US energy firms so far this year. But lower fuel prices have been good news for consumer spending, which accounts for more than two-thirds of US economic activity. Analysts said that the running down of warehouse stockpiles in the third quarter was likely to be a temporary effect and they expected growth to accelerate again in the fourth quarter.
2 After $6.6bn loss, Deutsche Bank to cut 15,000 jobs (Khaleej Times) Deutsche Bank says it is cutting 35,000 jobs through redundancies and the sale of businesses as new CEO John Cryan seeks to make Germany's biggest lender more manageable and profitable. The bank will slash 9,000 full-time jobs, 6,000 contractor positions and sell operations with 20,000 more workers. It will also close local operations in 10 smaller countries.
The announcement came as the bank reported a net loss of 6 billion euros ($6.6 billion). Net profit was hit by 5.8 billion euros in noncash charges for the reduced value of its investment bank and retail bank Postbank, which it plans to sell.
The bank has struggled to reduce costs and make its administration more transparent and ethical as it deals with uneven profits and investigations into rigging financial benchmarks. Former co-CEO Anshu Jain resigned in June. The other co-CEO, Juergen Fitschen is leaving in May.
The bank has set aside billions to pay for fines and legal settlements and costs in a several cases, including the rigging by a number of banks of the key interest rate benchmark known as the London Interbank Offered Rate, or Libor. The bank said it would close its onshore operations in Argentina, Chile, Mexico, Peru, Uruguay, Denmark, Finland, Norway, Malta and New Zealand. Some branches in Germany would close as well, Cryan said.
3 After 35 years, China ends one-child policy (Tom Phillips in The Guardian) China has scrapped its one-child policy, allowing all couples to have two children for the first time since draconian family planning rules were introduced more than three decades ago.
Some celebrated the move as a positive step towards greater personal freedom in China. But human rights activists and critics said the loosening – which means the Communist party continues to control the size of Chinese families – did not go far enough. “The state has no business regulating how many children people have,” said William Nee, a Hong Kong-based activist for Amnesty International.
For months there has been speculation that Beijing was preparing to abandon the divisive family planning rule, which was introduced in 1980 because of fears of a population boom. Demographers in and outside China have long warned that its low fertility rate – which experts say lies somewhere between 1.2 and 1.5 children a woman – was driving the country towards a demographic crisis.
The Communist party credits the policy with preventing 400m births, thus contributing to China’s dramatic economic takeoff since the 1980s. But the human toll has been immense, with forced sterilisations, infanticide and sex-selective abortions that have caused a dramatic gender imbalance that means millions of men will never find female partners.
In one of the most shocking recent cases of human rights abuses related to the once-child policy, a woman who was seven months pregnant was abducted by family planning officials in Shaanxi province in 2012 and forced to have an abortion.
Opponents say the policy has created a demographic “timebomb”, with China’s 1.3 billion-strong population ageing rapidly, and the country’s labour pool shrinking. The UN estimates that by 2050 China will have about 440 million people over 60. The working-age population – those between 15 and 59 – fell by 3.71 million last year, a trend that is expected to continue.
Experts said the relaxation of family planning rules is unlikely to have a lasting demographic impact, particularly in urban areas where couples were now reluctant to have two children because of the high cost.
Wednesday, October 28, 2015
Hint of US rate rise in December; Scandal hits Volkswagen but sales hold up; Record cash profit for ANZ
1 Hint of US rate rise in December (Rupert Neate in The Guardian) The Federal Reserve on Wednesday kept interest rates unchanged at their record low of near-zero, but raised the likelihood of a rate hike in December by dropping previous warnings about the fragility of the global economy.
Fed policymakers voted to leave rates at 0-0.25% – where they have been for the seven years since the financial crisis. However, the bank’s Federal Open market Committee (FOMC), which sets the rate, significantly raised the prospect of a historic rate rise at its next meeting in December by removing cautious statements about unstable international markets could adversely effect the US economy.
In September, following concerns about the health of the Chinese economy, the committee said: “Recent global economic and financial developments may restrain economic activity somewhat and are likely to put further downward pressure on inflation in the near term.”
This was modified on Wednesday to: “The committee continues to see the risks to the outlook for economic activity and the labor market as nearly balanced but is monitoring global economic and financial developments.”
The committee specifically pointed towards the possibility of raising rates at its December meeting – the last of 2015. “In determining whether it will be appropriate to raise [rates] at its next meeting, the committee will assess progress toward its objectives of maximum employment and 2% inflation,” it said in the statement.
