Tuesday, February 28, 2017

Australia goes 25 years without recession; Somalia drought threatens half the nation; YouTube TV to take on cable networks

1 Australia goes 25 years without recession (BBC) Australia's economy has jumped sharply in the last quarter of 2016, allowing the resource-rich economy to mark 25 years without recession. It brings the country close to breaking the Netherlands' record of modern-era uninterrupted economic growth.

Australia's economy had contracted in the third quarter but the surprise rebound pulled annual figures back to a 2.4% growth rate. Australia has not seen a recession - defined as two consecutive quarters of negative growth - since 1991.

It is now just one quarter short of the Dutch record set between 1982 and 2008. Estimates by the country's central bank see growth picking up to around 3% for 2017 thanks to the recovering commodity prices.

2 Somalia drought threatens half the nation (San Francisco Chronicle) Somalia's new president has declared a national disaster for a drought that threatens millions of people and is creating fears of a full-blown famine. President Mohamed Abdullahi Mohamed has appealed for help from the international community and Somalia's diaspora of 2 million.

Combating the drought is a priority for Mohamed, who was elected this month to lead this fragile Horn of Africa nation also coping with attacks by the Islamic extremist group al-Shabab. The United Nations humanitarian office estimates that 5 million people in Somalia, or nearly half the country's population, need aid.

About 363,000 acutely malnourished children "need urgent treatment and nutrition support, including 71,000 who are severely malnourished," says the US Agency for International Development's Famine Early Warning Systems Network.

Thousands have been streaming into Somalia's capital, Mogadishu, in search of food aid, overwhelming local and international aid agencies. Over 7,000 internally displaced people checked into one feeding center recently.

Somalia was one of four regions singled out by the UN secretary-general this month in a $4.4 billion aid appeal to avert catastrophic hunger and famine, along with northeast Nigeria, South Sudan and Yemen. All are connected by a thread of violent conflict, the UN chief said.

3 YouTube TV to take on cable networks (Gulf News) YouTube has unveiled a streaming television service offering bundles of live channels, in a direct challenge by the Google-owned network to traditional cable and pay TV.

YouTube TV was tailored for younger generations seeking news, films and more programs without subscribing to cable or satellite service, according to YouTube chief executive Susan Wojcicki.

The new service will allow subscribers in US markets to get access on any connected device to networks such as ABC, CBS, Fox and NBC, along with “sports networks and dozens of popular cable networks,” according to YouTube.

Set to launch in the coming months, YouTube TV will cost $35 monthly, with six user accounts allowed per subscriber, positioning itself to compete against so-called “skinny bundles” from Dish Network’s Sling TV and AT&T’s DirecTV Now.

Friday, February 24, 2017

Trump promises wall ahead of schedule; Pearson reports biggest ever loss; Alphabet accuses Uber of stealing tech

1 Trump promises wall ahead of schedule (BBC) US President Donald Trump has vowed to start building a wall on the Mexican border "soon, way ahead of schedule". Addressing the Conservative Political Action Congress (CPAC), he vowed to always put American citizens first and build a "great, great border wall".

He also promised to focus on "getting bad people out of this country". Mr Trump was greeted by chants of "USA, USA, USA!" as he addressed the annual forum in Maryland. "We're building the wall," he said. "In fact it's going to start very soon. Way ahead of schedule. It's way, way, way ahead of schedule."

His comments come a day after Secretary of State Rex Tillerson and Homeland Security Secretary John Kelly met their Mexican counterparts in Mexico City. The wall could cost up to $21.5bn, according to Reuters, citing a Department of Homeland Security internal report - much higher than Mr Trump's estimated price tag of $12bn.

2 Pearson reports biggest ever loss (Mark Sweney in The Guardian) Pearson has reported a pre-tax loss of £2.6bn for 2016, the biggest in its history, after a slump at its US education operation.

The world’s largest education publisher, which in January saw almost £2bn wiped from its stock market value after issuing its fifth profit warning in two years, reported the record loss after taking a £2.55bn non-cash charge for “impairment of goodwill reflecting trading pressures” in its North American businesses.

A spokesman said the charge related mainly to historic acquisitions of Simon & Schuster Education and National Computer Systems, purchased in 1998 and 2000 respectively, as a “necessary consequence” of the lower profit expectations announced last month.

In January, the company slashed its profit forecast for this year by £180m and scrapped its target of £800m for next year. It also announced that it planned to sell its stake in the world’s largest book publisher, Penguin Random House, to strengthen its balance sheet.

The profit warning was prompted by the collapse of its US higher education business, which is struggling with a decline in textbook sales and the transition to digital learning. The US business accounts for two-thirds of Pearson’s revenues and profits.

