S&P cuts EU rating after Brexit; Ozone layer hole may be healing; The war on youth is real

1 S&P cuts EU rating after Brexit (BBC) Ratings agency Standard and Poor's has cut its credit grade for the European Union after the UK's Brexit vote. S&P said the cut from AA+ to AA came after reassessment "of cohesion within the EU, which we now consider to be a neutral rather than positive".

The UK's Brexit vote had triggered "greater uncertainty" over long term economic and financial planning. On Monday, S&P cut the UK's top AAA credit rating, saying Brexit could hit the economy and financial sector. S&P said the change to its EU rating was because the previous assessment was based on all 28 states remaining in the bloc.

The agency said: "The rating action stems from S&P Global Ratings' view that the UK government's declared intention to leave the union lessens the supranational's fiscal flexibility, while reflecting weakening political cohesion.

http://www.bbc.com/news/business-36679481

3 Ozone layer hole may be healing (Oliver Milman in The Guardian) The vast hole in the ozone layer above Antarctica appears to be healing, scientists say, putting the world on track to eventually remedy one of the biggest environmental concerns of the 1980s and 90s.

Research by US and UK scientists shows that the size of the ozone void has shrunk, on average, by around 4m sq km since 2000. The measurements were taken from the month of September in each year, when the ozone hole starts to open up each year.

The study, published in Science, states that the phase-out of chlorofluorocarbon (CFC) chemicals means that the ozone layer is “expected to recover in response, albeit very slowly.” CFCs, once commonly found in aerosols and refrigeration, can linger in the atmosphere for more than 50 years, meaning that the ozone hole will not be considered healed until 2050 or 2060.

The Montreal protocol, a 1987 international treaty ratified by all UN members, successfully spurred nations to eradicate the use of CFCs in products. The UN estimates that2m cases of skin cancer a year have been avoided through the phase-out of CFCs.

The ozone hole opened up over the Antarctic due to the vast amounts of cloud that forms over the coldest continent on Earth. This cloud helps the CFC chemicals linger, causing the ozone layer to be eaten away. The void is at its greatest during the southern hemisphere’s spring.

https://www.theguardian.com/environment/2016/jun/30/ozone-layer-hole-appears-to-be-healing-scientists-say

3 War on youth is real (Jessica Irvine in Sydney Morning Herald) We hear a lot of whining from young people about a "war on youth" and their contempt for the easy ride the baby boomer generation seem to have enjoyed through life with free education, affordable housing, generous family benefits and super tax breaks. Meanwhile, university fees climb, house prices soar and the Newstart allowance goes nowhere.

Of course, it is a feature of youth to feel hard done by parents. So are young people today really getting ripped off? Is it getting worse? And is it any worse than what happened to our parents when they were young?  "The answer is yes, yes and yes," says John Daley, the head of the Grattan Institute.

"It's been a long time since policy has favoured the young, rather than the old. By contrast, we can point to dozens of decisions which have favoured older voters: a series of changes to the age pension over and above average weekly earnings; superannuation in general, which has just been the most massive gift to older generations imaginable, primarily the wealthy ones; the capital gains tax discount, which only works for people who own assets, so it's been terrific for them."

Daley adds the little commented upon fact that Australians aged over 65 also enjoy a higher tax-free threshold than younger Australians, thanks to the Senior Australians Tax Offset, for no apparent policy reason - just simple age discrimination. "Old people just don't have to pay as much tax as young people," says Daley. "All these things are manifestly unsustainable."

He has done the numbers, and found households aged under 65 contribute an average of about $4000 to $5000 each year to government coffers – ie, what they chip in as tax, minus the benefits they take out. Households aged over 65, by contrast, are a net drain on the system to the tune of about $22,000 at the start of the mining boom, rising to a whopping $32,000 six years later in 2010.

But isn't it true that young people will inevitably grow old themselves, and take their rightful place on the taxpayer gravy train?  "If young people think that, then they should adjust their expectations," warns Daley. It is becoming clear that the budget largesse shown towards older Australians over the past decade represents a one-off boost to the hip pockets of one generation of Australians that can neither be sustained, nor repeated again.

It is increasingly evident that the budget largesse heaped upon older Australians over the past decade has stretched the intergenerational compact to breaking point. No young person can realistically expect to enjoy the same spoils being enjoyed today by the baby boomer generation. Some will, of course, inherit their wealth. Many others will not be so lucky, deepening inequality in our society.

http://www.smh.com.au/comment/youth-to-foot-bill-for-baby-boomer-budget-incompetency-20160630-gpvf26.html

Japan factory growth at 3-year low; A New Zealand town with too many jobs; Referendum hara-kiri

1 Japan factory growth at 3-year low (Straits Times) Japan's industrial output slid in May at the fastest rate in three months to its lowest level since June 2013, highlighting concerns about falling exports and weak consumer spending.

May's 2.3 per cent fall in industrial output considerably exceeded the median estimate for a 0.1 per cent decline forecast in a Reuters poll."The decline in industrial output is directly related to the decline in exports," said Hidenobu Tokuda, senior economist at Mizuho Research Institute. "Another factor is the slow recovery in domestic consumer spending. The government should consider some measures to improve domestic demand."

Japan's government plans to announce more fiscal stimulus spending this autumn to revive Prime Minister Shinzo Abe's economic agenda. Strengthening domestic demand has become even more urgent as gains in the yen further threaten exports.

