Tuesday, February 9, 2016

Facebook Just Got Dealt a Huge Setback in India - Fortune

Posted: 08 Feb 2016 06:48 AM PST
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Monica Lewinsky Launches Anti-Cyberbullying Emoji InitiativeNorth Korean Satellite Passed Over Super Bowl StadiumIndia’s telecommunications regulator has just banned the practice of zero rating, where operators charge different tariffs for different data services. That means mobile carriers can no longer charge for normal mobile data usage but exempt certain services from counting towards the data limit.
Crucially, Facebook’s Free Basics service, which gives people free access to a limited set of services through special partnerships with local mobile carriers, is now effectively dead in India. For the operators, the whole point of Free Basics is to get people used to the Internet, then encourage them to buy a data plan so they can see what people are linking to from the free services.
Free Basics was already the subject of intense controversy in India (and elsewhere), with Internet freedom activists pointing out that it is a violation of net neutrality. The service, once known as Internet.org, simply does not treat all content as equal.
Facebook last year partnered with local carrier Reliance to offer Free Basics in India, but the regulator, TRAI, temporarily suspended the deal in December. TRAI said it wanted time to consider whether Free Basics was in violation of net neutrality principles.
Now it’s made its decision. “No service provider shall offer or charge discriminatory tariffs for data services on the basis of content,” TRAI said Monday.
The only exceptions are for closed electronic communication networks, where the data doesn’t come from or go to the Internet, and for emergency-services data. If operators flout the new rule, they could find themselves paying up to 5 million rupees ($74,000) in fines.
Campaigners, such as those at Access Now, were delighted.
The move means India joins a very small group of countries that have decided to ban zero rating as a net neutrality violation. With many other countries across Asia, Africa and Latin America also being in Facebook’s sights, it will be interesting to see whether others choose to follow India’s lead.


The other countries that have so far decided to nix zero-rating include Chile, the Netherlands and Slovenia. However, that ban may soon lift in the latter two countries because the European Union just agreed a new set of harmonised net-neutrality rules for EU countries, and those rules do not mention zero rating.
It’s probably worth noting how the chairman of the French telecoms authority, ARCEP, greeted the Indian news:
Of course, not everyone sees zero rating as a bad thing. It essentially involves giving people free stuff, after all, and it may play a genuine role in getting people in poorer countries online for the first time. Facebook’s Free Basics package doesn’t only offer people Facebook services – it also tends to include things like local health and employment information and Wikipedia.
As Mark Zuckerberg complained last month: “Who could possibly be against this?”
However, it can certainly be an anticompetitive practice, as it helps certain services to entrench themselves while discouraging people from trying out their rivals. The debate over zero rating will rage on for a while yet – but in India, the jury is in.
This article originally appeared on Fortune.com

Monday, February 8, 2016

China Wants to Make Its Biggest Foreign Takeover Ever - Fortune

Posted: 03 Feb 2016 08:35 AM PST
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North Korea’s Plan to Launch Rocket Earns Global CondemnationJapan Is Spending $107 Million to Rebuild a Tiny Pacific IslandChina made its boldest overseas takeover move yet when state-owned ChemChina made a $43 billion bid for Swiss seeds and pesticides group Syngenta on Wednesday.
The largest ever foreign purchase by a Chinese firm, announced by both companies, will accelerate a shake-up in global agrochemicals and marks a setback for U.S. firm Monsanto, which failed to buy Syngenta last year.
China is looking for ways to secure security of food supply for its population and the Syngenta deal will give it access to technology and expertise as well as global market share and Western distribution networks.
“Only around 10% of Chinese farmland is efficient. This is more than just a company buying another. This is a government attempting to address a real problem,” a source close to the deal told Reuters.
With growth slowing at home, Chinese companies are looking abroad for deals that can boost their businesses. If completed, the Syngenta acquisition would be more than double CNOOC’s $17.7 billion purchase of Canadian energy company Nexen in 2012.
Syngenta shares rose on news of the deal, but at around 412 Swiss francs, were some way below the agreed offer price of $465 per share, equivalent to 480 francs, reflecting market concerns that the deal could yet stumble over regulatory hurdles.
However, Syngenta CEO John Ramsay , who described the deal as “very appropriate and attractive,” said he saw no major barriers and noted that ChemChina had secure financing in place.
A source with knowledge of the deal said the funding would come from a range of Chinese players, as well as HSBC and China CITIC Bank International.
“I think the overall regulatory approvals will not be very challenging,” Ramsay told Reuters, adding he expected antitrust regulators to acknowledge the limited overlap.
The Committee on Foreign Investment in the United States (CFIUS), whose mandate is U.S. national security, would not pose a major hurdle, Ramsay said.
Syngenta’s board would still have to consider any rival offers, Ramsay said. But ChemChina, short for China National Chemical Corp., has agreed to pay about $3 billion in fees should it fail to meet all requirements for the deal, while Syngenta will owe ChemChina about $1.5 billion if the deal falls through for any reasons the Swiss group is accountable for.
“The discussions between our two companies have been friendly, constructive and cooperative, and we are delighted that this collaboration has led to the agreement,” ChemChina Chairman Ren Jianxin said.
In a hint of what may be in store for the enlarged group, Syngenta’s chairman said ChemChina will be on the lookout for more deals as China strives to improve its food supply.
“ChemChina has a very ambitious vision of the industry in the future. Obviously it is very interested in securing food supply for 1.5 billion people and as a result knows that only technology can get them there,” Michel Demare said.
China Calling
ChemChina’s move on Syngenta may be the biggest, but it is not the first as Chinese corporates shift offshore.
Similar deals include last year’s buyout of Italian tire maker Pirelli by ChemChina. In January, ChemChina announced the acquisition of German industrial machinery maker KraussMaffei Group for about $1 billion.
Beijing is keen to boost farming productivity as it seeks to cut reliance on food imports amid limited farm land, a growing population and higher meat consumption.
A global glut of corn and soybeans has depressed grain prices for the past three years, prompting U.S. farmers to reduce spending on everything from equipment to seeds and pesticides. The cutbacks, along with pressure from investors and a desire to bolster profit, have sent many of the world’s largest agricultural companies scrambling to cut deals.
DuPont and Dow Chemical agreed in December to combine in an all-stock merger valued at $130 billion in a first step towards breaking up into three separate businesses, a move that was seen as a trigger for further consolidation.
This article originally appeared on Fortune.com

