Warren Buffett: U.S. Economy Better Than Presidential Hopefuls Say - TIME

Warren Buffett: U.S. Economy Better Than Presidential Hopefuls Say

Posted: 27 Feb 2016 07:33 AM PST

(OMAHA, Neb.) — The United States’ economy is in better shape than the presidential candidates make it seem, investor Warren Buffett said Saturday, even though businesses like his still face challenges.
In his annual letter to Berkshire Hathaway shareholders, Buffett didn’t name specific candidates or issues, but noted that the negative drumbeat about the economy, health care reform and income inequality may get voters down about the future.
“It’s an election year, and candidates can’t stop speaking about our country’s problems (which, of course, only they can solve),” he said, adding later, “that view is dead wrong: The babies being born in America today are the luckiest crop in history.”
Buffett noted that there will still be economic troubles as business evolves, but that the country needs to make sure it has a solid safety net to help people who lose jobs.
“The answer in such disruptions is not the restraining or outlawing of actions that increase productivity. Americans would not be living nearly as well as we do if we had mandated that 11 million people should forever be employed in farming,” he wrote.
Buffett pointed out that change also creates challenges for Berkshire’s businesses. For instance, its BNSF railroad is certain to haul less coal in the future and Geico insurance could be hurt by driverless cars.
He assured shareholders that Berkshire’s businesses will adapt just as the company did when its original Berkshire Hathaway textile operation failed.
Buffett’s letter is one of the most well-read documents the business world each year because of his successful track record and his knack for explaining complicated subjects in simple terms.
Buffett said the book value of Berkshire’s businesses improved 6.4 percent last year even as its stock price fell 12.5 percent. When dividends are factored in, the S&P 500 gained 1.4 percent by comparison. Buffett has warned that it will be increasingly hard for Berkshire to continue beating the market because the company is so large.
Berkshire Hathaway employs more than 360,000 people at its eclectic mix of companies, including insurance, utilities, railroad, manufacturing and retail firms. Berkshire also holds significant stakes in Coca-Cola, Wells Fargo, American Express, IBM and other companies.

U.S. Economy’s Year-End Slowdown Not as Bad as Expected - TIME Business

Mark Zuckerberg Has Some Pretty Smart Advice For Twitter Posted: 26 Feb 2016 01:17 PM PST Twitter has spent its entire existence, especially since becoming a public company, in the shadow of Facebook. So maybe it shouldn’t come as a shock that someone asked Facebook CEO Mark Zuckerberg what he would do if he was CEO of Twitter, which has suffered stalled user growth and a slumping stock price in recent months. Zuckerberg fielded the question at a town hall Q&A session in Berlin, according to VentureBeat. Though he initially said he didn’t know how to answer the question, he eventually pivoted to crow about Facebook’s own successes, especially the rapid growth of Instagram. The photo-sharing network is similar to Twitter in that many people flock to it in order to keep up with public figures, according to Zuckerberg. But Instagram has now exceeded Twitter by many major metrics. Instagram has more than 400 million users compared to Twitter’s 320 million and it has 200,000 advertisers compared to Twitter’s 130,000. The next big development in this relationship between public figures and their followers will be live broadcasting, Zuckerberg predicts. Facebook has been heavily pushing live video and is now rolling out live-streaming to its Android users. Twitter, meanwhile, bought the live-streaming app Periscope in March. “‘Live’ is going to be an awesome thing for public figures… imagine your favorite public figure or politician having the power to broadcast from their pocket, go live, have an audience of thousands of people,” Zuckerberg said. “I think you’re going to see a lot of that on Instagram and Facebook, and if the Twitter folks do a good job, I think you’ll see a lot more of that on Twitter too.” The challenge for Twitter, of course, will be to figure out how to effectively fit live video into the core user experience before Zuckerberg and his employees do.