Separate data due on Friday is forecast to show core consumer prices fell at the fastest pace since the BOJ began its quantitative easing programme in April 2013, further vindicating the argument that efforts by the government and the BOJ to kindle inflation have failed.

http://www.straitstimes.com/business/economy/japan-factory-output-hits-3-year-low-on-weak-domestic-demand-export-slump

2 A New Zealand town with too many jobs (Eleanor Ainge Roy in The Guardian) A tiny New Zealand town has a unique problem – too many jobs, too many affordable houses and not enough people to fill them. So the 800 residents of picturesque Kaitangata, in the South Island, have launched a recruitment drive to lure new residents to the town.

The scheme involves offering house and land packages in the rural community for an attractive NZ$230,000 (£122,000) in the hope that Kiwis struggling with life in big cities will be tempted to relocate. Bryan Cadogan, mayor of the Clutha district, which includes Kaitangata, estimates there are upwards of 1,000 jobs vacant in his district and local residents are unable to meet demand.

He said: “When I was unemployed and had a family to feed, the Clutha gave me a chance, and now we want to offer that opportunity to other Kiwi families who might be struggling. “We have got youth unemployment down to two. Not 2% – just two unemployed young people.”

The major employers in the Clutha distract are linked to primary industries – including a dairy processing plant and freezing works – and for many years they have been forced to bus in workers from the provincial hub of Dunedin, which is over an hour away.

Dairy farmer Evan Dick is a third-generation resident of Kaitangata and he is spearheading the town’s recruitment drive. He is offering house and land packages and has the bank, lawyers and local community services on stand-by to streamline the relocation process for any blue-collar workers interested in shifting to the town.

“This is an old-fashioned community, we don’t lock our houses, we let kids run free. We have jobs, we have houses, but we don’t have people. We want to make this town vibrant again, we are waiting with open arms.”

https://www.theguardian.com/world/2016/jun/29/tiny-new-zealand-town-with-too-many-jobs-launches-drive-to-recruit-outsiders

3 A referendum hara-kiri (FS Aijazuddin in Dawn) In Japan, ritual suicide is known as hara-kiri. In Great Britain, the equivalent is a referendum. On Wednesday, June 22, the United Kingdom stood confidently astride the Channel, with one foot in the British Isles and the other in the European Union. At 9am the morning after, the referendum called by Prime Minister David Cameron opened.

It asked 46.5 million of his British electorate whether Britain should remain in the EU or opt out. It was suspected that the real reason for his decision was to pre-empt a coup within his own Conservative party. By early Friday morning, just over 17.4 million Britons had decided the future of 65 million of their fellow citizens. They voted to leave the European Union.

Suddenly, dramatically, everything changed. The Britain where a week ago one would be driven around by a Bulgarian in Penzance or for an interview with the BBC by a Lithuanian or served by a Polish waiter in Leeds is now ethnocentric. Xenophobia from being a British pastime has hardened into national policy.

What was the need for a referendum? That is a question millions of Britons are asking themselves. It is a question only they can answer, for they have no government left to interrogate. They have only themselves to blame, and the blame game in the UK has begun in earnest.

The Brexit juggernaut has begun its doleful journey, pulled by spurned members of the EU. Germany would like Britain out sooner than later; France wants to see a British prime minister — any prime minister — take the first, inexorable step to give formal notice of withdrawal.

Tradition requires Mr Cameron to tender his resignation to the Queen in private audience. It is not the 90th birthday present she expected from her 12th prime minister. With her sharp sense of history, she must feel like King Canute, seated on a throne of sand, watching the tides of secession erode her once united kingdom.

http://www.dawn.com/news/1268076/throne-of-sand

US first quarter growth revised upwards; Generation EU; Are we overpopulated or underdeveloped?

1 US first quarter growth revised upwards (BBC) The US economy grew faster than previously estimated in the first quarter of the year, according to official figures. The Commerce Department said gross domestic product (GDP) grew at an annual pace of 1.1% in the quarter, up from an earlier estimate of 0.8%. The upwards revision was helped by stronger export sales.

However, growth in consumer spending was revised down to 1.5%, the slowest pace since the first quarter of 2014. That weaker number was a reflection of slowing spending in service sectors such as health care and weak consumer spending during a harsh winter in many regions of the US.

The upward revision is a positive sign for growth in the current quarter, but there are concerns that the impact of the UK's decision to leave the European Union could send shockwaves through the US economy, slowing growth in the autumn. Economists currently expect second quarter growth in 2016 to be close to 2.4%

http://www.bbc.com/news/business-36650517

2 Generation EU (San Francisco Chronicle) In interviews after Brexit, Brits in their 20s and 30s described disagreements between euroskeptic parents and their more internationally minded children. The more passionate disagreements led to angry phone calls, accusatory text messages and — in one or two cases — parents and children who haven't spoken since the EU referendum results became known.

The reasons for the family feuds are as diverse as the families themselves, but for many young supporters of the "remain" camp, it's the prospect of seeing their parents shut the gates to Europe that galls, particularly as Britain's baby boomers prepare to bequeath their children a national debt of more than 1.6 trillion pounds ($2.1 trillion.)

