China's slowing growth not good for anybody, U.S. say(Reuters) - China's slowing growth is not good for anybody but it will not affect U.S. efforts to build business ties, U.S. Commerce Secretary Penny Pritzker said on Wednesday after Beijing announced its weakest quarter of growth in six years.
Pritzker, leading a trade mission to China with more than 20 U.S. companies, told reporters she believed the Chinese leadership saw opportunity in the "new normal" of slower gross domestic product expansion to invest in sustainable, long-term growth. Pritzker met Chinese officials in Beijing before traveling to Shanghai.
"The fact that China is not growing as fast as it would like, that's not good for anybody. But that has not changed our engagement with the Chinese, because we are in this for the long haul and our businesses are in this for the long haul," she told reporters.
"As China is adapting they have the opportunity to change the way they are doing business and we are hearing that from Chinese leadership."
China's GDP grew an annual 7.0 percent in the first quarter - its slowest pace since 2009 - slowing from 7.3 percent in the fourth quarter of 2014, China's statistics bureau said earlier. [ID:nL4N0XC35R]
The three-city trade mission, focused largely on green technology, comes amid trade frictions with China over issues including solar equipment and other high tech gear.
On Tuesday, the Wall Street Journal quoted unidentified sources as saying Premier Li Keqiang had urged Pritzker and other visiting U.S. officials to drop limits on high-tech exports or it would seek alternatives from Russia or other countries.
Pritzker defended a February decision by the Department of Commerce's Bureau of Industry and Security to bar exports of certain items to four Chinese entities she said were suspected of producing supercomputers for "nuclear explosive activities".
"The U.S. has a long-standing policy against allowing the export to most countries, including China, of items that are used for nuclear explosive activities. The entities that were put on that list, they can still apply for a license for those exports and they can appeal," Pritzker told reporters when asked about the report.
"But we have to protect our national security ... In looking at the items that have dual use, we make sure that they are not going to be used for purposes that could hurt our national security."s,
Wednesday, 15 April 2015
China growth slowest in six years, more stimulus expected soon
China growth slowest in six years, more stimulus ex(Reuters) - China grew at its slowest pace in six years at the start of 2015 and weakness in key sectors suggested the world's second-largest economy was still losing momentum, intensifying Beijing's struggle to find the right policy mix to shore up activity.
Measures to support the property sector and a series of cuts in interest rates and bank reserve requirements look to have delivered less support to the economy than hoped, apart from feeding a stock market surge, raising expectations of more stimulus soon.
Gross domestic product (GDP) grew an annual 7.0 percent in the first quarter, slowing from 7.3 percent in the fourth quarter of 2014, China's statistics bureau said. While matching the median forecast in a Reuters poll, some analysts said it seemed stronger than data on the components of growth suggested.
"Despite a headline growth rate in line with expectations, underlying economic activities appear to have softened further," Qu Hongbin, HSBC's co-head of Asian Economic Research, said in a note.
Video
RELATED VIDEO
Chinese economy shifts into lower gear
"We expect policy makers to deploy further monetary easing and other growth-supporting measures in the coming weeks."
Analysts calculated the GDP deflator had fallen 1.2 percent, a six-year low, indicating broad deflationary pressures.
Monthly retail sales, industrial output and fixed asset investment data released with the GDP figures all missed analyst expectations. Growth in fixed-asset investment (FAI), a key economic driver, was the slowest since 2000, while industrial output grew at its weakest since the global financial crisis in 2008.
Power output, which some analysts use as a proxy for economic activity, fell an annual 3.7 percent in March, the biggest fall since the 2008 crisis.
RELATED COVERAGE
› China's slowing growth not good for anybody, U.S. says
› Beijing boasts economic predictive power, markets more skeptical
› SLIDESHOW China growth slowest in six years, more stimulus expected soon
More bad news came from the real estate sector, a major economic pillar and where investment rose an annual 8.5 percent in the first quarter, the weakest rate since 2009.
"If you look at Q1, exports were poor, industrial production was poor, FAI was much slower, retail sales soft, so how can GDP in real terms still be 7 percent?" said Kevin Lai, senior economist at Daiwa in Hong Kong.
The National Bureau of Statistics did not release a breakdown of the GDP data, saying the final figures were not yet available.
WEAKEST SINCE GLOBAL CRISIS
It was China's weakest expansion since the first quarter of 2009, when the global financial crisis saw growth tumble to 6.6 percent. A massive stimulus package pulled China out of the slump, but saddled local governments with a mountain of debt.
Sheng Laiyun, the spokesman at the statistics bureau, sought to allay fears that the slowdown was getting out of hand.
"The risk of the Chinese economy having a 'double dip' or a 'hard landing' is very small," he told reporters, adding that China would meet its 2015 GDP growth target of around 7 percent.
The stock market .SSEC .CSI300, which has surged about 70 percent since Beijing began cutting rates in November, ceded early gains to be down 0.9 percent. Mainland investors have tended to see weak data as strengthening the case for easier policy and cash injections, some of which flow into shares.
And many analysts did see further easing as imminent, as Wednesday's data followed figures showing a fall in exports in March and slower-than-expected growth in money supply."We maintain our forecasts of one interest rate cut in the second quarter and two additional reserve requirement ratio cuts, with the risk of more," economists at Barclays said in a note.
DEFLATION RISKS
Chinese leaders, while emphasizing the need for slower but better-quality growth, have made clear they would not tolerate widespread job losses, a danger that is contained for now. A survey-based unemployment rate was flat at 5.1 percent, Sheng from the statistics agency said, unchanged from 2014.
Yet some analysts warned this could change if deflationary risks push firms to shed more jobs, and if Beijing carries out threats to allow more companies fighting overcapacity to fail.
"This is an economy in need of substantially easier financial conditions," Westpac economists said in a note.
"Lower benchmark lending rates, in addition to a more energetic quantitative effort from the People's Bank of China, should come into play without undue delay."pected soon,
Measures to support the property sector and a series of cuts in interest rates and bank reserve requirements look to have delivered less support to the economy than hoped, apart from feeding a stock market surge, raising expectations of more stimulus soon.
Gross domestic product (GDP) grew an annual 7.0 percent in the first quarter, slowing from 7.3 percent in the fourth quarter of 2014, China's statistics bureau said. While matching the median forecast in a Reuters poll, some analysts said it seemed stronger than data on the components of growth suggested.
"Despite a headline growth rate in line with expectations, underlying economic activities appear to have softened further," Qu Hongbin, HSBC's co-head of Asian Economic Research, said in a note.
Video
RELATED VIDEO
Chinese economy shifts into lower gear
"We expect policy makers to deploy further monetary easing and other growth-supporting measures in the coming weeks."
Analysts calculated the GDP deflator had fallen 1.2 percent, a six-year low, indicating broad deflationary pressures.
Monthly retail sales, industrial output and fixed asset investment data released with the GDP figures all missed analyst expectations. Growth in fixed-asset investment (FAI), a key economic driver, was the slowest since 2000, while industrial output grew at its weakest since the global financial crisis in 2008.
Power output, which some analysts use as a proxy for economic activity, fell an annual 3.7 percent in March, the biggest fall since the 2008 crisis.
RELATED COVERAGE
› China's slowing growth not good for anybody, U.S. says
› Beijing boasts economic predictive power, markets more skeptical
› SLIDESHOW China growth slowest in six years, more stimulus expected soon
More bad news came from the real estate sector, a major economic pillar and where investment rose an annual 8.5 percent in the first quarter, the weakest rate since 2009.
"If you look at Q1, exports were poor, industrial production was poor, FAI was much slower, retail sales soft, so how can GDP in real terms still be 7 percent?" said Kevin Lai, senior economist at Daiwa in Hong Kong.
The National Bureau of Statistics did not release a breakdown of the GDP data, saying the final figures were not yet available.
WEAKEST SINCE GLOBAL CRISIS
It was China's weakest expansion since the first quarter of 2009, when the global financial crisis saw growth tumble to 6.6 percent. A massive stimulus package pulled China out of the slump, but saddled local governments with a mountain of debt.
Sheng Laiyun, the spokesman at the statistics bureau, sought to allay fears that the slowdown was getting out of hand.
"The risk of the Chinese economy having a 'double dip' or a 'hard landing' is very small," he told reporters, adding that China would meet its 2015 GDP growth target of around 7 percent.
The stock market .SSEC .CSI300, which has surged about 70 percent since Beijing began cutting rates in November, ceded early gains to be down 0.9 percent. Mainland investors have tended to see weak data as strengthening the case for easier policy and cash injections, some of which flow into shares.
And many analysts did see further easing as imminent, as Wednesday's data followed figures showing a fall in exports in March and slower-than-expected growth in money supply."We maintain our forecasts of one interest rate cut in the second quarter and two additional reserve requirement ratio cuts, with the risk of more," economists at Barclays said in a note.
DEFLATION RISKS
Chinese leaders, while emphasizing the need for slower but better-quality growth, have made clear they would not tolerate widespread job losses, a danger that is contained for now. A survey-based unemployment rate was flat at 5.1 percent, Sheng from the statistics agency said, unchanged from 2014.
Yet some analysts warned this could change if deflationary risks push firms to shed more jobs, and if Beijing carries out threats to allow more companies fighting overcapacity to fail.
"This is an economy in need of substantially easier financial conditions," Westpac economists said in a note.
"Lower benchmark lending rates, in addition to a more energetic quantitative effort from the People's Bank of China, should come into play without undue delay."pected soon,
China calls on Dalai Lama to 'put aside illusions' about talks
China calls on Dalai Lama to 'put aside illusi(Reuters) - China on Wednesday urged the exiled Tibetan spiritual leader, the Dalai Lama, to "put aside his illusions" about talks on Tibet's future and accused him of insincerity and covertly pushing for independence, rather than autonomy.
China has ruled Tibet with an iron fist since troops "peacefully liberated" the region in 1950. The Dalai Lama fled into exile in India in 1959 after an abortive uprising against Chinese rule.
Representatives of the Nobel Peace laureate held rounds of talks with China until 2010, but formal dialogue has stalled amid leadership changes in Beijing and a crackdown in Tibet.
In a lengthy white paper released by the official Xinhua news agency, the government said that having failed to use violence to achieve their goals, the Dalai Lama and his supporters had little understanding of modern Tibet and "a sentimental attachment to the old theocratic feudal serfdom".
"The only sensible alternative is for the Dalai Lama and his supporters to accept that Tibet has been part of China since antiquity, to abandon their goals of dividing China and seeking independence for Tibet," it said.
"The central government hopes that the Dalai Lama will put aside his illusions in his remaining years and face up to reality," the government said in the white paper, released in both English and Chinese.
Beijing has been disappointed that the Dalai Lama remains committed to the Middle Way - which he says merely seeks genuine autonomy for the Himalayan region - and this is something China cannot accept as its real goal is still independence, it added.
"None of the negotiations were conducted in good faith - it was always the intention of the Dalai Lama and his supporters to divide China and achieve independence for Tibet," it added.
The Tibetan government in exile, based in India, said in an emailed statement that condemning the Middle Way showed Beijing's failure to come up with an alternative.
"The Middle Way Policy seeks genuine autonomy within the framework of the constitution of the People's Republic of China which is a win-win proposition for all parties and one lauded throughout the world including various governments," it said.
The Dalai Lama denies espousing violence and says he only wants genuine autonomy for Tibet, though China has repeatedly said he is insincere.
China has recently stepped up its rhetoric against the Dalai Lama. He is being received by fewer and fewer foreign leaders in recent years, because of the anger it draws from China, the world's second-largest economy.ons' about talks,
China has ruled Tibet with an iron fist since troops "peacefully liberated" the region in 1950. The Dalai Lama fled into exile in India in 1959 after an abortive uprising against Chinese rule.
Representatives of the Nobel Peace laureate held rounds of talks with China until 2010, but formal dialogue has stalled amid leadership changes in Beijing and a crackdown in Tibet.
In a lengthy white paper released by the official Xinhua news agency, the government said that having failed to use violence to achieve their goals, the Dalai Lama and his supporters had little understanding of modern Tibet and "a sentimental attachment to the old theocratic feudal serfdom".
"The only sensible alternative is for the Dalai Lama and his supporters to accept that Tibet has been part of China since antiquity, to abandon their goals of dividing China and seeking independence for Tibet," it said.
"The central government hopes that the Dalai Lama will put aside his illusions in his remaining years and face up to reality," the government said in the white paper, released in both English and Chinese.
Beijing has been disappointed that the Dalai Lama remains committed to the Middle Way - which he says merely seeks genuine autonomy for the Himalayan region - and this is something China cannot accept as its real goal is still independence, it added.
"None of the negotiations were conducted in good faith - it was always the intention of the Dalai Lama and his supporters to divide China and achieve independence for Tibet," it added.
The Tibetan government in exile, based in India, said in an emailed statement that condemning the Middle Way showed Beijing's failure to come up with an alternative.
"The Middle Way Policy seeks genuine autonomy within the framework of the constitution of the People's Republic of China which is a win-win proposition for all parties and one lauded throughout the world including various governments," it said.
The Dalai Lama denies espousing violence and says he only wants genuine autonomy for Tibet, though China has repeatedly said he is insincere.
