UK mulls interest rate cut; Ford warns of gloomy outlook; Food crisis for 10,000 Indians laid off in Saudi Arabia

1 UK mulls interest rate cut (Katie Allen in The Guardian) The Bank of England is expected to cut interest rates for the first time since the financial crisis this week and lower its UK growth forecasts by the biggest margin on record, in response to the uncertainty caused by the EU referendum result.

The Bank’s monetary policy committee will announce a decision on Thursday, when the latest inflation report and growth forecasts will be published. If interest rates are cut, it will be the first time they have changed since being set at 0.5% in March 2009.

The MPC held off reducing official borrowing costs from their record low in the immediate aftermath of the Brexit vote on 23 June. However, the committee has dropped heavy hints that it will act this week when fresh forecasts for the economy are published. Mark Carney, the Bank’s governor, warned before the referendum that voting to leave could push Britain into a recession.

The Bank’s forecasts are expected to include an unprecedented downgrade of the prospects for the British economy. In May’s inflation report, it forecast that the economy would grow by 2.3% this year, but economists believe this could now be slashed to less than 1%, which would be the largest downgrade in the Bank’s forecasts between inflation reports since it became independent in 1997.

https://www.theguardian.com/business/2016/jul/31/uk-interest-rates-set-to-be-cut-bank-of-england-growth-forecasts

2 Ford warns of gloomy outlook (Khaleej Times) Ford has warned that it could miss its 2016 profit forecast due to a plateauing of auto sales in the US market and slower economic growth.

Ford, which had described the first quarter of 2016 as "absolutely terrific," offered a much more subdued outlook as it cautioned that higher incentives in the critical North American market could dent profitability.

"We are committed to meeting our guidance but it is at risk," Ford chief financial officer Bob Shanks said. "We don't see growth, at least in the near term." The bleaker outlook came after Ford reported an 8.8 percent drop in second-quarter earnings to $2 billion. Revenues rose 6.0 percent to $39.5 billion.

Ford joined some other industry experts who have said the American auto market will have trouble topping the record of 17.5 million cars sold in 2015, a peak in a multi-year boom supported by strong sales of sport utility vehicles and other large autos.

http://khaleejtimes.com/business/auto/ford-shares-tumble-on-gloomy-outlook

3 Food crisis for 10,000 Indians laid off in Saudi Arabia (BBC) More than 10,000 Indian nationals laid off in Saudi Arabia are facing a "food crisis", India's foreign minister says. Sushma Swaraj said "large numbers" of Indians had lost their jobs in the kingdom, leaving them with not enough money to buy food.

The Indian community in Jeddah, with the government's help, has distributed food to those in need at the weekend. Growth has slowed in Saudi Arabia as the country suffers the effect of lower oil prices.

Ms Swaraj appealed on Twitter for the three-million-strong Indian community in the country to "help your fellow brothers and sisters". A government minister is travelling to Saudi Arabia, Ms Swaraj said. He is expected to help with arrange an airlift of laid-off Indians who are unable to afford the air fare home.

Reports in India said 800 Indian workers had lost their jobs at Saudi Oger, a large Saudi-Lebanese construction company. In the past, Human Rights Watch has criticised Saudi Arabia for "rampant employer abuses of migrant workers, including forcing them to work against their will or on exploitative terms".

Workers laid off in Kuwait were also suffering food shortages, Ms Swaraj said, but the situation there was more manageable, she added.

http://www.bbc.com/news/world-middle-east-36936666

US economy inches ahead; Eurozone growth halves; World is still wild about Harry Potter

1 US economy inches ahead (Jana Kasperkevic in The Guardian) The US economy grew at an annual rate of just 1.2% from April to June, as cut backs by businesses wiped out a rise in consumer spending.

The lower-than-expected figure is the latest in a series of disappointing economic numbers attributed to growing uncertainty among consumers and businesses, both of whom are keeping a tighter rein on spending. The economy has now grown at an annual rate of less than 2% for three straight quarters.

