Read Apple CEO Tim Cook’s Response to Europe’s Tax Ruling - TIME Business

Read Apple CEO Tim Cook’s Response to Europe’s Tax Ruling

Posted: 30 Aug 2016 06:15 AM PDT

European officials on Tuesday ordered Apple to pay up to $14.5 billion in back taxes, plus interest, to Ireland.
The European Commission is essentially accusing Apple of harboring profits in Ireland in exchange for providing jobs there. The arrangement, say European officials, meant Apple has enjoyed tax benefits not extended to its competition.
In a statement posted online, Apple CEO Tim Cook says his company plans to appeal the “unprecedented” ruling. The Irish government also said it would fight the ruling. “I disagree profoundly with the commission’s decision,” Irish Finance Minister Michael Noonan said.
Read Cook’s full letter regarding the ruling below:

Thirty-six years ago, long before introducing iPhone, iPod or even the Mac, Steve Jobs established Apple’s first operations in Europe. At the time, the company knew that in order to serve customers in Europe, it would need a base there. So, in October 1980, Apple opened a factory in Cork, Ireland with 60 employees.
At the time, Cork was suffering from high unemployment and extremely low economic investment. But Apple’s leaders saw a community rich with talent, and one they believed could accommodate growth if the company was fortunate enough to succeed.
We have operated continuously in Cork ever since, even through periods of uncertainty about our own business, and today we employ nearly 6,000 people across Ireland. The vast majority are still in Cork — including some of the very first employees — now performing a wide variety of functions as part of Apple’s global footprint. Countless multinational companies followed Apple by investing in Cork, and today the local economy is stronger than ever.
The success which has propelled Apple’s growth in Cork comes from innovative products that delight our customers. It has helped create and sustain more than 1.5 million jobs across Europe — jobs at Apple, jobs for hundreds of thousands of creative app developers who thrive on the App Store, and jobs with manufacturers and other suppliers. Countless small and medium-size companies depend on Apple, and we are proud to support them.
As responsible corporate citizens, we are also proud of our contributions to local economies across Europe, and to communities everywhere. As our business has grown over the years, we have become the largest taxpayer in Ireland, the largest taxpayer in the United States, and the largest taxpayer in the world.
Over the years, we received guidance from Irish tax authorities on how to comply correctly with Irish tax law — the same kind of guidance available to any company doing business there. In Ireland and in every country where we operate, Apple follows the law and we pay all the taxes we owe.
The European Commission has launched an effort to rewrite Apple’s history in Europe, ignore Ireland’s tax laws and upend the international tax system in the process. The opinion issued on August 30th alleges that Ireland gave Apple a special deal on our taxes. This claim has no basis in fact or in law. We never asked for, nor did we receive, any special deals. We now find ourselves in the unusual position of being ordered to retroactively pay additional taxes to a government that says we don’t owe them any more than we’ve already paid.
The Commission’s move is unprecedented and it has serious, wide-reaching implications. It is effectively proposing to replace Irish tax laws with a view of what the Commission thinks the law should have been. This would strike a devastating blow to the sovereignty of EU member states over their own tax matters, and to the principle of certainty of law in Europe. Ireland has said they plan to appeal the Commission’s ruling and Apple will do the same. We are confident that the Commission’s order will be reversed.
At its root, the Commission’s case is not about how much Apple pays in taxes. It is about which government collects the money.
Taxes for multinational companies are complex, yet a fundamental principle is recognized around the world: A company’s profits should be taxed in the country where the value is created. Apple, Ireland and the United States all agree on this principle.
In Apple’s case, nearly all of our research and development takes place in California, so the vast majority of our profits are taxed in the United States. European companies doing business in the U.S. are taxed according to the same principle. But the Commission is now calling to retroactively change those rules.
Beyond the obvious targeting of Apple, the most profound and harmful effect of this ruling will be on investment and job creation in Europe. Using the Commission’s theory, every company in Ireland and across Europe is suddenly at risk of being subjected to taxes under laws that never existed.
Apple has long supported international tax reform with the objectives of simplicity and clarity. We believe these changes should come about through the proper legislative process, in which proposals are discussed among the leaders and citizens of the affected countries. And as with any new laws, they should be applied going forward — not retroactively.
We are committed to Ireland and we plan to continue investing there, growing and serving our customers with the same level of passion and commitment. We firmly believe that the facts and the established legal principles upon which the EU was founded will ultimately prevail.