China has recently stepped up its rhetoric against the Dalai Lama. He is being received by fewer and fewer foreign leaders in recent years, because of the anger it draws from China, the world's second-largest economy.ons' about talks,
Toyota ends expansion freeze with new plants in Mexico, China
Toyota ends expansion freeze with new plants in Mexico, China, (Reuters) - Toyota Motor Corp (7203.T) said on Wednesday it will build new factories in Mexico and China, ending a self-imposed expansion freeze and putting more pressure on its global rivals.
The world's largest automaker by sales volume said it would build a $1 billion plant with an annual production capacity of 200,000 cars in the central Mexican state of Guanajuato, increasing its overall North American production capacity by about the same number of vehicles.[ID:nL4N0XB17S][ID:nL2N0WZ2B0]
That plant, Toyota's first in Mexico, would have about 2,000 workers, the company said.
It also will be the first built from the ground up under the Toyota New Global Architecture strategy, the automaker's new approach to engineering and building vehicles, Jim Lentz, head of Toyota's North American operations, said in an interview on Wednesday. [ID:nL3N0WR1M5]
Toyota said investment for the Guanajuato plant would likely be about 40 percent less than comparable investments in 2008. The Guanajuato site will be a model for other factories globally, Lentz said.
Toyota plans to move production of its Corolla compact car to the new Mexican plant in 2019 from a factory in Cambridge, Ontario.
That Canadian plant will get a new product, Lentz said, as part of a realignment of Toyota's North American manufacturing that will concentrate production of low-margin, small cars in Mexico and at a Mississippi factory currently building the Corolla.
Toyota plants in Canada and the central United States will focus on larger, expensive cars and sport utilities. Pickup truck production will remain in Texas and Mexico, Lentz said.
In China, Toyota said it would spend about 52.5 billion yen ($440 million) to add a new facility and a third line at its factory in Guangzhou, owned jointly with Guangzhou Automobile Group Co Ltd (601238.SS). The line could start production in 2017 with capacity to make about 100,000 cars a year.
Wednesday's moves officially end Toyota President Akio Toyoda's three-year moratorium on capacity expansion, and increase pressure on the Japanese automaker's rivals, including Volkswagen AG (VOWG_p.DE) and Detroit automakers General Motors Co (GM.N) and Ford Motor Co (F.N).
Toyota's sales took a hit during the 2007-2009 recession and after a 2010 recall scandal. Toyota says it is now using about 90 percent of its total manufacturing capacity, versus about 70 percent in 2009.
With the new Mexican plant, Lentz said, "We've expanded as much as we need to at this point."
The world's largest automaker by sales volume said it would build a $1 billion plant with an annual production capacity of 200,000 cars in the central Mexican state of Guanajuato, increasing its overall North American production capacity by about the same number of vehicles.[ID:nL4N0XB17S][ID:nL2N0WZ2B0]
That plant, Toyota's first in Mexico, would have about 2,000 workers, the company said.
It also will be the first built from the ground up under the Toyota New Global Architecture strategy, the automaker's new approach to engineering and building vehicles, Jim Lentz, head of Toyota's North American operations, said in an interview on Wednesday. [ID:nL3N0WR1M5]
Toyota said investment for the Guanajuato plant would likely be about 40 percent less than comparable investments in 2008. The Guanajuato site will be a model for other factories globally, Lentz said.
Toyota plans to move production of its Corolla compact car to the new Mexican plant in 2019 from a factory in Cambridge, Ontario.
That Canadian plant will get a new product, Lentz said, as part of a realignment of Toyota's North American manufacturing that will concentrate production of low-margin, small cars in Mexico and at a Mississippi factory currently building the Corolla.
Toyota plants in Canada and the central United States will focus on larger, expensive cars and sport utilities. Pickup truck production will remain in Texas and Mexico, Lentz said.
In China, Toyota said it would spend about 52.5 billion yen ($440 million) to add a new facility and a third line at its factory in Guangzhou, owned jointly with Guangzhou Automobile Group Co Ltd (601238.SS). The line could start production in 2017 with capacity to make about 100,000 cars a year.
Wednesday's moves officially end Toyota President Akio Toyoda's three-year moratorium on capacity expansion, and increase pressure on the Japanese automaker's rivals, including Volkswagen AG (VOWG_p.DE) and Detroit automakers General Motors Co (GM.N) and Ford Motor Co (F.N).
Toyota's sales took a hit during the 2007-2009 recession and after a 2010 recall scandal. Toyota says it is now using about 90 percent of its total manufacturing capacity, versus about 70 percent in 2009.
With the new Mexican plant, Lentz said, "We've expanded as much as we need to at this point."
China reef work could lead to new air exclusion zone: U.S. commander
China reef work could lead to new air exclusio(Reuters) - China could eventually deploy radar and missile systems on outposts it is building in the South China Sea that could be used to enforce an exclusion zone over the disputed territory, the U.S. military commander for Asia said on Wednesday.
Admiral Samuel Locklear, speaking at a congressional hearing in Washington, described as "aggressive" the land reclamation and construction projects China has been conducting at eight military outposts in the South China Sea.
The work involved "fairly massive" reclamation in the Spratley archipelago and upgrades to facilities in the Paracel Islands, he said.
The building in the Spratleys included better berthing space for ships, as well as what was presumed to be an airfield on the Fiery Cross Reef, Locklear, head of the U.S. Pacific Command, said in testimony to the House Armed Services Committee.
It would allow China to deploy more patrol ships in the area and to base and resupply them, he said.
"It allows them to exert basically greater influence over what's now a contested area. Expanded land features down there also could eventually lead to the deployment of things such as long-range radars, military, and advanced missile systems," he said.
"And it might be a platform if they ever wanted to establish an air defense zone."
China drew condemnation from Japan and the United States when it imposed an Air Defense Identification Zone (ADIZ), in which aircraft are supposed to identify themselves to Chinese authorities, above the East China Sea in late 2013.
The United States responded by flying B-52 bombers through the zone in a show of force.
China has denied speculation that it plans to declare a new ADIZ in the South China Sea but its rapid reclamation work has alarmed other regional states with territorial claimants.
Last week, U.S. President Barack Obama accused China of using its "sheer size and muscle" to push around smaller nations after Beijing sketched out plans to use the Spratleys for military defense as well as to provide civilian services that would benefit other countries.
China claims most of the potentially energy rich South China Sea, through which $5 trillion in ship-borne trade passes every year. The Philippines, Vietnam, Malaysia, Brunei and Taiwan also have overlapping claims.
Western and Asian naval officials have expressed fears that China could also try to limit sea navigation once the reclaimed islands are fully established.n zone: U.S. commander,
Admiral Samuel Locklear, speaking at a congressional hearing in Washington, described as "aggressive" the land reclamation and construction projects China has been conducting at eight military outposts in the South China Sea.
The work involved "fairly massive" reclamation in the Spratley archipelago and upgrades to facilities in the Paracel Islands, he said.
The building in the Spratleys included better berthing space for ships, as well as what was presumed to be an airfield on the Fiery Cross Reef, Locklear, head of the U.S. Pacific Command, said in testimony to the House Armed Services Committee.
It would allow China to deploy more patrol ships in the area and to base and resupply them, he said.
"It allows them to exert basically greater influence over what's now a contested area. Expanded land features down there also could eventually lead to the deployment of things such as long-range radars, military, and advanced missile systems," he said.
"And it might be a platform if they ever wanted to establish an air defense zone."
China drew condemnation from Japan and the United States when it imposed an Air Defense Identification Zone (ADIZ), in which aircraft are supposed to identify themselves to Chinese authorities, above the East China Sea in late 2013.
The United States responded by flying B-52 bombers through the zone in a show of force.
China has denied speculation that it plans to declare a new ADIZ in the South China Sea but its rapid reclamation work has alarmed other regional states with territorial claimants.
Last week, U.S. President Barack Obama accused China of using its "sheer size and muscle" to push around smaller nations after Beijing sketched out plans to use the Spratleys for military defense as well as to provide civilian services that would benefit other countries.
China claims most of the potentially energy rich South China Sea, through which $5 trillion in ship-borne trade passes every year. The Philippines, Vietnam, Malaysia, Brunei and Taiwan also have overlapping claims.
Western and Asian naval officials have expressed fears that China could also try to limit sea navigation once the reclaimed islands are fully established.n zone: U.S. commander,
Google anti-trust foes see friend in new EU competition chief
Google anti-trust foes see friend in new EU competition chief, (Corrects spelling of Bruegel think tank and its expert Mario Mariniello in paragraph 24)
By Foo Yun Chee
(Reuters) - After waiting more than four years for Brussels to resolve his anti-trust complaint against Google while traffic to his website plunged by 80 percent, Michael Weber of German online mapping service Hot-Map.com held out little hope of success. Until now.
He says a meeting with the new competition chief of the European Commission has left him with newfound hope that Brussels will take action at last to curb behavior by the U.S. Internet giant, which he blames for hurting his business.
Danish politician Margrethe Vestager, who took over the EU competition portfolio in November, inherited an anti-trust complaint by more than a dozen companies against Google, left unresolved by her Spanish predecessor Joaquin Almunia.
Almunia launched an investigation in 2010 and initially concluded that Google may have hurt competitors by favoring its own products and services in search results and blocking advertisers from moving their campaigns to rival platforms.
Since then, Google has offered three settlement proposals to resolve the case. Most recently, just over a year ago, it offered to give competing products and services bigger visibility on its website, let content providers decide what material it can use for its own services and make it easier for advertisers to move their campaigns to rivals.
Almunia initially accepted that deal, only to reverse his decision six months later and demand more concessions, leaving the ultimate decision to his successor.
So far, Vestager has said nothing in public that would explicitly signal what course she is considering.
She has also indicated that she will not rush into a decision. Asked whether enforcement regulators should emphasize quick action in cases involving fast-moving technologies, Vestager told Reuters: "I don't think that speed should be the priority. We should be even handed and open minded in interpretation of the facts. Of course it is better to be fast than slow but it's even better to be just."
Nevertheless, executives from some of the companies that brought the complaint against Google say they are more optimistic now than they have been for years, and that they believe action is finally coming soon.
"With Almunia, there was no real dialogue. With Vestager, it is different. The questions she asked us show that she understands the complainants' problems," said Weber.
Another of the complainants, who spoke on condition of anonymity because a meeting with Vestager was confidential, said: "The first thing she said at the meeting was that she understands the harm we have suffered."
The European Commission declined to comment on the case.
Asked to discuss anti-trust issues, Google spokesman Al Verney declined to comment.
HIGH STAKES
The stakes are high for Google which faces a fine of as much as $6.6 billion if found guilty of anti-competitive behavior. Even more disruptive, it may have to modify its business practices.
Google's dominant positions in markets like online search, advertising and smartphone operating systems have drawn regulatory scrutiny in various jurisdictions around the globe.
Its longstanding position is that competition is "just a click away" - a phrase meant to indicate that users have easy access to use rival services - and that its products are popular because people find them useful.
Vestager, 46, was a free-trading economy minister in Denmark who jolted Danes with deep cuts to the social welfare system, earning a reputation as a firm negotiator before coming to Brussels.
She has spoken in general terms of the need to keep fast-changing industries open and contestable and said both large and small players should be able to compete on the merits of their products, comments that some of the Google complainants have interpreted as sympathetic towards their case.
They also note that she met some of the complainants before seeing Google's executive chairman Eric Schmidt and general counsel Kent Walker last month.
In one sign of movement in recent weeks, the European Commission has asked some of the Google opponents to allow regulators to declassify some of the confidential data they submitted to justify their accusations, a step that would be necessary to present the data to Google for its response.
Wilko van Weert, a partner at law firm McDermott Will & Emery and specialist in the field, said Vestager could push for a settlement that would require Google to provide more information about its search ranking formula.
"Coming from a Scandinavian culture where transparency is very important, I would not be surprised if she pushes for maximum transparency in the way Google organizes and manages its search results," he said.
Any ruling by Vestager might have to be able to survive a potential court challenge from Google, which could be tougher to withstand because of Almunia's previous reversals.
Vestager may initially want to play hard ball, but that does not mean she will close the door to a settlement, said Mario Mariniello, a former economist at the Commission's competition unit and now an expert at think tank Bruegel.
“If at a certain point in the process effective remedies addressing her objections would be offered by Google, I guess it would be hard for her to say no,” he said.
By Foo Yun Chee
(Reuters) - After waiting more than four years for Brussels to resolve his anti-trust complaint against Google while traffic to his website plunged by 80 percent, Michael Weber of German online mapping service Hot-Map.com held out little hope of success. Until now.
He says a meeting with the new competition chief of the European Commission has left him with newfound hope that Brussels will take action at last to curb behavior by the U.S. Internet giant, which he blames for hurting his business.
Danish politician Margrethe Vestager, who took over the EU competition portfolio in November, inherited an anti-trust complaint by more than a dozen companies against Google, left unresolved by her Spanish predecessor Joaquin Almunia.
Almunia launched an investigation in 2010 and initially concluded that Google may have hurt competitors by favoring its own products and services in search results and blocking advertisers from moving their campaigns to rival platforms.
Since then, Google has offered three settlement proposals to resolve the case. Most recently, just over a year ago, it offered to give competing products and services bigger visibility on its website, let content providers decide what material it can use for its own services and make it easier for advertisers to move their campaigns to rivals.