The Fed warned that the pace of job gains has “slowed”, while the unemployment rate held steady. It also repeated its warning that it wants to be “reasonably confident” that currently ultra-low inflation will rise to its 2% target before it raises rates. Other central banks around the world are closely watching the Fed’s process and a decision to increase rates is likely to lead to rates being raised across the world.
2 Scandal hurts Volkswagen but sales hold up (San Francisco Chronicle) Volkswagen lost 1.67 billion euros ($1.83 billion) in the third quarter as it set aside 6.7 billion euros to pay for recalling and fixing cars that were rigged to evade U.S. diesel emissions tests.
While the German carmaker warned Wednesday that operating profit this year would be "down significantly," it indicated that sales would prove resilient. The company stuck to its prediction that unit sales would be on a level with last year's record 10.14 million.
Volkswagen, based in Wolfsburg, Germany, had already announced the set-asides for the recalls, so market analysts expected the quarterly loss, the company's first in over a decade. The result was in fact not as bad as analysts' expectations for a loss of 2.11 billion euros, as compiled by financial data provider FactSet. Sales revenue rose 5.3 percent to 51.5 billion euros.
Analysts say the impact will likely be several times larger than the set-asides, including fines, recall and repair costs, and possible lost sales due to damage to the company's reputation. The scandal became known on Sept. 18, near the end of the quarter, so any impact on quarterly sales was slight.
The US Environmental Protection Agency says Volkswagen installed software on 482,000 cars from model years 2009-2015 that disabled diesel engine emission controls when the vehicles were not being tested. Up to 11 million cars worldwide have the deceptive software.
The scandal spoiled what would otherwise have been a profitable quarter, with 3.2 billion euros in earnings excluding interest, taxes and the scandal set-asides. The scandal has cost Volkswagen the position as the biggest automaker in the world by sales, which Toyota has regained.
3 Record cash profit for ANZ (BBC) One of Australia's biggest lenders, ANZ, has posted a record annual cash profit of 7.2bn Australian dollars ($5.1bn). Analysts said the closely watched cash profit measure, which strips out some one-off items, would be welcomed by investors despite expectations for profits of A$7.29bn.
The result for the year to September marks a 1% rise on cash profits from a year earlier. The lender, which is the nation's third-biggest bank by market value, also said its after-tax profit rose 3% to A$7.5bn. The results follow National Australia Bank's full-year profit report, which failed to impress investors after it missed expectations.
Australia's banking sector, particularly the so-called top four, which includes National Australia Bank, Commonwealth Bank of Australia and Westpac, is regarded as being highly profitable. The sector made it through the global financial crisis relatively unscathed, but is now facing tighter regulatory controls. Banks have been told to increase the amount of capital they put aside in order to protect their mortgage businesses.
Tuesday, October 27, 2015
1 Apple’s best year, making $234bn (Rupert Neate in The Guardian) Apple has more than $205bn of cash in the bank, the company revealed as its chief executive Tim Cook said the firm had made more than $234bn in 2015, making it its “most successful year ever”.
The California company now has more money in the bank than the Czech Republic, Peru and New Zealand make in gross domestic product (GDP) a year, according to World Bank statistics. Apple’s cash balances increased by $2.8bn in the last three months alone.
Apple sold 48m iPhones worth $33.2bn in its latest quarter – an increase of 36% on the same period last year and more than the total sales achieved by both Microsoft and Facebook over the same period. Its quarterly profit came in at $11.1bn, 31% more than in the fourth quarter of 2014. Sales were up 22% in the three months to 28 September to $51.5bn.
“Today we’re reporting a very strong finish to a record-breaking year,” Cook said. “We are heading into the holidays with our strongest product lineup yet.” Apple, which is already the world’s most valuable company, worth $657bn, said predicted sales would increase further to between $75.5 and $77.5bn in its current quarter as only the first weekend of new iPhone 6S sales were captured in the previous three months.
2 UK growth slows to 0.5% (BBC) The UK economy's growth slowed in the third quarter of the year, weighed down by the performance of the construction and manufacturing sectors. Gross domestic product grew by 0.5% between July and September, the Office for National Statistics (ONS) said, down from 0.7% in the second quarter.
The rate was also lower than the 0.6% growth predicted by many analysts. Part of the slowdown was due to the biggest fall in construction output in three years, a drop of 2.2%.
"The slowdown is being led by the manufacturing sector, which is seeing a renewed recession as output has now fallen for three consecutive quarters, suffering a 0.3% decline in the three months to September," said Chris Williamson, chief economist at research firm Markit.