The Google-Uber Rivalry Is Seriously Heating Up - Fortune

The Google-Uber Rivalry Is Seriously Heating Up Posted: 30 Aug 2016 05:53 AM PDT Ride-hailing company Uber’s board of directors isn’t a happy family, it turns out. According to a report from tech news site The Information that cites anonymous sources, Uber has barred board member David Drummond from attending board meetings. Drummond, who joined Uber’s board in 2013, is senior vice president of corporate development and chief legal officer for Google’s parent company, Alphabet. On Monday, Uber confirmed to the Wall Street Journal and later to Fortune that he stepped down from the board several weeks ago because of increasing conflicts of interest. “I recently stepped down from Uber’s board given the overlap between the two companies. Uber is a phenomenal company and it’s been a privilege working with the team over the last two plus years,” said Drummond in a statement. “GV remains an enthusiastic investor and Google will continue to partner with Uber.” Uber is reportedly also limiting the information it shares with board “observer” David Krane, who runs GV, Alphabet’s venture capital arm. Krane recently took over as leader of GV from founder Bill Maris, but Uber was Krane’s investment from the start. He joined the board in August of 2013 as well. The move isn’t surprising at all—if anything, it’s surprising it didn’t happen sooner. Though Uber and Alphabet seem like a match made it heaven (Uber employs a large number of former Googlers and uses the tech giant’s mapping service), a collision between the two company’s ambitious plans seem increasing inevitable, as Fortune‘s Dan Primack predicted two years ago. Google has been rumored to be interested in developing its own ride-hailing service, and began experimenting last year with a carpooling feature through Waze, the navigation service it acquired in 2013. The two are also fiercely competing in the self-driving car race. Google has been working on autonomous cars for much longer—since 2009—but Uber has been aggressively working to catch up. What’s more, Uber now employs one of the original co-founders of Google’s self-driving car project, Anthony Levandowski. Levandowski, along with other former Googlers, founded a self-driving truck company, Otto, which Uber recently acquired to boost its efforts in that area. Levandowski left Google at the beginning of the year, largely because he was itching to get a self-driving car on the market fast—presumably, faster than Google plans to. Awkward scenarios like Uber’s are rare, but it’s not the first time it’s happened in Silicon Valley. In 2009, then Google CEO Eric Schmidt resigned from Apple’s board, where he had served since 2006. His decision came shortly after Google announced it was working on its own computer operating system, Chrome OS, which would compete with Apple’s. He had already been recusing himself from certain discussions that conflicted with his role at Google’s chief, such as those about the iPhone, which competes with his company’s mobile operating system, Android. Uber is also facing a similarly touchy situation related to its recent merger of its Chinese business with local rival Didi Chuxing. As part of the deal, Uber CEO Travis Kalanick joined Didi Chuxing’s board, while Didi CEO Cheng Wei is joining Uber’s. This could make things tense considering a Didi partnership with ride-hailing company Lyft, along with Ola in India, and Grab in Southeast Asia, which still compete with Uber in their respective local markets. It’s unclear whether Drummond or Krane will eventually depart from the board, though it wouldn’t be surprising. According to The Information, the limiting of their participation has been going on for “the better part of a year.” Fortune has contacted Uber and GV and will update this story if we hear back. The story has been updated to show that Drummond has officially resigned from Uber’s board. This article originally appeared on Fortune.com

Apple Ordered to Pay $14.5 Billion in Back Taxes - TIME Business

Apple Ordered to Pay $14.5 Billion in Back Taxes Posted: 30 Aug 2016 03:30 AM PDT BRUSSELS- E.U. antitrust regulators ordered Apple on Tuesday to pay up to 13 billion euros ($14.5 billion) in taxes plus interest to the Irish government after ruling that a special scheme to route profits through Ireland was illegal state aid. The massive sum, 40 times bigger than the previous known demand by the European Commission to a company in such a case, could be reduced, the E.U. executive said in a statement, if other countries sought more tax themselves from the U.S. tech giant. Apple, which with Ireland said it will appeal the decision, paid tax rates on European profits on sales of its iPhone and other devices and services of between just 0.005 percent in 2014 and 1 percent in 2003, the Commission said. “Ireland granted illegal tax benefits to Apple, which enabled it to pay substantially less tax than other businesses over many years,” said Competition Commission Margrethe Vestager, whose crackdown on mainly U.S. multinationals has angered Washington which accuses Brussels of protectionism. Online retailer Amazon.com Inc and hamburger group McDonald’s Corp face probes over taxes in Luxembourg, while coffee chain Starbucks Corp has been ordered to pay up to 30 million euros ($33 million) to the Dutch state. A bill of 300 million euros this year for Swedish engineer Atlas Copco AB to pay Belgian tax is the current known record. Other companies ordered to pay back taxes in Belgium, many of them European, have not disclosed figures. For Apple, whose earnings of $18 billion last year were the biggest ever reported by a corporation, finding several billion dollars should not be an insurmountable problem. The 13 billion euros represents about 6 percent of the firm’s cash pile. As of June, Apple reported it had cash, cash equivalents and marketable securities of $231.5 billion, of which 92.8 percent, or $214.9 billion, were held in foreign subsidiaries. It paid $2.67 billion in taxes during its latest quarter at an effective tax rate of 25.5 percent, leaving it with net income of $7.8 billion according to company filings. The European Commission in 2014 accused Ireland of dodging international tax rules by letting Apple shelter profits worth tens of billions of dollars from tax collectors in return for maintaining jobs. Apple and Ireland rejected the accusation. “I disagree profoundly with the Commission,” Irish Finance Minister Michael Noonan said in a statement. “The decision leaves me with no choice but to seek cabinet approval to appeal. “This is necessary to defend the integrity of our tax system; to provide tax certainty to business; and to challenge the encroachment of E.U. state aid rules into the sovereign member state competence of taxation.” Ireland also said the disputed tax system used in the Apple case no longer applied and that the decision had no effect on Ireland’s 12.5 percent corporate tax rate or on any other company with operations in the country. Apple said in a statement it was confident of winning an appeal. “The European Commission has launched an effort to rewrite Apple’s history in Europe, ignore Ireland’s tax laws and upend the international tax system in the process. The Commission’s case is not about how much Apple pays in taxes, it’s about which government collects the money. It will have a profound and harmful effect on investment and job creation in Europe.” “REVERSE ENGINEERING” When it opened the Apple investigation in 2014, the Commission told the Irish government that tax rulings it agreed in 1991 and 2007 with the company amounted to state aid and might have broken E.U. laws. The Commission said the rulings were “reverse engineered” to ensure Apple had a minimal Irish bill and that minutes of meetings between Apple representatives and Irish tax officials showed the company’s tax treatment had been “motivated by employment considerations.” Apple employs 5,500, or about a quarter of its Europe-based staff, in the Irish city of Cork, where it is the largest private sector employer. It has said it paid Ireland’s 12.5 percent rate on all the income that it generates in the country. Ireland’s low corporate tax rate has been a cornerstone of economic policy for 20 years, drawing investors from multinational companies whose staff account for almost one in 10 workers in Ireland. Some opposition Irish lawmakers have urged Dublin to collect whatever tax the Commission orders it to. But the main opposition party Fianna Fail, whose support the minority administration relies on to pass laws, said it would support an appeal based on reassurances it had been given by the government. The U.S. Treasury Department published a white paper last week that said the E.U. executive’s tax investigations departed from international taxation norms and would have an outsized impact on U.S. companies. The Commission said it treated all companies equally.