Samsung Wins Appeal in $120M Patent Fight With Apple Posted: 26 Feb 2016 11:49 AM PST Put one in the win column for Samsung. The U.S. Court of Appeals for the Federal Circuit on Friday ruled (PDF) in favor of Samsung in a long-fought patent battle with Apple. The court’s ruling means Samsung will not be required to pay $120 million in patent-infringement damages, nor will it need to alter any product designs, dealing a blow to Apple’s argument that Samsung has “slavishly” stolen its intellectual property. In its ruling, the U.S. Court of Appeals said that Samsung did not in fact violate patents Apple holds related to turning alphanumeric characters, such as phone numbers, into links, as well as the iPhone’s slide-to-unlock feature. The court also reversed an earlier jury decision that Samsung violated an Apple patent on auto-correction. The court was particularly scathing in its comments about Apple’s patents, calling them “obvious”—a term used to describe technologies that are not deserving of patents. The court added that Apple’s slide-to-unlock and auto-correct patents are “invalid.” Apple and Samsung have been battling over patents since 2011. Both companies have said that the other has violated patents they own related to mobile technology and design. As the patent-infringement cases extended across the U.S. and Europe, neither Apple nor Samsung won a significant case until 2012, when Apple won a landmark ruling in California that awarded the company more than $1 billion in damages. Since then, the companies decided to scuttle their international disputes and focus solely on the U.S., but the patent-infringement cases have continued to fly. Over the last couple of years, a series of appeals, rulings, and trials whittled down Apple’s $1 billion in damages to $548 million. Samsung has appealed that case to the U.S. Supreme Court in hopes of ultimately dealing a final blow and retrieving its cash from Apple, which is currently holding it until the Supreme Court decides whether to hear the case. The case in question on Friday is the other big battle between Apple and Samsung. Like the other case, Apple and Samsung sued each other over alleged patent infringement across a slew of mobile devices. Apple had initially sought $2 billion on the patents cited in the case, but was awarded just $120 million by a jury in 2014. At that time, the jury also awarded Samsung over $158,000 for Apple’s alleged infringement of a patent related to the way photos and videos are organized in folders. Interestingly, the U.S. Court of Appeals sided with the jury on Friday, meaning Samsung will still be able to collect that small sum of cash if Apple doesn’t appeal the ruling. Samsung argument in the case centered on the idea that Apple’s patents are invalid and obvious, and should not be a legitimate means by which the company could collect damages. The court’s agreement calls into question the validity of Apple’s patents and whether the company could (and should) hold patents related to so-called “obvious” technologies like slide-to-unlock—a software mechanism that allows users to unlock their smartphones. Given that, it’s possible the issue could ultimately find its way to the U.S. Patent and Trademark Office (USPTO), which awarded the patents to Apple. The USPTO has reviewed the legitimacy and validity of Apple patents in the past, most recently examining whether the so-called ‘915 patent, which describes how the pinch-to-zoom feature works on touch devices, is “patentable.” The USPTO has on separate occasions determined that the ‘915 patent should not have been awarded, forcing Apple to file an appeal last year to the Federal Circuit in hopes of keeping its patent and the damages associated with it. With the latest ruling now in, Apple has effectively lost $120 million in damages it would have otherwise received from Samsung and will now need to pay out a little over $158,000. The company can either accept the ruling or appeal it, though it hasn’t said what its next move will be. An Apple spokesperson declined to comment on the ruling. In addition to Samsung, several industry giants, including Google, Facebook, and eBay, may be pleased by today’s ruling. In July, those companies, along with others in the industry, filed a brief with the Federal Circuit Court supporting Samsung’s fight with Apple. The companies argued that if Apple’s victories are allowed to stand, it could unleash a series of subsequent patent lawsuits utilizing the same intellectual property to target other device makers. Those lawsuits, the coalition said, would negatively affect the development of “useful modern technologies” and “have a devastating impact on companies.” Samsung did not respond to a request for comment. This article originally appeared on Fortune.com

Tim Cook Just Gave Another Tantalizing Hint About the Apple Car Posted: 26 Feb 2016 11:40 AM PST The extent of Apple’s ambitions in the automobile market have taken centerstage—previously occupied by rumblings of a tablet or television set—in the canon of long-running rumors about the company’s future plans. CEO Tim Cook again addressed the issue Feb. 26 during the company’s annual shareholder’s meeting in Cupertino, Calif. Asked about the potential for an iCar of sorts, Business Insider reported he said: Do you remember when you were a kid, and Christmas Eve, it was so exciting, you weren’t sure what was going to be downstairs? Well, it’s going to be Christmas Eve for a while. Before answering, Cook kidded his questioner “maybe I should have called on someone else.” In a recent interview with Fortune, he addressed the spate of hires in the car space many have taken as confirmation of the firm’s interest in challenging locals Google and Tesla, not to mention potential competitors in Detroit. “The great thing about being here is we’re curious people. We explore technologies, and we explore products,” Cook told the magazine. “And we’re always thinking about ways that Apple can make great products that people love, that help them in some way. And we don’t go into very many categories, as you know. We edit very much. We talk about a lot of things and do fewer. We debate many things and do a lot fewer.” Tesla CEO Elon Musk has called Apple’s plans around building a car an “open secret,” something Apple itself has never confirmed. Reports about the project, supposedly called “Project Titan” internally, claim that some 600 employees are attached. Steve Zadesky, the executive many think in charge of Titan, recently left the company.

Facebook Ads Are About to Look Much Different Posted: 26 Feb 2016 08:28 AM PST The next time you actually click a Facebook ad, you may not get shuttled over to a marketer’s website. The social network announced Feb. 25 that it’s opening up Canvas, its full-screen multimedia ad format, to all advertisers. The goal of Canvas is to show users more engaging ads that load much faster than the external webpages to which ads often point. Canvas ads reside in the News Feed just like traditional ads, but when clicked they expand into a full-screen ad that can include images, text and video. A big problem with mobile advertising is that it’s harder for marketers to really grab a user’s attention with such a small amount of visual real estate. These new ads, like the vertical ads on Snapchat, are likely to leave a bigger impression than banner ads or other types of mobile marketing. Major brands like Coca-Cola and Burberry have already used the format and, according to Facebook, found it effective. In Coke’s case, people who viewed the ad watched it for 18 seconds on average, which is a long time in the battle for attention on mobile devices. The ad format is the latest initiative in Facebook’s ongoing plan to move more Internet activity to its own apps. The social network recently launched Instant Articles, which let news organizations load their content directly into the Facebook app for faster loading.

Apparently Even Oprah Can’t Save Weight Watchers Posted: 26 Feb 2016 07:38 AM PST Weight Watchers sales declined rapidly in the last quarter, despite media celebrity Oprah Winfrey’s investment and advertising campaign. Weight Watchers reported a 21% drop in quarterly revenue down to $259.2 million, and active subscriber membership dipped 4.8% during the fourth quarter ending Jan. 2, Reuters reports. Winfrey joined the weight-loss company in October 2015 after it had experienced a nearly three-year decline in sales. She made a $43.2 million investment for a 10% stake and was added to the company’s board; its stock more than doubled on the day her involvement was announced.