Saturday, February 6, 2016

Hillary Clinton is at her best when she's counted out, campaigning her heart out - Jill Abramson - The Guardian

There is a picture on the wall of the Espresso CafĂ© here in Portsmouth, New Hampshire, in a corner near the exit. Hillary Clinton is talking to voters, but it doesn’t show the famous “Hillary cried” moment from eight years ago, when the senator teared up on the eve of the presidential primary.
She was exhausted, and a loss to Barack Obama was predicted. Some pundits believed the unusual display of emotion was a turning point that helped show Clinton had a human side.
That was sexism. Why do powerful women need to show their softer side or shed tears to be considered fully human? 


The whole issue of Clinton’s likeability – now, on the verge of a potential defeat to Bernie Sanders, as then against Obama – rests on a long established, sexist double standard that many sociologists and business-school professors have studied: power and likeability have a negative corollary with powerful women. With men, that is not the case. If Clinton is judged too powerful and aggressive, she’s dinged for being unlikeable. If she’s too soft, she’s dismissed. Women, unlike men, are rarely perceived as warm and competent. This locks them in a classic double-bind. Certainly, I’ve seen it at points in my own career.
“Rand Paul may be coming Sunday,” one of the waitresses in the Portsmouth coffee shop told me the other day, hopefully. (I didn’t have the heart to tell her that he wasn’t coming because he had dropped out of the Republican field that morning.)
In her speeches and in debates with Sanders over the past week, Clinton vacillated between stressing her competence as a “progressive who gets things done” and talking more personally. Mostly, she got the equation right.
Chuck Campion, a Boston consultant who helped power Clinton’s come-back-from-the dead win in New Hampshire eight years ago, described her “amazing fortitude”. She campaigned “’til the last dog dies”, just as her husband famously said in 1992, when scandal almost led to loss in the Granite State. Turns out, Clintons are often at their best when they face defeat.
A wonderful part of the New Hampshire primary is that it is, in itself, personal. You can cover many campaign spots, some in small places, and see many candidates in a single day, by pure virtue that the state it is so small. It’s full of citizens who believe it’s their civic duty to see for themselves before the voting on Tuesday.
This is Hillary Clinton’s fourth New Hampshire primary, if you count Bill’s two. It might be her last, and it’s been poignant to see her up here, campaigning her heart out once again.
It was a bit nostalgic for me, too. My first New Hampshire primary reporting was in 1976. I was a college senior pining to be a real reporter. I remember going to the Sheraton Wayfarer hotel in Manchester after the votes were counted, gazing at the giants of political journalism at the time – the gonzo master Hunter S Thompson included. They were the famous boys on the bus. (Both Thompson and the author of that book, Timothy Crouse, worked for Rolling Stone.) I don’t remember seeing a woman anywhere, and I didn’t think I would ever get to sit on a barstool with the big boys. Still, it’s true, as Rolling Stone editor Jann Wenner recently emailed me: “Well, Jill, they is called ‘dem good ole days’. And the stakes weren’t as high and there was so much less media.”
On Wednesday, I went to two of Clinton’s get-out-the-vote rallies and watched her in a CNN candidate forum. Although she confessed it is hard for her, Clinton was more personal than I’ve seen her. In Manchester, she spoke of her mother’s hard life and resilience, which she obviously shares. “We may get knocked down, but we get back up,” Clinton said to cheers.
She talked about the people who come up to her after her appearances, who tell her their stories: about medicine that wasn’t affordable, about a son who died of a drug overdose, or the duress of caring for a family member with Alzheimer’s disease.
In Dover, she almost began to choke up when she said, “People share their hearts because they hope someone will respond.” At the CNN town hall, she gave her most thoughtful answer to a philosophical question posed by a rabbi in the audience. He asked her: “How do you cultivate the ego – the ego that we all know you must have, a person must have to be the leader of the free world – and also the humility to recognize that we know that you can’t be expected to be wise about all the things that the president has to be responsible for?”
“I think about this a lot,” Clinton answered. “Um, I feel very fortunate that I am a person of faith, that I was raised in my church and that I have had to deal and struggle with a lot of these issues about ambition and humility, about service and self-gratification – all of the human questions that all of us deal with. But when you put yourself out into the public arena, I think it’s incumbent upon you to be as self-conscious as possible.” She talked about her husband’s being more of a political natural than she is. She revealed that a minister, with whom she is close, emails her a piece of scripture every morning at 5am.
Then there was an addendum: “And the final thing I would say, because again, it’s not anything I’ve ever talked about this much publicly, everybody knows I – I have lived a very public life for the last 25 or so years. And so I’ve had to be in public dealing with some very difficult issues and personal issues – political, public issues. And I read a, um, a treatment of the prodigal son parable by the Jesuit Henri Nouwen, who I think is a magnificent writer of spiritual and theological concerns. And I – I read that parable and there was a line in it that became just a lifeline for me. And it basically is practice:
“The discipline of gratitude.”
It is odd that Hillary Clinton, one of the most familiar figures in American politics, has repeatedly felt the need to re-introduce herself in more personal terms. 
Although she’s been criticized for serving too much spinach, she delved into her platform, too, and no one is more impressive or knowledgeable on the issues. At each appearance I saw up-close-and-personal this week, she drew contrasts with Sanders on taxes, healthcare and guns. In Manchester, she was joined at a rally with former congresswoman Gabrielle Giffords, who was almost killed by a gunman in 2011.
By 8pm on Wednesday, she was still explaining the differences with her opponent over the Affordable Care Act; she was due at the televised CNN forum with Sanders an hour later. (Sanders would, she said, scrap Obamacare and start all over again with a pie-in-the-sky health reform plan that could never pass Congress.)
Clinton was once expected to trounce Sanders, but he has held a big lead in New Hampshire. So much for being the Anointed One. With the sudden rise of Marco Rubio on the Republican side, her campaign wasn’t getting as much attention as it did in 2008. Clinton’s nearly-down-but-not-out campaigning certainly didn’t feel like the high-wire act it was eight years ago.
Some of her advisers think an upset is still possible up here. Her campaign manager, Robby Mook, sought to lower expectations and said at a Thursday breakfast hosted by Bloomberg News that Clinton faced “significant head winds”. But, he added, “We are here – and we are all in.” Sanders’ huge following among young voters (he won 84% of them in Iowa) and surprisingly large campaign coffers will likely carry the Democratic nomination fight well into the spring. 
The Wayfarer hotel was torn down in March. These days, an anodyne bar and restaurant at the Radisson seems to be the press hangout in Manchester. The reporters are busy tweeting and doing TV interviews, rather than drinking and smoking, and plenty of them are female, from digital outfits that didn’t even exist back when “Hillary cried”. That was a long time ago now.