What America can learn from Brexit - Financial Times

Until recently, my politically obsessed friends in America did not express much interest in British elections. No wonder. Although the iconic figure of Margaret Thatcher had inspired fascination a few decades ago, as had, a little later, the white-toothed Tony Blair, the 2015 British election elicited barely a yawn. Westminster politicians — men such as David Cameron — seemed too dull to hold any lessons for the US.

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No longer. Right now, Republican and Democratic strategists are gearing up for the 2016 US election campaign. And, sitting around dinner tables in recent days listening to the anguished, endless debates among pollsters, campaigners and pundits, I’ve often heard the question: what lessons does the Brexit vote hold for the US? Does the “shock” result of the UK referendum suggest that an outsider such as Donald Trump might win? Or is that comparison too simplistic?

To my mind, the answer is both “yes” and “no”. Brexit was a very different vote but there are about half a dozen lessons from the UK referendum that could matter in the US this November.

First — and most obvious — Brexit shows just how blind a political elite can be in a socially and economically polarised world. As my colleagues Gideon Rachman and Edward Luce have recently written, the Brexit vote was partly a protest vote — a howl of rage against economic pain, immigration and a loss of cultural identity. The only thing more surprising than this vote was that the UK elite was surprised by it; and the Democratic camp could easily repeat that mistake.

The second lesson is that the electorate is losing its fear of leaping into the unknown. Nobody can assume that Trump will lose “just” because he presents a risk. In a world where voters feel angry, taking a risk no longer seems so risky. And there is another important psychological issue at work: the electorate has just experienced a decade in which most of the rules of finance and economics have been turned upside down, as a result of the financial crisis. Turning the political rules on their head no longer seems so strange — at least, no stranger than seeing rates turn negative and big banks collapse.

That leads to a third lesson: revolution cannot be crushed by mere statistics or scare stories. Politicians such as Cameron tried to defeat the Brexit vote by citing economic data showing how dangerous Brexit might be; but voters dismissed it because they were too angry to listen — and too distrustful of the elite. The Brexit vote was decided on the basis of emotion — and the Remain camp failed to give voters a really positive vision of Europe. The Brexit camp, by contrast, invoked an image of an independent, proud sovereign nation that appealed to many voters.

This highlights a crucial fourth lesson: if the Democrats want to beat Trump, they cannot rely only on a US version of “Project Fear”; they need a positive and upbeat image too. Last week, the Democrats tried to create this at the Philadelphia convention. But they must recognise that Trump is campaigning on both negative and positive emotions; somehow the Democrats need to find a slogan as memorable and upbeat as Trump’s “Make America Great Again”.

A fifth lesson is that it is not just emotions that matter: the geeky details of the electoral process do too. One reason why the Remain camp lost in the UK was that turnout was low among potential young voters (who generally favoured Remain). Another issue was a little-noticed technical detail: parents used to be able automatically to register their teenage kids to vote, but this has recently changed. There are numerous “technical” details in the US electoral process that could turn out to be even more important; particularly since strategists — on both sides — are skilled at using all the loopholes they can find to get their supporters out, or suppress the other side. Pundits who want to predict the November results must look hard at the electoral weeds.