"Manufacturing output has so far fallen 0.9% this year. Producers are struggling as weak demand in many overseas markets, notably China and other emerging nations, is being exacerbated by the appreciation of sterling."
3 A visionary democratizing education (Kim Lachance Shandrow in San Francisco Chronicle) Michael Karnjanaprakorn thinks anyone can be a teacher – doers, dreamers, thinkers, tinkerers. Anyone, yourself included. No college degree, formal training or accreditation required. All you need is knowledge and passion, and an eagerness to share both.
The 33-year-old entrepreneur and world champion poker player’s mission in life is to democratize education throughout the world, one online class at a time. “My goal is to transform education and make it accessible to every single person on this planet,” he says. “Education is a basic human right and we need to break down the $50,000 tuition barrier to it so that anyone, anywhere can learn whatever they set their mind to.”
To make the dream he set his mind to a reality, Karnjanaprakorn co-founded Skillshare, a “learning community for creators,” with his good friend and fellow tech startup veteran Malcolm Ong. (Ong has since moved on to other ventures.)
That was five years ago, back when Skillshare offered only two classes, the first being a poker-skills class taught by Karnjanaprakorn himself. Today, the burgeoning subscription-monetized startup, anchored in the heart of New York City’s SoHo neighborhood, offers some 1,700-plus peer-to-peer classes online. In all, the platform has served an estimated 1 million students.
Says Karnjanaprakorn: “Historically, the only option any serious student would have is to go to college and that’s what created thousands of universities all around the world. The student of the future wants more, to be able to take on hands-on learning experiences, like an apprenticeship at the top-rated restaurant in the world, or to take a bootcamp on coffee-making from the founder of Starbucks for three months. And they want nontraditional options like that to be socially acceptable.
“Over the next five to 10 years, our mission will be even more centered around providing access. Ideally, we’d have tens of thousands or hundreds of thousands of classes across every imaginable topic, completely accessible to any student around the world on any device and in any language.”
Monday, October 26, 2015
Japan Post raises $11.6bn in IPO; UK manufacturing faces demand slump; Apple, Microsoft lead in consumer 'delight'
1 Japan Post raises $11.6bn in IPO (Khaleej Times) Japan's government raised the maximum 1.44 trillion yen ($11.9 billion) sought in the privatisation of the nation's postal service and its banking and insurance units. Shares of Japan Post Holdings were priced at 1,400 yen, the top end of a marketed range. Its two financial units were also offered at the highest price a week ago.
The three-pronged IPO is the world's biggest since Alibaba Group Holding in September 2014, as Prime Minister Shinzo Abe fulfills a plan first drawn up by his mentor and predecessor Junichiro Koizumi 10 years ago. Almost 80 per cent of the shares are being sold to individuals as part of Abe's goal of getting households to invest more of their savings.
The brokerages that worked on the IPO will receive about 24.5 billion yen in fees, according to Bloomberg calculations. Nomura Holdings, Mitsubishi UFJ Morgan Stanley Securities Co, Goldman Sachs Group and JPMorgan Chase & Co were global coordinators of the sale.
Demand for the shares has been strong as Japan's stock market rebounds from a slump stemming from China's equity selloff in August. The Nikkei 225 Stock Average has gained 3.5 per cent since the sale plans were announced on September 10.
About 11 per cent of the three companies will be sold in the IPO, which is Japan's biggest since NTT Docomo Inc. in 1998 and the country's largest privatisation since Nippon Telegraph & Telephone Corp in 1987. Some of the proceeds will be used to rebuild areas in the northeast that were damaged by the 2011 earthquake and tsunami.
Italy is also floating its postal service, raising about $3.4 billion in the IPO of Poste Italiane SpA after fixing the price at ?6.75 a share last week. Most of Japan Post's profit comes from its two financial units, which the government plans to eventually divest entirely. The holding company is shifting the focus of the postal service to logistics and package delivery as the volume of letters and postcards declines due to the advent of electronic communication and the shrinking population.
2 UK manufacturing faces demand slump (Katie Allen in The Guardian) British manufacturers are suffering from waning demand from home and abroad, according to the latest business survey highlighting the impact of sputtering global growth and a strong pound.
The survey by the business group CBI suggests order books have deteriorated at the fastest pace for three years. Facing a gloomier outlook, manufacturers have scaled back hiring in recent months and are looking to cut spending on training and innovation.
The survey echoes other recent economic indicators that suggest demand is being depressed by a downturn in China and the wider global economy, as well as the prospect of more UK spending cuts being announced in the government’s review next month.