Thursday, February 4, 2016

Shell Reports a 44% Drop in Earnings Amid Oil Price Slump - Time Business

Posted: 04 Feb 2016 12:59 AM PST
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Oil Giant BP Reports 91% Plunge in 4th Quarter EarningsSolar Industry Gets a Victory in CaliforniaEthanol Is No Longer the Third Rail of the Iowa Caucus(LONDON) — Royal Dutch Shell said fourth-quarter earnings tumbled 44% as the collapse in oil prices took its toll on another European oil company.
Profit adjusted for changes in the value of inventories and one-time items dropped to $1.83 billion from $3.26 billion in the same period a year earlier, the Anglo-Dutch energy giant said Thursday.
The results came days after Shell sealed a 47-billion-pound takeover of BG Group Plc, which will increase the company’s proven reserves of oil and natural gas by 25%. While critics questioned the deal because of the plummeting price of oil, CEO Ben Van Beurden compared it to the bold moves that have defined the industry and promised it would rejuvenate Shell.
The BG deal comes as Shell and other oil companies are slashing jobs and postponing investments to adjust the bottom line to the dramatic circumstances.
Jobs will also be eliminated in the Shell-BG deal. In a trading statement unveiled just before shareholders voted on the BG merger, Shell said last month that streamlining and integration from the deal would include the loss of 10,000 staff and contractor positions across both companies in 2015-2016.
“In 2015, we significantly curtailed spending by reducing the number of new investment decisions and designing lower-cost development solutions,” Van Beurden said. “Shell will take further impactful decisions to manage through the oil price downturn, should conditions warrant that.”
Oil prices have been plunging. Brent crude, the benchmark for international oil, fell 34% last year and hit a 12-year low of $27.10 a barrel in January. It traded at $33.54 on Wednesday, having been above $100 a barrel as recently as September 2014.
The company cut capital investment by $8.4 billion to $28.9 billion and slashed operating costs by 4.1 billion to $41.1 billion for 2015. The company expects another $3 billion in cuts this year.
Net income improved, rising 58% $939 million
The report comes amid sweeping changes for the company. Shell has exited from exploring in Alaska for the foreseeable future and cancelled the Carmon Creek heavy oil project.
Oil supplies are high even though consumption growth has tailed off, particularly in China. OPEC members, meanwhile, haven’t wanted to cut production — even at a time Iran wants to turn on the taps after decades of sanctions.
Campaign groups like Greenpeace suggest that it’s time that the oil giants changed and relied on other forms of energy for their profits, citing more electric cars, solar panels, and better-insulated homes.
“Shell and BP have bet heavily on the wrong energy sources, and now they’re losing big,” Greenpeace UK’s senior climate adviser Charlie Kronick said. “The problem is that with thousands of jobs, billions in investments and people’s pensions tied up with their companies’ fortunes, Big Oil’s bosses won’t be the only ones to pay for their shortsightedness.”