Almunia initially accepted that deal, only to reverse his decision six months later and demand more concessions, leaving the ultimate decision to his successor.
So far, Vestager has said nothing in public that would explicitly signal what course she is considering.
She has also indicated that she will not rush into a decision. Asked whether enforcement regulators should emphasize quick action in cases involving fast-moving technologies, Vestager told Reuters: "I don't think that speed should be the priority. We should be even handed and open minded in interpretation of the facts. Of course it is better to be fast than slow but it's even better to be just."
Nevertheless, executives from some of the companies that brought the complaint against Google say they are more optimistic now than they have been for years, and that they believe action is finally coming soon.
"With Almunia, there was no real dialogue. With Vestager, it is different. The questions she asked us show that she understands the complainants' problems," said Weber.
Another of the complainants, who spoke on condition of anonymity because a meeting with Vestager was confidential, said: "The first thing she said at the meeting was that she understands the harm we have suffered."
The European Commission declined to comment on the case.
Asked to discuss anti-trust issues, Google spokesman Al Verney declined to comment.
HIGH STAKES
The stakes are high for Google which faces a fine of as much as $6.6 billion if found guilty of anti-competitive behavior. Even more disruptive, it may have to modify its business practices.
Google's dominant positions in markets like online search, advertising and smartphone operating systems have drawn regulatory scrutiny in various jurisdictions around the globe.
Its longstanding position is that competition is "just a click away" - a phrase meant to indicate that users have easy access to use rival services - and that its products are popular because people find them useful.
Vestager, 46, was a free-trading economy minister in Denmark who jolted Danes with deep cuts to the social welfare system, earning a reputation as a firm negotiator before coming to Brussels.
She has spoken in general terms of the need to keep fast-changing industries open and contestable and said both large and small players should be able to compete on the merits of their products, comments that some of the Google complainants have interpreted as sympathetic towards their case.
They also note that she met some of the complainants before seeing Google's executive chairman Eric Schmidt and general counsel Kent Walker last month.
In one sign of movement in recent weeks, the European Commission has asked some of the Google opponents to allow regulators to declassify some of the confidential data they submitted to justify their accusations, a step that would be necessary to present the data to Google for its response.
Wilko van Weert, a partner at law firm McDermott Will & Emery and specialist in the field, said Vestager could push for a settlement that would require Google to provide more information about its search ranking formula.
"Coming from a Scandinavian culture where transparency is very important, I would not be surprised if she pushes for maximum transparency in the way Google organizes and manages its search results," he said.
Any ruling by Vestager might have to be able to survive a potential court challenge from Google, which could be tougher to withstand because of Almunia's previous reversals.
Vestager may initially want to play hard ball, but that does not mean she will close the door to a settlement, said Mario Mariniello, a former economist at the Commission's competition unit and now an expert at think tank Bruegel.
“If at a certain point in the process effective remedies addressing her objections would be offered by Google, I guess it would be hard for her to say no,” he said.
Lovely airport, where are the planes? China's white elephants emerge
Lovely airport, where are the plan(Reuters) - When officials reopened the airport on the sparsely populated Dachangshan island off China's north-east coast after a $6 million refurbishment in 2008, they planned to welcome 42,000 passengers in 2010 and another 78,000 in 2015.
However, fewer than 4,000 passengers – or just a 10 a day - passed through its gates in 2013, data from China's civil aviation authority showed.
Since February last year, China has approved at least 1.8 trillion yuan ($290 billion) in new infrastructure projects to counter a slowing economy. The approvals come just as the full costs of the underused airports, expressways and stadiums built during the last spending binge are beginning to emerge.
While construction firms profited from the boom, it saddled China's provincial governments with $3 trillion worth of debt, with the most over-exuberant seeing their local economies weaken and become imbalanced towards the building sector.
The economy in Liaoning province, which includes Dachangshan island, was one of the slowest growing in China in 2014 - GDP expanded 5.8 percent, far undershooting its 9 percent target.
"There needs to be serious discussions over the economic rationality of large-scale engineering projects. Do we really need this many high-speed lines and airports?" said Lu Dadao, an academic at the Chinese Academy of Sciences.
A government official and economist estimated in November that China has wasted an approximate 42 trillion yuan on "ineffective investment" in the five years from 2009, with the problem worsening in the last two years.
AN AIRPORT, NO FLIGHTS
Despite its modern airport, finding a flight to Dachangshan island is not easy. Staff at Zhoushuizi International Airport in the port city of Dalian, the destination of the sole published route, said flights to the Changhai airport on Dachangshan have not operated for the last six months.
On a recent Wednesday morning, the airport's ticket counter was deserted apart from a female airport official. Still, its speckled grey marble floors were scrubbed shiny by a cleaning attendant, while the toilets were spotless.
"Call in two to three days to check if there's a flight," the official told Reuters. "The plane's under maintenance." A male colleague sat next to the baggage screening machine, head bent towards his knees, seemingly falling asleep.
Outside, there is little sign the small airport has had much impact on the island of about 30,000 inhabitants. Instead of shops or eateries, fishermen's homes surround the airport. Ferries are the preferred mode of transport to Dalian, locals said.
Undeterred, the Dalian government plans to spend 1.48 billion yuan ($238.9 million) this year to expand the airport to accommodate 250,000 by 2020, as part of its latest drive to spur the economy and to turn the fishing outpost into a holiday destination, according to local media reports.
Wu Hong, an official from Dalian Changhai County's publicity department, said the airport expansion was meant to keep up with the island's development, adding that it received 1.1 million tourists last year.
"In gross domestic product terms, none of this is bad. It generates growth, one way or another," said J Capital Research analyst Susannah Kroeber, who has been tracking China's infrastructure build-out since 2012.
"But is it useful and an efficient use of your resources? Absolutely not."
LARGEST, HIGHEST, LONGEST
Many of China's local governments set up corporations to obtain loans for massive infrastructure and real estate projects, skirting rules preventing direct borrowing while amassing a debt pile now seen as a key risk to the economy.
The results include the world's longest ocean-crossing bridge near the city of Qingdao and the highest railway track, which connects Qinghai province to Tibet. New districts built to house thousands have also been built, with some, such as Ordos in Inner Mongolia and Yujiapu in Tianjin, turning into ghost cities as China's residential property market slows.
While little official information is available on user numbers, China's expressways bled $10 billion in 2013 on toll revenue shortfalls. China Railway, which oversees the expansion of the world's longest railway network, is now 3.4 trillion yuan in debt, it said in September.
Still, there are concerns that it will be difficult to wean authorities off the addiction to over-building, particularly as signs emerge of fast-accelerating construction activity in China's inland western regions, where almost 40 percent of approved airport, railway and road projects are located.
Cement production is growing at its fastest rate in places such as Guizhou and Yunnan, two of China's poorest provinces that are in the southwest of the country, according to government data.
In northern China, where local governments are now dealing with overcapacity of steel and cement after their building booms, "you get a window into what happens after you build out pretty much all that you can possibly build," J Capital Research's Kroeber said.
"The early development of those trends...we think are starting to play out in other parts of the country now." es? China's white elephants emerge,
However, fewer than 4,000 passengers – or just a 10 a day - passed through its gates in 2013, data from China's civil aviation authority showed.
Since February last year, China has approved at least 1.8 trillion yuan ($290 billion) in new infrastructure projects to counter a slowing economy. The approvals come just as the full costs of the underused airports, expressways and stadiums built during the last spending binge are beginning to emerge.
While construction firms profited from the boom, it saddled China's provincial governments with $3 trillion worth of debt, with the most over-exuberant seeing their local economies weaken and become imbalanced towards the building sector.
The economy in Liaoning province, which includes Dachangshan island, was one of the slowest growing in China in 2014 - GDP expanded 5.8 percent, far undershooting its 9 percent target.
"There needs to be serious discussions over the economic rationality of large-scale engineering projects. Do we really need this many high-speed lines and airports?" said Lu Dadao, an academic at the Chinese Academy of Sciences.
A government official and economist estimated in November that China has wasted an approximate 42 trillion yuan on "ineffective investment" in the five years from 2009, with the problem worsening in the last two years.
AN AIRPORT, NO FLIGHTS
Despite its modern airport, finding a flight to Dachangshan island is not easy. Staff at Zhoushuizi International Airport in the port city of Dalian, the destination of the sole published route, said flights to the Changhai airport on Dachangshan have not operated for the last six months.
On a recent Wednesday morning, the airport's ticket counter was deserted apart from a female airport official. Still, its speckled grey marble floors were scrubbed shiny by a cleaning attendant, while the toilets were spotless.
"Call in two to three days to check if there's a flight," the official told Reuters. "The plane's under maintenance." A male colleague sat next to the baggage screening machine, head bent towards his knees, seemingly falling asleep.
Outside, there is little sign the small airport has had much impact on the island of about 30,000 inhabitants. Instead of shops or eateries, fishermen's homes surround the airport. Ferries are the preferred mode of transport to Dalian, locals said.
Undeterred, the Dalian government plans to spend 1.48 billion yuan ($238.9 million) this year to expand the airport to accommodate 250,000 by 2020, as part of its latest drive to spur the economy and to turn the fishing outpost into a holiday destination, according to local media reports.
Wu Hong, an official from Dalian Changhai County's publicity department, said the airport expansion was meant to keep up with the island's development, adding that it received 1.1 million tourists last year.
"In gross domestic product terms, none of this is bad. It generates growth, one way or another," said J Capital Research analyst Susannah Kroeber, who has been tracking China's infrastructure build-out since 2012.
"But is it useful and an efficient use of your resources? Absolutely not."
LARGEST, HIGHEST, LONGEST
Many of China's local governments set up corporations to obtain loans for massive infrastructure and real estate projects, skirting rules preventing direct borrowing while amassing a debt pile now seen as a key risk to the economy.
The results include the world's longest ocean-crossing bridge near the city of Qingdao and the highest railway track, which connects Qinghai province to Tibet. New districts built to house thousands have also been built, with some, such as Ordos in Inner Mongolia and Yujiapu in Tianjin, turning into ghost cities as China's residential property market slows.
While little official information is available on user numbers, China's expressways bled $10 billion in 2013 on toll revenue shortfalls. China Railway, which oversees the expansion of the world's longest railway network, is now 3.4 trillion yuan in debt, it said in September.
Still, there are concerns that it will be difficult to wean authorities off the addiction to over-building, particularly as signs emerge of fast-accelerating construction activity in China's inland western regions, where almost 40 percent of approved airport, railway and road projects are located.
Cement production is growing at its fastest rate in places such as Guizhou and Yunnan, two of China's poorest provinces that are in the southwest of the country, according to government data.
In northern China, where local governments are now dealing with overcapacity of steel and cement after their building booms, "you get a window into what happens after you build out pretty much all that you can possibly build," J Capital Research's Kroeber said.
"The early development of those trends...we think are starting to play out in other parts of the country now." es? China's white elephants emerge,
Stock buyback zeal undimmed by prospects for Fed rate hike
Stock buyback zeal undimmed by p(Reuters) - The seemingly insatiable appetite of companies for their own stock is unlikely to be satisfied soon, even if the U.S. Federal Reserve begins to hike benchmark interest rates and shares get pricier.
That would extend a pattern established in the last round of Fed tightening, according to a Reuters analysis of historical data. Many market analysts expect that higher borrowing costs won't derail the buyback boom that has been bolstering stocks.
Buybacks may lift earnings per share of companies in the Standard & Poor's 500 index by between 1.5 and 2 percentage points this year, according to estimates from Voya Investment Management in New York. With earnings estimates now calling for 1.5 percent growth for all of 2015, buybacks could make the difference between positive and negative growth in S&P 500 EPS.
Companies have ramped up stock repurchases since the practice bottomed for this cycle in 2009. Buybacks reduce the number of stocks in circulation, thereby boosting prices and calculated earnings per share.
General Electric Co. said today it plans to buy back as much as $50 billion of its stock, the second largest ever after Apple's $90 billion plan. GE shares rose about 9 percent to its highest since the financial crisis in afternoon trading on the New York Stock Exchange.
In 2014, while the S&P 500 rose to record highs, component companies spent $553 billion on share repurchases, according to S&P Dow Jones Indices data - a 16.3 percent increase from the previous year and four times as much as they did in 2009.
The buyback spree has accelerated this year. Pending and completed buybacks at all U.S.-based traded companies in the first quarter rose to $179.7 billion compared with $124.2 billion in the first quarter of 2014, up almost 45 percent, Thomson Reuters data show.
"Corporate management wants to do this trade," said Paul Zemsky, chief investment officer, Multi-Asset Strategies and Solutions at Voya Investment Management. "It's being rewarded by the market, and it's cheap to do."
The S&P 500 buyback index .SPBUYUP, which includes the top 100 stocks with the highest buyback ratios in the benchmark, has outperformed the S&P 500 .SPX for seven years in a row.
With low expectations for first quarter earnings just starting to come in now, buybacks are an effective and inexpensive way for companies to bolster their numbers, Zemsky said.
As the Fed begins to raise short-term rates - something now not expected until September- companies that borrow money to buy their own shares will likely have to pay more. Still, even several rounds of rate hikes may still leave borrowing to buy back shares a profitable strategy.