And that brings us to the sixth and most important lesson from Brexit: that democracy, by its nature, is unpredictable, particularly as social polarisation is increasing. Elites might hate this. So might investors or businesses, which need to plan for the long term. But if the whole point of democracy is to give people a voice, there will always be a risk that this voice will either howl in rage — or sit at home and not speak at all. Americans had better hope that the pundits learn this lesson ahead of time and — crucially — that politicians are ready to listen.

gillian.tett@ft.com

Controversial Trade Talks Between U.S. and E.U. Have Failed, German Economy Minister Says - TIME

Controversial Trade Talks Between U.S. and E.U. Have Failed, German Economy Minister Says

Posted: 28 Aug 2016 08:57 PM PDT

(BERLIN) — Free trade talks between the European Union and the United States have failed, Germany’s economy minister said Sunday, citing a lack of progress on any of the major sections of the long-running negotiations.
Both Washington and Brussels have pushed for a deal by the end of the year, despite strong misgivings among some E.U. member states over the Trans-Atlantic Trade and Investment Partnership, or TTIP.
Sigmar Gabriel, who is also Germany’s vice chancellor, compared the TTIP negotiations unfavorably with a free trade deal forged between the 28-nation E.U. and Canada, which he said was fairer for both sides.

“In my opinion, the negotiations with the United States have de facto failed, even though nobody is really admitting it,” Gabriel said during a question-and-answer session with citizens in Berlin.
He noted that in 14 rounds of talks, the two sides haven’t agreed on a single common item out of 27 chapters being discussed.
Gabriel accused Washington of being “angry” about the deal that the E.U. struck with Canada, known as CETA, because it contains elements the U.S. doesn’t want to see in the TTIP.
“We mustn’t submit to the American proposals,” said Gabriel, who is also the head of Germany’s center-left Social Democratic Party.
In Washington, there was no immediate comment from the office of the U.S. trade representative.
Christian Wigand, a spokesman for the European Commission, the E.U.’s executive arm and which is leading the TTIP negotiations, said Sunday that the institution had no comment or reaction at this time.
Gabriel’s ministry isn’t directly involved in the negotiations with Washington because trade agreements are negotiated at the E.U. level. But such a damning verdict from a leading official in Europe’s biggest economy is likely to make further talks between the EU executive and the Obama administration harder.
Gabriel’s comments contrast with those of Chancellor Angela Merkel, who said last month that TTIP was “absolutely in Europe’s interest.”
Popular opposition to a free trade agreement with the United States is strong in Germany. Campaigners have called for nationwide protests against the talks on Sept. 17 — about year before Germany’s next general election.

China caught in liquidity trap - Reuters

A construction site and a residential building are reflected on the glass wall of a building in Beijing, December 15, 2014. REUTERS/Kim Kyung-Hoon/File Photo

By Kevin Yao | BEIJING

On the face of it, China's central bank has room to cut interest rates to try to lift the economy, but sources say evidence companies and banks are hoarding cash has reinforced policymakers' view there is no major benefit in easing policy further.

The reluctance has also been shaped by the experience of Japan and the European Union. Despite much more aggressive easing policies than China, including negative interest rates, they have struggled to lift their economies out of the doldrums, these sources said.

So unless China's economic growth is at serious risk of falling below 6.5 percent, policymakers do not see the need to reduce interest rates or bank reserves, known as the reserve requirement ratio (RRR), they said. The sources are involved in internal discussions of policy proposals and offer advice, but are not part of the final decision-making process.

The People's Bank of China (PBOC) did not respond to a request for comment.

Beijing has already cranked up government spending this year to support economic growth, but the view that policymakers see limited dividend from cutting rates or the RRR could knock any lingering market expectations for a near-term easing.

It is also likely to disappoint state-owned enterprises and provincial governments, many of which are saddled with heavy debts, while many private companies are reluctant to invest right now given economic uncertainties, so cheaper credit may not make much difference to them.

"The central bank is not prepared to cut RRR or interest rates. The effectiveness of monetary policy is limited and we will have to rely on fiscal policy," said a person familiar with the PBOC's thinking, who spoke on condition of anonymity.

Even with China's official lending rate at a record low of 4.35 percent, economic data shows that firms are depositing money at banks rather than investing for the future, this person said.

July money supply figures showed a sharp increase in cash and short-term deposits and a much smaller rise in longer-term deposits, a divergence economists say shows companies are holding onto cash and banks are not lending all that they can. China's relatively low interest rates should favor borrowing and investing over saving, they said.

A Reuters analysis of the top 100 listed companies who provided quarterly figures shows that their cash and short-term investments at the end of June were up more than 27 percent from a year earlier. The increase for the top 2,071 was 17 percent, led by real estate with a rise of 87 percent.

LIQUIDITY TRAP?

The current easing cycle began when the central bank cut interest rates in November 2014. It subsequently cut rates another five times and RRR for all banks five times.

That has left the financial system flush with cash and interest rates low for borrowers, but has not pushed money into areas of the economy most in need, raising concerns of a "liquidity trap".

Household loans, mostly mortgages, accounted for more than 90 percent of new bank loans in July as corporate credit demand faltered, central bank data shows.