Growth in the US economy, according to Chris Williamson, chief economist at Markit, is “being driven largely by the consumer”. Earlier this week, the US central bank held off on raising interest rates for the fifth time this year. The Federal Reserve was originally expected to raise interest rates four times this year after it did so in December for the first time in almost a decade.

In its latest statement the Fed cited a lack of business investment as one of the reasons for its decision to hold off on a rate rise. Businesses are not spending money in part because earlier this year customers were also not spending money. That trend has become evident over the past week as US public companies have reported their second quarter earnings.

Ford reported flat sales in the US. Apple reported that it sold over 40m iPhones, down from 48m a year ago. Companies including Chipotle and McDonald’s have also reported lower-than-expected sales. Consumers were spending less because they are unsure about their financial security, the US elections and overall global events, said Steve Easterbrook, McDonald’s chief executive officer.

https://www.theguardian.com/business/2016/jul/29/us-economy-gdp-growth-second-quarter

2 Eurozone growth halves (BBC) Eurozone economic growth halved in the second quarter, but the 19-nation single currency area moved away from deflation. GDP rose by 0.3% between April and June, in line with expectations but below 0.6% growth in the first quarter.

France, the eurozone's second-largest economy, saw no growth after expanding by 0.7% in the first quarter. Eurozone inflation rose to 0.2% in July from 0.1% in June as a result of higher food, alcohol and tobacco prices. Data also revealed that the eurozone jobless rate remained at 10.1% in June.

The economic growth figures are the first to be published since Britain voted to leave the European Union (EU). Peter Vanden Houte, chief economist at ING Bank, said: "The good news is that the economy still has some momentum, though there is little acceleration to be expected as long as the Brexit story continues to inject some uncertainty into the external environment."

http://www.bbc.com/news/business-36922367

3 World is still wild about Harry Potter (San Francisco Chronicle) Nine years after JK Rowling's final novel about the boy wizard, Harry has returned, on the stage and the page — and he's still producing commercial alchemy.

"Harry Potter and the Cursed Child," a two-part stage drama that picks up 19 years after the novels ended, has its gala opening Saturday at London's Palace Theatre. It's already a hit. Although producers won't release ticket sales figures, the show is largely sold out through December 2017; another 250,000 tickets will go on sale Aug. 4.

It is not just the theater that is seeing a Potter-related boom. Booksellers expect a bonanza when the script is published Sunday. Thousands of bookstores around the world are holding midnight Potter parties Saturday, and are reporting advance sales not seen since the 2007 publication of "Harry Potter and the Deathly Hallows," the final novel in Rowling's seven-book series.

Rowling has long insisted there will be no new Harry Potter novels, so excitement about the new stage story is stratospherically high. She created the story for the drama alongside Thorne and director John Tiffany, who helmed the Tony Award-winning musical "Once."

Last seen as a teenage wizard, Harry is now an overworked civil servant at the Ministry of Magic, while his son Albus is a pupil at Hogwarts School of Witchcraft and Wizardry. The producers' synopsis says that "while Harry grapples with a past that refuses to stay where it belongs, his youngest son Albus must struggle with the weight of a family legacy he never wanted."

http://www.sfgate.com/news/world/article/Potter-play-hype-shows-the-world-is-still-mad-8608646.php

Alphabet beats earnings forecast; Amazon boss is third richest man; Globalisation, as we know it, is over

1 Alphabet beats earnings forecasts (San Francisco Chronicle) Alphabet Inc. on Thursday reported second-quarter earnings of $4.88 billion. The California-based company said it had profit of $7 per share. Earnings, adjusted for stock option expense, came to $8.42 per share.

The results surpassed Wall Street expectations. The average estimate of 14 analysts surveyed by Zacks Investment Research was for earnings of $8.07 per share.

The Internet search leader posted revenue of $21.5 billion in the period. After subtracting Alphabet's advertising commissions, revenue was $17.52 billion.

http://www.sfgate.com/business/technology/article/Alphabet-tops-Street-2Q-forecasts-8520331.php

2 Amazon boss is third richest man (BBC) Strong earnings from Amazon and a boost to the company's stock have made its founder, Jeff Bezos, the world's third richest man, according to Forbes. Mr Bezos's owns 18% of Amazon's shares. Forbes estimated his fortune to be $65.3bn.