In aggregate, S&P 500 companies would earn back almost 6 percent of their investment in repurchases in the following 12 months, as calculated by the earnings yield. On the other hand, companies in good credit standing can now borrow money for 2.9 percent on average. Given those rates, it may be cost-efficient to issue debt to buy their own shares for some time to come.
Companies intensified both bond issuance and buyback activity as rates rose during the tightening cycle that started in 2004. Back then, as the effective federal funds rate rose from about 1 percent in the first half of 2004 to an average of 3.21 percent in 2005, 4.97 percent in 2006 and 5.26 percent in the first half of in 2007, S&P 500 buybacks rose from $197.5 billion in 2004, to $349.2 billion in 2005, $431.8 billion in 2006 and $589.1 billion in 2007.
Today, the fed funds effective rate stands at 0.12 percent and Fed policymakers estimate it will be about 0.625 percent at the end of 2015, down from 1.125 percent in the previous forecast.
A small initial increase in the cost of funding "probably isn't going to matter that much to a lot of businesses, especially if they are going to do it for share buybacks," said Brian Jacobsen, chief portfolio strategist at Wells Fargo Funds Management in Menomonee Falls, Wisconsin. "But it could signal to companies that they better start acting now."
Companies do seem to be stepping ahead of the Fed, with investment grade corporate bond issuance up 87 percent in the first three months of this year to $345.6 billion, compared with $185 billion in the first quarter of 2014, according to data from the Securities Industry and Financial Markets Association.
"It could play out that companies could continue to make buybacks throughout a good chunk of the tightening cycle," said Brian Reynolds, chief market strategist at Rosenblatt Securities in New York.rospects for Fed rate hike,
That would extend a pattern established in the last round of Fed tightening, according to a Reuters analysis of historical data. Many market analysts expect that higher borrowing costs won't derail the buyback boom that has been bolstering stocks.
Buybacks may lift earnings per share of companies in the Standard & Poor's 500 index by between 1.5 and 2 percentage points this year, according to estimates from Voya Investment Management in New York. With earnings estimates now calling for 1.5 percent growth for all of 2015, buybacks could make the difference between positive and negative growth in S&P 500 EPS.
Companies have ramped up stock repurchases since the practice bottomed for this cycle in 2009. Buybacks reduce the number of stocks in circulation, thereby boosting prices and calculated earnings per share.
General Electric Co. said today it plans to buy back as much as $50 billion of its stock, the second largest ever after Apple's $90 billion plan. GE shares rose about 9 percent to its highest since the financial crisis in afternoon trading on the New York Stock Exchange.
In 2014, while the S&P 500 rose to record highs, component companies spent $553 billion on share repurchases, according to S&P Dow Jones Indices data - a 16.3 percent increase from the previous year and four times as much as they did in 2009.
The buyback spree has accelerated this year. Pending and completed buybacks at all U.S.-based traded companies in the first quarter rose to $179.7 billion compared with $124.2 billion in the first quarter of 2014, up almost 45 percent, Thomson Reuters data show.
"Corporate management wants to do this trade," said Paul Zemsky, chief investment officer, Multi-Asset Strategies and Solutions at Voya Investment Management. "It's being rewarded by the market, and it's cheap to do."
The S&P 500 buyback index .SPBUYUP, which includes the top 100 stocks with the highest buyback ratios in the benchmark, has outperformed the S&P 500 .SPX for seven years in a row.
With low expectations for first quarter earnings just starting to come in now, buybacks are an effective and inexpensive way for companies to bolster their numbers, Zemsky said.
As the Fed begins to raise short-term rates - something now not expected until September- companies that borrow money to buy their own shares will likely have to pay more. Still, even several rounds of rate hikes may still leave borrowing to buy back shares a profitable strategy.
In aggregate, S&P 500 companies would earn back almost 6 percent of their investment in repurchases in the following 12 months, as calculated by the earnings yield. On the other hand, companies in good credit standing can now borrow money for 2.9 percent on average. Given those rates, it may be cost-efficient to issue debt to buy their own shares for some time to come.
Companies intensified both bond issuance and buyback activity as rates rose during the tightening cycle that started in 2004. Back then, as the effective federal funds rate rose from about 1 percent in the first half of 2004 to an average of 3.21 percent in 2005, 4.97 percent in 2006 and 5.26 percent in the first half of in 2007, S&P 500 buybacks rose from $197.5 billion in 2004, to $349.2 billion in 2005, $431.8 billion in 2006 and $589.1 billion in 2007.
Today, the fed funds effective rate stands at 0.12 percent and Fed policymakers estimate it will be about 0.625 percent at the end of 2015, down from 1.125 percent in the previous forecast.
A small initial increase in the cost of funding "probably isn't going to matter that much to a lot of businesses, especially if they are going to do it for share buybacks," said Brian Jacobsen, chief portfolio strategist at Wells Fargo Funds Management in Menomonee Falls, Wisconsin. "But it could signal to companies that they better start acting now."
Companies do seem to be stepping ahead of the Fed, with investment grade corporate bond issuance up 87 percent in the first three months of this year to $345.6 billion, compared with $185 billion in the first quarter of 2014, according to data from the Securities Industry and Financial Markets Association.
"It could play out that companies could continue to make buybacks throughout a good chunk of the tightening cycle," said Brian Reynolds, chief market strategist at Rosenblatt Securities in New York.rospects for Fed rate hike,
Stock buyback zeal undimmed by prospects for Fed rate hike
Stock buyback zeal undimmed by prospects for Fed (Reuters) - The seemingly insatiable appetite of companies for their own stock is unlikely to be satisfied soon, even if the U.S. Federal Reserve begins to hike benchmark interest rates and shares get pricier.
That would extend a pattern established in the last round of Fed tightening, according to a Reuters analysis of historical data. Many market analysts expect that higher borrowing costs won't derail the buyback boom that has been bolstering stocks.
Buybacks may lift earnings per share of companies in the Standard & Poor's 500 index by between 1.5 and 2 percentage points this year, according to estimates from Voya Investment Management in New York. With earnings estimates now calling for 1.5 percent growth for all of 2015, buybacks could make the difference between positive and negative growth in S&P 500 EPS.
Companies have ramped up stock repurchases since the practice bottomed for this cycle in 2009. Buybacks reduce the number of stocks in circulation, thereby boosting prices and calculated earnings per share.
General Electric Co. said today it plans to buy back as much as $50 billion of its stock, the second largest ever after Apple's $90 billion plan. GE shares rose about 9 percent to its highest since the financial crisis in afternoon trading on the New York Stock Exchange.
In 2014, while the S&P 500 rose to record highs, component companies spent $553 billion on share repurchases, according to S&P Dow Jones Indices data - a 16.3 percent increase from the previous year and four times as much as they did in 2009.
The buyback spree has accelerated this year. Pending and completed buybacks at all U.S.-based traded companies in the first quarter rose to $179.7 billion compared with $124.2 billion in the first quarter of 2014, up almost 45 percent, Thomson Reuters data show.
"Corporate management wants to do this trade," said Paul Zemsky, chief investment officer, Multi-Asset Strategies and Solutions at Voya Investment Management. "It's being rewarded by the market, and it's cheap to do."
The S&P 500 buyback index .SPBUYUP, which includes the top 100 stocks with the highest buyback ratios in the benchmark, has outperformed the S&P 500 .SPX for seven years in a row.
With low expectations for first quarter earnings just starting to come in now, buybacks are an effective and inexpensive way for companies to bolster their numbers, Zemsky said.
As the Fed begins to raise short-term rates - something now not expected until September- companies that borrow money to buy their own shares will likely have to pay more. Still, even several rounds of rate hikes may still leave borrowing to buy back shares a profitable strategy.
In aggregate, S&P 500 companies would earn back almost 6 percent of their investment in repurchases in the following 12 months, as calculated by the earnings yield. On the other hand, companies in good credit standing can now borrow money for 2.9 percent on average. Given those rates, it may be cost-efficient to issue debt to buy their own shares for some time to come.
Companies intensified both bond issuance and buyback activity as rates rose during the tightening cycle that started in 2004. Back then, as the effective federal funds rate rose from about 1 percent in the first half of 2004 to an average of 3.21 percent in 2005, 4.97 percent in 2006 and 5.26 percent in the first half of in 2007, S&P 500 buybacks rose from $197.5 billion in 2004, to $349.2 billion in 2005, $431.8 billion in 2006 and $589.1 billion in 2007.
Today, the fed funds effective rate stands at 0.12 percent and Fed policymakers estimate it will be about 0.625 percent at the end of 2015, down from 1.125 percent in the previous forecast.
A small initial increase in the cost of funding "probably isn't going to matter that much to a lot of businesses, especially if they are going to do it for share buybacks," said Brian Jacobsen, chief portfolio strategist at Wells Fargo Funds Management in Menomonee Falls, Wisconsin. "But it could signal to companies that they better start acting now."
Companies do seem to be stepping ahead of the Fed, with investment grade corporate bond issuance up 87 percent in the first three months of this year to $345.6 billion, compared with $185 billion in the first quarter of 2014, according to data from the Securities Industry and Financial Markets Association.
"It could play out that companies could continue to make buybacks throughout a good chunk of the tightening cycle," said Brian Reynolds, chief market strategist at Rosenblatt Securities in New York.rate hike,
That would extend a pattern established in the last round of Fed tightening, according to a Reuters analysis of historical data. Many market analysts expect that higher borrowing costs won't derail the buyback boom that has been bolstering stocks.
Buybacks may lift earnings per share of companies in the Standard & Poor's 500 index by between 1.5 and 2 percentage points this year, according to estimates from Voya Investment Management in New York. With earnings estimates now calling for 1.5 percent growth for all of 2015, buybacks could make the difference between positive and negative growth in S&P 500 EPS.
Companies have ramped up stock repurchases since the practice bottomed for this cycle in 2009. Buybacks reduce the number of stocks in circulation, thereby boosting prices and calculated earnings per share.
General Electric Co. said today it plans to buy back as much as $50 billion of its stock, the second largest ever after Apple's $90 billion plan. GE shares rose about 9 percent to its highest since the financial crisis in afternoon trading on the New York Stock Exchange.
In 2014, while the S&P 500 rose to record highs, component companies spent $553 billion on share repurchases, according to S&P Dow Jones Indices data - a 16.3 percent increase from the previous year and four times as much as they did in 2009.
The buyback spree has accelerated this year. Pending and completed buybacks at all U.S.-based traded companies in the first quarter rose to $179.7 billion compared with $124.2 billion in the first quarter of 2014, up almost 45 percent, Thomson Reuters data show.
"Corporate management wants to do this trade," said Paul Zemsky, chief investment officer, Multi-Asset Strategies and Solutions at Voya Investment Management. "It's being rewarded by the market, and it's cheap to do."
The S&P 500 buyback index .SPBUYUP, which includes the top 100 stocks with the highest buyback ratios in the benchmark, has outperformed the S&P 500 .SPX for seven years in a row.
With low expectations for first quarter earnings just starting to come in now, buybacks are an effective and inexpensive way for companies to bolster their numbers, Zemsky said.
As the Fed begins to raise short-term rates - something now not expected until September- companies that borrow money to buy their own shares will likely have to pay more. Still, even several rounds of rate hikes may still leave borrowing to buy back shares a profitable strategy.
In aggregate, S&P 500 companies would earn back almost 6 percent of their investment in repurchases in the following 12 months, as calculated by the earnings yield. On the other hand, companies in good credit standing can now borrow money for 2.9 percent on average. Given those rates, it may be cost-efficient to issue debt to buy their own shares for some time to come.
Companies intensified both bond issuance and buyback activity as rates rose during the tightening cycle that started in 2004. Back then, as the effective federal funds rate rose from about 1 percent in the first half of 2004 to an average of 3.21 percent in 2005, 4.97 percent in 2006 and 5.26 percent in the first half of in 2007, S&P 500 buybacks rose from $197.5 billion in 2004, to $349.2 billion in 2005, $431.8 billion in 2006 and $589.1 billion in 2007.
Today, the fed funds effective rate stands at 0.12 percent and Fed policymakers estimate it will be about 0.625 percent at the end of 2015, down from 1.125 percent in the previous forecast.
A small initial increase in the cost of funding "probably isn't going to matter that much to a lot of businesses, especially if they are going to do it for share buybacks," said Brian Jacobsen, chief portfolio strategist at Wells Fargo Funds Management in Menomonee Falls, Wisconsin. "But it could signal to companies that they better start acting now."
Companies do seem to be stepping ahead of the Fed, with investment grade corporate bond issuance up 87 percent in the first three months of this year to $345.6 billion, compared with $185 billion in the first quarter of 2014, according to data from the Securities Industry and Financial Markets Association.
"It could play out that companies could continue to make buybacks throughout a good chunk of the tightening cycle," said Brian Reynolds, chief market strategist at Rosenblatt Securities in New York.rate hike,
Brazil's iPhone investment falls short on promises of jobs, lower prices
Brazil's iPhone investment falls short (Reuters) - The Brazilian iPhone was meant to mark a new era.