Wednesday, February 3, 2016

Google Overtakes Apple as the World’s Most Valuable Public Company - Time Business


Posted: 01 Feb 2016 01:58 PM PST
Alphabet, the holding company formed by Google last fall, handily beat analysts’ expectations in its quarterly earnings report Monday. The results sent the company’s stock soaring in after-hours trading, helping it topple Apple as the most valuable publicly traded company in the world.
The Mountain View, Calif. firm generated $21.3 billion in revenue, beating Wall Street estimates of $20.8 billion. Earnings were $8.67 per share, beating estimates of $8.09 per share. The company attributed its strong revenue growth to search ads, YouTube and programmatic advertising.
For the first time, Alphabet released separate financial information for Google (which includes search, YouTube and Android) as well as a cadre of so-called moonshots that Alphabet has lumped together as “Other Bets.” These include things like smart thermostat company Nest and innovation incubator Google X.
The new data reveal just how dependent Alphabet is on search as its core business. Google generated almost $75 billion in revenue for the year 2015 and had an operating profit of $23 billion. Other Bets generated just $448 million during the same period and posted a loss of $3.6 billion.
Still, investors rallied behind Alphabet’s stock thanks to the strength of search. Shares were up more than 5% in after-hours trading Monday, giving Alphabet a market capitalization of more than $570 billion, according to CNBC. The market cap of Apple, which has held the crown of most-valuable company since 2013, was around $535 billion at market close.

Tuesday, February 2, 2016

China January factory activity falls at fastest pace since 2012 - official PMI - Reuter



China January factory activity falls at fastest pace since 2012 - official PMI

SHANGHAI 
China's manufacturing activity contracted at its fastest pace in almost three-and-a-half years in January, an official survey showed, suggesting the world's second largest economy is off to a weak start in 2016 and adding to the case for near-term stimulus.
The official Purchasing Managers' Index (PMI) stood at 49.4 in January, compared with the previous month's reading of 49.7 and below the 50-point mark that separates growth from contraction on a monthly basis. It is the weakest index reading since August 2012 and below the median 49.6 forecast from a Reuters poll of economists.
The PMI marks the sixth consecutive month of factory activity contraction, highlighting a manufacturing complex under severe pressure from falling prices and overcapacity in key sectors including steel and energy.
"The electricity production remained sluggish and the crude steel output continued the weak trend in January, reflecting an ongoing deleveraging process in the industrial sectors," said Zhou Hao, an economist at Commerzbank. 
"In the meantime, China has started an aggressive capacity reduction in many sectors, which could add downward pressure on the bulk commodity prices over time." 
The Markit/Caixin factory PMI also showed activity deteriorating, although at a slower pace than in December. The index was 48.4, higher than economists' median forecast of 48.0, and above the December figure of 48.2.
The Markit report focuses more on small- and medium-sized firms as opposed to larger state-owned firms in the official survey. 
Both the official and private factory surveys showed domestic and export demand remained weak and companies continued to shed staff.
China's plan to cut its steel production capacity by 100-150 million tonnes will lead to the loss of up to 400,000 jobs, the official Xinhua news agency reported last week.
"To maintain growth above 6.5 percent this year the economy will need more policy support," said Ding Shuang, head of Greater China Economic Research at Standard Chartered bank in Hong Kong.
"The fiscal deficit is almost certain to exceed three percent now, and there could be additional support from the policy banks. There is less room now for expansionary monetary policy although we expect the central bank to remain accommodative."
Recent statements from central bank officials suggest they are reluctant to implement further broad-based easing measures like cutting bank reserve ratios while pressure on the yuan from capital outflows remain strong.
Meanwhile, the official non-manufacturing Purchasing Managers' Index (PMI) fell to 53.5 from December's 54.4, showing a slight slowdown in services activity growth.
With manufacturing decelerating quickly, services have been a crucial source of growth and jobs for China over the past year, and analysts have been watching closely to see if the sector can maintain momentum in 2016.
Analysts note headline PMI data in January might be distorted as activity tends to slow in the weeks leading into the Lunar New Year break, which begins this year on Feb. 8.
China's economic growth cooled to 6.9 percent in 2015, the slowest pace in 25 years, adding pressure to policymakers who are already struggling to restore the confidence of investors after a renewed plunge in stock markets and the yuan currency.

(Reporting By Nathaniel Taplin; Editing by Pete Sweeney and Sam Holmes

Monday, February 1, 2016

The EU May Investigate Britain’s Tax Deal With Google


Posted: 28 Jan 2016 08:07 AM PST
(LONDON) — The European Union could investigate the 130 million-pound ($186 million) deal for back taxes struck between Britain and Google, after furious opposition lawmakers suggested the Internet company should have paid more.
EU competition commissioner Margrethe Vestager told the BBC on Thursday it was too soon to say whether a probe would be launched. She said the EU “will take a look” if appropriate concerns are brought to her attention.
“If we find there is something to be concerned about, if someone writes to us and says this is maybe not as it should be, then we will take a look,” Vestager said.
The Scottish National Party asked for such an investigation on Wednesday, with deputy party leader Stewart Hosie arguing that the public was skeptical about the settlement.
“Considering the lack of transparency in the settlement reached between HMRC (the U.K. tax and customs authority) and Google, and the growing concerns of an opaque methodology having been employed, it is my view that an independent verification of this settlement would establish confidence that the settlement is within the boundaries of state aid regulations and is a fair deal for the taxpayers of the United Kingdom,” he wrote.