Here’s Why Kohl’s Is Closing So Many Stores Posted: 26 Feb 2016 07:38 AM PST Kohl’s will close 18 stores in 2016 in anticipation of another year of meager sales gains. The number may not sound huge, but it’s the first time the retailer has had a store-closing campaign. Earlier this month, Kohl’s reported comparable sales rose a modest 0.4% during the holiday season. Now the department store expects comparable sales, which exclude recently closed or opened stores, to range from unchanged to rising 1% for most in 2016. Total sales may even fall, Kohl’s warned investors on Thursday. So now the retailer has decided to pare some of its 1,160-store fleet. (Macy’s has also announced store closings because of weak sales.) “While the decision to close stores is a difficult one, we evaluated all of the elements that contribute to making a store successful, and we were thoughtful and strategic in our approach. We are committed to leveraging our resources on our more productive assets,” Kohl’s CEO Kevin Mansell said in an interview. While the planned closings represent not even 1% of square footage, they represent a shift in Kohl’s strategy toward smaller stores and outlets. As first reported by Fortune in October, Kohl’s will open seven smaller stores of 35,000 square feet each, or just under half the size of a regular Kohl’s store, in 2016. The retailer will also expand its new chain of outlets called Off-Aisle, adding two locations to the pilot stores. What’s more, Kohl’s will open 12 Fila outlet stores to showcase that sportswear brand. The shift comes as Kohl’s turnaround plan, launched in 2014 and called the “Greatness Agenda,” has helped it avoid sales declines that have hurt Macy’s, but they still have yet to significantly boost sales. The chain has reported five straight quarters of comparable sales growth, but the pace of gains has been modest. Kohl’s had promised investors that sales would go from $19 billion in 2014 to $21 billion by 2017. But with the company forecasting total sales from down 0.5% to up 0.5% from 2015’s $19.2 billion levels, Kohl’s is clearly not on track. This article originally appeared on Fortune.com

Subway’s Latest Sandwich Is Totally Different Posted: 26 Feb 2016 07:38 AM PST Subway, the world’s biggest fast-food restauranteur, will next month add a new chicken sandwich to its menu, one that will feature antibiotic-free meat for the first time in the chain’s history. The new sandwich, which Subway showcased at a media event in Manhattan this week, will debut on March 1 at U.S. restaurants. Subway says the new rotisserie-style chicken sandwich also features no artificial colors, flavors, or preservatives. The menu addition is part of a broader plan by Subway to transition to only serving chicken raised without antibiotics, with a promise to make the transition for all chicken it serves in the U.S. by the end of 2016. It will also transition to turkey raised without antibiotics over the next two to three years, while the pork and beef phase will be completed in 2025. The longer delay for those meats is because it takes longer for those animals to mature, and thus the change takes more time for suppliers to implement. “We are looking at all our menu items and ingredients and looking at how we can make those ingredient lists cleaner so customers can understand what’s in their food,” Lanette Kovachi, Subway’s global dietitian, told members of the media at a Subway store in New York City. She added that by the end of this year, Subway will have removed all artificial colors and flavors across the entire menu. Quick-service restaurant (QSR) concepts like Subway have made public strides to source ingredients that consumers have deemed healthier or come from more humane practices. Subway, like McDonald’s, Dunkin Brands and several others, has vowed to switch to cage-free eggs. In Subway’s case, that change is set to be completed by 2025. Subway, which opened its first store in 1965, says it has been on this journey for many years. It points to past initiatives to fortify bread with calcium and vitamin D; reduce sodium; and provide clearer details about the nutritional information for items on Subway’s menus. The restaurant chain, along with many of the industry’s largest brands, including McDonald’s and Burger King, have faced challenging sales trends as consumers have shifted their spending patterns. Fast-casual concepts with more focused menus are winning business away from the QSR concept. Consumers are also increasingly visiting convenience stores and supermarkets, which are offering more freshly made grab-and-go menu items. So Subway, like many of its competitors, is responding to a consumer-driven trend. And it are leaning on its suppliers to change their manufacturing process so Subway can offer antibiotic-free meats and other healthier fare. Will the fresher and cleaner image Subway espouses boost sales? Only time will tell. “Today’s consumer is ever more mindful of what they are eating, and we’ve been making changes to address what they are looking for,” Dennis Clabby, executive vice president of Subway’s Independent Purchasing Cooperative (IPC), said in a statement last year. This article originally appeared on Fortune.com

U.S. Economy’s Year-End Slowdown Not as Bad as Expected Posted: 26 Feb 2016 07:14 AM PST (WASHINGTON) — The U.S. economy’s slowdown in the final three months of 2015 wasn’t quite as bad as initially thought. The gross domestic product, the broadest measure of economic health, grew at an annual rate of 1 percent in the fourth quarter, the Commerce Department reported Friday. That’s an improvement from the first estimate of 0.7 percent, though just half the 2 percent growth posted in the third quarter. The revision was made because the downturn in business stockpiling was less severe than the government’s first estimate. That helped offset slightly weaker consumer spending. The latest figure, however, does little to change the fact that growth in the final months of 2015 was modest. Since then, global weakness and financial market turbulence have triggered worries about the potential fallout on the U.S. economy. Still, economists are confident that GDP is poised to accelerate this quarter. Steady job gains and faster wage growth are boosting consumer spending, which accounts for more than two-thirds of the economy. “First-quarter GDP growth is on track to rebound to a very healthy 2.5 percent (rate) which should dampen any concerns about an imminent recession,” said Paul Ashworth, chief U.S. economist at Capital Economics. The fourth-quarter figure marks the slowest growth in six months, since the economy skidded to a weak 0.6 percent showing in the first quarter last year. That was followed by a solid rebound to 3.9 percent in the second quarter and then the 2 percent gain in the summer. Friday’s upward revision stems from a tweak in the government’s data for business stockpiles. That translated into a 0.1 percentage point drag on growth, rather than a 0.5 percentage point drag initially reported. This change could weigh on first quarter activity if businesses are reluctant to add to their stockpiles. In addition, the trade deficit subtracted 0.3 percentage point from growth, rather than the 0.5 percentage point drag in the first report. Exports still suffered, reflecting the struggle American manufacturers are having from a stronger dollar. But the country imported less than first thought. Consumer spending grew at a 2 percent rate in the fourth quarter, down from an initial estimate of 2.2 percent. Spending had surged at a 3 percent rate in the third quarter, and economists are counting on a rebound in the current quarter. Also weighing on growth in the fourth quarter was a downward revision to government spending, which fell at a 0.1 percent rate instead of a 0.7 percent rise first reported. All the changes in the fourth quarter left GDP growth for the year unchanged at 2.4 percent, the same as 2014. While some economists have boosted the odds of a recession because of the declines in stock prices this year, Gus Faucher, senior economist at PNC Financial Corp., said he believe the economy will keep growing. He forecasts GDP will expand 2.3 percent this year, little changed from the past two years. “The decline in stock prices is something to watch out for, but consumer spending is being helped by rising home prices that are boosting household wealth, continued solid job growth and increased wage growth,” Faucher said. In addition, economists view the big decline in energy prices as the equivalent of a tax cut, giving consumers more money to spend on other items.