The company made more than £350m in cost savings last year, cutting 4,000 jobs, 10% of its global workforce. Staff will be braced for further losses this year with Pearson saying that it intends to “take further action to improve the overall efficiency of the company”.

3 Alphabet accuses Uber of stealing tech (Khaleej Times) The race to develop self-driving vehicles took a new turn when Google's parent company Alphabet filed a lawsuit against Uber, accusing it of stealing technology.

Alphabet contends that a manager at its autonomous car subsidiary Waymo took technical data with him when he left to launch a competing venture that went on to become Otto, Uber's self-driving vehicle unit, in a reported $680 million deal.

Waymo is calling for a trial to stop Otto and Uber from using what it says is patented technology. Waymo also wants unspecified damages in what it described in court documents as "an action for trade secret misappropriation, patent infringement, and unfair competition".

An Uber spokeswoman said that "we take the allegations made against Otto and Uber employees seriously and we will review this matter carefully". The California-based ride-sharing service acquired the commercial transport-focused tech startup Otto last year as it pressed ahead with its pursuit of self-driving technology.

Anthony Levandowski, a co-founder of Otto, a 90-person startup, was put in charge of Uber's efforts to develop self-driving technology for personal driving, delivery and trucking. Waymo's lawsuit contends that Levandowski downloaded more than 14,000 proprietary files from a highly confidential design server to a laptop in December 2015.

Wednesday, February 22, 2017

US Fed may raise rates soon; French candidate pitches for franc's return; Apple HQ ready to open

1 US Fed may raise rates soon (BBC) Federal Reserve officials have said they may need to raise interest rates "fairly soon" if the economy stays strong, minutes of their meeting show. The first meeting of the Fed since Donald Trump took office as president discussed the possibility of a rate rise as early as March.

Most economists have been forecasting a rise in June. However, Fed officials appear divided on the timing of a rise amid uncertainty over Mr Trump's policies. "Several'' expressed fears that unemployment could fall substantially below the Fed's 4.8% target. That could trigger inflation pressures and force the Fed to boost rates at a faster pace than financial markets expect.

Unemployment in December was 4.7%, although it was back at 4.8% in January. Paul Ashworth, chief US economist at Capital Economics, said the "fairly soon"' phrase in the minutes "clearly leaves the door open to a March rate hike, although ... we still think the Fed will delay until June".

2 French candidate pitches for franc’s return (San Francisco Chronicle) If Marine Le Pen has her way, the French will soon pay for their baguettes with francs, not euros. The presidential candidate from the anti-EU, anti-immigration National Front party is all about national sovereignty and independence. She wants France to take control of its money, subject to a referendum that would lead France out of the European Union and its shared currency.

But how would France pull off a euro exit, or "Frexit"? No country has left the euro since its creation in 1999. A number of economists paint dire scenarios in which the departure of one of the euro's 19 countries unleashes chaos: market plunges, controls on money transfers, customs officers stopping people carrying suitcases of cash out of the country, a plague of defaults and lawsuits on bonds and contracts.

The euro was designed to be irrevocable. It's the "Hotel California" principle, as in the Eagles' song: you may wish to "check out any time you like, but you can never leave." Le Pen is leading polls for the first round of voting April 23; most polls and prognosticators see her losing the second round on May 7.

But after the British vote last year to leave the 28-member European Union, and after Donald Trump's election as US President, fewer people are taking a Le Pen defeat for granted.

3 Apple HQ ready to open (Gulf News) Apple has announced that it is set to open its sprawling new campus where thousands of its employees will be moving into over a period of six months.

Officially called the Apple Park, the 175-acre site features huge green spaces, a ring-shaped building, a 17-megawatt of rooftop solar, an Apple Store and café open to the public, a 100,000-square-foot fitness centre for employees, a theatre, as well as research and development facilities.

The 12,000 employees of the iPhone maker will begin moving into the new site in April, with the whole process taking over a period of six months. The campus’ 2.8 million-square-foot main building is clad entirely in the world’s largest panels of curved glass. It is located in the heart of Santa Clara Valley in California.

Steve Jobs, who would have turned 62 on February 24, had envisioned the facility as a centre for creativity and collaboration. In honour of Jobs’ memory and his influence on Apple and the world, the theatre at Apple Park, a 1,000-seat auditorium that is perched on a hill, one of the highest points at the park, will be named the Steve Jobs Theatre.

Tuesday, February 21, 2017

Eurozone growth accelerates; India demonetization hits trust hurdle; South Korea women to live beyond 90

1 Eurozone growth accelerates (San Francisco Chronicle) Economic growth in the 19-country eurozone accelerated in February to a near six-year high. In its monthly survey of economic activity across the region, financial information company IHS Markit also said job creation was the best for nine and a half years, as order books and business optimism continued to pick up.