Amazon's revenue beat analysts' expectations, climbing 31% from last year to $30.4bn in the second quarter. Profit for the e-commerce giant was $857m, compared with $92m in 2015. Amazon had developed a reputation for announcing little or no profit each quarter, but appeared to hit a turning point last year and has seen improving earnings since.

Amazon shares have spiked 50% since February. Amazon's Prime membership, which offers extra services including free shipping for an annual fee, saw impressive international growth. In June, Amazon launched Prime in India to take advantage of the country's large consumer market.

Amazon's cloud computing unit also spiked. Revenue for Amazon Web Services (AWS), climbed 58.2% to $2.89bn, beating analysts' exceptions of $2.83bn. Sales growth for the unit in North America climbed 10% and 8% in the rest of the world. Amazon has grown its market share in cloud computing compared with rivals such as Microsoft and Google.

http://www.bbc.com/news/business-36917516

3 Globalisation, as we know it, is over (Ruchir Sharma in The Guardian) Inside Europe the political earthquake is receding, with the installation of a new UK prime minister who, ostensibly, did not want to leave the EU. Yet even if Brexit does not herald the unravelling of Europe or of the global economy, it is the most important sign yet that the era of globalisation as we have known it is over. Deglobalisation will be the new buzzword.

The world has entered what I call the AC era – after the crisis of 2008. It is already marked by much more upheaval than prevailed in the era before the crisis, and many of the policies and leaders that nations have embraced, hoping to ease the pain, have only made matters worse.

Worldwide, an anti-establishment revolt has been raging since the crisis. In 30 of the major democracies, the incumbent has been winning in as few as a third of national elections each year since 2008, down from two-thirds before that year. In the 20 top emerging and developed nations, the median approval rating of the incumbent leader has fallen from a high of 54% in the years before 2008, to just 37%.

Anger at incumbent governments is now widely seen as a boon to rightwing populists such as Donald Trump, Marine Le Pen, and some of the leaders of the Brexit campaign. This, however, is a revolt against the establishment, not an ideology, left or right.

The period since 2008 has seen weak wage growth but spectacular returns for the wealthy: in Britain, wages are up 13%, but the stock market is up 115%. This story repeats itself in country after country. In a recent study of 46 major economies, Credit Suisse found that prior to 2007, wealth inequality was on the rise in 12 of them; but after 2007, that number more than doubled to 35.

The hype for globalisation that excited the era before the crash has given way now to fears of deglobalisation. Global capital flows fell from a peak of 16% of global GDP in 2007 to just 1.6% – a level last seen in the 1980s. This retreat will act as a drag on economic growth, suggesting that every country needs to downsize its ambitions, or face new outbreaks of frustration.

Unfettered globalisation lifted millions of people out of poverty in the emerging world, but it also frayed the social fabric of many western nations. Brexit is just one manifestation of the anti-globalisation backlash in the post-2008 era. The champions of that backlash are pushing policies that are likely only to exacerbate the global economic slowdown.

But the message from Brexit and similar movements is clear: economic growth may have to take a back seat while political leaders work to address the anger of those who believe that globalisation has left them behind.

https://www.theguardian.com/commentisfree/2016/jul/28/era-globalisation-brexit-eu-britain-economic-frustration

Samsung boosted by smartphone sales; After Brexit, negative interest rate looms; Facebook user numbers grow

1 Samsung boosted by smartphone sales (BBC) Strong smartphone sales have helped Samsung Electronics post its best quarterly results in more than two years. Second-quarter operating profit jumped 18% to 8.1tn Korean won ($7.17bn), in line with the company's guidance issued in July. That is mainly driven by strong sales of its Galaxy S7 and Galaxy S7 Edge smartphone models.

But the company also indicated that "market competition is expected to strengthen as other companies release new mobile devices". Samsung is confident that the release of a new large-screen flagship smartphone in the third quarter will help maintain the track record of its smartphone sales.