Samsung Wins Appeal in $120M Patent Fight With Apple - Fortune

Samsung Wins Appeal in $120M Patent Fight With Apple

Posted: 26 Feb 2016 11:49 AM PST

Put one in the win column for Samsung.
The U.S. Court of Appeals for the Federal Circuit on Friday ruled (PDF) in favor of Samsung in a long-fought patent battle with Apple. The court’s ruling means Samsung will not be required to pay $120 million in patent-infringement damages, nor will it need to alter any product designs, dealing a blow to Apple’s argument that Samsung has “slavishly” stolen its intellectual property.
In its ruling, the U.S. Court of Appeals said that Samsung did not in fact violate patents Apple holds related to turning alphanumeric characters, such as phone numbers, into links, as well as the iPhone’s slide-to-unlock feature. The court also reversed an earlier jury decision that Samsung violated an Apple patent on auto-correction.
The court was particularly scathing in its comments about Apple’s patents, calling them “obvious”—a term used to describe technologies that are not deserving of patents. The court added that Apple’s slide-to-unlock and auto-correct patents are “invalid.”
Apple and Samsung have been battling over patents since 2011. Both companies have said that the other has violated patents they own related to mobile technology and design. As the patent-infringement cases extended across the U.S. and Europe, neither Apple nor Samsung won a significant case until 2012, when Apple won a landmark ruling in California that awarded the company more than $1 billion in damages.
Since then, the companies decided to scuttle their international disputes and focus solely on the U.S., but the patent-infringement cases have continued to fly. Over the last couple of years, a series of appeals, rulings, and trials whittled down Apple’s $1 billion in damages to $548 million. Samsung has appealed that case to the U.S. Supreme Court in hopes of ultimately dealing a final blow and retrieving its cash from Apple, which is currently holding it until the Supreme Court decides whether to hear the case.
The case in question on Friday is the other big battle between Apple and Samsung. Like the other case, Apple and Samsung sued each other over alleged patent infringement across a slew of mobile devices. Apple had initially sought $2 billion on the patents cited in the case, but was awarded just $120 million by a jury in 2014.

At that time, the jury also awarded Samsung over $158,000 for Apple’s alleged infringement of a patent related to the way photos and videos are organized in folders. Interestingly, the U.S. Court of Appeals sided with the jury on Friday, meaning Samsung will still be able to collect that small sum of cash if Apple doesn’t appeal the ruling.
Samsung argument in the case centered on the idea that Apple’s patents are invalid and obvious, and should not be a legitimate means by which the company could collect damages. The court’s agreement calls into question the validity of Apple’s patents and whether the company could (and should) hold patents related to so-called “obvious” technologies like slide-to-unlock—a software mechanism that allows users to unlock their smartphones.
Given that, it’s possible the issue could ultimately find its way to the U.S. Patent and Trademark Office (USPTO), which awarded the patents to Apple. The USPTO has reviewed the legitimacy and validity of Apple patents in the past, most recently examining whether the so-called ‘915 patent, which describes how the pinch-to-zoom feature works on touch devices, is “patentable.” The USPTO has on separate occasions determined that the ‘915 patent should not have been awarded, forcing Apple to file an appeal last year to the Federal Circuit in hopes of keeping its patent and the damages associated with it.
With the latest ruling now in, Apple has effectively lost $120 million in damages it would have otherwise received from Samsung and will now need to pay out a little over $158,000. The company can either accept the ruling or appeal it, though it hasn’t said what its next move will be.
An Apple spokesperson declined to comment on the ruling.
In addition to Samsung, several industry giants, including Google, Facebook, and eBay, may be pleased by today’s ruling. In July, those companies, along with others in the industry, filed a brief with the Federal Circuit Court supporting Samsung’s fight with Apple. The companies argued that if Apple’s victories are allowed to stand, it could unleash a series of subsequent patent lawsuits utilizing the same intellectual property to target other device makers. Those lawsuits, the coalition said, would negatively affect the development of “useful modern technologies” and “have a devastating impact on companies.”
Samsung did not respond to a request for comment.
This article originally appeared on Fortune.com