The firm's purchasing managers' composite output index — a broad gauge of economic activity — spiked to 56.0 points in February from 54.4 the previous month. The index now stands at its highest level since April 2011, and is pointing to potentially robust quarterly growth of 0.6 percent in the first three months of the year — if the current pace is sustained into March.

The big surprise within the survey was that France appears to be growing slightly faster than Germany for the first time since August 2012. Both are growing at rates of between 0.6 percent and 0.7 percent in the first quarter.

Political uncertainties abound in the eurozone this year. In addition to the French election in April/May, there are national polls taking place in the Netherlands next month and Germany in the autumn.

In light of last year's vote in Britain to leave the European Union and Donald Trump's victory in the US presidential election, there are concerns that a populist tide may sweep continental Europe, too. Given the uncertainties, few in the markets think the European Central Bank will soon end to its stimulus efforts to revive the eurozone economy.

2 India demonetization hits trust hurdle (Mihir Sharma in Gulf News) It’s been more than three months since Indian Prime Minister Narendra Modi told his people that 86 per cent of their currency would be worthless in a few hours. Since then, his government has scrambled to find justification for such an unprecedented and draconian decision — one justification after another, as it happens.

First, the goal was to eliminate “black money” — stacks of cash concealed from the taxman. When the programme turned up little such cash, officials started talking about combating counterfeit notes and terror financing. Finally, they hit on the idea that demonetisation would promote cashlessness, and that’s where we seem to have stopped for the moment.

I wonder how long the government will stick with that justification, though, because the initial data isn’t encouraging. According to the Reserve Bank of India, as cash trickles back into the economy, people are slowly abandoning the digital methods of payment they were forced to use in the first weeks after demonetisation.

As of January 18, only Rs9.2 trillion in new bills had re-entered the system, after Rs15.44 trillion in old bills had been taken out. This is unlikely to surprise most development economists. If the government had indeed intended to make digital payments more common, then they should have figured out ways to nudge people into using them, rather than trying to force the change.

Call it Liberalism 101 or call it common sense: If the state tries to force people into changing their behaviour, they resist. They find ways to get around state diktats and go back to old patterns of behaviour the moment the pressure’s off. Instead, governments have to set up patterns of incentives — gentle “nudges,” as behavioural economists would say — to get people to behave differently.

It’s particularly important to keep this in mind in low-trust economies like India. The reason that many poorer Indians keep a lot of cash in hand is not because they’re avoiding taxes — obviously — but because they have trouble trusting “formal” institutions that are quite visibly not set up for them to use.

3 South Korean women to live beyond 90 (James Gallagher on BBC) South Korean women will be the first in the world to have an average life expectancy above 90, a study suggests. Imperial College London and the World Health Organization analysed lifespans in 35 industrialised countries.

It predicted all would see people living longer in 2030 and the gap between men and women would start to close in most countries. "South Korea has gotten a lot of things right," Prof Majid Ezzati said. "They seem to have been a more equal place and things that have benefited people - education, nutrition - have benefited most people."

The data also forecasts that Japan, once the picture of longevity, will tumble down the global rankings. It currently has the highest life expectancy for women, but will be overtaken by both South Korea and France.

The US also performs poorly and is on course to have the lowest life expectancy of rich countries by 2030. The study predicts an average age of 80 for men and 83 for women - roughly the same state Mexico and Croatia will have achieved.

"[Society in the US is] very unequal to an extent the whole national performance is affected - it is the only country without universal health insurance” added Prof Ezzati

Monday, February 20, 2017

China reels under debt load; Russia overtakes Saudi as top oil producer; World's largest yacht impounded

1 China reels under debt load (Khaleej Times) Chinese banks lent more money in January alone than the annual GDP of South Africa, as borrowers rushed to take advantage of government policies intended to stimulate the economy with easy credit.

But the free-for-all has had unintended consequences, creating a tottering tower of unsustainable debt, with Beijing now trying to tighten monetary policy and reduce access to credit without bringing the entire edifice crashing down.

Chinese debt exceeded 270 per cent of the country's GDP by the end of 2016, stoked by multiple interest rate cuts as well as the growth of the unregulated "shadow finance" credit sector which involves lending to already indebted companies. Thanks in part to the easy credit, China's economy expanded by 6.7 per cent last year, with a construction boom and increased public spending on infrastructure.

But the world's second largest economy is now saddled with an unwieldy debt load, Andrew Fennell of ratings agency Fitch said in a January 23 note, adding that "China's stable growth reflects stimulus, not sustainability".

The abundance of cheap cash has had unexpected consequences: the cost of garlic jumped 80 per cent last year on speculation, investors poured money into bitcoin and real estate prices in some parts of the country have gone through the roof. At the same time, empty apartment buildings have mushroomed across cities where builders are struggling to find clients willing to invest in their speculative ventures.