When Taiwan's Foxconn Technology Group agreed in April 2011 to make Apple products here, President Dilma Rousseff and her advisers promised that up to $12 billion in investments over six years would transform the Brazilian technology sector, putting it on the cutting edge of touch screen development. A new supply chain would be created, generating high-quality jobs and bringing down prices of the coveted gadgets.
Four years later, none of that has come true.
Foxconn has created only a small fraction of the 100,000 jobs that the government projected, and most of the work is in low-skill assembly. There is little sign that it has catalyzed Brazil's technology sector or created much of a local supply chain.
The iPhones now rolling off an assembly line near São Paulo, the only ones in the world made outside China, carry a retail price tag of nearly $1,000 for a 32-gigabyte iPhone 5S without a contract - among the highest prices in the world and about twice what they sell for in the U.S.
That Brazil has so little to show for the Foxconn investment underscores the shortcomings of its industrial policy, defined by costly tax incentives that have driven a widening government budget deficit without spurring growth. The economy currently hovers close to recession and the productivity of Brazil's workforce is stagnant.
Apple Inc’s (AAPL.O) iPhone sales in Brazil have still been rising. Wholesale shipments increased more than 40 percent to 2.9 million last year, according to research firm Gartner.
Apple declined to comment for this story. Representatives for the Brazilian government and Foxconn declined to comment on why the investment fell so far short of initial projections.
With wages rising quickly in China, home to most of its 1.3 million employees, Foxconn is trying to control costs by using more robotics and expanding its global footprint to make more electronics in markets where they are sold.
But navigating politics and managing expectations beyond China has been tricky for Foxconn, whose flagship listed unit is Hon Hai Precision Industry Co Ltd (2317.TW).
For instance, Indonesia's government has said for years that Foxconn would invest up to $10 billion, but plans remain in limbo due to political snags.
In Brazil as in Indonesia, politicians and government officials were the ones making the big forecasts after conversations with Foxconn, which has been more circumspect in its own public statements and projections.
CITY OF EXAGGERATIONS
Still, as Foxconn ramped up assembly of iPhones and iPads in Brazil during 2012, reaping tax benefits, the company made a public commitment. The company pledged an initial investment of 1 billion reais ($325 million) to anchor an industrial park producing components locally within two years.
The location: Itu, a sleepy tourist town in São Paulo state nicknamed "The City of Exaggerations."
Today the site remains an empty expanse of dirt, where bulldozers have been leveling the land since late last year.
City councilor Givanildo Soares da Silva, who helped lead the push to donate nearly 100 acres of land to Foxconn, has since turned against the project.
"People are really frustrated," Silva said. "We were expecting all these jobs by now and it's still just empty promises."
The Itu mayor's office said in a statement it had given all the support necessary to bring Foxconn to the city, declining to comment on reasons for the delay.
Foxconn said in a statement the facility should be operational by the end of this year, bringing its Brazilian workforce to more than 10,000, though it did not provide a specific number of jobs or disclose how many are working on Apple products.
Apple's official list of its top 200 suppliers, accounting for 97 percent of materials and manufacturing costs, includes just two companies in Brazil: Foxconn and fellow Taiwanese electronics company Lite-On Technology Corp (2301.TW).
Foxconn currently has five facilities in the country that make products under contract for various technology companies, including just one unit producing Apple devices in JundiaÃ, about 30 miles (50 kilometers) east of Itu.
"Foxconn continues to invest in our operations in Brazil," the company said in a statement. "We are committed to our goal of introducing innovative technologies that enable our employees in Brazil to focus on high value-added elements."
Workers interviewed outside the Jundiaà plant said they had yet to see that skilled work.
"You hear 'Foxconn' and 'Apple' so you think it's something special. But there's no glamour in there. It's a dead-end job," said Andressa Silva, 19.
Silva tests iPhones at the plant for about $80 a week, just $15 above the minimum wage. She and several colleagues complained of monotonous work and a lack of promotion opportunities.
Evandro Oliveira Santos, the head of the local metalworkers' union, told Reuters the union was organizing for a strike at the factory. It would be the fourth in as many years.
The union wants better working conditions and professional development for the roughly 3,000 workers at the facility.
Foxconn turned down a request to tour the plant, but said in a statement it worked to meet international workplace standards, cooperated with unions and listened to feedback from employees.
ALL THE DANCING
When Terry Gou, the founder and chairman of Foxconn, discussed Brazilian labor in the past, his take was withering.
"Brazilian workers' wages are very high. But Brazilians, as soon as they hear 'soccer,' they stop working. And there's all the dancing. It's crazy," he told the Wall Street Journal in 2010.
Those comments made few Brazilian friends for Gou, who deftly built a manufacturing empire in China, but the underlying complaint was familiar to business leaders here.
Economists consider low productivity one of the chief reasons for the steep cost of consumer goods in Brazil, along with high tariffs and interest rates.
Analysts who follow Foxconn say the company may have underestimated those challenges during talks in early 2011 with Brazilian officials.
One of the clearest signs that the announcements in Beijing were premature came when a proposed deal for Foxconn to make touch screens in Brazil fell apart the next year.
Foxconn pushed to make cheaper screens rather than use the latest screen technology, and the company was reluctant to commit its own capital, according to press reports at the time.
"There was a misunderstanding," said Maria Luisa Cravo, the head of investments at APEX, Brazil's federal agency promoting foreign trade and investment. "Brazil expected one thing and Foxconn expected something else. But talks have restarted on this," she told Reuters.
Officials at three Brazilian ministries involved in the project declined requests for interviews about Foxconn's investments.
A spokeswoman at Brazil's science and technology ministry said the tax breaks benefiting Foxconn require it to reinvest 4 percent of Brazilian revenue in research and development. Local content and assembly contribute at least 20 percent of the value of the devices that Foxconn makes in Brazil, she added.
With that, an industrial sales tax of around 15 percent and a value-added tax of about 9 percent on imported iPhones and iPads are largely eliminated when the products are made in Brazil, tax experts said. In addition, locally made devices avoid heavy import duties, and a Sao Paulo state consumption tax would be less than half the 18 percent levied on foreign goods.
Some companies have passed the lighter tax burden along to consumers. For example, camera company GoPro said in November it would cut prices by up to 30 percent on models that contract manufacturer Flextronics started making in São Paulo state.
Apple enthusiasts have had no such luck.
At the time the Foxconn investment was announced, Aloizio Mercadante, then the minister of science and technology, said the price of iPads in Brazil could fall as much as 30 percent.
Four years ago a ten-inch iPad with 16 gigabytes of storage and no cellular card cost 1,549 reais. Today a new device with those specifications costs 1,599 reais ($520). In the U.S., it would cost $399.
"If we're buying it at that price, then why would they bring it down?" said Luzangelo de Jesus, 23, a technical support analyst looking over the latest iPad at a São Paulo mall. "I don't even know what the next iPad does, but I know I need it."on promises of jobs, lower prices,
When Taiwan's Foxconn Technology Group agreed in April 2011 to make Apple products here, President Dilma Rousseff and her advisers promised that up to $12 billion in investments over six years would transform the Brazilian technology sector, putting it on the cutting edge of touch screen development. A new supply chain would be created, generating high-quality jobs and bringing down prices of the coveted gadgets.
Four years later, none of that has come true.
Foxconn has created only a small fraction of the 100,000 jobs that the government projected, and most of the work is in low-skill assembly. There is little sign that it has catalyzed Brazil's technology sector or created much of a local supply chain.
The iPhones now rolling off an assembly line near São Paulo, the only ones in the world made outside China, carry a retail price tag of nearly $1,000 for a 32-gigabyte iPhone 5S without a contract - among the highest prices in the world and about twice what they sell for in the U.S.
That Brazil has so little to show for the Foxconn investment underscores the shortcomings of its industrial policy, defined by costly tax incentives that have driven a widening government budget deficit without spurring growth. The economy currently hovers close to recession and the productivity of Brazil's workforce is stagnant.
Apple Inc’s (AAPL.O) iPhone sales in Brazil have still been rising. Wholesale shipments increased more than 40 percent to 2.9 million last year, according to research firm Gartner.
Apple declined to comment for this story. Representatives for the Brazilian government and Foxconn declined to comment on why the investment fell so far short of initial projections.
With wages rising quickly in China, home to most of its 1.3 million employees, Foxconn is trying to control costs by using more robotics and expanding its global footprint to make more electronics in markets where they are sold.
But navigating politics and managing expectations beyond China has been tricky for Foxconn, whose flagship listed unit is Hon Hai Precision Industry Co Ltd (2317.TW).
For instance, Indonesia's government has said for years that Foxconn would invest up to $10 billion, but plans remain in limbo due to political snags.
In Brazil as in Indonesia, politicians and government officials were the ones making the big forecasts after conversations with Foxconn, which has been more circumspect in its own public statements and projections.
CITY OF EXAGGERATIONS
Still, as Foxconn ramped up assembly of iPhones and iPads in Brazil during 2012, reaping tax benefits, the company made a public commitment. The company pledged an initial investment of 1 billion reais ($325 million) to anchor an industrial park producing components locally within two years.
The location: Itu, a sleepy tourist town in São Paulo state nicknamed "The City of Exaggerations."
Today the site remains an empty expanse of dirt, where bulldozers have been leveling the land since late last year.
City councilor Givanildo Soares da Silva, who helped lead the push to donate nearly 100 acres of land to Foxconn, has since turned against the project.
"People are really frustrated," Silva said. "We were expecting all these jobs by now and it's still just empty promises."
The Itu mayor's office said in a statement it had given all the support necessary to bring Foxconn to the city, declining to comment on reasons for the delay.
Foxconn said in a statement the facility should be operational by the end of this year, bringing its Brazilian workforce to more than 10,000, though it did not provide a specific number of jobs or disclose how many are working on Apple products.
Apple's official list of its top 200 suppliers, accounting for 97 percent of materials and manufacturing costs, includes just two companies in Brazil: Foxconn and fellow Taiwanese electronics company Lite-On Technology Corp (2301.TW).
Foxconn currently has five facilities in the country that make products under contract for various technology companies, including just one unit producing Apple devices in JundiaÃ, about 30 miles (50 kilometers) east of Itu.
"Foxconn continues to invest in our operations in Brazil," the company said in a statement. "We are committed to our goal of introducing innovative technologies that enable our employees in Brazil to focus on high value-added elements."
Workers interviewed outside the Jundiaà plant said they had yet to see that skilled work.
"You hear 'Foxconn' and 'Apple' so you think it's something special. But there's no glamour in there. It's a dead-end job," said Andressa Silva, 19.
Silva tests iPhones at the plant for about $80 a week, just $15 above the minimum wage. She and several colleagues complained of monotonous work and a lack of promotion opportunities.
Evandro Oliveira Santos, the head of the local metalworkers' union, told Reuters the union was organizing for a strike at the factory. It would be the fourth in as many years.
The union wants better working conditions and professional development for the roughly 3,000 workers at the facility.
Foxconn turned down a request to tour the plant, but said in a statement it worked to meet international workplace standards, cooperated with unions and listened to feedback from employees.
ALL THE DANCING
When Terry Gou, the founder and chairman of Foxconn, discussed Brazilian labor in the past, his take was withering.
"Brazilian workers' wages are very high. But Brazilians, as soon as they hear 'soccer,' they stop working. And there's all the dancing. It's crazy," he told the Wall Street Journal in 2010.
Those comments made few Brazilian friends for Gou, who deftly built a manufacturing empire in China, but the underlying complaint was familiar to business leaders here.
Economists consider low productivity one of the chief reasons for the steep cost of consumer goods in Brazil, along with high tariffs and interest rates.
Analysts who follow Foxconn say the company may have underestimated those challenges during talks in early 2011 with Brazilian officials.
One of the clearest signs that the announcements in Beijing were premature came when a proposed deal for Foxconn to make touch screens in Brazil fell apart the next year.
Foxconn pushed to make cheaper screens rather than use the latest screen technology, and the company was reluctant to commit its own capital, according to press reports at the time.
"There was a misunderstanding," said Maria Luisa Cravo, the head of investments at APEX, Brazil's federal agency promoting foreign trade and investment. "Brazil expected one thing and Foxconn expected something else. But talks have restarted on this," she told Reuters.
Officials at three Brazilian ministries involved in the project declined requests for interviews about Foxconn's investments.
A spokeswoman at Brazil's science and technology ministry said the tax breaks benefiting Foxconn require it to reinvest 4 percent of Brazilian revenue in research and development. Local content and assembly contribute at least 20 percent of the value of the devices that Foxconn makes in Brazil, she added.
With that, an industrial sales tax of around 15 percent and a value-added tax of about 9 percent on imported iPhones and iPads are largely eliminated when the products are made in Brazil, tax experts said. In addition, locally made devices avoid heavy import duties, and a Sao Paulo state consumption tax would be less than half the 18 percent levied on foreign goods.
Some companies have passed the lighter tax burden along to consumers. For example, camera company GoPro said in November it would cut prices by up to 30 percent on models that contract manufacturer Flextronics started making in São Paulo state.
Apple enthusiasts have had no such luck.
At the time the Foxconn investment was announced, Aloizio Mercadante, then the minister of science and technology, said the price of iPads in Brazil could fall as much as 30 percent.
Four years ago a ten-inch iPad with 16 gigabytes of storage and no cellular card cost 1,549 reais. Today a new device with those specifications costs 1,599 reais ($520). In the U.S., it would cost $399.