The CBI survey, which assesses the sector based on a balance of responses from individual firms, found that 22% of businesses reported an increase in total new order books. Thirty per cent reported a decrease in the three months to October. That gave a balance of -8%, the lowest since October 2012.
3 Apple, Microsoft lead in consumer ‘delight’ (Benny Evangelista in San Francisco Chronicle) Apple is the top electronics brand that “delights” consumers, but Microsoft is a strong No. 2 on the strength of its new tablets, phones and fitness brands, according to a report from research firm Argus Insights.
“Apple has created a walled garden with its all-star mix of hardware and software,” Argus CEO John Feland said. “But over the past year we have watched Microsoft’s success in devices poking holes in Apple's walls with their tablet and wearables offerings.”
The firm sifted through about 942,000 online consumer reviews and social media conversations from January to September to generate its report, “Battle of the Brands — Making Sense of the Mad Dash for Mindshare.” The report examined the buzz generated by five big consumer brands: Apple, Microsoft, Google, Amazon and Samsung.
“Unlike Google and Amazon, which offer inexpensive hardware offerings meant to entice more consumers to visit their gardens more often, Microsoft has focused on crafting new experiences built on solid hardware that is delighting consumers,” Feland said. “Samsung, without a strong content play, is just leasing space in the gardens of other brands.”
Amazon and Samsung were battling for third place in the delight rankings, while Google ranked last, the report said. Argus found that consumers called Google’s Nexus phones only “good enough,” which was “a bar being raised by Microsoft and Apple.”
Sunday, October 25, 2015
Oil price decline lowers remittances out of Gulf countries; Perhaps India, not China, should be target of Britain's charm offensive; Conservatives win in Poland
1 Falling oil price lowers remittances out of Gulf countries (Babu Das Augustine in Gulf News) The decline in oil prices and their impact on economic growth is expected to have a dampening effect on remittances from Gulf Cooperation Countries (GCC), according to the latest regional economic outlook of the International Monetary Fund (IMF). The GCC’s economic growth is projected to slow to 3.25 per cent this year. It will further slow to 2.75 per cent next year.
The region’s non-oil growth is projected at just below 4 per cent for both 2015 and 2016, a reduction of 1.75 per cent per cent compared with 2014. Remittances from the GCC are an important source of income for Egypt, Jordan, Lebanon, Pakistan and Yemen.
The Gulf region is one of the largest sources of migrant remittances in the world. Some 29 million foreign workers sent home more than $100 billion in remittances in 2014, about one-third of which was sent to the Mashreq region, Pakistan and Yemen.
Historically, remittances have been much less volatile than oil prices. This is mainly because the GCC countries had accumulated large buffers, which allowed them to maintain their fiscal spending, even in periods of temporary declines in oil prices.
2 Perhaps India, not China, should be target of Britain’s charm offensive (Ian Jack in The Guardian) According to Steve Hilton, former chief strategist to David Cameron, Britain is humiliating itself unnecessarily by “sucking up” to China when instead it could be “rolling out the red carpet” for India. “We should prioritise our relationship with India because that’s where the opportunity is,” he said.
Parliamentary democracy, a free media, the English language, tea with milk: however ruthless and greedy British imperialism may have been, its 250-year history in India left that country with several of the imperfect institutions, beliefs and habits that Britain finds familiar and admirable.
But where is the money in all this – the investment in the nuclear power plants and high-speed railways that Britain allegedly needs? The brute truth is that China has piles of cash looking for a return abroad and India doesn’t. It will overtake China in the next 10 years to become the world’s most populous country, and yet it’s still only the world’s seventh-largest economy.
Its gross domestic product lies between those of France and Italy in a league table that has the UK in fifth place with a GDP a quarter of China’s. Of course, these positions aren’t fixed. This year India overtook China in its growth rate, and it may well replace Japan as the world’s third-richest country during the next 10 to 15 years. In the long term, then, Hilton may be right about India as the greater opportunity.
In a speech 10 years ago, India’s then prime minister, Manmohan Singh, quoted the work of the English economic historian, Angus Maddison, to show how India’s share of world income collapsed from 22.6% in 1700, which was almost equal to the whole of Europe’s share at that time, to as low as 3.8% in 1952. “There is no doubt that our grievances against the British Empire had a sound basis,” Singh said, adding that the so-called “brightest jewel in the British crown” was by 1900 the poorest country in the world in terms of per capita income.
