The quiet financial services revolution; Hackers hit US military data; 'I wrote this column -- Despite being a woman'

1 The quiet financial services revolution begins (Mohamed El-Erian in The Guardian) Steadily and indisputably, the financial services industry – with which we all interact, whether as borrowers, savers, investors, or regulators – has embarked on a multiyear transformation. This process, slow at first, has been driven by the combined impact of two sets of durable forces.

On one hand, top-down factors – regulatory change, unusual pricing, and what US economist Nouriel Roubini has cleverly termed the “liquidity paradox” – are at work. Then there are disruptive influences that percolate up from below: changing customer preferences and, even more important, outside visionaries seeking to transform and modernise the industry.

As a result, established institutions – particularly the large banks – will be inclined to do fewer things for fewer people, despite being flush with liquidity provided by central banks (the liquidity paradox). The impact on the financial services industry of top-down factors will gradually amplify the importance of the bottom-up forces. Over time, this second set of factors will fuel more direct and efficient provision of services to a broader set of consumers, contributing to a reconfiguration of the industry as a whole.

For starters, customer expectations will evolve as the millennial generation increasingly accounts for a larger portion of earning, spending, borrowing, saving and investing. With many of these newer clients favouring “self-directed” lives, providers of financial services will be pressed to switch from a product-push mindset to offering more holistic solutions that allow for greater individual customisation.

Airbnb and Uber have demonstrated that disruption from another industry is particularly powerful, because it involves enabling efficiency-enhancing structural changes that draw on core competencies and strategies that the incumbent firms lack. The end result will be an industry that serves people via a larger menu of customisable solutions.

And, while emerging firms will offer better services, they will not find it easy to overcome immediately and decisively the institutional and regulatory inertia that anchors traditional firms’ market position. As a result, a proliferation of financial providers is likely, with particularly bright prospects for institutional partnerships that combine the more agile existing platforms with exciting new content and approaches.

http://www.theguardian.com/business/2015/jun/09/the-quiet-financial-services-revolution-begins

2 Hackers hit US military data (BBC) Hackers with suspected links to China appear to have accessed sensitive data on US intelligence and military personnel, American officials say. Details of a major hack emerged last week, but officials have now given details of a potential second breach. It is feared that the attack could leave US security personnel or their families open to blackmail.

The agency involved, the Office of Personnel Management (OPM), is yet to comment on the reports. Officials believe the attackers have targeted the forms submitted by intelligence and military personnel for security clearances. The document includes personal information - everything from eye colour, to financial history, to past substance abuse, as well as contact details for the individual's friends and relatives.

It is also believed the breach of personal data of US government workers announced last week may be far larger than previously reported. Initial estimates put the number of people potentially affected at four million, but officials close to the investigation said that as many as 14 million might be involved.

http://www.bbc.com/news/world-us-canada-33120405

3 ‘I wrote this column – Despite being a woman’ (Shada Islam in Dawn) Social media in India and the world over has had a field day over Indian prime minister Narendra Modi’s sexist praise of his Bangladeshi counterpart, Sheikh Hasina of being tough on terror “despite being a woman”. Imagine: the leader of the world’s largest democracy — and one which had a powerful female prime minister — making such an old-fashioned, disparaging remark about women. Indian men are still stuck in a time warp.

Really? Once the laughter stops, let’s take a sober look at the sad reality of women’s role, status and influence in the 21st century. And let’s also recognise that there is no dearth of men — and women — who still believe that women should be neither seen, nor heard. And that those of us who do manage to live “normal” lives, sometimes even becoming prime ministers, parliamentarians, business leaders, judges, doctors, teachers, journalists and so on… do so “despite being a woman”.

In the same week that Modi got blasted for his comments, Tim Hunt, an English biochemist who is also a Nobel laureate, told the World Conference of Science Journalists in Seoul, South Korea, that he believed scientists should work in gender-segregated labs. “Let me tell you about my trouble with girls … three things happen when they are in the lab … You fall in love with them, they fall in love with you and when you criticise them, they cry,” Hunt intoned. Oh dear.

If only Modi and Hunt were alone in believing women aren’t really strong and stoic enough to play hard ball. As the two men have shown, rubbishing women is probably the one sentiment/prejudice that unites many men, rich or poor, educated or illiterate, living in an industrialised or a developing country.