Authorities are also worried about the intensifying risk of corporate defaults, particularly in the unregulated "shadow finance" sector that covers loans to heavily indebted manufacturers and property developers.

2 Russia overtakes Saudi as top oil producer (Gulf News) Russia overtook Saudi Arabia as the world’s largest crude producer in December, when both countries started restricting supplies ahead of agreed cuts with other global producers to curb the worst glut in decades.

Russia pumped 10.49 million barrels a day in December, down 29,000 barrels a day from November, while Saudi Arabia’s output declined to 10.46 million barrels a day from 10.72 million barrels a day in November. That was the first time Russia beat Saudi Arabia since March.

Saudi Arabia and fellow producers from the Organisation of Petroleum Exporting Countries decided at the end of November to restrict supplies by 1.2 million barrels a day for six months starting Jan. 1, with Saudi Arabia instrumental in the plan. Non-member producers, including Russia, pledged additional curbs. Brent crude prices have climbed about 20 per cent since the end of November.

The US was the third-largest producer, at 8.8 million barrels a day in December compared with 8.9 million barrels a day in November, according to JODI. Saudi Arabia’s crude exports declined to 8 million barrels a day in December, from 8.26 million barrels a day, the biggest outflow for any month since May 2003.

3 World’s largest yacht impounded (Rupert Neate in The Guardian) The world’s largest sailing yacht has been impounded in Gibraltar over claims that its billionaire Russian owner owes the shipbuilder €15.3m (£13.3m).

The Gibraltar Port Authority impounded the €400m “Sailing Yacht A” as it was on its way to be delivered to industrialist Andrey Melnichenko, following a legal filing from the German shipbuilder that constructed the futuristic-looking vessel.

The 143m-long Bermuda-registered yacht, which has three masts taller than Big Ben’s clock tower, left the Kiel shipyard of superyacht builder Nobiskrug two weeks ago to conduct final sea trials before being handed over to Melnichenko.

But on Wednesday two Gibraltarian “ship keepers” took control of the Philippe Starck designed yacht, which is longer than 13 London buses and features a helipad, onboard swimming pool, and underwater observation pod. “In the volatile world of shipping, particularly in the recent economic downturn, disputes and defaults are an unfortunate fact of life,” the Gibraltar Port Authority says on its website.

Court papers show Nobiskrug is seeking an outstanding payment of €9.8m, as well as €5.5m for subcontractors and interest charges. The claims are made against Valla Yachts Ltd, the Bermuda company to which the yacht is registered.

Melnichenko is said to have chosen to name his yachts “A” so that they appear first in shipping registers. Sailing Yacht A, which requires 54 crew to operate, has eight decks connected by several lifts, and is capable of achieving speeds of 35 knots downwind. The unique carbon fibre masts can withstand 90 knots of wind with full sail up, the equivalent to a category 2 hurricane or hanging two double-decker buses from each tip.

Sunday, February 19, 2017

Arms trade at highest since cold war; After Brexit, likelihood of Nexit; China's leftover men

1 Arms trade at highest since cold war (Saeed Kamali Dehghan in The Guardian) The global transfer of major weapons systems rose over the past five years to the highest volume since the end of the cold war as the Middle East nearly doubled its imports, according to an annual report on arms sales.

The Stockholm International Peace Research Institute (Sipri) said that more weapons were delivered between 2012 and 2016 than any other five-year period since 1990. Saudi Arabia, which leads a military intervention in Yemen that has cost hundreds of civilian lives, was the world’s second largest importer after India, increasing its intake by 212%, mainly from the US and the UK.

Asia was the main recipient region in the world as India dwarfed regional rivals, China and Pakistan, by accounting for 13% of the global imports. While India received most of its arms from Russia, the Saudis relied heavily on US arms. US and Russia together supplied more than half of all exports. China, France and Germany were also among the top five exporters.

Despite staggering figures in the Middle East, which includes a 245% increase in the imports of arms by Qatar, Iran, which is under an arms embargo, received only 1.2% of total arms transfers to the region. In 2016, Iran took delivery of S-300 air defence missile systems from Russia in its first significant import of major weapons system since 2007.

The high demands for arsenals in the Middle East was in contrast with the plummeting oil prices. China solidified its position as a top-tier supplier by increasing exports by 6.2% compared to 3.8% in the period between 2007 and 2011, while Germany decreased its exports by 36% in the same period. Algeria was the largest importer in Africa.