This City Has the Most Billionaires - TIME

This City Has the Most Billionaires

Posted: 24 Feb 2016 06:21 AM PST

(BEIJING) — Move over, New York City: Beijing is the new “Billionaire Capital of the World.”
The Chinese capital has overtaken the Big Apple as home to the most billionaires — 100 to 95 — according to Hurun, a Shanghai firm that publishes a monthly magazine and releases yearly rankings and research about the world’s richest people and their spending habits.
The study, which comes months after reports suggested China now has more billionaires than the United States, highlights how China’s elite are continuing to accrue vast wealth despite a wobbling stock market and cooling economy.
Different tabulations of wealth, such as the Hurun Report and the Forbes list, have historically produced somewhat different results depending on their methodology.
Rupert Hoogewerf, the founder of Hurun, attributed China’s explosive wealth creation to Chinese market regulators allowing a flood of new initial public offerings after holding back new IPOs for several years.
Hoogewerf said his wealth calculations were made using stock prices as of Jan. 15, which means they took into account the Chinese market’s 40 percent tumble over the past half year.
Had the calculations been made at the market’s peak last summer, the number of Chinese billionaires would have been nearly 150, Hoogewerf said.
Beijing took the title from New York after minting 32 new billionaires last year, while New York gained four. Moscow came in third place, with 66 billionaires, while Hong Kong and Shanghai came in fourth and fifth with 64 and 50, respectively, Hurun said.
China’s richest man, real estate tycoon Wang Jianlin, came in 21st place globally behind Wal-Mart scions, the Swedish family that owns Ikea and Brazilian investor Jorge Paulo Lemann. Other Chinese billionaires in the global top 100 included Alibaba founder Jack Ma, beverage magnate Zong Qinghou, and the tech bosses at phone maker Xiaomi, social media firm Tencent and Baidu, the search engine.
Hoogewerf said China had a particularly high proportion of self-made billionaires compared to the United States.
“What we showed today is that at the super-wealth creation level, the Chinese are now leading,” Hoogewerf said. “People will look at China the same way that people looked at Stanford or Silicon Valley in the 1990s.”

Scientists Find Causes of Takata Air Bag Explosions - TIME business

Scientists Find Causes of Takata Air Bag Explosions Posted: 23 Feb 2016 06:41 PM PST (DETROIT) — Scientists hired by the auto industry have determined that multiple factors — including moisture and high humidity — can cause some Takata air bags to inflate with too much force and hurl shrapnel at drivers and passengers. The Independent Testing Coalition, which has been investigating the cause for the past year, announced its findings Tuesday. Air bags made by Japan’s Takata Corp. have caused at least 10 deaths and 139 injuries worldwide. The exact cause of the problem has eluded investigators for more than a decade, although more recent probes have focused on Takata’s use of a mixture of ammonium nitrate and other chemicals to create a small explosion and inflate the air bags in a crash. The rocket science company Orbital ATK, which was hired by the coalition, determined that three factors, working together, can cause the air bags to explode. Using an ammonium nitrate compound without a moisture-absorbing substance — as Takata does — increases the risk of an explosion after long-term exposure to high temperatures and moisture. Orbital ATK also found that Takata’s inflator assembly doesn’t adequately prevent moisture from intruding in very humid conditions. The coalition said its findings apply to around 23 million of the 28 million Takata air bag inflators that have been recalled by the U.S. government. All of those air bags use specially formulated ammonium nitrate without a drying agent. David Kelly, a former acting administrator of the National Highway Traffic Safety Administration and the coalition’s project manager, said that while humidity and ammonium nitrate have been discussed as factors, this is the first time scientists have determined all the factors that combine to cause the explosions. Kelly also said the design of the inflator is coming under more scrutiny than it has in the past. Kelly said determining exactly what was causing the explosions was a critical step. Now, he said, investigators will focus on the performance of all of the inflators that are being used as replacement parts in ongoing recalls of Takata air bags. He said owners whose vehicles have been recalled should continue to get their air bags replaced while the investigation continues. “If you don’t have the root cause, you’re just throwing stuff up on the wall,” he said. “You may never get to a situation where you can have an end game.” Takata has given multiple explanations for the problem, including quality control problems at manufacturing facilities and exposure of the air bags to high humidity. Frustrated by the numerous explanations and the slow pace of the investigation, 10 of Takata’s customers — Toyota, BMW, Fiat Chrysler, Ford, General Motors, Honda, Mazda, Mitsubishi, Nissan and Subaru — formed the Independent Testing Coalition and hired Orbital ATK in February of last year. Orbital makes rocket propulsion systems, small arms ammunition, warhead fuses and missile controls. Kelly said he’s not sure how long the next phase of the investigation will take. Scientists need to replicate the behavior of air bags over a period of several years, which will take time, he said. In a statement Tuesday, Takata said the coalition’s results are consistent with its own testing. Takata said age and long-term exposure to heat and high humidity appear to be significant factors in cases where inflators have malfunctioned. The company said it is cooperating with the coalition and the U.S. government. The faulty inflators are used in both driver and passenger-side air bags. Globally, about 50 million inflators are subject to recall. U.S. safety investigators have said that the number of recalls is certain to grow as more tests are done. Analysts say there could be 50 million or more Takata inflators in U.S. cars and trucks that haven’t been recalled yet. Takata must prove to U.S. regulators that the inflators are safe or all of them will be recalled starting in 2018.

Explainer: Hong Kong's 2016-17 Budget and What it Means for You - Hong Kong Magazine

What's in it for you in John Tsang's $38.8 billion relief package?

Xavier Ng

Feb 24, 2016

Financial secretary John Tsang Chun-wah delivered his ninth budget speech today to the Legislative Council. The government is offering a relief package of $38.8 billion: But what does that mean for the man on the Causeway Bay minibus?