Surveys show a notable division between Britain's young and old on Brexit; an Ipsos MORI survey showed 64 percent of those aged 18 to 35 favored the "remain" side, with 60 percent of those aged 55 and over backing Brexit.

http://www.sfgate.com/news/world/article/Generation-EU-British-vote-often-pitted-old-8329006.php

3 Overpopulated or underdeveloped? (Carla Kweifio-Okai & Josh Holder in The Guardian) Global population hit 7.3 billion midway through 2015, an increase of 2 billion since 1990. It will continue to climb steadily, according to forecasters, reaching 8.5 billion in 2030, 9.7 billion in 2050, and 11.2 billion in 2100.

But there is more to the population story than unprecedented numbers. The rate of growth is continuing to slow – the overall growth rate has been falling since the 1970s – and demographics are shifting. Globally, women are having fewer children than ever before

“The number of births has peaked, or has levelled off globally,” says John Wilmoth, director of the population division in the UN’s department of economic and social affairs. “Some countries still have increasing numbers of births but for the world as a whole, we’re not adding people to the population through births. We’re mostly adding to the population because people are living longer.”

Even if global fertility rates were to drastically reduce to replacement levels, populations would continue to grow for some time due to what experts refer to as the population momentum – the increasing number of people surviving to reproductive age and beyond. In 2015 global life expectancy rose to 71.4 years, a five-year increase since 2000.

More than half of global population growth between now and 2050 is expected to take place in Africa. The most notable growth is expected in Nigeria, where the population is estimated to surpass that of the US by 2050, making it the third largest nation on earth.

Fertility is projected to decline in Africa too, but the pace with which this happens will have important implications for development. There are a number of factors that can play a role in a country’s fertility rates, including its investment in education, the availability of family planning services, the status of women’s rights and the prevalence of early and forced marriage.

The UN Population Fund (UNFPA) argues that addressing these key issues is fundamental to slowing population growth. “Population dynamics are not destiny,” the UNFPA’s population matters report says. “Change is possible through a set of policies which respect human rights and freedoms and contribute to a reduction in fertility, notably access to sexual and reproductive healthcare, education beyond the primary level, and the empowerment of women.”

http://www.theguardian.com/global-development/datablog/2016/jun/28/over-populated-or-under-developed-real-story-population-growth

UK loses triple-A rating; India needs $1.5trn for infrastructure; When populism distorts democracy

1 UK loses triple-A rating (Jill Treanor & Katie Allen in The Guardian) The UK has been stripped of its last AAA rating as credit agency Standard & Poor’s warned of the economic, fiscal and constitutional risks the country now faces as a result of the EU referendum result.

The two-notch downgrade came with a warning that S&P could slash its rating again. It described the result of the vote as “a seminal event” that would “lead to a less predictable stable and effective policy framework in the UK”. The agency added that the vote to remain in Scotland and Northern Ireland “creates wider constitutional issues for the country as a whole”.

That downgrade was swiftly followed by a cut to the UK’s credit score from rival agency Fitch. Intensifying the pressure on the UK’s standing on international markets, Fitch cut the UK’s rating to ‘AA’ from ‘AA+’. The UK had already lost its top rating with Fitch back in 2013.

S&P was the last of the big three ratings agencies to have a blue-chip rating on the UK’s credit-worthiness. Moody’s, which stripped the UK of its top notch rating amid the austerity cuts of 2013, said last week it might further cut its view of the UK. Rating agency moves have the potential to make it more expensive for the government to borrow.

The pound hit fresh 31-year lows and £40bn was wiped off the value of the UK’s biggest companies on Monday, despite efforts by George Osborne to quell investors’ concerns about the economic and political ramifications of the Brexit vote.

Expectations are mounting that the Bank of England will cut interest rates – possibly to zero from their historic low 0.5% – to stimulate the economy, and yields on government bonds fell below 1% for the first time, which could spell cheaper mortgage rates.

https://www.theguardian.com/business/2016/jun/27/property-and-financial-shares-slide-as-referendum-fallout-hits-stock-markets

2 India needs $1.5trn for infrastructure (Gulf News) India needs more than $1.5 trillion in investment in the next 10 years to bridge infrastructure gap as the government intends to connect seven hundred thousand villages with roads by 2019 as part of a massive modernisation plan, Finance Minister Arun Jaitley said.

“We have been able to sustain growth in the phase of global slowdown essentially on the strength of the infrastructure creation in India where the gap is huge,” said Jaitley. “Over the next decade, we require over $1.5 trillion in India alone to fill up the infrastructure gap.

“In investing large public finance into infrastructure, for instance, we have seventeen hundred thousand villages in India. We intend to connect each of them by 2019,” he said. He also spoke of massive rural sanitation programme as part of India’s current infrastructure programme.

“In terms of highway construction this year alone our target is 10,000 kms. Our railway system is over 100 years old. We are going in for a massive modernisation,” he said. About arranging funding for the massive development, he said “we realise that starting point is public finances. It is only when the public finances are put into it, you start attracting and the activity begins a lot of private funds”.

http://gulfnews.com/business/economy/india-needs-1-5r-for-infrastructure-jaitley-1.1852917

3 When populism distorts democracy (Javed Jabbar in Dawn) One of the world’s oldest parliamentary democracies, the UK used an inappropriate electoral system which enabled mere populism to distort the long-term vision of a mature democracy.

Even without a written constitution, a referendum with fundamental implications for the future of the country should have been determined by at least a two-third majority of votes, and not left to be decided by a narrow margin of less than 4pc. A simple majority is valid to enact normal, day-to-day legislation. But it is inadequate to decide on a subject that has far-reaching dimensions embracing not just narrow national interests but larger regional and global values.