Women have achieved much over the years. But there’s still a long way to go. For all the howls of derision directed at him, Prime Minister Modi has done his bit to empower women through political appointments and social policies. After taking office last May, he appointed six women to his cabinet — the highest number in the history of the country.

He has taken a strong stance against female feticide, which he called a “terrible crises” since India has a child sex ratio of 918 girls for every 1000 boys, a recipe for social unrest. It’s great he’s taken these and other steps — despite being a man.

http://www.dawn.com/news/1187862/view-from-abroad-i-wrote-this-column-despite-being-a-woman

IMF walks out of Greece bailout talks; For UK, years more of spending cuts foreseen; Using diversity for business success

1 IMF walks out of Greece bailout talks (Phillip Inman, Graeme Wearden & Helena Smith in The Guardian) The International Monetary Fund has dramatically pulled out of talks with debt-stricken Greece after it accused Athens of failing to compromise over labour market and pension reforms. The Washington-based lender of last resort said its team of negotiators had quit talks in Brussels after reaching a stalemate.

The move left the Greek negotiating team with no option but to say it would also be leaving the talks and heading home to Athens. The IMF’s decision followed increasingly sharp criticism from EU officials frustrated at the Greek government’s continued refusal to bow to creditors’ demands. Donald Tusk, the president of the European Council, earlier attempted to pressure the Greek prime minister, Alexis Tsipras, to agree terms with its creditors, warning that the time for gambling was over.

Greece has wrangled with creditors over the release of the remaining funds in its bailout. Without the €7.2bn available, Greece faces imminent bankruptcy, putting up capital controls and even exiting the euro. Tusk warned that unless an agreement is signed in the next few days there is a risk that the talks will collapse and Greece will default on its existing €320bn of loans. He added: “There is no more time for gambling. The day is coming, I’m afraid, that someone says that the game is over.”

http://www.theguardian.com/business/2015/jun/11/imf-walks-out-of-greece-bailout-talks

2 For UK, years more of spending cuts foreseen (BBC) Further cuts in government spending will be needed beyond this parliament in order to bring the national debt under control, UK’s Office for Budget Responsibility (OBR) has warned. In its annual report, the OBR said that without further spending cuts or tax rises, the national debt would only increase.

It said a permanent £20bn cut in annual public spending will be needed by 2020. That would help bring the national debt down to 40% of GDP by 2064, it said. If achieved, this means it would have taken more than half a century to bring the national debt back to the same level it was before the 2008 financial crisis. Last year, public sector net debt was £1.48tn, or 80% of economic output, compared with around £600bn, or around 42% of GDP, in 2008.

The forecast spending cuts come a day after the Chancellor George Osborne announced plans to bind future governments to operating a budget surplus during times of economic growth. The OBR said the government's triple-lock on the state pension - whereby the state pension rises by whichever is the greater of inflation, average earnings, or 2.5% - had meant an resulted in an additional £2.9bn cost to the government, seven times higher than the £0.4bn increase originally forecast in 2010.

Earlier this week, ratings agency Moody's warned that the government will find it very difficult to achieve a budget surplus by 2018-19, and is still likely to be operating a deficit of between 1% and 2% of GDP by 2020. The chancellor is due to announce spending cuts to welfare and government departments totalling £30bn over two years in his summer Budget next month.

http://www.bbc.com/news/business-33092658

3 Using diversity for business success (Cesar Melgoza in San Francisco Chronicle) Successful entrepreneurs know about overcoming adversity to beat the odds. And as both an entrepreneur and a first-generation immigrant, I would say that I’ve beaten the odds twice. But at least part of my success comes from yet another characteristic I have worked toward -- diversity -- which has helped me obtain the new perspectives that in turn have further helped me grow my business.

To understand what entrepreneurs who contribute diversity to the workplace can teach us about success, I sought out a colleague in the Hispanic business community whose experience parallels my own: Alejandro Ruelas is a founder and partner at LatinWorks, the largest Hispanic advertising agency in the country.