Samsung's results are in contrast to rival Apple. Earlier this week, the US company reported a 15% drop in iPhone sales for the April-to-June quarter. And it also said it expected sales to fall again in the current quarter. As for other divisions in the Samsung conglomerate, the company is forecasting a decline in TV demand for the second half of the year, citing "weakened demand in Europe and a prolonged economic slowdown in emerging markets".

http://www.bbc.com/news/business-36911228

2 After Brexit, negative interest rate looms (David Blanchflower in The Guardian) Since the leave vote in the EU referendum, the bad economic news has continued to roll in. A survey by the Royal Institution of Chartered Surveyors shows a sharp fall in inquiries from homebuyers. Markit’s flash purchasing managers index (PMI) surveys taken after the vote for both manufacturing and services were especially grim. They exclude retail and construction which may well be even harder hit.

A week ago two external monetary policy committee (MPC) members both said that the case for a cut in interest rates was unclear. On 20 July Kristin Forbes argued that the MPC should “wait for the Brexit fog to clear before an interest rate cut” and it was “a good time to keep calm and carry on”. 

To this point the MPC haven’t cut below 0.5%, whereas other central banks went to zero, because of their concerns that this would constrain the ability of banks and building societies to extend new credit. But that is set to change at the 4 August meeting as the MPC is going to put those fears aside and is likely to cut rates to 0.25% and maybe even to zero. 

The MPC has hinted it will put in place a “package” of measures, which will likely include a further round of quantitative easing although we don’t know yet what assets they will buy. But they may not stop at zero and may eventually go lower. I don’t see this happening in August, but there is a distinct possibility down the road, if the data worsens further, as it well might, that rates will have to go negative. 

This is not pie-in-the-sky economics; it is a real possibility and banks are already preparing. NatWest wrote to its 850,000 business customers this week, changing the terms and conditions of their accounts and warning of the possibility that negative interest rates may be coming. 

Everyone else is doing it. Negative rates are already being charged by the European Central Bank; along with the central banks of Japan; Denmark, Switzerland, Sweden and Hungary. Lower rates encourage business investment and consumer spending and the hope is that there is a nice continuum from positive rates to small negatives. 

Economists used to think that zero was the lower limit for interest rates, but it seems rates can go below zero. The vote to leave the EU has been a nasty negative shock to the UK economy that is going to lower living standards and cause much pain and suffering. A self-inflicted wound. The Brexiters were warned.

https://www.theguardian.com/commentisfree/2016/jul/27/brexit-economy-shock-uk-negative-interest-rates

3 Facebook user numbers grow (San Francisco Chronicle) Facebook's stock is trading higher after the world's biggest social media company handily surpassed Wall Street's expectations for the second quarter, barrelling ahead on mobile advertisements, user growth and the next frontier — video.

Chief Operating Officer Sheryl Sandberg said that people are spending more time each day on Facebook, on average. The company's focus on video is attracting more attention from users, she said. Facebook has been working to get users to create and watch more videos, from each other, from businesses and from celebrities.

Facebook had 1.71 billion monthly users as of June 30, up 15 percent year-over-year. Mobile accounted for 84 percent of the quarter's ad revenue. Overall, Facebook Inc. said its second-quarter net income nearly tripled, to $2.06 billion, or 71 cents per share.

Menlo Park, California-based Facebook's revenue grew 59 percent, to $6.44 billion. Eleven analysts surveyed by Zacks expected $6.01 billion. Facebook has a long tradition of surpassing analysts' expectations with its quarterly earnings.

http://www.sfgate.com/business/technology/article/Facebook-beats-Street-2Q-forecasts-8471849.php

Historic nomination for Hillary Clinton; iPhone sales fall again; The new age of uncertainty

1 Historic nomination for Hillary Clinton (San Francisco Chronicle) Taking her place in history, Hillary Clinton has become the first woman to lead a major party toward the White House, a triumphant moment for Democrats to relish before plunging into a bruising general election against Republican Donald Trump.