Today the UK no longer makes the list of India’s top 15 trading partners; neither does India appear in such a British list. China matters far, far more to both countries than they do to each other. So, Xi Jinping or Narendra Modi? We must try to imagine an Indian peasant being confronted with a similar question in 1700, when India had a quarter of the world’s income. Colonial armies are gathering over the horizon. Who would you rather rule you, Britain or France?
3 Conservatives win in Poland (BBC) Poland's conservative opposition Law and Justice party has won parliamentary elections. Exit polls suggest it has enough seats to govern alone, with an anticipated 39% of the vote.
Its eurosceptic leader Jaroslaw Kaczynski has claimed victory, and the outgoing Prime Minister, Ewa Kopacz of the centrist Civic Platform party, has admitted defeat. Law and Justice has strong support in Poland's rural areas.
If the numbers suggested by the exit poll are confirmed, it will be the first time since democracy was restored in Poland in 1989 that a single party has won enough seats to govern alone. "We will exert law but there will be no taking of revenge. There will be no squaring of personal accounts," said Mr Kaczynski. "There will be no kicking of those who have fallen through their own fault and very rightly so."
Saturday, October 24, 2015
Emirates, at 30, is 'fastest-growing' airline; Fifth of UK adults stuck with parents until 26; Making the most of your break
1 Emirates, at 30, is ‘fastest-growing’ airline (Sadiq Shaban in Khaleej Times) Emirates airline, launched in October 1985 with first flights to Karachi and Mumbai, is now one of the world's biggest international carriers, flying to more than 140 destinations around the globe.
The transition from a regional airline that started off with a leased Boeing 737 and an Airbus 300 B4 to a global behemoth in terms of revenue has been truly spectacular. Three decades on, Emirates has grown in both scale and stature. It is now the largest airline in the Middle East in terms of revenue, fleet size and passengers carried.
Subsidiary of the Emirates Group, which is wholly owned by the Investment Corporation of Dubai, Emirates operates over 1,500 flights per week from Dubai International Airport. With a fleet of more than 230 aircraft, it currently flies to more than 80 countries.
As one of the most profitable airlines in the world, it announced its 27th consecutive year of profit earlier this year. The Emirates Group recorded its second highest profit of Dh5.5 billion. The airlines created history in 2007 by announcing a historic civil aviation aircraft order for 120 Airbus A350s, 11 A380s, and 12 Boeing 777-300ERs, worth an estimated $34.9 billion at the Dubai Airshow.
Three years later, in line with the airline's strategic growth plan, Emirates significantly hiked its orders for new aircraft. During the Berlin Airshow, Emirates announced an order for 32 Airbus A380s. Subsequently at the Farnborough Airshow, 30 more Boeing 777-300ERs were added to the list, taking the combined value to a whopping $13.4 billion.
During the financial year 2013/2014, Emirates carried 44.5 million passengers and 2.25 million tonnes of cargo. More than 76,000 customers travelled on a single day - September 18 - with Emirates, according to the airline's booking figures. The overall figure represented a 65 per cent growth from last year. Employing more than 62,000 people across 50 business units and associated firms, it is one of the biggest employers in the region.
2 Fifth of UK adults stuck with parents until 26 (Hilary Osborne in The Guardian) It has been dubbed the hotel of mum and dad but few guesthouses have such favourable terms. As the housing crisis bites, a fifth of young adults are staying in the family home until they are at least 26, and the same proportion are not paying a penny towards their keep.
A survey by Nationwide, the building society, found that the proportion of adults living at home varied around the country, from just under 9% in the east Midlands, to more than double that in London, where house prices and rents are highest. While many around the country contributed financially, it found that 20% were paying nothing at all.
Young adults are being squeezed by low wages and rents which have hit record highs, while those who want to buy a property are finding the monthly cost of renting is preventing them saving enough to get on the housing ladder. Research published by the homeless charity Shelter showed half of tenants were unable to save a penny towards a deposit, while a quarter could only put by £100 or less each month.
Faced with this, young adults are increasingly returning to the family home in order to save money, and parents who cannot afford to offer their offspring a lump sum seem willing to help. Nationwide’s survey found that 28% of adults were living at home because they were trying to save a deposit. However, it also found that 30% were not saving any money.
A Nationwide spokesman said: “The hotel of mum and dad is often staying open for longer than many anticipated. Rental costs and deposits or the need to save for a mortgage deposit mean that some children understandably have to wait before flying the nest. And, for some, moving out may never be an option.”
3 Making the most of your break (Lisa Evans in San Francisco Chronicle) It may seem counter-intuitive to busy entrepreneurs, but research shows the best way to improve your productivity is to stop working. While managers have long complained that employees take too many breaks and should be working harder and longer, studies are now showing that breaks hold the key to improved productivity.