That lowers the urgency for the central bank to cut interest rates or RRR because the price and availability of cash do not appear to be having the desired effect, the policy insiders said.

While policymakers believe rate or RRR cuts yield limited economic returns, they are also worried easing would weigh on the yuan CNY=CFXS, which hit a six-year low last month, at a time when financial markets are speculating about the next U.S. rate rise. 

Easing could also have other negative effects.

"Cutting interest rates could increase pressure on asset bubbles as money flows into sectors outside the real economy. Housing prices in some cities are still rising due to more liquidity and loose monetary conditions," said another policy adviser.

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INEFFECTIVE?

Cutting rates would be an obvious incentive for companies to borrow funds if they want to invest. But many private companies, which account for 60 percent of overall investment, are either reluctant to borrow of find themselves unable to get loans while economic growth is uncertain.

Many banks shy away from lending to private firms because they are seen as more of a credit risk than a state-related entity that they assume would be bailed out by the government if it was unable to pay its debts.

Private-sector investment grew at a record-low pace of just 2.1 percent in January-July compared with a year earlier, while investment by state-owned firms jumped 21.8 percent as Beijing boosted infrastructure and other spending to support the economy.

Government spending overall rose 13 percent in the first seven months of 2016, double the 6.7-percent pace of first-half GDP growth.

Earlier this month, Sheng Songcheng, head of the PBOC's Survey and Statistics Department, was quoted by China Business News as saying China's fiscal deficit could rise to between 4 percent and 5 percent of GDP, up from the 2016 target of 3 percent.

To be sure, the sources said easing monetary policy would be an option if economic growth unexpectedly dipped to near or below 6.5 percent – a baseline needed until 2020 to meet long-term GDP goals.

"Fiscal policy is definitely more effective than monetary policy, but we cannot say monetary policy is ineffective," said a senior economist at a top government think-tank.

"We won't allow growth to slip below 6.5 percent - it's a bottom line," said the economist. ($1=6.6266 yuan)

(Reporting by Kevin Yao: Additional reporting by TriptiKalro in BANGALORE:; Editing by John Mair and Neil Fullick)

Elon Musk's Tesla latest model is the fastest acceleration car - Forbes

Elon Musk's drive to dominate a future market for affordable, stylish electric cars took a slight detour.

Instead of sharing updates on Tesla’s much-awaited $35,000 Model 3 sedan, the brash tech industrialist and his engineers unveiled what they describe as the world’s fastest production vehicles: the P100D Model S sedan and Model X crossover, both starting at around $135,000.

Performance specs on these machines designed for very high net worth — and presumably very impatient — drivers bring to mind the proto-punk classic by Iggy & the Stooges: Raw Power.

Armed with a tweaked version of Tesla’s “Ludicrous” speed setting, the new 100-kilowatt-hour battery pack in the top-end Model S propels the car from 0 to 60 miles per hour in 2.5 seconds. The P100D Model X can reach 60 mph from a standstill in a mere 2.9 seconds. Ferrari and Porsche may have produced faster cars, buy they were limited production vehicles selling for nearly $1 million, according the Palo Alto, California, company.

“I think it’s amazing that an electric car is now the fastest car in production in the world,” an audibly delighted Musk said on a conference call today. “It’s a great message to the world and really speaks to the fact that electric cars are the future and that’s a very positive message to the electric vehicle industry as a whole, going beyond just Tesla.”

Range increases to an estimated 315 miles per charge on the $134,500 Model S P100D, compared to 268 miles for the current top-end P90D, the most ever for a battery-powered vehicle, said JB Straubel, Tesla’s long-time chief technology officer. Likewise, the $135,500 Model X P100D can go 289 miles fully charged, up from 257 miles for the Model X P90D.

the new pack is approaching the limits of what’s possible with the current generation of lithium-ion cells Tesla uses, Musk said. Fortunately, the company is close to bringing out a higher-powered cell now in development with battery partner Panasonic , he said on the call.

Production will be relatively low volume for the time being, averaging around 200 units per week.

Given that Tesla long ago made its mark for high-performance autos capable of staggering levels of acceleration, the P100Ds seem to be an answer to a question few were asking. Nevertheless, Musk reiterated his long-standing belief that the company’s most expensive vehicles pay for and pave the way for its more affordable ones, namely the Model 3. Still, upping its halo vehicle line right now is curious, maybe even ludicrous.

Tesla is laboring to accelerate vehicle production at its Fremont, California, plant ahead of the roll out of the Model 3 next year and is racing to complete work on the massive Gigafactory battery plant in Nevada. It also has to pull off the acquisition of solar power company SolarCity and integrate it into the company’s broader operations.

If that weren’t enough, Tesla is pouring resources into becoming a leader in highly automated driving technology, readying an electric commercial truck and transit van and preparing to raise additional funds to cover the expanding list of cash-intensive projects.

Meanwhile, it’s still awaiting the outcome of a U.S. government safety review of its Autopilot automated driving system that was in use when a fatal accident in May killed a Model S driver.