He emigrated from Mexico to Los Angeles at a young age. His story of founding LatinWorks personifies how he used diversity to beat the odds -- and his experience seeking diversity is useful for any entrepreneur facing adversity. Specifically, Ruelas used diversity to his advantage in three distinct ways:

A. Diversity of experiences. Ruelas and his family were more interested in building the relationships necessary to achieve a quality life in America. It was this desire to learn more, do more and meet more people that he attributes to his success. Working in the beer industry at the distributor level, Ruelas obtained a firsthand perspective about how consumers view a brand. In business school, he networked with successful company founders. As he rose through the ranks at Anheuser-Busch, he sought experiences that would shape his foundation as a leader.

B. Diversity of skill sets. Ruelas understood that choosing a quality team is what makes a business scale and grow. “As an entrepreneur, you need to focus on what you do best -- then surround yourself with people who are better than you at other areas,” said Ruelas.

C. Diversity of cultures. Cultural understanding is what prompted his agency to leverage Hispanic comedian Carlos Mencia in an advertisement for Bud Light during the 2007 Super Bowl. Choosing the right cultural icon allowed LatinWorks to become the first Hispanic ad agency to obtain a number one Super Bowl spot.

However, relying on culture to grow sales is a dynamic task. It’s important to understand that today’s American culture is the accumulation of multiple multicultural influences. To grow their businesses successfully, entrepreneurs must be aware of these nuances and cultural changes. A diversity of perspectives helps you grow; and an understanding of societal trends keeps you at the top. Building a business involves counting on and learning from people of all backgrounds, strengths and experiences.

http://www.sfgate.com/news/article/How-Diversity-Helps-Your-Business-Beat-the-Odds-6310101.php

Africa creates biggest trade zone; Al-Qaida ripped apart by Isis; An online 'mausoleum' for dead start-ups

1 Africa creates biggest trade zone (Lerato Mbele on BBC) African leaders have agreed to create the continent's largest free-trade zone, covering 26 countries in an area from Cape Town to Cairo. The deal, signed in Egypt, is intended to ease the movement of goods across member countries which represent more than half the continent's GDP.

Since the end of colonial rule, governments have been discussing ways to boost intra-African trade. The poor state of roads, railways and airlines have made it difficult. Three existing trade blocs - the Southern African Development Community (Sadc); the East African Community (EAC) and the Common Market for Eastern and Southern Africa (Comesa) - are to be united into a single new zone.

With this agreement comes into fruition a century-old dream to link the continent from the Cape to Cairo. Explorers and freedom fighters alike all shared the vision to integrate African economies. However, it needs parliamentary endorsements from all member-nations and once governments start reading the fine print, the mood may change.

The pact - known as The Tripartite Free Trade Area (TFTA) - will then be officially unveiled at the upcoming summit of the African Union this weekend in South Africa. The idea behind it is to remove trade barriers on most goods, making them cheaper, and stimulating $1tn worth of economic activity across the region of more than 600 million people. The wheels of action are hoped to be set in motion by 2017.

http://www.bbc.com/news/world-africa-33076917

2 Al-Qaida ripped apart by Isis (Spence Ackerman, Shiv Malik, Ali Younes & Mustafa Khalili in The Guardian) Two of al-Qaida’s most important spiritual leaders have said that the terror group is no longer a functioning organisation after being ripped apart by Isis.  Abu Qatada, a Jordanian preacher who was based in London before being deported in 2013, and Abu Muhammad al-Maqdisi,

regarded as the most influential jihadi scholar alive, say the al-Qaida leader, Ayman al-Zawahiri, is cut off from his commanders and keeping the group afloat through little more than appeals to loyalty.

Senior insiders in Jordan add that al-Qaida around the Middle East has been drained of recruits and money after losing territory and prestige to its former subordinate division. The ongoing war between al-Qaida and Isis has left the US struggling to catch up with the tectonic shifts within the global jihadi movement, intelligence insiders said.

Qatada said Isis members were extremists and a “cancer” growing within the jihadi movement following their assault on al-Qaida over the last two years. “[Isis] don’t respect anyone,” he said. Isis was al-Qaida’s branch in the heart of the Middle East until the group was excommunicated from the network in 2014 after disobeying commands from Zawahiri and starting an internecine war with fellow jihadists in Syria which left thousands dead on both sides.

Today that fight continues and has expanded across Eurasia and the Mediterranean. Since declaring the establishment of its so-called Islamic State a year ago, Isis has gone on to build a global network of affiliates and branches that now stretches from Afghanistan to west Africa and competes with al-Qaida in its scale.