Vestager’s spokesman, Ricardo Cardoso, said later that “we will look into it and then decide where to move from there.”
Writing in the Financial Times, Google’s vice president of communications, Peter Barron, insisted the company paid tax at the standard corporate rate of 20 percent.
“Governments make tax law, the tax authorities independently enforce the law, and Google complies with the law,” he wrote.
The anger of lawmakers has been stoked by reports that France and Italy were in talks to squeeze more out of the company.
In Italy, the financial police confirmed news reports Thursday that Google was under investigation for allegedly avoiding up to around 300 million euros ($326 million) in taxes. Italian daily La Repubblica reported that the investigation stems from Google activities in Italy from 2008-2013, when Google allegedly declared its fiscal headquarters in Ireland.
Italy has brought several cases against global technology companies that have headquarters in low-tax nations like Ireland to avoid paying higher taxes in other countries, like Italy. In December, Apple agreed to pay Italy 318 million euros in back taxes covering the same time period now contested against Google.
At the time of Apple’s settlement, Google said it was working with Italian tax authorities to determine what it might owe.
Google Inc. is based in Mountain View, California.

Sunday, January 31, 2016

The U.S. Economy Slowed Sharply in Final Months of 2015 - Time Business

Posted: 29 Jan 2016 06:53 AM PST
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(WASHINGTON) — The U.S. economy’s growth slowed sharply in the final three months of 2015 to a 0.7 percent annual rate. Consumers reduced spending, businesses cut back on investment and global problems trimmed exports.
The slowdown could renew doubts about the durability of the 6½-year-old economic expansion, though most economists expect growth to rebound in the current January-March quarter.
The government’s estimate Friday of the economy’s expansion in the October-December period was less than half the 2 percent annual growth rate in gross domestic product in the third quarter of 2015. It was the weakest showing since a severe winter reduced growth to a 0.6 percent annual rate in last year’s first quarter.
Much of the weakness last quarter reflected a slowdown in consumer spending, which grew at an annual rate of just 2.2 percent, compared with a 3 percent rate in the previous quarter. Spending on both durable goods, such as cars, and nondurable goods, such as clothing, slowed.
Consumer spending accounts for about two-thirds of economic activity, and analysts are counting on the strong employment growth to fuel a rebound in the current quarter. Some, however, worry that China’s economic troubles and sinking oil and stock prices could continue to dampen the U.S. expansion.
Friday’s estimate of fourth-quarter growth was the first of three that the government will issue.
Besides consumer spending, another source of weakness last quarter was a drop in exports. It reflected in part a stronger dollar, which has made U.S. goods pricier and therefore less competitive on overseas markets. Persistent weakness in such key export markets as China and Europe hurt, too. A wider U.S. trade deficit cut annual growth for the quarter by 0.5 percentage point.
Another drag came from cutbacks in business investment spending, which fell at a 1.8 percent annual rate, with spending on structures down 5.3 percent. That reflected a 38.7 percent plunge in spending in the oil and gas industry, which has slashed drilling and exploration in response to the plunge in oil prices.
In addition to their reduction in investment, businesses cut spending on stockpiles to try to pare unwanted inventories. That effort trimmed growth by 0.5 percentage point in the fourth quarter.
Home construction grew at a solid 8.1 percent annual rate. Government spending slowed to a growth rate of just 0.7 percent. Spending by the federal government grew by a 2.7 percent annual rate, while state and local governments cut back on spending at a rate of 0.6 percent.
For all of 2015, the economy grew 2.4 percent, matching the growth in 2014. Both years improved on a 1.5 percent increase in 2013. The 2015 growth continues the economy’s pattern of subpar growth since the Great Recession officially ended in June 2009.
For 2016, economists have forecast another year of modest growth of around 2 percent. At the same time, they have nudged up the likelihood of a recession this year. While still low, the likelihood is now put at around 20 percent, though most analysts still see an outright recession as unlikely.
This week, the Federal Reserve issued a cautious assessment of the economy. The Fed left interest rates unchanged after having raised its benchmark short-term rate in December from record lows. Many analysts think that economic weakness, subpar inflation and global pressures will cause the Fed to slow its pace of rate hikes this year from what had been expected to be four increases to perhaps only two.
Economists expect strength in the domestic economy this year to offset weakness in export sales and in the U.S. energy sector.
While economic growth was lackluster last year, hiring was not. The economy added an average of 284,000 jobs a month in the final quarter of last year. The unemployment rate ended the year at a low 5 percent.
Mark Zandi, chief economist at Moody’s Analytics, has said he expects strong job growth to keep lowering unemployment and to help boost wages, which have lagged in this recovery. He said the extra consumer spending, which will be aided by lower gas prices, will likely support economic growth of around 2.5 percent in 2015.
Growth at that level is above the economy’s potential right now, which many analysts put at around 2 percent, reflecting a slower pace of people entering the job market and slower productivity growth.