"If we're buying it at that price, then why would they bring it down?" said Luzangelo de Jesus, 23, a technical support analyst looking over the latest iPad at a São Paulo mall. "I don't even know what the next iPad does, but I know I need it."on promises of jobs, lower prices,
Aetna, Cigna balk as Angelina effect spurs genetic cancer testing
Aetna, Cigna balk as Angelina effect (This version of the April 12 story corrects reference to Dr. Daly's role in publishing recommendations for genetic testing in paragraph 18)
By Caroline Humer
(Reuters) - Medical researchers call it the "Angelina Effect," the surge in demand for genetic testing attributable to movie star Angelina Jolie's public crusade for more aggressive detection of hereditary breast and ovarian cancer.
But there's a catch: Major insurance companies including Aetna, Anthem and Cigna are declining to pay for the latest generation of tests, known as multi-gene panel tests, Reuters has learned. The insurers say that the tests are unproven and may lead patients to seek out medical care they don't need.
That's a dangerous miscalculation, a range of doctors, genetic counselors, academics and diagnostics companies said. While they acknowledge that multi-gene tests produce data that may not be useful from a diagnostic standpoint, they say that by refusing or delaying coverage, insurance companies are endangering patients who could be undergoing screenings or changing their diets if they knew about the possible risks.
The tests have come a long way since Jolie, 39, went public in 2013, revealing that she underwent a double mastectomy after a genetic test found she carried mutations in the BRCA1 and BRCA2 genes, indicating a high risk of breast and ovarian cancer. She disclosed last month that she had her ovaries and fallopian tubes removed.
The new panel tests, which can cost between $2,000 to $4,900, analyze 20 or more genes at once. That allows healthcare professionals to establish possible DNA links to other cancer-related conditions such as Lynch syndrome and Li-Fraumeni Syndrome earlier. Humans have about 23,000 genes.
Susan Kutner, a surgeon at a Kaiser Permanente hospital in San Jose, California, who serves on a U.S. Centers for Disease Control and Prevention advisory committee on young women and breast cancer, said more women with a family history of cancer should be able get these tests.
"If we have members who are not being tested in a timely manner, we know that their risk of cancer in the long run costs us and them a lot more," Kutner said.
Kaiser, which insures its own members, covers panel tests for patients with family histories of cancer.
That's not so at three of the four largest managed care companies. Aetna Inc, Anthem Inc and Cigna Corp state in their policies that in most cases they don't cover multi-gene panel tests. The fourth, UnitedHealth Group, covers the tests if patients meet certain criteria.
All insurers cover screenings for BRCA1 and BRCA2 and for certain other genes for women who have family histories of cancer. Indeed, such coverage is mandated by the Affordable Care Act, known as Obamacare.
But many insurers said they simply don't know enough about the specific risk of other mutations to justify coverage of the new family of tests.
They also say that the tests may find mutations with a well-established link to a disease, but which are difficult to interpret. These results could lead to patients taking misguided actions about medical care, such as preventive chemotherapy and surgery.
Aetna's medical director of quality management, Robert McDonough, said Aetna pays for testing of individual genes but that "the routine application of a panel would be considered unproven."
Cigna's David Finley, national medical officer for enterprise affordability, said multi-gene tests are more likely to find unknown mutations for which there are no care guidelines.
"This is where there is controversy and disagreement," Finley said. "My problem is what do you do with that information?"
Instead, he said, there need to be more clinical trials and research to establish exact risks and medical guidelines for each type of gene mutation.
Healthcare professionals said that while they recognize the downside of patients getting unclear information about their genetic makeup, genetic counseling and support from doctors can mitigate risks.
CATCH-22
Mary Daly, a physician who chairs the National Comprehensive Cancer Network guidelines panel for breast and ovarian cancer, oversees the process for setting guidelines that most doctors in this field follow. She points to what is, in effect, a "Catch 22:" Without insurance coverage of these tests, there isn't enough data to analyze how effective they are.
"If we don't start looking at these genes, we'll never obtain the data we need," she said.
Leading academics in genetic research also dispute the claim that multi-gene tests produce too much confusing information, saying they often lead to beneficial steps such as cancer screenings.
"The utility of panel testing is that we know there are a lot more genes beyond BRCA1 and BRCA2 that are associated with cancer predisposition," said Colin Pritchard, a University of Washington geneticist.
Pritchard said the understanding of the link between genetic mutations and cancer is evolving quickly. A recent study in the New England Journal of Medicine established rates of breast cancer associated with a mutation in one of the genes included in many of these panel tests, known as the PALB2 gene.
Hereditary cancers are expected to account for about 5 percent of the 230,000 cases of invasive breast cancer that will be diagnosed this year in the United States. In the year Jolie went public about her testing, an AARP Public Policy Institute study found that BRCA testing had risen 40 percent. Jolie’s spokesperson did not return a call requesting comment on the multi-gene testing trend.
Myriad Genetics Inc, which accounts for 90 percent of the hereditary cancer-testing market, said 15 of the 25 genes that National Comprehensive Cancer Network guidelines indicate should be included in multi-gene testing are in its "MyRisk" panel test. The business represents a $5 billion global market opportunity for Myriad, the company said in January.
Other lab companies including Ambry Genetics, Quest Diagnostics Inc and Invitae Corp each offer a variety of panels that start at about seven genes and go up to 40 genes.
"In general, the trend is moving toward more genes,” said Carin Espenschied, a senior products manager at Ambry and a genetic counselor. "Research and insurance companies kind of just have to catch up."spurs genetic cancer testing,
By Caroline Humer
(Reuters) - Medical researchers call it the "Angelina Effect," the surge in demand for genetic testing attributable to movie star Angelina Jolie's public crusade for more aggressive detection of hereditary breast and ovarian cancer.
But there's a catch: Major insurance companies including Aetna, Anthem and Cigna are declining to pay for the latest generation of tests, known as multi-gene panel tests, Reuters has learned. The insurers say that the tests are unproven and may lead patients to seek out medical care they don't need.
That's a dangerous miscalculation, a range of doctors, genetic counselors, academics and diagnostics companies said. While they acknowledge that multi-gene tests produce data that may not be useful from a diagnostic standpoint, they say that by refusing or delaying coverage, insurance companies are endangering patients who could be undergoing screenings or changing their diets if they knew about the possible risks.
The tests have come a long way since Jolie, 39, went public in 2013, revealing that she underwent a double mastectomy after a genetic test found she carried mutations in the BRCA1 and BRCA2 genes, indicating a high risk of breast and ovarian cancer. She disclosed last month that she had her ovaries and fallopian tubes removed.
The new panel tests, which can cost between $2,000 to $4,900, analyze 20 or more genes at once. That allows healthcare professionals to establish possible DNA links to other cancer-related conditions such as Lynch syndrome and Li-Fraumeni Syndrome earlier. Humans have about 23,000 genes.
Susan Kutner, a surgeon at a Kaiser Permanente hospital in San Jose, California, who serves on a U.S. Centers for Disease Control and Prevention advisory committee on young women and breast cancer, said more women with a family history of cancer should be able get these tests.
"If we have members who are not being tested in a timely manner, we know that their risk of cancer in the long run costs us and them a lot more," Kutner said.
Kaiser, which insures its own members, covers panel tests for patients with family histories of cancer.
That's not so at three of the four largest managed care companies. Aetna Inc, Anthem Inc and Cigna Corp state in their policies that in most cases they don't cover multi-gene panel tests. The fourth, UnitedHealth Group, covers the tests if patients meet certain criteria.
All insurers cover screenings for BRCA1 and BRCA2 and for certain other genes for women who have family histories of cancer. Indeed, such coverage is mandated by the Affordable Care Act, known as Obamacare.
But many insurers said they simply don't know enough about the specific risk of other mutations to justify coverage of the new family of tests.
They also say that the tests may find mutations with a well-established link to a disease, but which are difficult to interpret. These results could lead to patients taking misguided actions about medical care, such as preventive chemotherapy and surgery.
Aetna's medical director of quality management, Robert McDonough, said Aetna pays for testing of individual genes but that "the routine application of a panel would be considered unproven."
Cigna's David Finley, national medical officer for enterprise affordability, said multi-gene tests are more likely to find unknown mutations for which there are no care guidelines.
"This is where there is controversy and disagreement," Finley said. "My problem is what do you do with that information?"
Instead, he said, there need to be more clinical trials and research to establish exact risks and medical guidelines for each type of gene mutation.
Healthcare professionals said that while they recognize the downside of patients getting unclear information about their genetic makeup, genetic counseling and support from doctors can mitigate risks.
CATCH-22
Mary Daly, a physician who chairs the National Comprehensive Cancer Network guidelines panel for breast and ovarian cancer, oversees the process for setting guidelines that most doctors in this field follow. She points to what is, in effect, a "Catch 22:" Without insurance coverage of these tests, there isn't enough data to analyze how effective they are.
"If we don't start looking at these genes, we'll never obtain the data we need," she said.
Leading academics in genetic research also dispute the claim that multi-gene tests produce too much confusing information, saying they often lead to beneficial steps such as cancer screenings.
"The utility of panel testing is that we know there are a lot more genes beyond BRCA1 and BRCA2 that are associated with cancer predisposition," said Colin Pritchard, a University of Washington geneticist.
Pritchard said the understanding of the link between genetic mutations and cancer is evolving quickly. A recent study in the New England Journal of Medicine established rates of breast cancer associated with a mutation in one of the genes included in many of these panel tests, known as the PALB2 gene.
Hereditary cancers are expected to account for about 5 percent of the 230,000 cases of invasive breast cancer that will be diagnosed this year in the United States. In the year Jolie went public about her testing, an AARP Public Policy Institute study found that BRCA testing had risen 40 percent. Jolie’s spokesperson did not return a call requesting comment on the multi-gene testing trend.
Myriad Genetics Inc, which accounts for 90 percent of the hereditary cancer-testing market, said 15 of the 25 genes that National Comprehensive Cancer Network guidelines indicate should be included in multi-gene testing are in its "MyRisk" panel test. The business represents a $5 billion global market opportunity for Myriad, the company said in January.
Other lab companies including Ambry Genetics, Quest Diagnostics Inc and Invitae Corp each offer a variety of panels that start at about seven genes and go up to 40 genes.
"In general, the trend is moving toward more genes,” said Carin Espenschied, a senior products manager at Ambry and a genetic counselor. "Research and insurance companies kind of just have to catch up."spurs genetic cancer testing,
Banks see talent flee amid healthcare M&A boom
Banks see talent flee amid healthcare M&A boo(Reuters) - Several high-ranking bankers have left their jobs at major investment banks in the last 13 months amid a surge in U.S. healthcare deal activity to seek better compensation at boutique investment banks as well as to participate in the growth of the industry at biotech companies themselves.
JPMorgan Chase & Co and Bank of America have both lost senior healthcare investment bankers to boutique investment bank Guggenheim Partners, showing that banks face challenges in being able to pay competitive rates. The biggest U.S. banks are under pressure from regulators to preserve more capital, rather than use M&A fees to pay higher bonuses.
"The volume of transactions across healthcare is extreme and so the banker merry-go-round begins," said Paul Heller, the leader of executive recruiting firm Caldwell Partners' financial services practice.
There's been $92.5 billion worth of U.S. healthcare merger activity so far this year, 73 percent more than in the same period last year, driven by 242 deals. Healthcare has been the busiest sector for deals so far this year, fueled by transactions such as Pfizer Inc's (PFE.N) $17 billion offer for Hospira Inc (HSP.N) and Valeant Pharmaceuticals International Ltd's (VRX.TO) $11 billion acquisition of Salix Pharmaceuticals Ltd.
U.S. healthcare investment banking fees, meanwhile, have topped $1.9 billion since January, up more than 37 percent from the same period last year.
Average annual pay for a healthcare investment banking managing director – the most typical role for a senior banker -- is roughly $1.5 million to $2 million, according to recruiters and bankers, and hasn’t budged much in recent years despite the rise in M&A activity. Wall Street compensation rose about 4 percent on average last year, according to financial industry recruiting firm Options Group.
Some large banks are hoping to stem the flow of banker departures by offering one-year pay guarantees for top performers, according to industry bankers.
Guggenheim Partners said in March that Joseph Kohls, a former Bank of America Corp (BAC.N) global healthcare co-head and Jeffrey Hoffman, JPMorgan Chase & Co's (JPM.N) former West Coast healthcare head, would be joining the firm.
Kohls helped advise medical device company Biomet Inc on its $13.4 billion acquisition by Zimmer Holdings Inc (ZMH.N) last year, and Hoffman led a team that advised AbbVie Inc (ABBV.N) on its $55 billion deal for British pharmaceutical company Shire, which it ended up abandoning.
Bankers can often negotiate a 30 to 50 percent pay raise for their first-year compensation at a new bank if they jump ship, according to recruiters and bankers. Free from many of Wall Street's regulations, a boutique investment bank can also offer bankers hefty commissions on individual deals.
Some boutique banks are luring rainmakers with the promise of taking home a large percentage of the fees they generate, bankers and recruiters said, a practice rarely seen at the bigger banks.
Boutiques can also offer their bankers compensation in cash, while a large portion of pay at larger banks remains tied up in stock.