Supporters of Bernie Sanders, Clinton's primary rival, repeatedly interrupted Monday's proceedings with boos and chants of "Bernie." Before Clinton's nomination became official, Sanders' supporters had one more opportunity to voice their fierce loyalty to the Vermont senator. Hawaii Rep. Tulsi Gabbard vowed that the movement Sanders' sparked "can never be stopped or defeated."

Sanders sat in the arena soaking in the cheers and waving to the crowd. But the convention belonged to Clinton, who was bursting through the glass ceiling she was unable to crack during her failed 2008 campaign. She was nominated by a trio of Democrats, including Georgia Rep. John Lewis, who praised Clinton as a "great leader who can unite us as a nation and a people."

"Tonight we will make history, about 100 years in the making," said Karen Finney, a senior adviser for Clinton's campaign. "What we're really going to focus on tonight is telling that story, and telling her story, talking about the fights of her life."

http://www.sfgate.com/news/article/History-and-hostility-as-Clinton-ascends-to-8425325.php

2 iPhone sales fall again (BBC) Apple has reported a second consecutive quarter of falling iPhone sales, but the 15% drop was not as bad as analysts had feared. The US tech giant sold 40.4 million iPhones in its third quarter, slightly above forecasts of 40.02 million.

Apple chief executive Tim Cook said the results reflected "stronger customer demand... than we anticipated". The firm said it expected sales to fall again in the fourth quarter to between $45.5bn and $47.5bn. Demand for Apple's flagship product has been slowing since the second quarter when the firm reported the first drop in iPhone sales since their 2007 launch.

The iPhone makes up for around two-thirds of Apple's sales and accounts for even more of its profits. The slowdown in iPhone sales sent profit down 27% to $7.8bn in the three months to 25 June, while revenues fell 14.6% to $42.4bn. Apple's sales in Greater China - defined by the company as China, Hong Kong and Taiwan - plunged 33%.

http://www.bbc.com/news/business-36900134

3 The new age of uncertainty (Stuart Jeffries in The Guardian) The future is always to some extent uncertain, but never more so than now. “Disruption is the new normal,” says author Jonathan Fields. Will we Brexit? Could there be another referendum? What will happen next?

Not all current uncertainty is a result of the EU referendum. We worry increasingly about things that never concerned our parents. Will Donald Trump be US president in November? Will the combination of rocketing property market and burden of student debt mean that you’ll never be able to afford downpayment?

Is it more financially wise to keep your money under the mattress rather than entrust it to a bank? Is it worth saving at all now that negative interest rates are being considered? Possibly worst of all, following a spate of murderous attacks across Europe and now Japan, we’re increasingly uncertain about our safety when we go beyond our front doors.

My only consolation is what Bertrand Russell wrote in The Triumph of Stupidity: “In the modern world the stupid are cocksure while the intelligent are full of doubt.” The parents who know, with vexing self-confidence, which school would be best for their little horrors are really deluded, while I’m a genius because of my very uncertainty. That must be what’s happening.

Every choice feels like a gamble, every decision relies on making a prediction about an unpredictable future. To make a plan for a life in such circumstances feels like a fool’s wager.

Here’s a consoling thought: earlier historical eras have not felt any different to those struggling through them. In 1977, for instance, the great economist John Kenneth Galbraith presented a BBC TV series called The Age of Uncertainty, contrasting “the great certainties in economic thought in the last century with the great uncertainty with which problems are faced in our time”.

https://www.theguardian.com/world/2016/jul/26/new-age-of-uncertainty-brexit-trump-future-world-flux

Solar plane completes world trip; 'Superbook' as the office-in-pocket; Dutch are the world's tallest

1 Solar plane completes world trip (Damian Carrington in The Guardian) Solar Impulse 2 has completed the first round-the-world flight by a solar-powered aeroplane, after touching down in Abu Dhabi early on Tuesday.

The final leg of the feat, aimed at showcasing the potential of renewable energy, was a bumpy one, with turbulence driven by hot desert air leaving the solo pilot, Bertrand Piccard, fighting with the controls.