Saturday, January 30, 2016

These Companies Are Working on a Zika Vaccine - Fortune

Posted: 29 Jan 2016 07:59 AM PST
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The Zika virus has spread rapidly across the Americas, arriving in Brazil last May and creeping into 22 other countries and territories around the region. The virus’ spread has been accompanied by a steep increase in babies born with abnormally small heads and in cases of Guillain-Barre syndrome, an uncommon nervous system disease. This has raised the alarm among public health officials around the world—and launched the quest for a vaccine that could stop its spread.
The U.S. and international governments are pushing forward with programs for Zika vaccines, and at least three pharmaceutical companies are either considering or actively pursing programs, including giants GlaxoSmithKline, and Sanofi . But the company that appears to be the farthest along is a relatively small $500 million market cap biotech named Inovio Pharmacuetucals. Wall Street has shown interest in the company. Inovio’s stock was up about 8% today on news that it is entering clinical trials with its MERS vaccine, which could also hold promise for a future Zika vaccine.
Nonetheless, even Inovio is likely a ways off from developing a human Zika vaccine.
“It is important to understand that we will not have a widely available, safe, and effective Zika vaccine this year, and probably not even in the next few years,” Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases (NIAID), said in a press conference.
The advantage of Zika vaccine programs is that they can use similar mosquito-based diseases, part of a family called flaviviruses, like dengue, West Nile virus, and chikungunya as a “jumping off” point. While researchers are currently trying to learn more about the basics of the Zika virus and its effects on the human body given how new the disease is, they can already use past vaccine development platforms from other flaviviruses as a foundation since they spread in similar ways.
NIAID is already working on two approaches: a DNA-based vaccine, similar to a strategy used for West Nile virus, which has been found safe and effective in a phase one trial. It is also working on a more traditional killed virus-vaccine, similar to those already developed to prevent dengue.

Traditional killed-virus vaccines, also called live-attenuated vaccines, are what most of us are used to. They are grown in eggs using live viruses, and then made inactive by a chemical process, and are the basis for the vast majority of vaccines we take as children and annually to prevent the flu. They are time intensive to develop, typically requiring between 10 and 15 years before they are approved, according to GlaxoSmithKline.
DNA-based vaccines, on the other hand, can reduce that development time by creating a synthetic DNA sequence in a lab that can trigger the human body to create the same antigens as from a killed virus. This cuts development time since it doesn’t need to grow a live virus, which can have unpredictable development pathways.
Inovio Pharmaceuticals has also been working on a DNA-based vaccine for Zika since December. In that time, Inovio has created a DNA strand that can potentially prevent the virus, using its knowledge from its dengue virus program. It is now testing the vaccine in mice and plans to move into testing primates “in the next few weeks,” said Inovio CEO J. Joseph Kim. Once its safety is confirmed, the vaccine will move into phase one testing in humans—as soon as the end of 2016.
“The beauty of this technological platform is that the vaccine is simply a DNA sequence developed in water,” said Kim. “It cuts through all the difficult handling and complex development times of traditional vaccine approaches.”
Inovio has taken this same approach with an Ebola vaccine, going from “bench to clinic”—researcher terms, meaning from initial creation to human testing—in just over 18 months. That program attracted the interest of the U.S. Defense Advanced Research Projects Agency (DARPA), which gave the company $45 million to support the program’s ongoing development. The biotech is also working on a DNA-based vaccine for MERS, which has gone from its creation in a lab to a phase one trial at Walter Reed Army Institute of Research in just over a year.
Still, while animal applications of these preventatives have been approved in animals, DNA-based vaccines are one of the latest medical advancements, and one has yet to be approved for use in humans in the U.S. Even though Inovio has attracted fans on Wall Street, it still has a lot to prove.
This article originally appeared on Fortune.com