2 After Brexit, likelihood of Nexit (Khaleej Times) For a small nation that has grown hugely wealthy thanks to centuries of doing business far and wide, the political mood in the Netherlands has turned surprisingly inward. As a March 15 parliamentary election looms in the Netherlands - one of the founding members of the European Union - popular lawmaker Geert Wilders is dominating polls with an isolationist manifesto that calls for the Netherlands "to be independent again. So out of the EU".

After Britons voted last year to divorce from the EU, could a Dutch departure - known here as "Nexit", after "Brexit" - be close behind? "I see the European Union as an old Roman Empire that is ceasing to exist. It will happen," Wilders said.

Wilders' Party for Freedom is a serious contender to win the popular vote, with most polls a month out from the election showing it ahead of all other parties. Over the past dozen years, the Dutch have already voted in referenda against EU proposals twice.

Few analysts think Nexit would materialise: Despite his popularity, Wilders will struggle to find coalition partners among mainstream parties, which shun him and his strident anti-EU rhetoric. Then again, few observers predicted last year that Britain would vote to become the first country to leave the EU, so the worries are real about the possible effects of a Nexit - or a further disintegration of European unity driven by the rise of nationalist populism throughout the continent.

An exit from the EU would likely deal a huge blow to Rotterdam, a cosmopolitan city known for its port, one of the world's busiest. The city employs 90,000 people, and a further 90,000 are directly linked to its activities elsewhere in the country. Port of Rotterdam corporate strategist Michiel Nijdam believed a Dutch exit from the EU seemed unlikely, though not impossible.

3 China’s leftover men (Rob Budden on BBC) In China, there is a name for unmarried men over 30. Shengnan, meaning “leftover men” have yet to find a wife – and in a country with a growing gender gap, that’s a big problem.

China has many millions more men than women, a hangover of the country's one-child policy, which was overturned in 2015, though its effects will last decades more. The gender imbalance is making it hard for many men to find a partner – and the gap is likely to widen.

By 2020, it’s estimated there will be 30 million more men than women looking for a partner. In his book, The Demographic Future, American political economist Nicholas Eberstadt cites projections that by 2030, more than a quarter of Chinese men in their 30s will not have married.

Now, with far fewer women than men, the race to find a suitable partner—and win her over before someone else does—has led some men to go to great lengths to find a wife. The longstanding tradition of meeting a potential partner has given way to modernity. Online dating is growing fast in China, as elsewhere, and messaging apps such as WeChat are increasingly popular ways of getting to know people. 

Saturday, February 18, 2017

Saudis prepare for Aramco IPO, world's biggest; When Zuckerberg sets the rules; Fake news isn't a new phenomenon

1 Saudis prepare for Aramco IPO, world’s biggest (Khaleej Times) Saudi Arabia is considering two options for the shape of Saudi Aramco when it sells shares in the national oil giant next year: a global industrial conglomerate, and a specialised international oil company, industry and banking sources said.

The listing of Aramco, expected to be the world's biggest initial public offer and raise tens of billions of dollars, is a centrepiece of the government's ambitious plan - known as Vision 2030 - to diversify the economy beyond oil.

When the plan was publicly released in June last year, it pledged to "transform Aramco from an oil-producing company into a global industrial conglomerate". But now Saudi officials and their advisers are debating whether to make Aramco "a Korean chaebol", as one source said, referring to sprawling South Korean conglomerates, or a specialised company focused purely on oil and gas.

A specialised company might be easier to value because of its simplicity and, since the risks in its business would be clearer, achieve a higher price for its shares. Other than its core oil and gas production, exploration and refining businesses, Aramco - which employs more than 55,000 people - has plans to build solar and wind power facilities.

As the kingdom's biggest company and one of its most efficient, it is being pressed into service to jump-start industrial projects that are too big or daunting for the private sector. It is developing a $5 billion ship repair and building complex on the east coast, and working with General Electric on a $400 million forging and casting venture.

As the IPO approaches, officials are asking themselves whether the domestic and international investors who will be asked to buy Aramco shares really want exposure to such a complicated array of assets. Last year, Prince Mohammed said he expected the IPO would value Aramco at a minimum of $2 trillion, and that the figure might end up being higher. But this will depend partly on the tax regime which Aramco faces.

2 When Zuckerberg sets the rules (Carole Cadwalladr in The Guardian) Last week, Mark Zuckerberg set out a new mission for the company he has created. “In times like these, the most important thing we at Facebook can do is develop the social infrastructure to give people the power to build a global community that works for all of us,” he says. A global community that “prevents harm, helps during crises and rebuilds afterwards”.

A role that might be more accurately described as this: government. Because that’s what this letter is, a template for Facebook’s role in a new world order. A supranational power that exists above and beyond the nation state. A digital interface between you and everything else: your friends, the news, the world.