Given how challenging the road ahead looks, maybe the P100D line is a reward for Tesla engineers, letting them have some fun wallowing in the pure speed their powertrain delivers. How it helps get the company to the mass-market scale it craves and, ultimately, profitably isn’t quite so clear.

How the world view Donald Trump - Financial Times

In this installment of our special election series on Donald J. Trump, OZY reports on how the rest of the worldviews the Republican front-runner. Hint: It’s probably not what you think. Stay tuned for more pieces as the billionaire continues his march to the GOP nomination and, perhaps, the Oval Office.

Erick Rhesa just can’t get enough of his political idol. The 30-year-old farmer stays up till the wee hours to watch primary results and, when the Donald reigns supreme — as he did on Super Tuesday — Rhesa can sometimes be heard gleefully shouting: “Trump for president!” In Rhesa’s eyes, like many others, Trump’s the only candidate deserving of the big gig in the Oval Office, because he’s brave enough to speak out against migration: “He is right about Mexicans or Syrians,” says Rhesa. “We have the same problem in Kenya; we have let thousands of Somali refugees in, and now we have terrorism!”

Trump mania has officially gone global. From the streets of Mumbai to matatus in Nairobi, where OZY’s Laura Secorun Palet caught up with Rhesa, a conservative Kenyan, Trump’s message is resonating with a surprising number of people. Not only has the blustery billionaire developed a keen sense of the American electorate’s mood, experts say, but he’s also finding a kind of global constituency: pockets of discontented people around the world who agree with some of his nationalistic stances on trade agreements, battling “radical Islamic terrorism” and curbing the flow of certain migrants. 

Sure, not everyone’s a fan, or totally sold on the reality-TV king yet. Sebastian Rivas, a Chilean reporter, says his countrymen are worried about the type of relationship they might have with the U.S. given Trump’s anti-immigrant speeches, while Natchapol Praditpetchara, a 23-year-old researcher at the Thailand Development Research Institute, is much more blunt: “His rhetoric is poisonous and is tearing away the soul of the country.” 

What else do people around the world think about the GOP’s front-runner? Here’s what our global team of reporters found in…

ITALY

Trump’s views on immigration, border control and family values have resonated with parts of conservative, Catholicism-steeped Italy, says Marco Perduca, a former Italian senator and current U.N. representative for the Nonviolent Radical Party. And young Italians don’t seem all that surprised by Trump’s rise; rather, it feels like déja vù all over again. After all, notes our Paris-based reporter Fiona Zublin, the orange-tanned and often gauche media mogul Silvio Berlusconi trod this trail long before Trump did. Berlusconi got pretty far too: Prime Minister Bunga Bunga took his own political party, Forza Italia (“Go, Italy!”), named for a popular football chant, to the record books, getting elected three times and becoming Italy’s longest-serving prime minister since World War II.

ELSEWHERE IN EUROPE

Trump’s polarizing effect on the GOP has occurred against a backdrop of the similar splintering and polarization across Europe. Nationalists took power in Poland and made strides in French elections, for instance, while far-left parties gained votes in Spain and Greece — so America’s Trumpian trajectory seems par for the global course. Even so, Zublin says that while many young Europeans don’t think Trump will actually be elected, they’re worried about the pervasiveness of populist rhetoric; they believe it encourages hypernationalist thinking and allows people to become inured to racism, for example.

ISRAEL 

Many in Israel are on the lookout for a stronger advocate than President Obama — perhaps Marco Rubio, with his vociferous pro-Israel stance. Certainly it’s early, so those who are paying attention are often following the primaries for their entertainment value. Which is high. When it comes to Trump, the consensus seems to be that his foreign-affairs policies aren’t well enough outlined — something that’s concerning to locals such as Opher Rom, a tour guide for celebrities when they visit Israel.

INDIA

Few of the names peppering the 2016 primaries are on the tips of everyday people’s tongues here. But two names are generating buzz, as Mumbai-based Sanjena Sathian has discovered. Hillary Clinton, with her familiar name, is the one many Indians figure will lead America. She’s perhaps not beloved but is certainly trusted. Yet Trump, inevitably, has burst out of U.S. borders and into the minds of locals here, perhaps confirming his constant assertion of the power of his surname. Many discuss Trump with an air of casual observation: He’s entertaining, maybe a bit threatening, but his presence doesn’t loom large here — yet. 

CANADA

My fellow Canucks let out a collective sigh when Trump, during the latest GOP debate, dismissed the idea of building a wall between Canada and the U.S. — and instead doubled down on his pitch to erect a border along Mexico. Overall, a nationwide Insights West poll released last month found that 67 percent of Canadians say Trump would be “bad” for their country. And while Republican candidates normally fare well among conservative voters, Trump was regarded a poor choice by well over half of those who voted for our right-wing party in last year’s federal election.

Meanwhile, our prime minister, Justin Trudeau, has been asked about whether he’d condemn Trump’s hateful rhetoric — to which the Liberal Party leader first replied at a town hall hosted by Maclean’s that it would be “important for Canadians, for Canadian jobs, for Canadian prosperity, to be able to have a positive relationship with whoever Americans choose as their president.” Then came the “however,” where he added, “If we allow politicians to succeed by scaring people, we don’t actually end up any safer.”