Friday, January 29, 2016

The One Economic Book You Must Read Now - Time Business

Posted: 28 Jan 2016 05:39 AM PST
One of the most disturbing things about our economic era is its juxtapositions. Wages are flat, yet corporations are flush. Interest rates remain at nearly unprecedented lows, yet investment lags. Growth is there – barely – yet it’s not coming from the places that we expected (the emerging markets) and is slower than expected in the U.S. and Europe, despite unthinkable money dumps by governments since the financial crisis. The economic gap between Main Street and the markets, which are increasingly volatile, is as big as it’s ever been.
If you want to understand this bifurcated world and where it’s headed, there is no better interpreter than Mohamed El-Erian. El-Erian is the former CEO of PIMCO, the world’s largest bond trading firm, and now the chief strategist for insurance giant Allianz. His new book, “The Only Game In Town: Central Banks, Instability and Avoiding the Next Collapse” (Random House), is an excellent primer on how we got here. It’s also a guide on what to expect as the world struggles to cope with slower, less equal growth and the resulting populism, nationalism and ugly partisan politics that we see in countries from the U.S. to France to China.
At the center of it all is an unglamorous institution: The central bank. Central banks are in charge of controlling the world’s money supply and how quickly and easily it can move between countries, companies and the pockets of consumers. In the wake of the 2008 financial crisis and Great Recession, they were forced, in large part thanks to political gridlock in many countries that made larger fiscal stimulus plans impossible, to pump unthinkable amounts of cash into the global system—around $22 trillion in total ($4 trillion from the U.S. Federal Reserve alone)—and slash interest rates to zero. It worked, in the sense that rather than a Great Depression, we got a “new normal” of slower growth. But hey, at least it was growth.
But that New Normal—a term that El-Erian himself coined while at PIMCO—is coming to an end. What replaces it will likely be a period of economic and political volatility. That, along with instability of the sort that we have only just begun to see, with roller coaster markets rising and falling on the latest jittery news from China or the oil markets, and formerly unimaginable politicians like Donald Trump or Marine Le Pen taking advantage of people’s fears that tomorrow will be worse than today.
How did we get here? In a phrase, too much finance — a topic near and dear to my heart, and the subject of my own upcoming book, “Makers and Takers: The Rise of Finance and the Fall of American Business” (Crown, May). In the 40 or so years leading up to the 2008 financial crisis, the economic policy makers and powers that be focused way too much on promoting and encouraging the financial sector – and the growth of credit – to the detriment of Main Street and society as a whole.
As El-Erian writes, “Even the common labeling of the industry itself changed—from “financial services” to just “finance.” Instead of seeing Wall Street for what it is and should be – a helpmate to business – it became the tail that wagged the dog. “Suddenly, the highest level of capitalistic achievement involved finance,” writes El-Erian.
There are many important and growth-hindering ramifications of this. But the one El-Erian focuses on most closely is the growing power of global central bankers over the last several decades. From Alan Greenspan onwards, they’ve lowered interest rates, eased and smoothed the business cycles, and lulled us all into thinking that markets should go in only one direction: Up. But it’s been a sugar high. Investment into the real economy has lagged. Now, the disconnect between markets and Main Street has become so disconcerting that, in El-Erian’s view, businesses are scared to invest and consumers are scared to spend. Nobody knows what the future will bring. So we are all, in some sense, turning Chinese – saving for not just a rainy day, but the prospect of another economic hurricane.
What can get us back on the right track? There are some positive developments. New technologies in the energy sector, the sharing economy, innovations in healthcare and biotech, as well as the industrial Internet all offer hope of a higher growth future. But harnessing their power will require political will. In order for prosperity to be shared, governments have to figure out a way to train a 21st century workforce, rebuild trust in global institutions, create legislative frameworks that spread wealth more equitability (think major tax reform, for example), and so on. As El-Erian admits, policymakers have shown almost no ability to do so over the last few years. That’s why his most likely new “New Normal” is an ongoing era of rocky markets and unpredictable growth.
Market geeks will appreciate the investment tips for navigating this world that he presents at the end of his book. But one of the most interesting and insightful bits of advice he offers to corporate leaders is to, in the words of Steve Jobs, “think different.” In a world in which old economic and political paradigms are no longer relevant, companies will need to overcome the decision biases that lead them to follow the same old path, again and again, to their demise, in a new economic era. Success in the New New Normal will come from unexpected places. That means corporations need much, much more diversity in their workforces – in terms of gender, nationality, educational and economic background and so on. El-Erian cites companies like Google, which have taken diversity hiring to a new level, focusing more on passion, intellect and character than the schools and workplaces on a rĂ©sumĂ©. If more firms follow, then the age of volatility will have at least one upside.

Thursday, January 28, 2016

China’s GDP Growth Could Be as Low as 4.3%, Top Economist Says - TIME

Posted: 27 Jan 2016 12:46 AM PST
Official data last week showing that China’s economy is growing at its slowest rate in a quarter of a century has investors worldwide concerned.
But one Chinese economist reckons the figures provided by the country’s National Statistics Bureau — which have long been treated with some suspicion — could be inflated by almost 3 percentage points, the Wall Street Journal reports. That would make the outlook even gloomier.
Xu Dianqing, an author of several books on China’s economy and economics professor at Beijing Normal University and the University of Western Ontario in Canada, has been sifting through data on the country’s manufacturing sector, which accounts for some 40.5% of the world’s second largest economy.
The sector officially grew by 6% during 2015, but Xu believes that number could be wrong “no matter how the number is counted,” the Wall Street Journal quoted him as saying. Monthly figures released by the government that include the output of thermal power stations and factories making railway freight, iron ore, plate glass and steel suggest that many industries contracted significantly, according to Xu.
Xu argues that China’s overall GDP growth — barring any other gaps in the official data — was in fact between 4.3% and 5.2% in 2015, compared with the official year-on-year growth rate of 6.9%.
After the release of the latest data, the National Statistics Bureau was quick to head off any suggestion that the the growth figures might be overoptimistic, with an official giving a “warning that the use of unofficial methods and incomplete data fail to give a complete picture.”
In a possibly unrelated — but still intriguing — twist, the head of the National Statistics Bureau, Wang Baoan, is now being investigated for a “severe disciplinary violation,” Chinese state media said Tuesday, using the Communist Party terminology normally used to refer to corruption probes.