The physical proximity of the UK to Europe is an unchangeable reality and related links will always remain. However, the result by only a thin margin will have very thick repercussions. Several are already evident. New uncertainty in the financial sector. Big dips in stock markets. New unknowns for mainland Europeans working in the island country and vice versa. Unprecedented economic imponderables for the country, the continent and the world.

The major setback is to the concept of how to build formal structures for regional cooperation. The multiple institutions of cross-border cooperation which evolved in Europe over the past 40 years were innovative and direction-setting. Regional pacts in other continents looked towards the EU as an inspirational model.

The small margin of the result also disproportionately magnifies the representative credentials of emerging xenophobic elements like the UK Independence Party. It encourages similar elements in France, Germany and elsewhere.

This is in a country that bothered so little about respecting the borders of other countries when it imposed colonial and imperial interests for centuries. It is also clear that the voting principles and processes of old democracies are not necessarily pertinent in a complex new world.

http://www.dawn.com/news/1267630/unwise-voting

Brexit losses prompt firms to quit UK; Goldman sees UK recession; When the 'risky trinity' looms

1 Brexit losses prompt firms to quit UK (Zoe Wood, Jill Treanor & Phillip Inman in The Guardian) British businesses have warned that Brexit will trigger investment cuts, hiring freezes and redundancies as the consequences of leaving the European Union threaten to destabilise markets further this week.

The survey by the Institute of Directors (IoD), which found that the majority of businesses believed Brexit was bad for them, comes amid fears that investors will wipe billions more pounds off share values on Monday morning, and signs that the pound, which hit a 30-year low on Friday, was coming under further pressure from trading in Asia.

The IoD said a quarter of the members polled in a survey were putting hiring plans on hold, while 5% said they were set to make workers redundant. Nearly two-thirds of those polled said the outcome of the referendum was negative for their business. One in five respondents were considering moving some of their operations outside of the UK.

The governor of the Bank of England, Mark Carney, was expected to abandon plans to travel to a meeting of central bankers and policy makers organised by the European Central Bank in Portugal on Wednesday. He will remain in London to oversee the response to the uncertainty.

Meanwhile, fears are spreading that an estimated 100,000 roles could be lost in the financial sector if banks press on with contingency plans to move jobs out of the UK. Banks are preparing to shift roles out of London amid the uncertainty about whether the UK can keep its “passporting” rights allowing them to operate across the EU.

Analysts said that Brexit should not spark the chaos which followed the collapse of Lehman Brothers in September 2008. “Policymakers and companies have had time to make contingency plans, even if they can’t fully offset the impact,” said analysts at at French bank Société Générale. However, the analysts expect the pound to fall another 10% “over time” and the euro by half that amount.

https://www.theguardian.com/business/2016/jun/26/city-of-london-expecting-further-post-brexit-losses-when-trade-reopens

2 Goldman sees UK recession (Straits Times) Britain is likely to enter a recession within the year as a result of last week's vote to leave the European Union, a decision that will stunt global economic growth as well, Goldman Sachs' top economists said.

"We now expect the (British) economy to enter a mild recession by early 2017," Goldman economist Jan Hatzius and Sven Jari Stehn wrote in a note for clients. They expect the victorious "leave" outcome in the June 23 referendum to chop a cumulative 2.75 per cent off UK gross domestic product in the next 18 months.

They also expect knock-on effects in the US and European economies. Goldman now expects euro zone GDP over the next two years to average 1.25 per cent versus 1.5 per cent before the Brexit vote.

For the US economy, the bank now expects GDP growth in the second half of 2016 to come in at 2 per cent versus a forecast of 2.25 per cent previously. Goldman sees three principle risks for as a result of the vote: terms of trade are likely to deteriorate; companies are likely to scale back investment due to the uncertainty; and financial conditions will tighten due to exchange rate fluctuations and weakness in risk assets like stocks and junk bonds.

http://www.straitstimes.com/business/economy/goldman-sees-post-brexit-uk-recession-cuts-us-eu-growth-forecasts

3 When the ‘risky trinity’ looms (Khaleej Times) Global economic policy urgently needs rebalancing, the Bank for International Settlements (BIS) said on Sunday, as the world faces a "risky trinity" of high debt, low productivity growth and dwindling firepower at the world's big central banks.

The BIS, an umbrella body for major central banks, said in its annual report that the global economy was highly exposed even before Thursday's vote by Britain to leave the European Union. "There are worrying developments, a sort of "risky trinity", that bear watching, said the head of the BIS monetary and economic department, Claudio Borio.

He said the global economy cannot afford to rely any longer on the debt-fuelled growth model that has brought it to the current juncture. Despite sub-zero interest rates and trillions of dollars of stimulus, Europe and Japan's central banks are struggling to lift inflation and growth.

The BIS's foreign exchange reserves data, which are considered the most accurate in the world, showed a $668 billion decline globally last year. China accounted for $513 billion of that, presumably as it sought to sure up the yuan.

Middle East countries burnt through $140 billion of their reserves as oil prices dropped. Japan and Malaysia which saw big currency declines last year, of $20 bilion and $21 billion.

http://khaleejtimes.com/business/economy/say-hello-to-the-risky-trinity---and-why-you-should-fear-it

Post-Brexit financial world remains uncertain; Soros warns of EU disintegration; Democracy's woes

1 Post-Brexit financial world remains uncertain (Nils Pratley in The Guardian) This post-Brexit financial world will require a lot of untangling. If a UK recession, however mild or brief, lies ahead, banks will see more loans turn sour while consumers’ appetite for fresh debt will shrink. Worse for the banks, the whiff of any medium-term rise in interest rates in the UK has disappeared.