Even less tax

One of the most eye-catching parts of the package is a 75 percent reduction in salary tax for 2015-16. Taxpayers will have up to $20,000 of their tax bill covered by it, and if there's extra then they'll get a check from the Inland Revenue Department. Nice.

More cash

There will be an increase in basic allowance from $120,000 to $132,000 and in married person’s allowance from $240,000 to $264,000, meaning you get to keep more of your cash before you're taxed on it. There are also increased allowances if you're maintaining a dependent parent or grandparent.

Flat-owners are still fine

Rates will be waived for four quarters of 2016-17, with a ceiling of $1,000 per quarter. Then again, if you own a flat in Hong Kong, $4,000 is probably chump change.

Business Owners Make Money

Just like personal income tax, profits tax for small and medium businesses in 2015-16 are coming down by 75 percent, again with a $20,000 cap. It's also a good time to start a business, as they're waiving registration fees. License fees are also being waived for travel agents, restaurateurs and hawkers for a six-month period.

Food Trucks

Despite initially announcing this last year, nothing really happened. But it's definitely happening this year, with 16 potential parking spots up for grabs. 

Old People Get a Break

Those who recieve Comprehensive Social Security Assistance welfare, disability allowance or old age allowances will get an extra month's worth free.

Of course, the critics are already out in force, bashing the package for a lack of relief measures for the poor, especially in terms of housing needs—including the cancellation of this year's one-month rent waiver for public housing residents.

Facebook’s Big Plan to Make Your Cellphone Faster - Fortune

Facebook’s Big Plan to Make Your Cellphone Faster Posted: 22 Feb 2016 06:30 AM PST Facebook has teamed up with Nokia, Intel, and several telcos to create an open source hardware and software platform for the telecommunication industry designed to make it easier and faster to build communications networks. The program is modeled after a similar effort the social network created five years ago for its data center. If successful, the project will help operators build networks using a more modular approach, but it will also change the economics of telco equipment providers such as Ericsson and Cisco . Facebook is proposing the Telco Infra Project, or TIP. The goal is to build open source hardware and software that will cover the three elements of a telecommunications network: The access, the backhaul and the core. Access is how a phone or a computer gets online in the first place and includes elements like the base stations and cell towers. The backhaul is how the signals from the devices get onto the Internet itself, and includes fiber access or even copper or microwave, depending on the situation. Once it gets to the Internet, those data packets have to get where they’re going and be counted appropriately on the cellular network for billing or application purposes (things like traditional text messages are still routed differently than WhatsApp messages). This happens in the core. That’s telecom 101, and, because it’s a system that has been built up over a century, it’s a mish-mash of complicated gear and proprietary software holding it all together. However, the Internet, and particularly the evolution of services that go over the top of carrier networks using data connections, have threatened the carrier’s business models. It’s hard to charge people 20 cents per text, for example, when Facebook Messenger or WhatsApp are “free” with a data plan. The proprietary, cumbersome, and expensive mess of gear is holding carriers back. It raises their costs, keeps them from innovating quickly and forces their executives to fear becoming a dumb pipe. Enter the cloud model The solution for carriers has been to turn to cloud providers for inspiration. The big question for the telecommunications carriers is whether they can turn fast enough—and whether their vendors will move with them. For example, this shift in underlying infrastructure is behind AT&T’s move to adopt software-defined infrastructure. That infrastructure will hopefully give Ma Bell more flexibility to deliver services without having to manually change out its gear, and also helps it simplify the overall network design. As part of AT&T’s plans to build this new type of network, it announced last week that its SDN efforts were 5.7% complete in 2015 and would be 30% complete by the end of 2016. It plans to roll out its next-generation wireless network using equipment from Ericsson and Intel. Facebook’s TIP has a similar goal to AT&T and is even working with Intel. Other partners include Deutsche Telekom, Nokia, SKTelecom and Globe Telecom. Facebook hopes to create a more simplified network architecture using modular components that combine hardware and software. This would replace the expensive, proprietary gear that underlies telecommunications networks today. Facebook calls the efforts open, but there will be licenses involved, simply because the telecommunications world is far more complicated than the world of building servers, where Facebook has experimented with open source hardware before. In April 2011, Facebook launched the Open Compute Foundation, an effort to build open source servers. At the time the goal was to help eliminate much of the unnecessary stuff that the server makers put on servers that Facebook felt added costs in terms of components and power draw. For a company like Facebook, which had tens of thousands of severs, $2 in extra components costs added up. A year ago, the company said investing in open source servers had saved it more than $2 billion. What was good for Facebook and other big buyers of server gear was less of a win for the makers of the boxes themselves. While Dell and HP were on board as Open Compute partners from the get go, it’s no secret that the margins of building bare bones servers for the most demanding buyers are slim. Dell has made a go of it, while HP has struggled. As Facebook tries to bring this model to the telecommunications world, which has seen its business hurt by consolidation as well as the recent move to more open systems, things are about to become brutal. So far, of the equipment vendors only Nokia is a member of TIP, leaving out the two largest telco equipment vendors Ericsson and Huawei. Ericsson did just join the Open Compute Foundation, the open source server project, which also counts Nokia as a member. Nokia has less to lose by becoming involved in any effort to build modular telecom gear. That was already a move that Alcatel-Lucent, the company that Nokia merged with, was veering toward. However, for other providers of gear, who tend to sell their equipment as a highly integrated system, modularity represents a threat. Being able to pick and choose from a variety of vendors creates competition for the various elements of the network, where it didn’t really exist before. Axel Clauberg, a VP of aggregation, transport, IP & fixed access at Deutsche Telekom AG, said via email he’s looking forward to the lowered costs and potential boost in efficiency. We believe that the exponential growth of Internet traffic requires new approaches, also on networking equipment like routers and switches. The Open Compute Project has proven that open specifications for hardware, combined with an active community, can have a drastic impact on efficiency and cost—TIP will trigger the same for all areas of the network. As for existing vendors, Clauberg says of including companies such as Cisco and Juniper (whose gear is also likely to be hard hit by this initiative), “We are expecting similar changes as they already happened within the data center. While this impacts existing players, it also creates large opportunities.” TIP in action So far Facebook working with Globe has created the first pilot network using the TIP gear in a small village in the Philippines, and Jason Taylor, VP of infrastructure at Facebook, estimates that more networks will be tested later this year. Carriers will likely reap the benefits of having this level of modular design first, although the savings may not be as drastic as what happened in the data center because of the level of complexity that telecommunications infrastructure requires. The equipment vendors that move quickly to reduce their costs and adapt to build products for the TIP will have an easier time than those who ignore it as a flash in the pan or something that won’t have much an impact. One question worth pondering is how far the TIP efforts will extend. When Facebook introduced the Open Compute Project, it was mostly adopted by the companies that operated giant data centers and those in the financial service industry. Server makers still could count on enterprise clientele to buy their fancier boxes at higher margins. But the telco equipment market has a much smaller group of buyers. So it’s not clear if there will eventually be a bifurcation of buyers who will adopt the Facebook’s Telco Infra Project while others steer clear. Even those who don’t play along are likely to adopt the principles of modularity and flexibility through software-defined architectures and buying gear from companies that support true interoperability. That’s why vendors like Cisco and others have been leery about the threat of open source switches, Open Flow, and other elements that have been forcing the network world to open up and embrace interoperability between vendors and their gear. With TIP, Facebook is basically creating a framework and consortium to ensure that interoperability happens without all of the FUD and games that typically happens in an industry that is long overdue for a change. The fact that Facebook has convinced Nokia and several carriers to get involved is a great first step and one that makes TIP worth watching. If I were Cisco, Ericsson, Huawei or Juniper, I’d be looking over my shoulder. This article originally appeared on Fortune.com