According to a recent study published in the Journal of Applied Psychology, by Emily Hunter and Cindy Wu, associate professors of Management at Baylor University, breaks not only help to prevent burnout, but increase feelings of job satisfaction and helpfulness at work.
But there are right and wrong ways to take a break. Here’s how to get the most out of your break time: Aim for a mid-morning break. Waiting for that 3pm slump to take your first break isn’t going to yield great results, according to Hunter and Wu. Their research found the best time of day to take a break was mid-morning.
Do something that you like. Their study revealed the best way to enjoy a break is to do an activity that you prefer to do, whether that means calling your mom or catching up on Facebook. And third, there’s no set number of breaks. Although some experts claim breaks work best when taken every hour, Hunter and Wu didn’t find this was necessarily the case.
While some individuals thrive off taking one long break, others find their productivity soars when they take frequent small breaks. Finding that sweet spot may take some trial-and-error, but Hunter warns, it’s important not to wait until you’re completely exhausted before taking a break.
Friday, October 23, 2015
China interest rate cut fuels fear over economy; South Africa announces 0% increase in university fees; Weather's too hot for global economy
1 China interest rate cut fuels fear over economy (Phillip Inman in The Guardian) China fuelled fears that its ailing economy is about to slow further after Beijing cut its main interest rate by 0.25 percentage points. The unexpected rate cut, the sixth since November last year, reduced the main bank base rate to 4.35%. The one-year deposit rate will fall to 1.5% from 1.75%.
The move follows official data earlier this week showing that economic growth in the latest quarter fell to a six-year low of 6.9%. A decline in exports was one of the biggest factors, blamed partly by analysts on the high value of China’s currency, the yuan.
The rate cut sent European stock markets higher as investors welcomed the boost from cheaper credit in China, together with the hint of further monetary easing by the European Central Bank president, Mario Draghi, on Thursday. Investors were also buoyed by the likelihood that the US Federal Reserve would be forced to signal another delay to the first US rate rise since the financial crash of 2008-2009 until later next year.
Some economists have warned that the world economy is about to experience a third leg of post-crash instability after the initial banking collapse and eurozone crisis. The slowdown in China, as it reduces debts and a dependence for growth on investment in heavy industry and property, will be the third leg.
World trade has already contracted this year with analysts forecasting weaker trade next year. The International Monetary Fund (IMF) in July trimmed its forecast for global economic growth for this year to 3.1% from 3.3% previously, mainly as a result of China’s slowing growth. The Washington-based fund also warned that the weak recovery in the west risks turning into near stagnation.
Corporations considered bellwethers of the global economy have also warned of a sharp slowdown. Caterpillar, the industrial equipment manufacturer, has seen profits slide over the last year. AP Moller-Maersk, the shipping firm cut its 2015 profit forecast by 15% on Friday, blaming a slowdown in the container shipping market.
2 South Africa announces 0% university education fee hike (Johannesburg Times) "We agreed that there will be a zero increase of university fees in 2016," President Jacob Zuma has said. His address comes after a meeting with student leaders and university officials following a nationwide protest against increased fees.
Thousands of students had travelled from around Pretoria and Johannesburg to attend the demonstration, which gradually degenerated into violent scenes at a fence erected on the south lawn separating the students from the Union Buildings.
Students who had come to protest peacefully were overshadowed by a minority of students at the fence, many of them wearing T-shirts bearing the branding of the Economic Freedom Fighters, the SA Students Congress, ANC Youth League, and the Pan Africanist Movement of Azania.
Those at the front of fence antagonised riot police by tearing down the fence, and throwing stones, bricks and other objects at police and even media. Police used stun grenades, tear gas and a water cannon to disperse some of them.
3 Weather’s too hot for global economy (Khaleej Times) With each upward degree, global warming will singe the economies of three-quarters of the world's nations and widen the north-south gap between rich and poor countries, according to a new economic and science study.
Compared to what it would be without more global warming, the average global income will shrivel 23 per cent at the end of the century if heat-trapping carbon dioxide pollution continues to grow at its current trajectory, according to a study published in the scientific journal Nature.
Some countries, like Russia, Mongolia and Canada, would see large economic benefits from global warming, the study projects. Most of Europe would do slightly better, the US and China slightly worse. Essentially all of Africa, Asia, South America and the Middle East would be hurt dramatically, the economists found.