Isis leaders, who described al-Qaida as a “drowned entity” in issue six of their official English-language publication, Dabiq, have declared that they will not tolerate any other jihadi group in territory where they are operating. But the US has been slow to grasp the implications of al-Qaida’s decline and possible collapse despite extensive study of Isis, according to intelligence community insiders.

Meanwhile, the US continues to target al-Qaida. So far this year the Americans have launched 11 drone strikes in Yemen and 11 more in Pakistan, killing between 82 and 122 people. US officials have warned that al-Qaida’s presence in Yemen, which al-Qaida’s scholars consider to be its most loyal branch, has benefited from the January coup that displaced the US client government and the Saudi-led war to roll it back.

http://www.theguardian.com/world/2015/jun/10/isis-onslaught-has-broken-al-qaida-its-spiritual-leaders-admit

3 An online ‘mausoleum’ for dead start-ups (Greta Kaul in San Francisco Chronicle) Startups generate a lot of buzz when they grow, but when they die, it often happens quietly. A new website, Autopsy, aims to make sure that dead startups, though gone, are not forgotten. It also includes a quick tally of “lessons from failed startups.”

The site looks like a Google spreadsheet and reads like a mausoleum wall, with the autopsy date, a blurb about the startup and why it died. Many of the entries link to explainers — blogs posts or founders’ Medium.com confessionals — about the startups’ failures.

For instance, poor old Dinnr, a same-day dinner delivery service, died last year because it “simply didn’t have legs,” according to Autopsy. Keep Fit Stay Sane, “an emotional gym” “couldn’t find a market.” And BitShuva Radio — a Pandora for those with niche tastes — fell victim to a “failed business model.”

Autopsy’s “undertakers” are Maryam Mazraei and Matthew Davies, of Milc and Niral Patel of Sameroom.io, according to BloombergView. It currently has about 100 entries but allows viewers to suggest dead startups to be featured. The funny thing is, many of the epitaphs describe startups that sound a whole lot like others in operation today. Will founders of living companies take heed?

http://blog.sfgate.com/techchron/2015/06/10/autopsy-a-mausoleum-for-dead-startups/

There's nothing called a digital fortress; Over 100,000 migrants cross Mediterranean this year; Aspirational parents and joyless children

1 There’s nothing called a digital fortress (Allan Jacob in Khaleej Times) Downloading a smart government utility app and paying your bills may be easy, but the recent hack attack on the US Office of Personnel Management, which experts term the largest ever breach of American federal employee information, makes you wonder if the digital infrastructure is equipped to ward off such threats.

The US attack has been traced to China; 4 million records of current and past US government employees that were stolen are a treasure trove of information that can give hackers the ability to commit identity fraud on a grander scale. With the information in their possession, they can create new phishing scams via email which can lead to bigger cyberattacks that targets more users.

‘‘It is important to understand that if our infrastructure is affected then it is not just our ability to surf the internet and check Facebook that is impacted, but also our ability to put fuel in our cars, have a shower and turn on our light,’’ says Nicolai Solling, who has worked with different sectors of the economy on cyber security.

An organisation may build the most secure application, but if the user has no awareness on security they may still be tricked into transacting with a rogue third party disguising as a government entity. Then there’s the rise of social media which gives hackers more windows of opportunity to penetrate important systems that keep a country running.

What’s most worrying is that information people give away on themselves can be utilised in social engineering attacks, where users are tricked into a level of trust. Yes, smart government systems are vulnerable just like any others to hackers.

http://khaleejtimes.com/kt-article-display-1.asp?xfile=data/opinion/2015/June/opinion_June18.xml&section=opinion

2 Over 100,000 migrants cross Mediterranean this year (San Francisco Chronicle) More than 100,000 migrants — many fleeing the war in Syria — have crossed the Mediterranean Sea to Europe so far this year, the UN refugee agency has said — and the arrivals in Greece have reached their highest level since the crisis began.

Citing national figures, the UNHCR said 54,000 people had traveled illegally to Italy and 48,000 to Greece so far in 2015, with another small fraction heading for Spain and Malta. The numbers were announced as the European Union is struggling to persuade its 28 nations to adopt a quota system aimed at making the crossings less dangerous and easing the burden on Mediterranean countries.