Hillary Clinton’s campaign will head to South Carolina this week, hopeful that the tide of the Democratic presidential race has turned decisively in her favour - The Independent

After holding back the surge of Bernie Sanders at the Nevada caucuses, Hillary Clinton’s campaign will head to South Carolina this week, hopeful that the tide of the Democratic presidential race has turned decisively in her favour.

The former Secretary of State ground out a five-point victory over the Vermont Senator in Nevada, a far slimmer margin than was predicted several weeks ago, but sufficient to give her the momentum as the race turns towards the southern states. 

An electoral bellwether for the West, Nevada has a diverse population that more closely resembles the broader US than the largely rural, predominantly white Iowa and New Hampshire, which precede it in the presidential primary season. Ms Clinton can now be hopeful of a convincing win in the South Carolina primary on Saturday.

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I can act as presidential as any other US leader - Trump

After a paper-thin win in Iowa and a crushing defeat to Mr Sanders in New Hampshire, the Clinton campaign had believed minority voters would provide a bulwark of support in the Silver State, where they had laboured to portray Ms Clinton as the candidate more committed to Latino voters’ issues. That strategy was partially successful at best, with an entrance poll suggesting Mr Sanders had in fact won 53 per cent of the Latino vote – a figure quickly disputed by Ms Clinton’s team.

The same poll, however, suggested Ms Clinton’s support among African-Americans remains staunch, accounting for three-quarters of Nevada’s black voters. That is seen as promising news ahead of Saturday’s primary in South Carolina, where she has a 20-point poll lead, and where the large black population has long been considered Clinton-friendly. The same is true of several southern states due to vote on Super Tuesday, 1 March, among them Texas, Georgia and Alabama.

In her victory speech in Las Vegas on Saturday, Ms Clinton reiterated her recent critique of Mr Sanders  as a single-issue candidate, focused only on new financial regulations for Wall Street. “The truth is, we aren’t a single-issue country,” she said. “We need more than a plan for the big banks.”

Yet the speech also demonstrated just how much Mr Sanders’ rhetoric has influenced his rival, drawing her further left on economic issues. “We all want to get secret unaccountable money out of politics,” Ms Clinton said. “That starts with appointing a new Justice to the Supreme Court who will protect the right of every citizen to vote, not every corporation to buy elections.”

In his concession statement, Mr Sanders pointed out how close he had come to overwhelming Ms Clinton in Nevada. “Five weeks ago we were 25 points behind and we ended up in a very close election,” he said. The impressive result was surely helped by his campaign spending: almost $35m (£24m) in January, $15m more than his opponent.

Leaving Nevada, Mr Sanders reassured his supporters that “the wind is at our backs”, but there was at least one troubling sign for his campaign’s longevity: his call for a “political revolution” relies on a record turnout, boosted by the young voters he has attracted to his cause. But a low 80,000 Nevadans participated in Saturday’s caucuses, more than 60 per cent of them aged 45 and over.