"What climate change is doing is basically devaluing all the real estate south of the US and making the whole planet less productive," said study co-author Solomon Hsiang, an economist and public policy professor at the University of California Berkeley. "Climate change is essentially a massive transfer of value from the hot parts of the world to the cooler parts of the world. This is like taking from the poor and giving to the rich," Hsiang said.
Lead author Marshall Burke of Stanford and Hsiang examined 50 years of economic data in 160 countries and found what Burke called "the goldilocks zone in global temperature at which humans are good at producing stuff" - an annual temperature of around 13 degrees Celsius or 55.4 degrees Fahrenheit, give or take a degree.
For countries colder than that economic sweet spot, every degree of warming heats up the economy and benefits. For the US and other countries already at or above that temperature, every degree slows productivity, Burke and Hsiang said.
The 20th-century global average annual temperature is 57 degrees, or 13.9 degrees Celsius, according to the National Oceanic and Atmospheric Administration. Last year - the hottest on record - was 58.24 degrees and this year is almost certain to break that record, according to NOAA.
Thursday, October 22, 2015
South Korea growth at five-year high; Thailand forecasts record tourists; UAE fifth richest on built assets per capita
1 South Korea growth at five-year high (BBC) South Korean economic growth hit a five-year high in the third quarter of the year, coming in ahead of estimates. The country's economy grew 2.6% in the three months to September over the same period the previous year. From the second quarter, growth was up 1.2%, marking the biggest jump since 2010.
South Korea's economy had been held back by the effects of the deadly Mers virus affecting tourism and domestic spending in the first half of the year. A weakening global demand had hit the country's exports with car maker Hyundai just yesterday releasing disappointing results.
Yet the central bank's data showed that a sharp recovery in domestic demand more than offset the drop in exports. The weaker growth rates over the past quarters had led to the government launching various stimulus packages and the central bank to lower interest rates twice this year hoping to boost growth and spending.
2 Thailand forecasts record tourists (San Francisco Chronicle) A deadly bombing in August threatened to scuttle Thailand's economically crucial tourism industry but officials are now forecasting more than 30 million visitors this year as arrivals from China swell.
The bounce back reinforces the teflon reputation of Thai tourism, which has thrived over the past decade despite two coups, episodes of deadly street fighting, airport occupations and natural disasters.
Thailand's tourism council is forecasting a record 30.3 million visitors this year, an increase of 22 percent from last year. Chinese tourists are expected to total 8.1 million, rising by three quarters from 2014. Only a small number of countries attract more than 30 million tourists a year, among them France, China, the US, Spain and Turkey. Thailand was aiming for 28.8 million tourists this year.
Tour operators say Thailand's resilience reflects the variety it offers from high-end shopping in busy Bangkok to idyllic beaches in the south and laid back small cities in the north. Thailand has also cultivated a reputation for friendliness and value that is particularly appealing in countries such as China, which has only recently reached income levels high enough for large numbers of people to travel abroad on holidays.
3 UAE fifth richest on built assets per capita (Khaleej Times) The UAE has become the world's fifth richest country per capita measured by the value of its built environment according to the latest Global Built Asset Wealth Index published by Arcadis, the leading global Design & Consultancy firm for natural and built assets. The UAE makes up the top five behind Qatar, Singapore, Hong Kong and Japan, with built assets of $140,500 for every citizen.
The index calculates the value of all the buildings and infrastructure that contribute to economic productivity in 32 countries, which collectively make up 87 per cent of global GDP. "The health and wealth of a nation can be measured in many different ways and while factors such as GDP or employment have great value, a prosperous society is underpinned by a well-developed built environment that meets the needs of its people and economy," said Alan Richell, head of Business Advisory in the Middle East at Arcadis.
"To date, Dubai alone has built 190 skyscrapers since the millennium and is developing its economic diversification plans even further in sectors such as tourism, financial services and education."
Qatar and Singapore stand comfortably ahead of the pack on built assets per capita, at $198,000 and $192,000 respectively. The countries near the top of this ranking are disproportionately made up of smaller nations, either by population or area, so the density of the built asset stock is much greater per resident.
Total built asset wealth globally now stands at an estimated $218 trillion, which is the equivalent to $30,700 per person alive today. The stock of built assets is closely correlated with a nation's economic output. On average, countries analyzed have a built asset stock worth 2.9 times GDP. China now has a built asset wealth of $47.6trillion, overtaking the USA which comes second with a wealth of $36.8trillion.
Wednesday, October 21, 2015
1 Joblessness seen surging across Gulf (Babu Das Augustine in Gulf News) Unemployment across the oil exporting countries in the region including the GCC is expected to surge as governments are poised to cut spending to cope with rising fiscal deficits, according to the IMF’s regional economic outlook.