The fear of recession also undermined the housebuilding sector, where most stocks fell by a quarter. Mortgages may remain extraordinarily cheap in the new world, but confidence in house prices is suddenly anybody’s guess.

What happens next? It’s easy to imagine how financial waves from the upheaval in currency markets could spread around the world. Even as things stand, the strong US dollar is creating severe pressures in China, where Beijing’s softly-softly attempt to loosen the renminbi’s peg with the US currency upset markets at the start of this year.

Dominic Rossi of fund manager Fidelity International expects lower growth across the UK and the rest of Europe, but thinks the political shock from the UK referendum will be greater than the economic one.

The good(ish) news was delivered by Mark Carney, governor of the Bank of England: the financial system is far stronger than it was in 2008 and banks’ capital requirements have been stressed against “scenarios more severe than the country currently faces”. There is no reason to doubt that statement. But financial markets’ medium-term adjustment to the post-Brexit world remains deeply uncertain.

https://www.theguardian.com/business/nils-pratley-on-finance/2016/jun/24/post-brexit-financial-world-uncertain-eu-referendum-stock-markets

2 Soros warns of EU disintegration (BBC) Billionaire investor George Soros has warned that Britain's vote to leave the European Union makes the disintegration of the bloc "practically irreversible". However, he called for thorough reconstruction of the EU in an attempt to save it.

Before Thursday's UK referendum, Mr Soros had warned of financial meltdown if Britain voted to leave. "Britain eventually may or may not be relatively better off than other countries by leaving the EU, but its economy and people stand to suffer significantly in the short- to medium term," he wrote after the referendum.

He said the consequences for the economy would be comparable to the financial crisis of 2007-2008. "After Brexit, all of us who believe in the values and principles that the EU was designed to uphold must band together to save it by thoroughly reconstructing it," he wrote.

http://www.bbc.com/news/business-36630468

3 Democracy’s woes (Anjum Altaf in Dawn) Over 2,000 years ago, Plato was sceptical of democracy because he felt that voters, even though restricted to property-owning male citizens, were swayed easily by the rhetoric of politicians.

Democracy disappeared for over 1,500 years following its demise in Athens and it was only then that its slow evolution began in England and spread to other parts of the world. During colonialism it was asserted that natives were not ready for democracy. Similar reservations regarding the developing world persisted beyond the end of colonialism.

The intellectual challenge to democracy was unaddressed — after all Hitler was popularly elected and voters have often elected leaders who they themselves condemn as thieves and rascals. The revival of this debate is due to the turmoil in the democratic homeland — governmental gridlock, the surge in extremist sentiment in Europe, and the emergence of Trump as a presidential candidate in the US.

Reservations about democratic decision-making have been expressed more recently by Richard Dawkins with reference to the UK referendum on EU membership. Dawkins asks: “You want your surgeon to know anatomy… Why would you entrust your country’s economic and political future to know-nothing voters like me?”

http://www.dawn.com/news/1267272/democracys-woes

EU, Britain prepare for 'divorce'; Dubai rents may see 8% decline; After exit, Brits Google 'what is EU?'

1 EU, Britain prepare for divorce (BBC) EU leaders are to meet to discuss the UK's "divorce" from the organisation after a historic referendum result. The UK voted by 52% to 48% to leave the EU. Prime Minister David Cameron has said he will step down by October.

The first meeting of EU leaders with no British representation will be held on Wednesday. The EU has urged the UK to start negotiations to leave quickly. European Commission head Jean-Claude Juncker stressed the "Union of the remaining 27 members will continue".

Global stock markets fell heavily on the news of the so-called "Brexit". The value of the pound has also fallen dramatically. The UK must now invoke Article 50 of the EU Lisbon Treaty, which then allows for two years for withdrawal to be negotiated. Mr Cameron said he preferred to leave negotiations to his successor.

European Parliament President Martin Schulz said the EU "as a whole was taken as a hostage" by infighting among Mr Cameron's Conservative party.

http://www.bbc.com/news/world-europe-36626409

2 Dubai rents to see 8% decline (Cleofe Maceda in Gulf News) Jesse Downs, managing director of Phidar Advisory, argued that softening demand will continue to put pressure on residential rents in Dubai to drop to more affordable levels this year, giving some relief to tenants who are still spending too much of their income on housing.

Downs said they expect average rents to fall by approximately 8 per cent to 10 per cent over the next three months, with some areas forecast to post “even higher declines.” Downs said “these rent declines are caused by softening demand, especially in mid-high to high income bracket, a consequence of the current economic situation which has increased job losses and slowed new job creation”.

Downs’ forecast runs contrary to recent analysis by other experts that the market is at the trough stage and nearing recovery. Consultancy firm ValuStrat said that based on their price index for the month of May, there is now a “clear trend of a plateau” in residential prices.

Downs said that Dubai’s property market is a reflection of global and regional trends. With employment levels also slowing down in other parts of the globe, it is normal to expect the same for the domestic market.