But where does that power end? Who holds it to account? What are the limits on it? Because the answer is there are none. Facebook’s power and dominance, its knowledge of every aspect of its users’ intimate lives, its ability to manipulate their – our – world view, its limitless ability to generate cash, is already beyond the reach of any government.

He is wrestling with the question of how Facebook can change the world. Whereas the question is: do we actually want Facebook to change the world? Do we want any corporation to have so much unchecked power? “In recent campaigns – from India across Europe to the US – we’ve seen the candidate with the largest and most engaged following on Facebook usually wins,” Zuckerberg writes.

Zuckerberg’s letter is a big deal. And yet, in the current news cycle, you may well have missed it. He released it on Thursday, coincidentally the same day on which Donald Trump denounced the press as the enemy of the people. A press whose financial model has been undermined by Google and Facebook. Which, we all have to hope, finds another financial model – and fast.

Because good intentions are not enough. It is not enough that Mark Zuckerberg is not an arrogant fool. Facebook is a corporation doing what corporations do: making money, grabbing market share, maximising profit.

3 Fake news isn’t a new phenomenon (BBC) Fake news, false stories that masquerade as real news are not new. In the spring of 1917 some of Britain's most influential newspapers published a gruesome story. Britain was at the time trying to bring China into the war on the Allied side.

In February a story appeared in the English-language North China Daily News that claimed the Kaiser's forces were "extracting glycerine out of dead soldiers". Rumours about processing dead bodies had been in circulation since 1915 but had not been presented as facts by any official source.

That changed in April when the Times and the Daily Mail published accounts from anonymous sources who claimed to have visited the Kadaververwertungsanstalt, or corpse-utilisation factory. The Times ran the story under the headline Germans and their Dead, attributing the claim to two sources - a Belgian newspaper published in England and a story that originally appeared in a German newspaper, Berliner Lokal-Anzeiger on 10 April.

The German government protested loudly against these "loathsome and ridiculous" claims. But their protests were drowned out by public expressions of horror from the Chinese ambassador. China declared war against Germany on 14 August 1917.

It was in 1925 that Sir Austen Chamberlain admitted, in a Commons statement, there was "never any foundation" for what he called "this false report". In the same year the Conservative MP John Charteris - who served as head of intelligence - reportedly admitted, while on a lecture tour of the US, that he had fabricated the story.

In 1917 MI7 employed 13 officers and 25 paid writers, some whom moonlighted as "special correspondents" for national newspapers. One of their most talented agents was Major Hugh Pollard who combined his work in the propaganda department with the role of special correspondent for the Daily Express. After the war Pollard confessed his role in spreading the corpse factory lie to his cousin, Ivor Montague. But lies have consequences. During the 1930s the corpse factory lie was used by the Nazis as proof of British lies during the Great War.

Monday, February 13, 2017

Global stocks rise on hopes of Trump policy, EU growth; Ten Indian cities among 20 with worst air; Smartwatch no threat to the traditional

1 Global stocks rise on hopes of Trump policy, EU growth (San Francisco Chronicle) Global stocks rose Monday after President Donald Trump promised tax cuts for companies and appeared to steady relations with key Asian trading partners Japan and China. Upbeat economic forecasts from the European Union also helped buoy sentiment.

Investors pushed US indexes to a record on Friday, encouraged by strong company earnings and optimism over the Trump administration's promises of tax cuts and less government regulation. Trump also appeared to back away from promises to declare Beijing and Tokyo manipulate their currencies and said he had a "very warm" phone conversation with his Chinese counterpart, Xi Jinping.

Trump said Washington would honor its "one China" policy, which had been in question since he spoke to the leader of Taiwan after his election. Trump also met with Japanese Prime Minister Shinzo Abe and announced discussions of a possible bilateral trade deal.

The Trump-Abe meeting and Trump's "One China" commitment "could allay some of the trade concerns in Asia and set free into the market more bullish bets," Jingyi Pan of IG said in a report. "While it remains to be hashed out, President Donald Trump's mention of a 'level playing field' on currency valuation also appears to reflect an amicable turn after the US president accused his visitors of currency manipulation."

2 Ten Indian cities among 20 with worst air (The Guardian) Billions of people in cities around the world are exposed to dangerous air, but pollution levels vary widely – and the fast-growing cities of Asia and Africa are the worst affected.

We’ve broken down data from the World Health Organization on ultra-fine particles of less than 2.5 microns (PM2.5s) region by region. Paris’s air may have almost twice as many PM2.5s as WHO recommended levels (18 micrograms per cubic metre compared with 10µg/m³) – but Delhi’s air contains 122µg/m³, while Zabol, Iran, is the worst at 217µg/m³.

Tetovo in Macedonia – a city of 50,000 near the Kosovo border – has the worst PM2.5 air pollution in Europe, according to the WHO data. There are 10 Indian cities in the list of top 20 with the worst air.