The UN agency said about half of the 600 people who arrive daily in Greece are heading to Lesvos — where numbers have shot up from 737 in in January to 7,200 in May. Few migrants want to remain in debt-stricken Greece, where unemployment runs above 26 percent. Most aim to make their way to the more prosperous countries of Europe's center and north. They usually travel by land across Greece's northern border with Macedonia or cross the Ionian and Adriatic seas smuggled aboard ferries into Italy.

The International Organization for Migration said Greek arrivals this year have already exceeded the 2014 total. According to the European Union's border protection agency, Frontex, Syrians made up the largest group of people crossing illegally into the EU last year, followed by Afghans and Iraqis.

http://www.sfgate.com/news/world/article/Hundreds-of-migrants-arrive-by-boat-on-Greek-6315656.php

3 Aspirational parents and joyless children (George Monbiot in The Guardian) We know that our conditions of life are deteriorating. Most young people have little prospect of owning a home, or even of renting a decent one. Interesting jobs are sliced up, through digital Taylorism, into portions of meaningless drudgery. The natural world, whose wonders enhance our lives, and upon which our survival depends, is being rubbed out with horrible speed.

An article in Financial Times marked a new form of employment: the nursery consultant. These people, who charge from £290 an hour, must find a nursery that will put their clients’ toddlers on the right track to an elite university. They spoke of parents who had already decided that their six-month-old son would go to Cambridge then Deutsche Bank. In New York, playdate coaches charging $450 an hour train small children in the social skills that might help secure their admission to the most prestigious private schools.

From infancy to employment, this is a life-denying, love-denying mindset, informed not by joy or contentment, but by an ambition that is both desperate and pointless, for it cannot compensate for what it displaces: childhood, family life, the joys of summer, meaningful and productive work, a sense of arrival, living in the moment. For the sake of this toxic culture, the economy is repurposed, the social contract is rewritten, the elite is released from tax, regulation and the other restraints imposed by democracy.

Governments used to survey the prevalence of children’s mental health issues every five years, but this ended in 2004. Imagine publishing no figures since 2004 on, say, childhood cancer, and you begin to understand the extent to which successive governments have chosen to avoid this issue. If aspirational pressure is not enhancing our wellbeing but damaging it, those in power don’t want to know.

In the cause of self-advancement, we are urged to sacrifice our leisure, our pleasures and our time with partners and children, to climb over the bodies of our rivals and to set ourselves against the common interests of humankind. And then? We discover that we have achieved no greater satisfaction than that with which we began.

In 1653, Izaak Walton described in the Compleat Angler the fate of “poor-rich men”, who “spend all their time first in getting, and next in anxious care to keep it; men that are condemned to be rich, and then always busie or discontented”. Today this fate is confused with salvation. Finish your homework, pass your exams, spend your 20s avoiding daylight, and you too could live like the elite. But who in their right mind would want to?

http://www.theguardian.com/commentisfree/2015/jun/09/aspirational-parents-children-elite

HSBC to axe 25,000 jobs; How disruptive and derivative startups coexist; What it means to miss an IMF payment

1 HSBC to axe 25,000 jobs (Jill Treanor in The Guardian) HSBC is to cut up to 25,000 jobs around the world – including as many as 8,000 in the UK – as its chief executive, Stuart Gulliver, embarks on a fresh strategy to reduce costs and bolster returns to shareholders.

Gulliver – who took the helm in 2011 – has already cut the total head count to 257,000 from 296,000 but has signalled another wave of reductions as he turns the bank’s focus towards Asian markets. Branches will be closed in seven major markets including the UK, where the bank employs 48,000 in total.

Unions in Britain reacted angrily as the news broke. In a detailed presentation to shareholders Gulliver is also setting out the criteria the bank will use to decide whether to keep its headquarters in the UK, where it has been based since 1992 when it moved from Hong Kong to facilitate the takeover of Midland bank.

The job cuts are not part of that review, which will kick-start a debate about the government’s tax policy and attitude to financial services companies – two of the 11 factors HSBC will use to determine whether to stay based in London. The UK bank levy costs HSBC £700m a year.