In the GCC, excluding the UAE, more than 2 million nationals are expected to join the workforce by 2020. If private sector job growth were to follow past trends, and public sector employment growth is consistent with the current fiscal projections, more than half a million job market entrants will end up being unemployed, in addition to the 1 million who are already out of work.
“The aggregate GCC unemployment rate would increase from 12 per cent to 16 per cent. Clearly, if more fiscal adjustment were to take place, with some of it in the form of reined-in public sector hiring, unemployment rates would be even higher,” said Masoud Ahmad, the IMF’s regional director for Middle East and Central Asia.
In the non-GCC region, about 8 million people will enter the labour force over the next five years. Under current growth projections, and using historical growth — employment elasticities, the average unemployment rate would increase from 14 per cent to 15.5 per cent. In practice, the increase could be much higher, because cash-strapped governments will not be able to maintain the pace of public sector hiring.
Clearly, the private sector will have to take over from the public sector as the main source of job creation. However, the expansion of the private sector and the diversification away from oil that are needed to absorb the growing workforce have so far proven elusive. Though some progress has been made, most economies in the region are still deeply dependent on the capital-intensive hydrocarbon sector, which generates limited direct employment.
2 Nike’s self-lacing sneakers (Emily Price in San Francisco Chronicle) Marty McFly famously visited Oct. 21, 2015 in “Back to the Future II.” Now in the real 2015, we may not have a hoverboard just yet, but today Nike is bringing one of the technologies shown off in the film into reality: self-lacing shoes.
The shoes have a responsive system that senses the wearer’s motion and adjusts accordingly for on-demand comfort and support. Nike says that the models it is showing off today are merely the shoe’s first iteration. The technology involved in the shoes will likely make its way to other footwear down the line.
“Although the project started as science fiction, we’re now proud to turn that fiction into fact,” Nike design Tinker Hatfield said in a note sent to Michael J Fox, who played McFly in the films. Fox posted a picture of the note on Twitter: Fox was the first person to receive a pair of the sneakers, and subsequently posted a video of himself trying them on.
The company ultimately plans on testing the tech in shoes designed for athletes in a number of different sports. “We started creating something for fiction and we turned it into fact, inventing a new technology that will benefit all athletes,” Mark Parker, president and CEO of Nike, said in a post officially announcing the shoes.
3 Why girls wear make-up (Rhiannon Lucy Cosslett in The Guardian) From the soot-rimmed eyes of the ancient Egyptians to the lead paint worn by the Elizabethans, women and girls have experimented with cosmetics throughout history. Ask a group of women why they wear makeup and you’ll receive myriad responses.
“After 20 years working as a makeup artist I can say quite confidently that women wear makeup for themselves,” Lisa Eldridge, the author of Face Paint: The Story of Makeup, tells me. “There are many different roles makeup can play in a woman’s life. There’s the playful and creative aspect – who doesn’t enjoy swirling a brush in a palette of colour? Then there’s the confidence-building aspect – why not cover a huge red blemish on your nose, if you can? Finally, there is an element of war paint and tribalism. Makeup can make you feel more powerful and ready to face any situation.”
But just as there are women and girls who wear makeup completely for themselves, there are those who wear makeup for the perceived benefit of others, or who feel as though they are unacceptable without it. Makeup can be a mask you hide behind that gets you ready to face the world, or something you deploy as a weapon – to attract a partner, to intimidate, shock and amaze.
Makeup is so ubiquitous in our society that for a woman to go without it has become, in some cases, a statement – the “no makeup selfie” being a case in point. Perhaps, then, the more useful question to ask is not “Why do women wear makeup?” but “Why do women wear makeup when most men don’t?”
For some feminists, the question can be answered by simply muttering “patriarchy” and dusting off their hands before heading to the bar. Evolutionary psychologists have it that, as with so many things, makeup comes down to sex. Women tend to have darker eyes and lips than men, and makeup enhances those sex differences.
Cosmetics companies often rely on women’s insecurities – inculcated through years of exposure to images of physical perfection in mainstream media – in order to sell products, operating on the basis of “maybe she’s born with it, but probably not, so buy this concealer”.
Perhaps, then, when it comes to makeup, we are our own worst enemies, believing that the world wants to see us in a certain way when in actual fact we’re fine the way we are. Why do women wear makeup? You could say it’s a pinch of patriarchy, a dusting of sex, a smattering of fun, and a whole, caked-on layer of misplaced insecurity.