3 Smartwatch no threat to the traditional (Manoj Nair in Gulf News) The time hasn’t come for a smartwatch revolution to take hold, and traditional luxury watchmakers are just fine with that.

“I think of them as a smart instrument like your phone or computer and helps you keep in touch,” 
said Raynald Aeschlimann, President and CEO of Omega. “It was an interesting way of thinking of carrying information and how you can get at it. “But a [luxury] watch is a totally different thing —  it’s the spirit people are buying into. It’s not a storage place for information… but more like the ring you bought or some pens. They are full of emotions.”

Nearly two years from the launch of the Apple Watch — which was supposed to be the moment when smartwatches were to upend the traditional watch business — things haven’t actually panned out that way. For the tech giants, smartwatches still represent a niche with their sales universe. And during this period, they have not turned out to be the must have lifestyle-work accessory everyone needed to have.

But there have been other threats the Swiss watch industry has had to confront during this period. China’s crackdown on corruption meant sales of luxury timepieces was ticking along slowly, while another constant worry was the strength of the Swiss franc.

There are shifts that Omega — one of the crown jewels in the Swatch Group portfolio — is bringing on. Last month, it sold out a Limited Edition Speedmaster — all 2,012 pieces — in just over four hours exclusively through its online channels.

Selling online is not the only way Omega wants to connect with a younger buyer base — it can always call in star power to impress them. There’s the brand’s association with the James Bond movies, and George Clooney is always on hand to light up billboards with an Omega in hand. And for the younger set, Omega’s got Eddie Redmayne, the 35-year old with an best actor Oscar on his resume.

Sunday, February 12, 2017

Rolls-Royce headed for historic loss; Mexico unites against Trump; Mulling a cashless society

1 Rolls-Royce headed for historic loss (Graham Ruddick in The Guardian) Rolls-Royce will report one of the biggest losses in British corporate history this week as Brexit and a corruption scandal leave an indelible mark on the famous aerospace company.

City analysts have forecast that Rolls could report a pre-tax loss of more than £4bn – its worst ever – due to the sharp decline in the value of the pound and the £671m penalty that the company has agreed to pay to settle corruption allegations.

Accounting rules mean Rolls will be forced to write down the value of its currency hedges to reflect sterling’s slump. The pound has lost almost a fifth of its value against the dollar since Britain voted to leave the EU last June. Rolls hedges billions of pounds of cash to protect itself against currency fluctuations because deals in the aerospace industry are conducted in dollars.

The financial results will also recognise the impact of the £671m penalty that Rolls agreed with authorities in the UK, US and Brazil to settle corruption charges. Although Rolls will make the payment over five years it is likely to recognise the full cost in the latest accounts as an impairment charge.

Rolls, which makes engines for Boeing’s 787 Dreamliners and Airbus’s A380 superjumbos among others, has been affected by lower-than expected demand for the wide-bodied airliners to which it supplies engines. But it has also been hurt by cuts to defence spending and the decline in the oil price, which has lowered demand from the offshore oil and gas industry for its marine products.

2 Mexico unites against Trump (BBC) Tens of thousands of people in Mexico have taken to the streets to protest against Donald Trump's immigration policies and plan for a border wall. Demonstrators in more than a dozen Mexican cities, dressed in white, waved Mexican flags and anti-Trump placards.

Organisers said they wanted to send a message that Mexico was united against Mr Trump. They also criticised Mexican President Enrique Pena Nieto for failing to tackle corruption and reduce violence. Demonstrators marching through the nation's capital, Mexico City, carried signs of unity. One banner read: "Gracias, Trump, for unifying Mexico!"

Mr Trump's plan to build a wall along the US border with Mexico has angered citizens in the country and Mr Pena Nieto has consistently refused to meet the US president's demands to pay for it. "Mexico does not believe in walls," he said.

Mr Trump's crackdown on immigration has also created fear among Mexicans living in the US, who may face deportation under the president's new measures. Mr Trump has signed three executive orders targeting crime and drug cartels with the aim of deporting illegal immigrants who have committed such crimes.

3 Mulling a cashless society (Aref Al Ramli in Gulf News) For more than 200 years, the world has used cash as the basis of economic activity. But is that about to radically change with the rapid development of digital payment systems, products and services?

Doing a quick online search, there are conflicting theories about what a cashless society actually means and whether or not it is a pipe-dream that will never fully realise its potential. An article in Fast Co makes a compelling point: “…one thing is clear: As online shopping becomes yet more prevalent, and prepaid credit cards take the place of more and more low-value cash transactions, cash is well on its way to becoming obsolete.”