Gulliver has already pulled back from a presence in 87 countries or territories to 73. Gulliver, who has spent his career at HSBC, in 2011 introduced the motto of “courageous integrity” before the bank was slapped with a £1.2bn fine the following year by authorities in the US for laundering money for Mexican drug barons. Since then it has been embroiled in the Libor rigging debacle and more recently a tax avoidance scandal.

http://www.theguardian.com/business/2015/jun/09/hsbc-cuts-25000-jobs-globally

2 How disruptive startups coexist with derivative startups (Sohin Shah in San Francisco Chronicle) When a startup succeeds in creating a new market or industry, there’s often a ‘gold rush’ phenomenon of others trying to grab a piece. But not all of these spin-offs are copycats.

Once the space is saturated, hustling entrepreneurs identify the need to offer support services, and that’s how derivative startups are born. Typically, startups have one or more needs that are unmet internally. For example, most startups can’t afford a full-time attorney to perform legal and compliance work. This creates an opportunity for another startup to serve as outsourced compliance and due-diligence professionals. Other new companies might spring up to help with logistics, infrastructure, payment mechanisms, data aggregation or customer service.

Just as fungi help plants thrive (and vice versa), derivative businesses form a symbiotic relationship with disruptors. As the second wave of innovation, they allow emerging sectors to flourish. Disruptors arise to meet an unmet need, but they often generate their own gap in the market. Derivative startups can provide the missing puzzle piece.

For example, when Airbnb disrupted the hotel industry, its business created an unmet need for property management services. After their experience as hosts for Airbnb, Guesty’s founders developed a system to fill this need and take the pain out of the sharing economy for hundreds of thousands of hosts.

Consider ride-sharing services such as Lyft and Uber. They revolutionized the transportation services industry, but the limited number of car owners hampered their potential to scale up. Derivative startups Breeze and HyreCar arose and began leasing vehicles to Uber and Lyft drivers throughout the US, thereby solving the new industry’s bottleneck.

Disruptive startup leaders should encourage this growth rather than look at disruptors as challengers. By nurturing support services companies, a disruptor can foster his own company’s growth and allow his industry to mature and evolve.

http://www.sfgate.com/news/article/How-Disruptive-Startups-Spread-the-Wealth-by-6304300.php

3 What it means to miss an IMF payment (Robert Peston on BBC) If you had asked me even a few months ago what event could cause devastating shock waves to roll over financial markets, and seriously set back the global economic rival, well Greece missing a payment to the IMF would have been one of them. But here we are: Greece has announced it is missing its payment, and the world feels pretty much as it did before.

So why is Greece's refusal to stump up 300m euros an apparent non-event? Well the first thing to say is that it is not a non-event. The symbolism of Greece's request to defer the payment - the first such deferral since the 1980s and probably the first ever deferral by a developed economy - is incredibly powerful.

Whether they like it or not, it represents a massive humiliation both for Greece's Syriza government and for its creditors, eurozone governments, the European Central Bank and the IMF itself - in the sense that they have been working day and night to avoid this impasse, and they have failed. Greece has asked to defer the payment, and indeed a series of payments due during the course of this month, into a single sum of 1.5bn euros, to be handed over to the IMF at the end of June.

There are three things to say. First is that even if there is a deal, that may not be the happy-ever-after - because Tsipras may be obliged to put the deal to the Greek people, either in a referendum or a general election, given that it would be a million miles from the platform of no-more-austerity on which he was elected.

Second, if there is no deal that inevitably means the imposition of painful capital controls in Greece, to prevent every last euro in the country being taken offshore by panicked investors. As a minimum, that would tip the country into yet another deep and dark recession, because all access to credit would vanish.

Third, Greece in default would not necessarily mean Greece leaving the euro. There would be a possibility of its debt being reconstructed, and of its banks being recapitalised by imposing hideous losses on their creditors, as a precursor to some kind of financial rehabilitation while remaining inside the euro. The prospect of default and Grexit are two sides of the same coin - namely Greece's madly excessive debts.

http://www.bbc.com/news/business-33019724

China exports fall for third month; Stunning setback for Turkey's Erdogan; Logistics isn't all about trucks and warehouses

1 China exports fall for third month (BBC) Exports in the world's second largest economy, China, fell for a third consecutive month in May, highlighting slowing demand in the country. Exports fell 2.5% from a year ago in dollar denominated terms, and 2.8% in yuan denominated figures.

Imports tumbled 17.6% in dollar terms, while yuan-denominated imports plunged 18.1% - falling for the seventh month. Zhu Haibin, economist at JP Morgan said Monday's data show that the economy will struggle to meet the government's trade growth target even with the export rise.