Standard & Poor’s Rating Services had earlier said that the UAE real estate market in general is not showing any signs of market improvement yet. It said that the market will continue to face pressure from declining oil prices and softening of hiring and business activities

http://gulfnews.com/business/property/dubai-realty-expert-sees-8-rent-decline-1.1849626

3 After exit, Brits Google ‘what is EU?’ (Amy Graff in The Guardian) Hours after Britons voted for the United Kingdom to leave the European Union, they started Googling "What is the EU?" according to Google Trends.

"What is the EU?" is the second top UK question on the EU since the #EURefResults were officially announced. In a tweet, the tech company claimed this was the second top search term in the UK since the vote on the decision for a British Exit, or Brexit, was officially announced.

Some are saying a sharp uptick in searches posing basic questions about the European Union and Brexit suggests that many Britons weren't clear on the details of what they were voting on. Other common questions on Google search in recent hours include: "How many countries are in the EU?" "Which countries are in the EU" and "What does it mean to leave the EU?"

The Washington Post noted that a British woman named Mandy, who voted in favor of an exit, told ITV that since the reality of the vote has hit her, she has realized that she would choose to stay with the EU if she were given the chance to vote again.

http://www.sfgate.com/news/article/Britons-Googling-What-is-the-EU-after-Brexit-8323105.php

Pound plunges as Brexit seems near; Volkswagen 'to pay $10bn' for US emission claims; Refugees as future entrepreneurs

1 Pound plunges as Brexit seems near (Andrew Sparrow in The Guardian) Sir Vince Cable, the former Lib Dem business secretary, has told BBC that if leave win, David Cameron’s days as prime minister will be over.

Professor Michael Thrasher, the Sky News number cruncher, says that as things stand it looks as if leave is heading for a 12-point lead. The pound is slumping, down 5.5% at $1.408 as bookies put Leave as the favourite to win. And the FTSE 100 futures are down more than 4%.

Leanne Wood, the leader of Plaid Cymru, has said the leave vote – which is looking very strong in Wales – was an attack on the establishment. She also said that if the UK does leave the EU it could provide opportunities for Plaid, whose ultimate aim is independence for Wales.

“It’s looking as though those areas where there are greatest areas of deprivation and poverty, those areas which are receiving the most amount of money from EU funds are the areas where people are voting in the greatest number to leave. I’m of the view it’s austerity that is at the root of the problem here. People want change and they’ve seen this as an opportunity to get the change they want,” she said.

http://www.theguardian.com/politics/live/2016/jun/23/eu-referendum-result-live-counting-leave-remain-brain-in-europe

2 Volkswagen ‘to pay $10bn’ for US emission claims (BBC) Volkswagen has agreed to pay $10.2bn to settle some claims in the US from its emissions cheating scandal, according to reports. Most of the money would compensate 482,000 owners of two-litre diesel cars programmed to distort emissions tests.

Owners could receive between $1,000 and $7,000, depending on their car's age. The agreement could still change when it is officially announced by a judge on Tuesday, sources said. Lawyers representing car owners, Volkswagen and the US Environmental Protection Agency have not yet agreed the steps VW will take to fix the cars.

The company still faces accusations over its three-litre diesel cars, as well as the prospect of hefty fines from US regulators and possible criminal charges. Earlier this year the German company more than doubled its provisions for the scandal to €16.2bn.

Volkswagen admitted in September it had installed a "defeat device" - or software - in diesel engines in the US that could detect when they were being tested. The company subsequently revealed that more than 11 million cars worldwide were affected.

http://www.bbc.com/news/business-36611152

3 Refugees as future entrepreneurs (John Pilmer in San Francisco Chronicle) Current world events have spotlighted refugees in an often unflattering light. Governments are expressing concern that refugees will take up dwindling resources or be a security risk. While these may be valid concerns, there are plenty of positive reasons to take in refugees.

Much like the economic conditions in Cuba have made the population restless and ready for new opportunities, for many refugees, life-changing struggles help to fuel an entrepreneurial spirit. You don’t have to look very far to discover great examples of refugees who have had a positive impact on the world. (Google co-founder Sergey Brin is among them) Refugees have a strong inclination to not only survive, but to reach for something better.

Necessity naturally drives people to come up with solutions to problems all around them, from starting a pizza delivery service in a displacement camp to influencing global politics. By bringing their unique perspectives and skill sets to a new country, refugees are more than capable of finding new ways of doing business.

In Canada, Australia and Germany -- to name a few places -- immigrants and refugees have had a higher rate of successful entrepreneurial endeavors than the native population. In 2016 in the US, more than one in six business owners are foreign born.

Of course, creating a business out of nothing is always an uphill battle. Hurdles such as startup capital, language barriers and lack of a strong support network are real problems to would-be refugee entrepreneurs. But the courage that brought them out of conflict-ridden countries, the risk-taking that brought them across dangerous borders, the determination that led them to start a new life and the resilience that keeps them going so far from everything they know are all of the traits that make for successful business owners.

http://www.sfgate.com/news/article/We-Should-Welcome-Refugees-They-Are-Often-Great-8313148.php

IMF warns US over high poverty; Instagram hits half billion users; LG's mosquito-repelling TV

1 IMF warns US over high poverty (BBC) The US has been warned about its high poverty rate in the International Monetary Fund's annual assessment of the economy. The fund said about one in seven people were living in poverty and that it needed to be tackled urgently. It recommended raising the minimum wage and offering paid maternity leave to women to encourage them to work.