Still, that doesn’t mean we lost our sense of humor with the goings-on south of the border. The “Move to Cape Breton if Donald Trump Wins” campaign, for one, has gained national attention — traction we haven’t seen since, well, Sarah Palin nearly became veep in ’08. 

*Nick Fouriezos, Laura Secorun Palet, Sanjena Sathian, Fiona Zublin, Libby Coleman, Leslie Nguyen-Okwu and Taylor Mayol contributed reporting. 

Why Tesla’s New Battery Is So Important - Fortune

Why Tesla’s New Battery Is So Important Posted: 24 Aug 2016 10:16 AM PDT Tesla Motors announced a breakthrough on Tuesday that was the stuff of energy nerds: a new battery pack for its performance cars that packed more energy into it. The not-so-geeky result of that new 100 kilowatt-hour battery pack are cars that can accelerate more quickly and can drive for longer on a single charge. This milestone isn’t just another notch on Tesla’s belt. It shows how as Tesla continues to innovate, how it’s leading the auto industry, and how far it is ahead of competitors when it comes to developing electric car battery technology. According to Tesla, the new Model S P100D—thanks to the new battery pack—is the third fastest accelerating production car ever produced (including traditional gas-powered cars). And at 315 miles, it has the longest range ever for a production electric vehicle. It was only six or so years ago that Tesla’s first car, the $100,000 Roadster, was enabling its early customers to travel a little over 200 miles on a single charge. Then came the Model S, which kicked up the range closer to 300 miles on a single charge, followed by an optional upgrade to a 90 kilowatt-hour battery pack last year. Thanks to Tesla’s engineers, the company has now crammed even more energy into the same size pack, using the same battery cells. Tesla’s battery packs contain thousands of lithium-ion battery cells that discharge energy to power the car. Customers can upgrade to the 100-kilowatt hour battery pack from the 90-kilowatt hour battery pack for a charge. Tesla’s CEO Elon Musk said during a call with reporters on Tuesday that the 100-kilowatt battery pack is coming close to reaching the theoretical limit of how much energy density the company can pack into that size and shape battery pack using those specific batteries. For Tesla to achieve a higher energy density for future battery packs, it would need to improve the battery chemistry itself by adding new materials or tweaking the battery cell design. If Tesla wanted to create an even more powerful battery, it would have to make the battery pack bigger, but that would add on weight to and change the shape of the cars. Instead of changing the external pack shape or size or cell chemistry for the 100 kilowatt-hour battery pack, Tesla created a whole new battery cell cooling system and rearranged the battery cell architecture and electronics, explained Tesla’s CTO JB Straubel on the call. It’s likely Tesla added in more battery cells to the same shape pack, but it was able to still place the cells in a position where they could be adequately cooled while charging and discharging. (Batteries heat up when they charge and discharge.) The big fear is that the more energy-dense a battery pack is, the bigger the risk that there could be a fire if there’s an accident. Tesla needs to be careful, because—like with internal combustion cars—cars can catch on fire and Tesla needs to assure its customers that its cars are safe. “It’s been quite a challenging development,” Musk said. The 100-kilowatt hour battery pack will only be sold to Tesla’s high-end cars for now, and will only represent maybe 10% of production, said Musk. But down the road, Tesla will eventually offer the 100 kilowatt-hour battery pack for all versions of the Model S and Model X. The 100-kilowatt hour battery pack will help differentiate the Model S and Model X from the less expensive Model 3, which is supposed to cost $35,000 and start shipping at the end of 2017. The range of the Model 3 isn’t supposed to be any more than 250 miles per charge, according to analysts. The Model 3 will have new lithium-ion batteries made at Tesla’s Gigafactory outside of Reno, Nevada. Those batteries will be bigger (wider and longer) than the traditional ones, packing more materials into each battery. They’ll also use the latest in battery chemistry, including using silicon in the anode part of the battery. A battery has an anode and a cathode, as well as an electrolyte medium that shuttles lithium ions between the anode and cathode. Battery technology is meaningless unless it’s delivering a better electric car. Tesla’s 100-kilowatt hour battery pack is an auto industry breakthrough that shows what a company can do with current battery technology and car design. No other company is producing electric cars on a production basis with a 315-mile range. That milestone will also help set the bar for what customers will expect from other automakers like GM, Ford, and Nissan. And Tesla’s move will push these automakers to try to get close to or match Tesla’s new features. This article originally appeared on Fortune.com