Neither Kohls nor Hoffman responded to requests for comment.
Meanwhile, Goldman Sachs Group Inc (GS.N) banker Lorence Kim left in March 2014 to take a job with life science company Moderna, while his Goldman colleague David Woodhouse joined NGM Biopharmaceuticals in March of this year. Morgan Stanley's (MS.N) Steve Harr took an executive position at Juno Therapeutics in March 2014.
Former Credit Suisse investment banker Mark Page joined biotech Macrocure Ltd (MCUR.O) in February as chief financial officer.
"My whole banking career was to help set me up for an opportunity like this," Page said.
Kim, Woodhouse and Harr all declined to respond to requests for comment.
These bankers may benefit by taking executive roles at biotech companies and receiving stock as part of their compensation, in a bet that the share price will go up. The Nasdaq Biotechnology index has risen 66 percent in the last 12 months.
"The potential equity upside on the corporate side is as attractive today than it ever has been compared to Wall Street compensation," said Burke St. John, vice chairman and head of the global financial services practice at executive search firm CTPartners. "It might take you two or three times as long on a more traditional Wall Street career path to earn what you could make working for the right client."m,
JPMorgan Chase & Co and Bank of America have both lost senior healthcare investment bankers to boutique investment bank Guggenheim Partners, showing that banks face challenges in being able to pay competitive rates. The biggest U.S. banks are under pressure from regulators to preserve more capital, rather than use M&A fees to pay higher bonuses.
"The volume of transactions across healthcare is extreme and so the banker merry-go-round begins," said Paul Heller, the leader of executive recruiting firm Caldwell Partners' financial services practice.
There's been $92.5 billion worth of U.S. healthcare merger activity so far this year, 73 percent more than in the same period last year, driven by 242 deals. Healthcare has been the busiest sector for deals so far this year, fueled by transactions such as Pfizer Inc's (PFE.N) $17 billion offer for Hospira Inc (HSP.N) and Valeant Pharmaceuticals International Ltd's (VRX.TO) $11 billion acquisition of Salix Pharmaceuticals Ltd.
U.S. healthcare investment banking fees, meanwhile, have topped $1.9 billion since January, up more than 37 percent from the same period last year.
Average annual pay for a healthcare investment banking managing director – the most typical role for a senior banker -- is roughly $1.5 million to $2 million, according to recruiters and bankers, and hasn’t budged much in recent years despite the rise in M&A activity. Wall Street compensation rose about 4 percent on average last year, according to financial industry recruiting firm Options Group.
Some large banks are hoping to stem the flow of banker departures by offering one-year pay guarantees for top performers, according to industry bankers.
Guggenheim Partners said in March that Joseph Kohls, a former Bank of America Corp (BAC.N) global healthcare co-head and Jeffrey Hoffman, JPMorgan Chase & Co's (JPM.N) former West Coast healthcare head, would be joining the firm.
Kohls helped advise medical device company Biomet Inc on its $13.4 billion acquisition by Zimmer Holdings Inc (ZMH.N) last year, and Hoffman led a team that advised AbbVie Inc (ABBV.N) on its $55 billion deal for British pharmaceutical company Shire, which it ended up abandoning.
Bankers can often negotiate a 30 to 50 percent pay raise for their first-year compensation at a new bank if they jump ship, according to recruiters and bankers. Free from many of Wall Street's regulations, a boutique investment bank can also offer bankers hefty commissions on individual deals.
Some boutique banks are luring rainmakers with the promise of taking home a large percentage of the fees they generate, bankers and recruiters said, a practice rarely seen at the bigger banks.
Boutiques can also offer their bankers compensation in cash, while a large portion of pay at larger banks remains tied up in stock.
Neither Kohls nor Hoffman responded to requests for comment.
Meanwhile, Goldman Sachs Group Inc (GS.N) banker Lorence Kim left in March 2014 to take a job with life science company Moderna, while his Goldman colleague David Woodhouse joined NGM Biopharmaceuticals in March of this year. Morgan Stanley's (MS.N) Steve Harr took an executive position at Juno Therapeutics in March 2014.
Former Credit Suisse investment banker Mark Page joined biotech Macrocure Ltd (MCUR.O) in February as chief financial officer.
"My whole banking career was to help set me up for an opportunity like this," Page said.
Kim, Woodhouse and Harr all declined to respond to requests for comment.
These bankers may benefit by taking executive roles at biotech companies and receiving stock as part of their compensation, in a bet that the share price will go up. The Nasdaq Biotechnology index has risen 66 percent in the last 12 months.
"The potential equity upside on the corporate side is as attractive today than it ever has been compared to Wall Street compensation," said Burke St. John, vice chairman and head of the global financial services practice at executive search firm CTPartners. "It might take you two or three times as long on a more traditional Wall Street career path to earn what you could make working for the right client."m,
Union spends big on low-wage campaign, endgame unclear
Union spends big on low-wage campaig(Reuters) - Tens of millions of dollars and counting. That's how much the Service Employees International Union (SEIU) has spent so far on a three-year campaign to improve the plight of low-wage retail and fast-food workers, an analysis of public filings shows.
The money, which has gone to labor groups, lawyers and others involved in the effort, has provided financial firepower for a movement that has made surprising progress in its push for lifting wages, successfully making the issue part of the public conversation.
In recent months, cities have passed or introduced laws to require higher minimum wages within their boundaries. Wal-Mart Stores and McDonald's Corp, among a number of big employers, have raised minimum pay. And on Wednesday, organizers say, tens of thousands of people will fan out across 200 U.S. cities in the biggest rally since the campaign got its start in late 2012.
But the union's critics are focused on another number: zero. That's the tally of fast-food workers who have joined SEIU's membership rolls since the campaign began. And with McDonald's and other deep-pocketed fast-food chains determined to fight back any attempts at unionization, organizing the industry is an objective that even labor advocates warn might not be achievable.
The lack of organizing success to date has led some to ask whether the union should continue spending large sums to better the lives of workers who are unlikely to become members. One SEIU organizer, who spoke on condition of anonymity, said members would get "restless" if progress on boosting membership wasn't evident after a few years.
U.S. fast-food workers have been notoriously difficult to organize due to high turnover and a fragmented industry structure. Most outlets are independently operated by franchisees and have generally been considered legally separate from the parent chain. That means organizing efforts would have to be waged restaurant by restaurant.
“The SEIU is on a failed mission,” said Rick Berman, a powerful lobbyist for the tobacco, alcohol and food and beverage industries, who is using his groups such as the Center for Union Facts (CUF) to oppose SEIU and low-wage workers. “Most of these fast-food strikes are the equivalent of a Potemkin village."
Mary Kay Henry, president of the SEIU, which has nearly 2 million members, disagrees, saying the McDonald's and Wal-Mart pay hikes have helped shift the balance of power toward workers. She said pundits and business groups had underestimated the movement's impact on wages and was doing so again on its prospects for unionizing low-wage workers.
"We are quite confident there will be a breakthrough in having the union recognized as part of this growing movement," she told Reuters. "We think a settlement in fast-food would be catalytic for other kinds of workers in the service sector, like Wal-Mart, like home care workers, like childcare workers, like workers at airports all across this nation."
The SEIU wouldn’t say exactly how much it has spent in its efforts on behalf of low-wage workers. But the Employment Policies Institute (EPI), a research arm of Berman's CUF, estimates the union has spent some $50 million on an array of local worker committees, lawyers and consultants that have worked on a broad campaign to help low-wage workers, including efforts to influence legislation at the state and city level.
Of that total, Reuters was able to independently verify in SEIU's annual filings $24 million allocated to 8 worker organizations whose stated purpose, as cited in labor department filings or online job advertisements, was to work for better conditions in the fast-food and retail industries. That compares to the approximately $28 million the union put toward getting Barack Obama elected president in 2008.
SEIU's annual report showed a pattern of increased spending last year. For instance, outlays to the Fast Food Workers Committee, one of the worker organizations, more than doubled to $3.8 million, while public relations firm Berlin Rosen took in $1.3 million, up from around $850,000 in 2013.
TOUGH OPPOSITION
Henry said the SEIU in the United States is following examples set in Australia and Denmark, where unionized fast-food workers have hammered out labor agreements. The union here faces well-funded opposition on myriad fronts, however, something that was not as big a factor in the other countries.
The National Restaurant Association and the U.S. Chamber of Commerce, which are among the roughly two dozen business groups to have opposed raising the minimum wage, together spent $342.4 million to lobby U.S. lawmakers from 2012 to 2014, according to data compiled by the Center for Responsive Politics’ OpenSecrets.org.
Groups such as Berman’s CUF fight the fast-food industry’s public relations battles. And, the International Franchise Association, which represents large franchisors and franchisees, is flexing its political muscle as well.
Still, Sarita Gupta, executive director at Jobs With Justice, a worker advocacy group involved in the "Fight for 15" campaign, said worker groups will continue to target state and city efforts to improve pay and working conditions for workers whether or not they are in unions. She cited as an example a bill introduced in Connecticut, co-sponsored by the local SEIU chapter, that would fine large employers who fail to pay at least $15 per hour.
For SEIU the question of whether it can turn fast-food workers into dues-paying members is nevertheless important. Critics say failure to make gains quickly could raise doubts among the more highly skilled workers whose dues are financing the campaign.
SEIU's Henry brushed aside such critiques, saying union members were solidly behind the movement and seeing tangible benefits. She pointed to the Los Angeles Unified School District and Johns Hopkins Hospital among employers who had agreed to a $15 an hour wage floor in recent negotiations with SEIU members.
"Frankly I'm not worried about it," she said.n, endgame unclear,
The money, which has gone to labor groups, lawyers and others involved in the effort, has provided financial firepower for a movement that has made surprising progress in its push for lifting wages, successfully making the issue part of the public conversation.
In recent months, cities have passed or introduced laws to require higher minimum wages within their boundaries. Wal-Mart Stores and McDonald's Corp, among a number of big employers, have raised minimum pay. And on Wednesday, organizers say, tens of thousands of people will fan out across 200 U.S. cities in the biggest rally since the campaign got its start in late 2012.
But the union's critics are focused on another number: zero. That's the tally of fast-food workers who have joined SEIU's membership rolls since the campaign began. And with McDonald's and other deep-pocketed fast-food chains determined to fight back any attempts at unionization, organizing the industry is an objective that even labor advocates warn might not be achievable.
The lack of organizing success to date has led some to ask whether the union should continue spending large sums to better the lives of workers who are unlikely to become members. One SEIU organizer, who spoke on condition of anonymity, said members would get "restless" if progress on boosting membership wasn't evident after a few years.
U.S. fast-food workers have been notoriously difficult to organize due to high turnover and a fragmented industry structure. Most outlets are independently operated by franchisees and have generally been considered legally separate from the parent chain. That means organizing efforts would have to be waged restaurant by restaurant.
“The SEIU is on a failed mission,” said Rick Berman, a powerful lobbyist for the tobacco, alcohol and food and beverage industries, who is using his groups such as the Center for Union Facts (CUF) to oppose SEIU and low-wage workers. “Most of these fast-food strikes are the equivalent of a Potemkin village."
Mary Kay Henry, president of the SEIU, which has nearly 2 million members, disagrees, saying the McDonald's and Wal-Mart pay hikes have helped shift the balance of power toward workers. She said pundits and business groups had underestimated the movement's impact on wages and was doing so again on its prospects for unionizing low-wage workers.
"We are quite confident there will be a breakthrough in having the union recognized as part of this growing movement," she told Reuters. "We think a settlement in fast-food would be catalytic for other kinds of workers in the service sector, like Wal-Mart, like home care workers, like childcare workers, like workers at airports all across this nation."
The SEIU wouldn’t say exactly how much it has spent in its efforts on behalf of low-wage workers. But the Employment Policies Institute (EPI), a research arm of Berman's CUF, estimates the union has spent some $50 million on an array of local worker committees, lawyers and consultants that have worked on a broad campaign to help low-wage workers, including efforts to influence legislation at the state and city level.
Of that total, Reuters was able to independently verify in SEIU's annual filings $24 million allocated to 8 worker organizations whose stated purpose, as cited in labor department filings or online job advertisements, was to work for better conditions in the fast-food and retail industries. That compares to the approximately $28 million the union put toward getting Barack Obama elected president in 2008.
SEIU's annual report showed a pattern of increased spending last year. For instance, outlays to the Fast Food Workers Committee, one of the worker organizations, more than doubled to $3.8 million, while public relations firm Berlin Rosen took in $1.3 million, up from around $850,000 in 2013.
TOUGH OPPOSITION
Henry said the SEIU in the United States is following examples set in Australia and Denmark, where unionized fast-food workers have hammered out labor agreements. The union here faces well-funded opposition on myriad fronts, however, something that was not as big a factor in the other countries.
The National Restaurant Association and the U.S. Chamber of Commerce, which are among the roughly two dozen business groups to have opposed raising the minimum wage, together spent $342.4 million to lobby U.S. lawmakers from 2012 to 2014, according to data compiled by the Center for Responsive Politics’ OpenSecrets.org.
Groups such as Berman’s CUF fight the fast-food industry’s public relations battles. And, the International Franchise Association, which represents large franchisors and franchisees, is flexing its political muscle as well.