The report also cut the country's growth forecast for 2016 to 2.2% from a previous prediction of 2.4%. Slower global growth and weaker consumer spending were blamed. US economic growth slowed to an annual pace of 0.5% during the first three months of the year, down sharply from 1.4% in the last three months of 2015.

But the stronger labour market meant that overall "the US economy is in good shape", said the IMF's managing director Christine Lagarde. May's unemployment figures showed the rate at an eight-year low of 4.7%. The report called on the US to invest more in education, as well as implement better social programmes such as childcare to help poorer Americans get jobs.

http://www.bbc.com/news/business-36599316

2 Instagram hits half billion users (Jill Treanor in The Guardian) The photo-sharing app Instagram now has 500 million users, reaping the benefits from the growth of selfies and the propensity for celebrities such as Kim Kardashian to share images with a wider audience.

Launched in 2010, it was bought by Facebook for $1bn when it had 30 million users. Kevin Systrom, one of its founders, said: “500 million is a milestone very few companies get to. This scale is not a badge on our uniform, but a signal of our ambition. If we can have a billion or a billion and a half on Instagram, we get closer to capturing every experience in the world.”

More than 80% of its half-billion users are outside the US, the company said, and that 300 million used the app every day. Earlier this year, Instagram caused controversy by introducing a system that changed the order in which photographs were posted.

https://www.theguardian.com/technology/2016/jun/21/instagram-hits-half-billion-users

3 LG’s mosquito-repelling TV (Emily Price in San Francisco Chronicle) LG’s newest television will repel mosquitoes for you. Available in India where it was also designed, the TV uses sound to repel mosquitoes from the room. The set broadcasts a noise only hearable by the bug, that is so unpleasant they’d prefer to stay away rather than interrupt your binge-watching session.

Beyond working as a digital form of bug spray, the line of 1080p high definition televisions have built-in 20W sound as well as built-in games. It also offers Bollywood and Cricket modes for an enhanced experience watching those types of programming.

The sets start at 31-inches in size, with pricing beginning at around $400. The same bug-repelling technology is also being used in some other appliances made by LG, including air conditioners and washing machines.

http://blog.sfgate.com/techchron/2016/06/21/lgs-new-tv-repels-mosquitos/

India opens up on FDI; Nigeria currency plummets on floatation; China to halve meat consumption

1 India opens up on FDI (Khaleej Times) India has announced sweeping reforms to rules on foreign direct investment, opening up its defence and civil aviation sectors to complete outside ownership and clearing the way for Apple to open stores in the country.

The move comes two days after central bank governor Raghuram Rajan, a darling of financial markets but under pressure from political opponents at home, announced he would not seek another term, a surprise move that raised concerns about whether reforms he set in motion will stall.

Prime Minister Narendra Modi hailed the changes to the foreign direct investment rules, stressing his government's reform credentials. In a tweet, he said the changes would provide a "major impetus to employment and job creation in India."

The new reform measures also relax restrictions on inbound investments in pharmaceuticals and single-brand retail. Defence contractors that have been reluctant to transfer technology to manufacture equipment in India would get the right to own local operations outright, with government approval, up from a cap of 49 per cent previously.

In other changes, India allowed 100 per cent FDI in civil aviation, following on from last week's launch of a new policy that lowered barriers to entry for airlines that want to fly international routes. The government also allowed foreign companies to own up to 74 percent in 'brownfield' pharmaceuticals projects without prior government approval. India already allows 100 percent ownership of greenfield pharma businesses.

http://khaleejtimes.com/business/economy/let-indias-fdi-party-begin

2 Nigeria currency plummets on floatation (San Francisco Chronicle) Nigeria's currency plummeted on Monday, losing more than 40 percent of its value as the government floated the naira for the first time in the history of the oil-producing nation.

The move was forced by a spiraling economic crisis and massive shortage of foreign exchange created by slumping oil prices and aggravated by President Muhammadu Buhari's 16-month-long insistence that the Central Bank defend the naira at a fixed rate of 197 to the dollar. Other oil producers like Angola and Venezuela devalued months ago.

The naira started Monday at 255 to the dollar but ended with $530 million being traded at 280 to the dollar among 21 banks, according to traders who insisted on anonymity because the Central Bank has not published the figures.

"This is good news for the majority of Nigerians," Ayo Teriba, CEO of Economic Associates consultancy, said of the devaluation. "The biggest gain is on the appreciation of the parallel market because the parallel market devaluation has destroyed domestic activities, with prices of local goods skyrocketing." Imported goods also have doubled and trebled in price.

Inflation is soaring at nearly 16 percent this month, and analysts say it will get worse before it slows down. The devaluation is a boon for MTN, Africa's largest telecommunications company, which this month negotiated a deal to pay a fine of 330 billion naira, now effectively discounted by about 30 percent.

Among losers are companies with billions of naira trapped in Nigeria that they were not allowed to repatriate. Analysts said the devaluation could exacerbate bad debts already standing at 10 percent of bank loans. Bankers will adjust loans made in dollars to the new value of the naira, including more than $10 billion loaned to Nigerian companies to buy assets from oil multinationals in recent years.

http://www.sfgate.com/news/world/article/Naira-gains-as-Nigeria-floats-currency-for-1st-8312711.php

3 China plans to halve meat consumption (Oliver Milman in The Guardian) The Chinese government has outlined a plan to reduce its citizens’ meat consumption by 50%, in a move that climate campaigners hope will provide major heft in the effort to avoid runaway global warming.