Retiring Rich Is Looking Less Likely for These Americans - TIME Business

Retiring Rich Is Looking Less Likely for These Americans Posted: 18 Feb 2016 07:30 AM PST For every age group under 65, the prospects for a financially sound retirement have diminished over the past 15 years, new research shows. Soaring student debt and falling access to employer-sponsored savings plans are two of the troubling trends putting a squeeze on younger groups’ financial security, according to a study from the Stanford Center on Longevity. The hardest hit age brackets have been millennials, in this case defined as those aged 25-34. The study said that group’s financial security dropped 8%, on average, since 2000. Security for those aged 35-54 fell 7% over the same period, and was down 4% for those aged 55-64. Only those age 65 or older have seen their financial security hold steady or rise modestly, on average, since 2000. Greater prevalence of traditional pensions in that group may help explain the stability. The study looked at nine aspects of financial health, clustered in three groups: cash flow determinants (income, debt, emergency savings), assets (investments, retirement accounts, homeownership), and insurance (health, disability, life). Researchers compared data for each age group in 2000 and again in 2014. They found security had fallen in every category other than health insurance—and credited the Affordable Care Act for this one bright spot. Overwhelming Debt Debt was a key factor undercutting financial security for young Americans, the researchers found. About a quarter of Americans under 35 have debts in excess of 30% of their household income — a share that’s risen 136% in two decades, the study found. Among college graduates aged 25-34, student debt has risen five-fold since 1995 to about $24,000. Many college graduates can handle the payments, and their degree puts them in a better position to earn more in the long term. But this debt forces them to delay savings and homeownership, in turn diminishing their long-term financial security. The study also found that in every group under age 65, more Americans are living near or below the poverty line than in 2000. And fewer Americans have an IRA or workplace savings plan. That last point is critical because 70% of folks who aren’t eligible for a workplace plan have no retirement plan of any kind. Even among those approaching retirement age and participating in a work-based plan, savings rates are slipping: Just 58% are contributing 10% of their pay, compared to 69% doing so in 2001. Crisis Ahead? Taken as a whole the study illustrates woeful retirement readiness, especially among the younger generation. And it emerges as Americans are giving scant attention to other retirement issues — including health and diet — even though they expect to live to 90 or longer. Remarkably, the vital issue of financial security is getting almost no airtime in the presidential debates. Democratic hopeful Bernie Sanders has said he wants to make college free, and a number of candidates have plans to help students with their debts — which, ultimately, will improve the financial security of younger generations. But there has been little discussion of Social Security, nor of how to get Americans to save more and secure enough lifetime income to sustain them through two or more decades after work. Evidently, that’s much tougher than rhetorical bombast and empty promises.

Apple’s misjudgment over San Bernardino - Financial Times

http://www.ft.com/cms/s/2/58dd0688-d63c-11e5-829b-8564e7528e54.html#ixzz40cDGt100

February 18, 2016 6:21 pm

Apple’s misjudgment over San Bernardino

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Cook should drop his objection to the FBI order on iPhone access

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E

ver since Edward Snowden revealed the extent of mass surveillance of private communications by the US and UK intelligence agencies, technology groups and governments have had an increasingly fractious relationship.

The American and British security services insist they must maintain the right to penetrate secure networks to combat the growing threat of jihadi terror. The US tech companies counter that they should be allowed to protect customer privacy. The FBI has now brought this stand-off to a head with a court order requiring Apple to help unblock an iPhone used by one of the perpetrators of the fatal San Bernardino shooting last December.

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Tim Cook, Apple’s chief executive, has decided to challenge the order, voicing his company’s strong objection to a “chilling” example of “over-reach by the US government”. After the Snowden revelations, Apple, like other tech companies, is entitled to scrutinise any such request carefully. But Mr Cook’s outright resistance in this particular case is a serious misjudgment.

The San Bernardino murders took place in Apple’s home state of California. Fourteen people died and 22 were injured. The perpetrators, Syed Rizwan Farook, and his wife, Tashfeen Malik, were later killed in a police shootout. The FBI is seeking access to the contents of Farook’s iPhone. Apple makes a commercial virtue of the fact it cannot itself reach the data on iPhones, but a court has ordered it to create software that would allow the FBI to circumvent certain security measures, using an identifier supplied by Apple specifically for Farook’s device. 

Mr Cook argues these measures would “undeniably create a backdoor” to every iPhone. If the FBI were seeking blanket access to private data on all iPhones that would be a legitimate concern. The FBI is doing no such thing. It wants to decrypt this particular handset. Any subsequent use of the software would require a separate court order, a vital safeguard.

Mr Cook’s message to customers implies a further concern that granting access to this iPhone will set a precedent for other governments to make similar demands. True, Apple would find it harder to resist orders to help authorities from less friendly jurisdictions; and it is possible to imagine prosecutors in, say, China or the Middle East demanding access to the devices of dissidents or troublemakers. Even so, it is equally possible to imagine situations, such as a murder investigation, where Apple could and should co-operate with any prosecuting authority.

Podcast

Apple versus the FBI

Apple has taken a stand against a US court order that it must help the FBI unblock an iPhone used by one of the San Bernardino shooters. Ravi Mattu discusses the FBI request and Apple’s response with Sam Jones, FT defence and security editor, and Tim Bradshaw, San Francisco correspondent. Music by David Sappa.

The FBI’s case is strong. Indeed, it could hardly be stronger. It has not mounted a vague fishing expedition. It wants to investigate an act of terrorism carried out by US citizens, on US citizens, on US soil. 

Mr Cook’s firm initial response to the court order has won support from other tech companies, such as Google and WhatsApp, and applause from privacy campaigners, including Mr Snowden himself. He tweeted that it was “the most important tech case in a decade”. But Apple’s chief executive has overplayed his hand. He should back down and, subject to specific safeguards, enable FBI access to this device.

There is a broader point. Mr Cook may say he is acting to protect the privacy of all iPhone users. But Apple and other US technology companies sometimes give the impression that they float above national jurisdictions, notably in tax and other regulatory matters. The San Bernardino case should concentrate minds. Apple, and others, need to realise that, however powerful they are, and however popular their products, they do not live in a moral universe of their own creation.