Wednesday, January 27, 2016

Has Apple Peaked? - TIME

Posted: 26 Jan 2016 03:00 AM PST
When Apple reports its earnings on Tuesday, it’s virtually certain that the tech giant will report record quarterly profits. Apple almost always does.
The question is, are overall iPhone sales growing or shrinking? And if they’re on the rise, will the pace of that growth be enough to cheer Wall Street and stem the recent drop in Apple’s stock, which has tumbled nearly 5% this year and 25% from its all-time highs?
Despite the recent slump, Apple APPLE INC. AAPL -1.29% is still trading at around $100 per share, and investors have made the consumer electronics giant—with a total market value of $562 billion—the most valuable company on earth.
That doesn’t mean they quite believe in it, though.
For one thing, Apple now faces stiff competition for the title of world’s most valuable company. Thanks to Apple’s decline and the 40% gain in shares of Alphabet ALPHABET INC. GOOGL -1.59% since the start of 2015, Google’s parent company is closing in on Apple, with a total market value of $507 billion.
Moreover, the stock’s price is less than 11 times the earnings analysts expect for next year. That compares with a P/E ratio of 16 for the S&P 500, and 19 for rival Microsoft. In other words, the “E” in Apple’s P/E is so high that its total value must be similarly stratospheric, but investors are skeptical that Apple’s profits can grow quickly from here.
Apple does have enormous strength.
The iPhone, which represents two-thirds of the company’s revenues, grew sales 52% over the past year. Continuous upgrades give Apple a regular source of huge cash flow, plus it can still set a premium price “despite a deflationary environment for smartphone prices,” says Motley Fool Asset Management portfolio manager Dave Meier, who holds the stock.
 MoneyOn the other hand, smartphones are a maturing business, and it’s hard for new products to move the needle at a company of Apple’s size.
“There is no next big thing at Apple that will suddenly dwarf the iPhone,” concedes Michael Sansoterra, portfolio manager of RidgeWorth Large Cap Growth, another Apple owner. Sales of the iPad and digital music have been soft, and the Apple Watch wasn’t the massive hit Apple fans were hoping for. Retailers were offering steep discounts on the watches over the holidays.
What to do: The iPhone-driven corporate leap that brought Apple from about $30 a share six years ago to triple digits today won’t be repeated. But the stock could be compelling for investors seeking tech exposure with a bit less drama.
Apple’s comparatively modest P/E means it doesn’t have to keep shooting out the light to keep its share price rising. And its enormous cash stake — some $200 billion — means investors can expect to steadily get paid back in dividends and stock buybacks. It’s also a business you can get your arms around conceptually.
“It’s not like Microsoft, with lots of different businesses,” says Lamar Villere of Villere Balanced Fund. “It’s straightforward, high-cash, and high-profit margin, and yet it’s valued as though it’s going to be shrinking.”

Tuesday, January 26, 2016

Tesla CEO Elon Musk Says Cheap Oil Will Hurt Electric Cars - Fortune

Cheap oil—and in turn, lower gas prices—usually means costs savings for drivers, a lower U.S. trade deficit, and increased sales of gas-guzzling trucks and SUVs. But not everyone—or industry—is a winner.
Electric vehicle sales have already slowed as oil prices have dropped nearly a third in the past 12 months. The average price for regular has fallen from $2.74 per gallon in June to $1.85 a gallon as of Monday, according to the U.S. Energy Information Administration.
Elon Musk, the CEO of electric carmaker Tesla  TSLA -3.05% , expects the suffering to continue. The electric car industry, as a whole, will take a hit from lower oil prices, Musk told CNN’s Kristie Lu Stout in an interview Monday. “It just makes economic sense.”
But Musk argued that Tesla’s luxury, higher-priced electric vehicles will better withstand the effect of cheap oil prices than its lower-priced rivals. Musk didn’t elaborate, but the assumption is that consumers of his high-priced luxury cars—they start at $70,000 before incentives—aren’t buying them just for fuel savings.
Automakers that produce models that come in gas or electric will be hardest hit, Musk predicted. Under that scenario, consumers have no compelling economic reason to pick the electric vehicle over the gas-powered one.
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Major automakers such as Ford and General Motors  GM -0.17%  are adding more plug-in hybrid and all-electric cars to their portfolio. And while, electric vehicle sales may slow, it’s not exactly hurting their bottom line.
GM delivered a 8% more vehicles in 2015 than the year prior largely because of the high demand for SUVs, crossovers, and trucks. A similar story played out at Ford  F -1.32% .
“Overall low gas prices are good for our business” because pickups are a big part of Ford’s business, Ford CEO Mark Fields said during a Fortune Brainstorm Tech event in January. However, he did add an important caveat: Consumers know that gas prices will eventually rise, so Ford’s aim is to have the best fuel economy in every segment it’s in.
Unlike Tesla, which is a pure all-electric business, major automakers are investing in both fuel sources, some more heavily than others. GM, Ford, Volvo, and now Volkswagen have all made public commitments and investments in developing electric vehicles.
GM CEO Mary Barra unveiled the new Chevrolet Bolt EVat CES, the annual consumer electronics trade show held in Las Vegas in early January. By this time next year, the hatchback will be in full production and sitting in showrooms across the U.S. Audi introduced its first all-electric car, the A3 Sportback e-tron, to U.S. markets this year and has plans to produce an all-electric SUV by 2018.

Cheap oil has already forced the Obama Administration to reexamine its electric vehicle goals. U.S. Energy Secretary Ernest Moniz said Thursday that sales of electric vehicles in the United States may not top one million until 2020, in part due to low gas prices.
President Barack Obama set a goal in 2008—when gas prices hovered round $4 a gallon and he was still just a candidate—to have one million plug-in electric vehicles on the roads by 2015. He repeated that goal during his 2011 State of the Union address. But only 400,000 electric vehicles have been sold in the U.S. to date.