Domestic demand in China continues to be weak despite stimulus measures by the government and central bank to boost growth. The central bank has lowered interest rates just last month, which was the third time in six months to spur lending and economic activity. The drop in imports led China's trade surplus of $59.5bn in May, up nearly 75% from April.

http://www.bbc.com/news/business-33043999

2 Stunning setback for Turkey’s Erdogan (Fox News) In a stunning rebuke of President Recep Tayyip Erdogan's ambitions to expand his powers, Turkish voters stripped his party of its simple majority in parliament, preliminary election results showed. With 99.9 percent of the vote counted, Erdogan's ruling Justice and Development Party, the AKP, had the support of around 41 percent of voters. According to projections, that would give it some 258 seats — 18 below the minimum needed to keep its majority.

The unexpected setback for AKP likely puts an end, for the time being, to Erdogan's hopes of passing constitutional changes that would have greatly boosted the powers of his office. Instead, he faces struggles to retain his pre-eminent place in Turkish politics without the obvious levers to steer the government through his party in parliament.

The result is also a bitter blow to Prime Minister Ahmet Davutoglu, whose political prospects are uncertain after leading his party to such a disappointing result. AKP will now have to seek a coalition partner to stay in power, with the nationalist MHP the most likely candidate.

In an indication of how precipitously Erdogan's fortunes have fallen, he had begun the campaign asking voters for 400 of the total 550 seats in the Grand National Assembly, a massive majority well above the 330 seats needed to call for a national referendum to change the constitution.

The biggest setback for AKP came with the rise of the main pro-Kurdish party, HDP, which for the first time easily cleared the threshold of ten percent for representation as a party in the parliament. The preliminary results put its tally at almost 13 percent. The main secular opposition Republican Peoples Party, or CHP, got about 25 percent of the vote, while MHP got just above 16 percent.

Erdogan has been Turkey's dominant politician since his party swept into power in 2002 — becoming prime minister in 2003 and leading his party to two overwhelming parliamentary election victories. In a gamble last year, he decided to run for president, banking that his party could later bolster his powers.

http://www.foxnews.com/world/2015/06/07/turks-head-to-polls-in-pivotal-parliamentary-election/

3 Logistics isn’t all about trucks and warehouses (Kate Lester in The Guardian) I have spent 20 years in the logistics industry. While my industry remains undeniably male dominated, this fact, and the implications it might have for me as a businesswoman, are not issues I’ve ever given much thought to. They certainly had no bearing on the decisions I made when I started my business, or those that I make now.

To really succeed in logistics you don’t need to be a transport expert. Effectively applying client-centric principles and then scaling your operation is where real success lies. My choice of career was entirely opportunistic: at 20-years-old I found myself working for a courier firm and quickly realised I could do a better job of running it than the people in charge.

When I say logistics what image comes into your head? Trucks? A giant warehouse? Delivery drivers, shipping containers and stacks of brown boxes? It doesn’t get more stereotypically masculine than that. Of course my work relates to all of those things, but it’s not what we’re about. Couriers are actually customer service companies. Positive relationships, mutual trust… it’s starting to sound more feminine, isn’t it?

Historically, logistics has had an image problem. Not one of gender dominance, rather of reliability. We see ourselves as business enablers. The logistics services we provide help other organisations to grow, and the more they grow the more we grown in turn. It’s all about shared success. This is an inherently positive principle, one that’s at the core of service sectors such as ours, and one that I think other industries could learn from.

These days I’m seeing more and more women running logistics companies, which is obviously great. My daughter is in her early twenties, by the time she has a daughter that age I don’t think we’ll be talking about male domination in the same terms anymore. And I hope that the logistics industry will be viewed in an entirely different way too.

http://www.theguardian.com/women-in-leadership/2015/jun/05/logistics-industry-women-boardroom-executive-gender

US hit by massive data breach; South Africa drops out of top-40 mining list; Try telling Sepp Blatter we live in a post-American world

1 US hit by massive data breach (Tom Bateman on BBC) Chinese hackers are suspected of carrying out a "massive breach" affecting the data of millions of US government workers, officials said. The Office of Personnel Management (OPM) confirmed that almost four million current and past employees have been affected. The breach could potentially affect every federal agency, officials said.