New dietary guidelines drawn up by China’s health ministry recommend that the nation’s 1.3 billion population should consume between 40g to 75g of meat per person each day. The measures, released once every 10 years, are designed to improve public health but could also provide a significant cut to greenhouse gas emissions.

Should the new guidelines be followed, carbon dioxide equivalent emissions from China’s livestock industry would be reduced by 1bn tonnes by 2030, from a projected 1.8bn tonnes in that year.

Globally, 14.5% of planet-warming emissions emanate from the keeping and eating of cows, chickens, pigs and other animals – more than the emissions from the entire transport sector. Livestock emit methane, a highly potent greenhouse gas, while land clearing and fertilizers release large quantities of carbon.

Meat has gone from rare treat to a regular staple for many Chinese people. In 1982, the average Chinese person ate just 13kg of meat a year and beef was nicknamed “millionaire’s meat” due to its scarcity.

The emergence of China as a global economic power has radically altered the diets of a newly wealthy population. The average Chinese person now eats 63kg of meat a year, with a further 30kg of meat per person expected to be added by 2030 if nothing is done to disrupt this trend. The new guidelines would reduce this to 14kg to 27kg a year.

China now consumes 28% of the world’s meat, including half of its pork. However, China still lags behind more than a dozen other countries in per capita meat consumption, with the average American or Australian consuming twice as much meat per person compared to China.

https://www.theguardian.com/world/2016/jun/20/chinas-meat-consumption-climate-change

Brexit would be end of EU, says Soros; Tourism, Leicester City and cheap oil propel Thailand; Romance in virtual reality

1 Brexit would be end of EU, says Soros (Phillip Inman in The Guardian) Billionaire investor George Soros has warned that a Brexit vote this month would make the breakup of the EU “almost certain”.

Soros – who shot to fame in 1992 as the man whose $10bn (£6.9bn) bet against the pound broke the Bank of England – has switched more of his fortune into gold as he anticipates possible shockwaves from a leave vote in the EU referendum. “If Britain leaves, it could unleash a general exodus, and the disintegration of the European Union will become practically unavoidable,” he said.

Soros said an EU breakup was another threat to global stability along with concerns over the Chinese economy and a Trump presidency. In recent months the currency speculator has bet that a devaluation of the Chinese currency, the yuan, was inevitable, earning himself a rebuke from the Beijing authorities.

Gold, considered a safe haven by investors, has risen 17% since January to $1,244 an ounce. Shares in gold miners have soared this year with the Philadelphia Gold and Silver Index up 98% compared with a 3.5% increase in the New York S&P 500 Index.

https://www.theguardian.com/business/2016/jun/09/george-soros-warns-britain-leaving-could-be-end-of-eu

2 Tourism, Leicester City and cheap oil propel Thailand (Straits Times) When it comes to hefty trade surpluses, the likes of China, Japan, Germany and South Korea make the list of usual suspects. But without much fanfare, Thailand - best known for its beaches, food, military coups and more recently, the football heroes Leicester City - has run up the biggest current-account surplus among major emerging markets.

The current-account surplus in the first quarter ballooned to an annualized 10.2 per cent of gross domestic product, an improvement that Richard Iley, chief economist for Asia at BNP Paribas, describes as "phenomenal."

Much of the buffer is down to a steep fall in oil prices - Thailand relies on crude imports for more than 80 per cent of its energy needs - and a surge in tourism fueled by Chinese shoppers. The nation attracted 7.9 million visitors from China last year, a 70 per cent increase from 2014.

Thailand has been using the windfall to replenish its foreign-exchange reserves by about $20 billion this year, providing a key bulwark if it faces a sudden surge in capital outflows or foreign-exchange market volatility. The increase in reserves has been the fastest of any other emerging market, according to BNP.

It's not all good news though. The current-account data also reflects a reluctance by companies and households to spend the dividend from cheaper energy, indicating a deeper malaise in the economy.  Thailand remains under military rule two years after a coup and political uncertainty has eroded confidence. Savings rates soared to 33 per cent of GDP in the first quarter, while investment has slid.

http://www.straitstimes.com/business/economy/thailands-winning-mix-tourism-leicester-city-and-cheap-oil

3 Romance in virtual reality (San Francisco Chronicle) Critically acclaimed Chinese director Jia Zhangke says he will make a virtual reality film next year with a romantic story as he and viewers get used to the new medium, and declared: "I think VR is going to be the next big thing."

The director, better known for films that depict China's social changes and acts of violence, said that the short film would be a gentle romance as "it takes time for people to feel comfortable" in virtual reality. "The speed and direction of movements may make people feel physically uncomfortable, so we're starting with a romantic story," he said.

Virtual reality entertainment consists largely of video games, but film festivals are starting to showcase VR films as directors venture into the new medium. It offers a much more solitary experience compared to watching a movie in a packed theater.

VR requires a headset that blocks out your surroundings and lets you wander through a story in a different world — either by moving a few steps in various directions or sitting on a swivel chair and moving your body to look around a 360-degree scene. The fake environment is, nonetheless, often realistic, but movie makers are still trying to work out how to tell a story in VR.

It also gives the audience more power as they choose what to watch. "In the past, the audience could only imagine the world inside and outside the frame," he said. "VR liberates an audience and allows people to independently choose what we want to be concerned with. Audiences become more important."

http://www.sfgate.com/business/technology/article/AP-Interview-Jia-Zhangke-plans-virtual-reality-8311542.php