The plane, which has a wingspan wider than a Boeing 747 and carries more than 17,000 solar cells on its wings, began the circumnavigation in March 2015 in Abu Dhabi. It has since crossed both the Pacific and Atlantic Oceans using no fossil fuel and has spent more than 23 days in the air.

Piccard said he was feeling emotional as he neared the end of the journey: “It is a very, very special moment – it has been 15 years that I am working on this goal. I hope people will understand that it is not just a first in the history of aviation, but also a first in the history of energy,” he said.

“All the clean technologies we use, they can be used everywhere. So we have flown 40,000km, but now it is up to other people to take it further. It is up to every person in a house to take it further, every head of state, every mayor in a city, every entrepreneur or CEO of a company.

During daylight, the solar panels charged the plane’s batteries, which make up a quarter of the craft’s 2.3 tonne weight. The pilot also climbed to 29,000 feet during the day and glided down to 5,000 feet at night, to conserve power. The plane flies at about 30mph, although it can go faster if the sun is bright.

Bertrand alternated with André Borschberg to fly the 16 legs of the journey, spending up to five days in the unheated and unpressurised cabin, taking only short naps and with the single seat doubling up as a toilet. Borschberg flew the longest leg, 4,000 miles over the Pacific from Japan to Hawaii, smashing the record for the longest uninterrupted journey in aviation history.

The aim of the Solar Impulse adventure was not to develop solar-powered planes for widespread use, but to show the capabilities of renewable energy.

https://www.theguardian.com/environment/2016/jul/26/solar-impulse-plane-makes-history-completing-round-the-world-trip

2 ‘Superbook’ as the office-in-pocket (Khaleej Times) A US-based startup has launched a smart laptop shell that turns your Android smartphone into a complete laptop, making it more convenient and affordable for people in developing countries like India and South Africa to carry their office in their pocket - literally.

The shell, called ‘Superbook’ by Andromium, makes an Android smartphone output look very much like a desktop environment. It is essentially a "dumb terminal" - a notebook without a processor but with a keyboard, battery, trackpad and display. Andromium launched this ambitious product on Kickstarter - a website "designed to bring creative projects to life" - and is available at $99.

Developed by Andrew Jiang and his team at Andromium, Superbook provides a large screen, keyboard and multi-touch trackpad, more than eight hours of battery and phone-charging capabilities. When plugged into an Android smartphone, it launches an app that will deliver a full laptop experience to its user.

According to Jiang, the app is essentially Android Continuum that lets you work seamlessly, going from phone to notebook.

http://khaleejtimes.com/business/technology/now-carry-your-office-in-your-pocket

3 Dutch are the world’s tallest (Jonathan Amos on BBC) When it comes to height, Dutch men and Latvian women tower over all other nationalities, a new study confirms. The average Dutchman is now 183cm (6ft) tall, while the average Latvian woman reaches 170cm (5ft 7in).

The research, published in the journal eLife, has tracked growth trends in 187 countries since 1914. It finds Iranian men and South Korean women have had the biggest spurts, increasing their height by an average of more than 16cm (6in) and 20cm (8in).

In the UK, the sexes have gone up virtually in parallel by about 11cm (4in). "Mr Average" in Britain is now 178cm (5ft 10in) tall; Ms Average stands at 164cm (5ft 5in).

This contrasts for example with men and women in the US, where the height of the nation's people started to plateau in the 1960s and 1970s. Over the century, they have seen increases of just 6cm and 5cm (a couple of inches), respectively.

Indeed, Americans have tumbled down the rankings. Back in 1914, they had the third tallest men and fourth tallest women on the planet. Today they are in 37th and 42nd place. The height charts are now utterly dominated by European countries, but the data would suggest that growth trends in general in the West have largely levelled out.

The smallest men on the planet are to be found in East Timor (160cm; 5ft 3in). The world's smallest women are in Guatemala, a status they also held back in 1914. According to the survey data, a century ago the average Guatemalan 18-year-old female was 140cm (4ft 7in). Today she has still not quite reached 150cm (4ft 11in).