When you couple this with the emergence of technology like Near Field Communication (NFC) and Bluetooth Low Energy (BLE), which allows chip-enabled cards, mobile phones and even smart watches to conduct transactions with a mere waft of the payment device over a programmed payment point, it is hard to argue against the growth of cashless transactions.

Other technologies like the peer to peer payments will also limit the transfer of cash among friends, colleagues and others. The possibilities for the future of digital banking are exciting. The way in which we bank and conduct transactions is rapidly changing and it is being driven from both customers and through emerging technologies.

The solutions need to work for the society as a whole, and be meaningful, simple, efficient and secure and not just a fad or gimmick that works for a while and then becomes obsolete. If we continue to embrace the digital revolution and keep the customer at the heart of every decision, of every product development, then they will come with us on that journey.”

Saturday, February 11, 2017

Record revenues for Renault; Brazil's corruption scam spreads across Latin America; North Korea dares US with missile tests

1 Record revenues for Renault (BBC) French carmaker Renault has reported record annual revenues after a revamp of its range boosted sales. Revenues rose 13.1% to 51.2bn euros (£43.6bn) last year, slightly ahead of expectations, while net income jumped by nearly 20% to 3.54bn euros.

Earlier this week, Renault said it had sold 3.2 million vehicles last year, a 13.4% rise on 2015, with market share rising in all regions. The firm's sales have now overtaken French rival Peugeot Citroen. Renault's financial director Clotilde Delbos said 2016 had been "a very good year" for the carmaker, and the company had hit all of its targets.

Renault said it expected the global car market to grow by between 1.5% and 2% next year, with sales in Europe and France up 2%. It forecasts the markets in Brazil and Russia will be "stable", but expects 5% growth in China and the Indian market to expand by 8%.

Last month, French authorities said they would investigate Renault over suspected "cheating" in diesel emissions tests. The Paris prosecutors office is to conduct a probe into "cheating on key parts" of vehicles and into the quality of the tests.

2 Brazil’s corruption scam spread across Latin America (Emma Graham-Harrison in The Guardian) The fallout from a massive bribery scandal that helped to bring down a Brazilian president is spreading across Latin America, threatening to engulf leaders from Panama to Peru.

The workings of a secret “bribery department” at the Brazilian construction conglomerate Odebrecht that suborned government officials around the world for years are being exposed by investigators. Meticulous schemes of graft laid out by witnesses, in plea deals and in leaked and seized documents show how the company funnelled $800m of payouts to politicians and parties in Latin America alone.

As prosecutors chase the trail of that cash, it has led them towards some of the region’s most prominent figures. Brazil’s president, Michel Temer, was accused in leaked testimony last year of taking campaign funds from Odebrecht, and the Panamanian president, Juan Carlos Varela, was implicated by a man who has himself been arrested in connection with the scandal. Both deny wrongdoing.

Perhaps the most surprising accusations came this week, when authorities implicated two men who have based their political careers on a reputation for integrity in countries plagued by graft. Peru sent out an Interpol arrest warrant for its former president Alejandro Toledo, on charges of taking some $20m in bribes. And Colombia’s chief prosecutor has said the country’s Nobel peace prize-winning president Juan Manuel Santos may have taken money for his re-election campaign. Both men have strongly denied the charges.

Authorities who offered a $30,000 reward for Toledo’s capture say he took the money in return for smoothing Odebrecht’s path to a lucrative contract for a road connecting Brazil to Peru’s Pacific coast. They have sought particular help from the US, where Toledo is a visiting scholar at Stanford University, and from Israel. His wife has Israeli citizenship and the country does not have an extradition treaty with Peru, so officials fear he may try to seek refuge there.

3 North Korea dares US with missile test (San Francisco Chronicle) North Korea reportedly fired a ballistic missile in what would be its first such test of the year and an implicit challenge to President Donald Trump's new administration. Details of the launch, including the type of missile, were scant.

There was no immediate confirmation from the North, which had recently warned it is ready to test its first intercontinental ballistic missile. The reports come as Trump was hosting Japanese Prime Minister Shinzo Abe and just days before the North is to mark the birthday of leader Kim Jong Un's late father, Kim Jong Il.

Trump ignored a shouted question about the developing situation as he, Abe and their wives posed for photos before heading to dinner at Trump's Mar-a-Lago estate in Florida. The South's Joint Chiefs of Staff said the missile was fired from around Banghyon, North Pyongan Province, which is where South Korean officials have said the North test launched its powerful midrange Musudan missile on Oct. 15 and 20.

Though Pyongyang has been relatively quiet about the transfer of power to the Trump administration, its state media has repeatedly called for Washington to abandon its "hostile policy" and vowed to continue its nuclear and missile development programs until the US changes its diplomatic approach.