Fed Chair Janet Yellen Says Case for Interest Rate Hike Stronger - TIME

Fed Chair Janet Yellen Says Case for Interest Rate Hike Stronger

Posted: 26 Aug 2016 07:17 AM PDT

(JACKSON HOLE, Wyo.) — The case for raising U.S. interest rates has strengthened in recent months because of improvements in the labor market and expectations for moderate economic growth, Federal Reserve Chair Janet Yellen said on Friday.
Yellen did not indicate when the U.S. central bank might raise rates, but her comments reinforced the view that such a move could come later this year. The Fed has policy meetings scheduled in September, November and December.
Speaking at a three-day international gathering of central bankers in Jackson Hole, Wyoming, Yellen said the “U.S. economy was nearing the Federal Reserve’s statutory goals of maximum employment and price stability.”
“In light of the continued solid performance of the labor market and our outlook for economic activity and inflation, I believe the case for an increase in the federal funds rate has strengthened in recent months,” Yellen said in prepared remarks.
She added that the Fed still thinks future rate increases should be “gradual.”
The Fed raised rates in December, its first hike in nearly a decade, but it has held off further increases so far this year due to a global growth slowdown, financial market volatility and generally tepid U.S. inflation data.
Investors currently see an 18 percent probability the Fed will raise rates at its September policy meeting and a 53 percent chance of an increase in December, according to CME Group’s FedWatch tool.
Yellen’s comments, by failing to lay out a clear roadmap for what the Fed needs to see to raise rates, will likely not convince some investors that a rate increase is imminent, in part because Fed policymakers are seen as sharply divided over whether to increase rates soon or take a more cautious approach.
Yellen was speaking on Friday at a Fed conference on designing new monetary policy frameworks, with central bankers eager to find new ways to stimulate economies even after they have cut rates to near zero and flooded banks with money.
She devoted much of her speech to outlining how the Fed may deal with future recessions now that many economists and Fed officials believe that an aging population and other dynamics appear to be slowing U.S. economic growth over the long term.
Because slower growth means future U.S. interest rates will likely also need to be lower on average, some analysts have suggested that the Fed will have less room to fight future recessions because there will be less room to cut rates.
Such a view is “exaggerated,” Yellen said, because the Fed will be able to use bond purchases and forward guidance to ease conditions. It may also want to explore other options, including broadening the range of assets it can purchase, raising the inflation target, or targeting nominal GDP, she said. (Reporting by Jason Lange and Ann Saphir; Additional reporting by Lindsay Dunsmuir in Washington; Editing by Paul Simao)

Facebook’s Plan for WhatsApp Data Poses Legal Risks - Fortune

Facebook’s Plan for WhatsApp Data Poses Legal Risks Posted: 25 Aug 2016 08:05 PM PDT When WhatsApp announced on Thursday that it would start sharing data with its corporate parent, Facebook, some of its fans howled that the popular messaging service was betraying long-held promises to protect their privacy. But for the companies, angry users may pose less of a problem than the Federal Trade Commission, which serves as the country’s top privacy regulator. Recall that in 2014, after Facebook GOOG -0.03% announced it would acquire WhatsApp, the FTC’s Bureau of Consumer Protection sent a stern letter to the companies warning them to honor their promises to consumers or face an investigation into unfair trade practices. That letter also pointed to specific pledges from the companies including one by Facebook CEO Mark Zuckerberg who insisted that, “We are absolutely not going to change plans around WhatsApp and the way it uses user data.” The result is that WhatsApp, which has over 1 billion users, will have to tread very carefully as it implements its plan to share information such as phone numbers and analytics data with Facebook. (While WhatsApp users will have an option to block Facebook from using certain data for advertising, they will be unable to block Facebook from linking the accounts internally to get a better picture about who its users are and, possibly, an even better idea about who they know). For Facebook, the task of carrying out all this in a lawful manner is more challenging still since the company is under a 20-year consent decree related to earlier complaints about its privacy policies: If @facebook & @WhatsApp didn't consult @FTC before making this privacy policy change, they could be in hot water. https://t.co/VsMo2YWQtp — William McGeveran (@BillMcGev) August 25, 2016 The FTC, as is its custom, declined to comment on how or if it will scrutinize Facebook’s plan to integrate the WhatsApp data. Since the FTC acts as a law enforcement agency, it does not actively tell companies what is or is not acceptable, but instead requires them to be familiar with its rules and act accordingly. In this case, the answer to whether the Facebook data plan is legal is likely turn on just how WhatsApp goes about obtaining permission to implement the changes. As the 2014 letter from the agency noted: Finally, if you choose to change how you collect, use, and share newly-collected WhatsApp data, we recommend that you offer consumers an opportunity to opt out of such changes or, at least, that you make clear to consumers that they have an opportunity to stop using the WhatsApp service In practice, this means Facebook could face extra scrutiny if it puts the new WhatsApp changes deep in a pile of legal mumbo-jumbo. As for the opt-out, here is what WhatsApp says it would look like:  Screen shot from Fortune: Facebook Plan For WhatsApp Data Poses Legal RisksSo the outcome will likely turn on whether the FTC agrees that the opportunity to uncheck that box amounts to a fair opt-out procedure. In response to a question about the FTC rules, Facebook provided the following statement from a WhatsApp spokesperson: “WhatsApp complies with applicable laws. As always, we consider our obligations when designing updates like this … We’ve made our terms and privacy policy easily accessible, provided an overview of the key updates, and empowered people to make decisions that are right for them, including offering a control for existing users over how their data can be used.” For Facebook, the data integration plan is important since WhatsApp, which it acquired for $22 billion, has yet to generate any real revenue for the company. This article originally appeared on Fortune.com