Some of the variation in height across the globe can be explained by genetics, but the study's authors say our DNA cannot be the dominant factor. Lead scientist Majid Ezzati said: "About a third of the explanation could be genes, but that doesn't explain the change over time. Changes over time and variations across the world are largely environmental. That's at the whole population level versus for any individual whose genes clearly matter a lot."

http://www.bbc.com/news/science-environment-36888541

UK explores free trade deal with China; How hesitation is stifling global economy; Jeep celebrates 75th anniversary

1 UK explores free trade deal with China (Kamal Ahmed on BBC) Chancellor Philip Hammond has begun discussions with China on an ambitious free trade deal which could see greater access for major Chinese banks and businesses to the UK economy.

The Chancellor said it was time to explore "new opportunities" across the world, including with China, one of the UK's biggest inward investors. That is despite a short term economic shock from leaving the European Union. He added that the EU is not in "punishment mode" over the Brexit vote.

"What we now need to do is get on with it in a way that minimises the economic impact on the UK economy in the short term and maximises the benefit in the long term," Mr Hammond said, admitting that there had been "global disappointment" about the Brexit vote. Chinese state media reported that the Chinese Ministry of Commerce wants to do a UK free trade deal.

Mr Hammond has now revealed that Britain is also keen. It will be the first time the UK has embarked on such a major project with the second largest economy in the world. And will raise concerns about cheap manufactured goods entering the UK more easily.

http://www.bbc.com/news/business-36877573

2 How hesitation is stifling global economy (Robert Shiller in The Guardian) Economic slowdowns can often be characterised as periods of hesitation. Consumers hesitate to buy a new house or car, thinking that the old house or car will do just fine for a while longer.

So how does such behaviour become sufficiently widespread to bring about an economic slump? Loss of economic confidence is one possible cause. Uncertainty about economic policy is another possible source of hesitation. If businesspeople don’t know what regulations, taxes, or worse, nationalisations, will be coming, they may dither.

In a 2015 working paper, the economists Scott R Baker, Nicholas Bloom, and Steven J. Davis constructed Economic Policy Uncertainty (EPU) indices for a dozen countries using digital news archives. The indices (covering Canada, China, France, Germany, India, Italy, Japan, Russia, South Korea, Spain, the UK, and the US) were created by counting the number of newspaper articles in each country and each month that had the trifecta of terms economy (E), policy (P) and uncertainty (U).

They found that their EPU index foreshadows economic contractions in the 12 countries, and that for the two countries with long-term indices, the EPU values were high during the Great Depression. But do contractions cause uncertainty, they ask, or does uncertainty cause contractions? Given that we know that people are highly reactive to each other, the causality most likely runs both ways, in a feedback loop.

The Brexit vote in the UK last month has been viewed worldwide with extraordinary alarm as a signal of political instability. The rising incidence of terrorism has added a vivid emotional edge to such developments.

Will these fears fuel enough economic hesitation to bring on another worldwide recession? Any answer at this time would be impressionistic and imprecise. Given the importance of the consequences, however, we should not shrink from considering how such fears are affecting economic decision-making.

https://www.theguardian.com/business/2016/jul/21/how-hesitation-is-stifling-the-global-economy

3 Jeep celebrates 75^th anniversary (Heather Leighton in San Francisco Chronicle) Jeep celebrated its 75th anniversary for building military vehicles the only way a car brand knows how: build an epic military-themed concept vehicle.

In 1941, Jeep made vehicles for the military, but has slowly transformed itself to the commercial go-anywhere, do-anything vehicles for civilians. And to celebrate the three-quarters of a century anniversary, Jeep built a concept vehicle that is true to its rugged beginnings.

The Wrangler 75th Salute concept vehicle pays tribute to the brand's legendary history and military heritage. "We are creating this unique Jeep Wrangler 75th Salute concept vehicle in celebration of the brand's legendary history," said Mike Manley, head of Jeep Brand FCA Global. "And to demonstrate that 75 years later, today's iconic Jeep Wrangler is instantly recognizable and clearly connected to the original Willys MB."

http://www.sfgate.com/cars/article/Jeep-celebrates-its-75-years-as-a-military-8399478.php