Susan Collins, a member of the Senate Intelligence Committee, said the attack was thought to originate in China. The Chinese embassy in Washington warned against "jumping to conclusions".

It is the scale of what the OPM calls a "cyber intrusion" in April this year that is breathtaking - the records of four million former and current government employees may have been breached. The agency is contacting all of those potentially affected, offering to insure them against identity fraud. Of even greater concern may be the fact that security clearance information on government officials could have been targeted.

OPM serves as the human resource department for the federal government. The agency issues security clearances and compiles records of all federal government employees. Ken Ammon, chief strategy officer of Xceedium - a cyber security firm - warned that the hacked data could be used to impersonate or blackmail federal employees with access to sensitive information.

http://www.bbc.com/news/world-us-canada-33017310

3 South Africa drops out of top 40 mining list (Johannesburg Times) The Top 40 mining companies in the world lost $156 billion‚ or about 16% of their combined market value‚ in 2014. The prolonged downswing in commodity prices has forced companies to fight hard to implement various measures to improve free cash flow. A major focus was on reducing costs.

This is according to Mine: PwC’s 12th annual review of the top trends in the global mining industry. This year saw no companies in South Africa from the Top 40 list – “the first time a company from this traditional mining heavyweight has not been part of our analysis‚ and a far cry from the five companies included in our 2004 first edition of Mine‚” PwC said.

The report analysed 40 of the largest listed mining companies by market capitalisation. Two of the three new entrants in this year’s Top 40 were Chinese companies and one was North American. Commodity prices remained under pressure‚ as iron ore‚ coal‚ and copper took another tumble in 2014. Gold prices  were volatile‚ but remained relatively steady compared to prior years‚ it noted. Iron ore was hardest hit in 2014‚ with prices falling by half as a result of oversupply and a negative short-term demand outlook.

On the positive side‚ “lower crude oil prices and a stronger US dollar are proving beneficial for miners by helping to lower operating costs”. A slowdown in China’s economic growth‚ to around 7% from double-digit growth in recent years‚ is expected to weigh on the industry in the months to come. China accounts for as much as 40% to 50% of global commodity demand.

http://www.timeslive.co.za/local/2015/06/04/South-Africa-falls-out-of-Top-40-mining-list

3 Try telling Sepp Blatter we live in a post-American world (Natalie Nougayrede in The Guardian) The Fifa corruption investigation stands out not only as a momentous event for football fans and sport overall. It also comes as a thunderbolt in international relations. First, the notion of a multipolar world has taken a hit. Here we have one power – the US – calling the shots. Vladimir Putin has complained about US interference, but mainly because he’s worried about the prospects for the 2018 World Cup in Russia. No one has taken his cue, nor has he been able to save Sepp Blatter.

Second, we have been reminded that some rules do carry weight. The reach of the US justice department is such that no one can ignore the criminal charges it has brought nor pretend that it can be business as usual. In a global environment, it turns out that there is no free-for-all, and acts can have serious global consequences.

Third, soft power is back. What the Harvard professor Joseph Nye coined as “soft power” – the ability to get your way without resorting to armed force, through influence and persuasion – had come to look like a somewhat quaint ineffective concept. That may no longer be the case. The Fifa-Blatter empire has been brought down without a shot being fired. If this says something about the future, there is cause to rejoice – and worry.

The rejoicing is obvious. There may not be much consensus in the world today, but fighting corruption is something everyone agrees on. Equally, if soft power is back, who could possibly complain? Those who do not have much hard power might see an opportunity.

Europe lacks a joint army but does have influence – and it is right that Europe is increasingly using that influence: sanctioning Russia over its armed aggression against Ukraine, putting pressure on dictatorships, and waging anti-trust campaigns against big players such as Microsoft, Gazprom or Google. And China worries many with its sabre-rattling in Asia, but it could also be applauded for its Silk Road strategy of developing infrastructure along land and maritime trade routes all the way to Europe.

But there are reasons to worry. American power in the Fifa case has been applied through the extraterritorial dimension of US legislation. There is far from a consensus about this globally. But it will be harder to cast this American extraterritorial legalistic power as a solution to global woes, simply because it runs counter to multilateralism. It sets rules, but unilaterally. It brings progress in the Fifa case, but will be hard to duplicate beyond football.

http://www.theguardian.com/commentisfree/2015/jun/04/sepp-blatter-post-american-world-soft-power