Still, Sarita Gupta, executive director at Jobs With Justice, a worker advocacy group involved in the "Fight for 15" campaign, said worker groups will continue to target state and city efforts to improve pay and working conditions for workers whether or not they are in unions. She cited as an example a bill introduced in Connecticut, co-sponsored by the local SEIU chapter, that would fine large employers who fail to pay at least $15 per hour.
For SEIU the question of whether it can turn fast-food workers into dues-paying members is nevertheless important. Critics say failure to make gains quickly could raise doubts among the more highly skilled workers whose dues are financing the campaign.
SEIU's Henry brushed aside such critiques, saying union members were solidly behind the movement and seeing tangible benefits. She pointed to the Los Angeles Unified School District and Johns Hopkins Hospital among employers who had agreed to a $15 an hour wage floor in recent negotiations with SEIU members.
"Frankly I'm not worried about it," she said.n, endgame unclear,
London stakes its claim as global bitcoin hub
London stakes its claim as global bitcoin hub,(Reuters) - London, center of the $5-trillion-a-day global currency market, now wants to be home to a controversial upstart - bitcoin.
British authorities have come out in support of digital currencies in the name of promoting financial innovation, while proposing that regulations should be drawn up to prevent their use in crime.
But it is technophiles who are leading the drive to make London a real-world hub for trade in web-based "cryptocurrencies", of which bitcoin is the original and still most popular.
Every Tuesday evening in a trendy cafe in London's Shoreditch neighborhood, a group of digital currency enthusiasts gathers to discuss ideas, "vape" from e-cigarettes and exchange their pounds for bitcoins in a dedicated "ATM".
With more than 2,200 members, CoinScrum, run by a former derivatives trader who left the world of traditional finance to work on a digital currency start-up, is the biggest bitcoin networking group in the world. Its meetings draw a mostly young, mostly male crowd - some amateurs, others who have come to Britain to start bitcoin businesses.
Already the capital of traditional currency trading, London is competing with San Francisco's web expertise and New York's financial clout as it pushes to be the foremost financial technology - or fintech - center in the world.
Last month the British government announced plans to regulate digital currency exchanges to prevent their use in money-laundering, and to help to develop a set of standards for cryptocurrencies.
Backers of bitcoin praised this for lending legitimacy to the currency - which unlike traditional money has no printed form and remains outside the control of central banks - without stifling innovation.
"London has been the home of financial innovation for hundreds of years," said Nicolas Cary, co-founder of Blockchain, which provides bitcoin data and "wallet" software for storing the currency. "It would be a historical mistake not to make this the home of digital currencies. There's an incredible amount of talent and experience here."
Just over 14 million bitcoins are in circulation, worth around $3.1 billion at the current exchange rate of around $220 each.
Bitcoin brought 29-year-old Cary to Britain two years ago from Denver, Colorado. He joined forces with Ben Reeves, then a 22-year-old computer science graduate, to develop the Blockchain wallet, spending the first year working out of a two-bedroom apartment in northern England.
Now Blockchain, named after the technology behind bitcoin, is the world's biggest wallet provider, with over 3 million users. Last year it raised over $30 million in its first round of funding, including from billionaire Richard Branson.
POSITIVE ATTITUDE
While some people argue that London lags New York overall as the center for traditional finance, many say the latter's attitude to digital currencies - including a state plan to impose a "BitLicense" on bitcoin start-ups - makes London more attractive for the growing number of businesses dealing in the budding technology.
"What we see in the UK ... is a different attitude," said Jerry Brito, executive director of Coin Center, a Washington DC-based non-profit advocacy group for digital currencies.
"It's a very positive attitude, one of: this is an amazing innovation, we're going to have to have some kind of regulation in terms of money laundering, but let's do this in a constructive way, in partnership with the technologists and the industry."
Detractors worry that digital currencies make it easy for users to buy products anonymously from websites like Silk Road, an underground marketplace for drugs and other illegal goods which was shut down in 2013.
But advocates argue that using cash for illicit trades is easier and less traceable, pointing out that most U.S. banknotes are contaminated with cocaine.
Asked about bitcoin, the governing body for the City of London financial district said authorities needed to be "alive to the potential risks and take strong action if they find evidence of abuse or criminal activities". But the employment and growth opportunities offered by the fintech in general were to be welcomed, it said.
Britain made bitcoin trading exempt from value-added tax last year. Other countries have yet to decide how to tax bitcoin, since its independence from any central bank means it does not fall into the traditional definition of money.
However, Australia has made bitcoin transactions subject to goods and services tax. That helped to drive CoinJar, an Australian company that allows users to buy, sell and spend bitcoins, to move its headquarters to London last December.
INVESTMENT
Later this month Swiss banking giant UBS will open a technology lab in London to explore the wider application of the technology in the financial services industry.
Finance minister George Osborne has said he wants Britain to lead the world in developing fintech, highlighting the potential of digital currencies.
Last year investment in fintech firms in Britain and Ireland more than doubled compared with 2013, to $623 million, representing 42 percent of such investment in Europe, according to consultancy Accenture.
Alongside the new regulation and standards, the British government promised an additional 10 million pounds ($15 million) for a research initiative that will look into the blockchain technology behind digital currencies.
It is the blockchain - essentially a ledger of every bitcoin transaction that is virtually impossible to tamper with - that the Bank of England has also said could be revolutionary. Central banks, it has said, could eventually issue digital currencies of their own.
Dozens of others have copied this technology to set up their own digital currencies, though none has so far managed to knock bitcoin off the top spot.
TANTRIC MASSAGE
Londoners can change cash for bitcoins at seven ATMs in the capital, and use them to pay for anything from tantric massage to a designer dress, a pork chop to a pint of beer. One company even allows rent on property to be paid in bitcoin.
Back in the trendy "Vape Lab" e-cigarette cafe, one young bitcoiner was putting 800 pounds' worth of 20 pound notes into a bitcoin ATM in exchange for the digital currency.
"I just sell bitcoin to others, because they don't know how to do it, so I take advantage of that and I make a profit," he said.
British authorities have come out in support of digital currencies in the name of promoting financial innovation, while proposing that regulations should be drawn up to prevent their use in crime.
But it is technophiles who are leading the drive to make London a real-world hub for trade in web-based "cryptocurrencies", of which bitcoin is the original and still most popular.
Every Tuesday evening in a trendy cafe in London's Shoreditch neighborhood, a group of digital currency enthusiasts gathers to discuss ideas, "vape" from e-cigarettes and exchange their pounds for bitcoins in a dedicated "ATM".
With more than 2,200 members, CoinScrum, run by a former derivatives trader who left the world of traditional finance to work on a digital currency start-up, is the biggest bitcoin networking group in the world. Its meetings draw a mostly young, mostly male crowd - some amateurs, others who have come to Britain to start bitcoin businesses.
Already the capital of traditional currency trading, London is competing with San Francisco's web expertise and New York's financial clout as it pushes to be the foremost financial technology - or fintech - center in the world.
Last month the British government announced plans to regulate digital currency exchanges to prevent their use in money-laundering, and to help to develop a set of standards for cryptocurrencies.
Backers of bitcoin praised this for lending legitimacy to the currency - which unlike traditional money has no printed form and remains outside the control of central banks - without stifling innovation.
"London has been the home of financial innovation for hundreds of years," said Nicolas Cary, co-founder of Blockchain, which provides bitcoin data and "wallet" software for storing the currency. "It would be a historical mistake not to make this the home of digital currencies. There's an incredible amount of talent and experience here."
Just over 14 million bitcoins are in circulation, worth around $3.1 billion at the current exchange rate of around $220 each.
Bitcoin brought 29-year-old Cary to Britain two years ago from Denver, Colorado. He joined forces with Ben Reeves, then a 22-year-old computer science graduate, to develop the Blockchain wallet, spending the first year working out of a two-bedroom apartment in northern England.
Now Blockchain, named after the technology behind bitcoin, is the world's biggest wallet provider, with over 3 million users. Last year it raised over $30 million in its first round of funding, including from billionaire Richard Branson.
POSITIVE ATTITUDE
While some people argue that London lags New York overall as the center for traditional finance, many say the latter's attitude to digital currencies - including a state plan to impose a "BitLicense" on bitcoin start-ups - makes London more attractive for the growing number of businesses dealing in the budding technology.
"What we see in the UK ... is a different attitude," said Jerry Brito, executive director of Coin Center, a Washington DC-based non-profit advocacy group for digital currencies.
"It's a very positive attitude, one of: this is an amazing innovation, we're going to have to have some kind of regulation in terms of money laundering, but let's do this in a constructive way, in partnership with the technologists and the industry."
Detractors worry that digital currencies make it easy for users to buy products anonymously from websites like Silk Road, an underground marketplace for drugs and other illegal goods which was shut down in 2013.
But advocates argue that using cash for illicit trades is easier and less traceable, pointing out that most U.S. banknotes are contaminated with cocaine.
Asked about bitcoin, the governing body for the City of London financial district said authorities needed to be "alive to the potential risks and take strong action if they find evidence of abuse or criminal activities". But the employment and growth opportunities offered by the fintech in general were to be welcomed, it said.
Britain made bitcoin trading exempt from value-added tax last year. Other countries have yet to decide how to tax bitcoin, since its independence from any central bank means it does not fall into the traditional definition of money.
However, Australia has made bitcoin transactions subject to goods and services tax. That helped to drive CoinJar, an Australian company that allows users to buy, sell and spend bitcoins, to move its headquarters to London last December.
INVESTMENT
Later this month Swiss banking giant UBS will open a technology lab in London to explore the wider application of the technology in the financial services industry.
Finance minister George Osborne has said he wants Britain to lead the world in developing fintech, highlighting the potential of digital currencies.
Last year investment in fintech firms in Britain and Ireland more than doubled compared with 2013, to $623 million, representing 42 percent of such investment in Europe, according to consultancy Accenture.
Alongside the new regulation and standards, the British government promised an additional 10 million pounds ($15 million) for a research initiative that will look into the blockchain technology behind digital currencies.
It is the blockchain - essentially a ledger of every bitcoin transaction that is virtually impossible to tamper with - that the Bank of England has also said could be revolutionary. Central banks, it has said, could eventually issue digital currencies of their own.
Dozens of others have copied this technology to set up their own digital currencies, though none has so far managed to knock bitcoin off the top spot.
TANTRIC MASSAGE
Londoners can change cash for bitcoins at seven ATMs in the capital, and use them to pay for anything from tantric massage to a designer dress, a pork chop to a pint of beer. One company even allows rent on property to be paid in bitcoin.
Back in the trendy "Vape Lab" e-cigarette cafe, one young bitcoiner was putting 800 pounds' worth of 20 pound notes into a bitcoin ATM in exchange for the digital currency.
"I just sell bitcoin to others, because they don't know how to do it, so I take advantage of that and I make a profit," he said.
At least three killed, peacekeepers injured in Mali suicide attack: U.N.
At least three killed, peacekeep(Reuters) - At least three civilians were killed and nine United Nations peacekeepers seriously injured in a suicide attack on Wednesday at a U.N. base in town of Ansongo in northern Mali, a spokesman for the peacekeeping mission said.
"A vehicle tried to penetrate the camp and there was an explosion," Olivier Salgado told Reuters by telephone from the capital Bamako. He said the casualty figure was provisional as the wounded were still being evacuated.
A Niger security official in Niamey said several Nigerien soldiers taking part in the U.N. mission were wounded in the attack.
Mali army spokesman Diarran Kone said the suicide bomber tried to force his way into the camp but was shot. However, his bomb-ladened vehicle exploded.
The United Nations has deployed some 10,000 personnel in Mali to help stabilize the Sahel nation, which was overran by al Qaeda-linked Islamists in 2012.
The militants were driven out by a French-led intervention in 2013 but there remain pockets of insurgents who have launched numerous attacks on U.N., French and Malian forces as well as civilians.ers injured in Mali suicide attack: U.N.,
"A vehicle tried to penetrate the camp and there was an explosion," Olivier Salgado told Reuters by telephone from the capital Bamako. He said the casualty figure was provisional as the wounded were still being evacuated.
A Niger security official in Niamey said several Nigerien soldiers taking part in the U.N. mission were wounded in the attack.
Mali army spokesman Diarran Kone said the suicide bomber tried to force his way into the camp but was shot. However, his bomb-ladened vehicle exploded.
The United Nations has deployed some 10,000 personnel in Mali to help stabilize the Sahel nation, which was overran by al Qaeda-linked Islamists in 2012.
The militants were driven out by a French-led intervention in 2013 but there remain pockets of insurgents who have launched numerous attacks on U.N., French and Malian forces as well as civilians.ers injured in Mali suicide attack: U.N.,
At least three killed, peacekeepers injured in Mali suicide attack: U.N.
At least three killed, peacekeepers injured in Mali(Reuters) - At least three civilians were killed and nine United Nations peacekeepers seriously injured in a suicide attack on Wednesday at a U.N. base in town of Ansongo in northern Mali, a spokesman for the peacekeeping mission said.
"A vehicle tried to penetrate the camp and there was an explosion," Olivier Salgado told Reuters by telephone from the capital Bamako. He said the casualty figure was provisional as the wounded were still being evacuated.
A Niger security official in Niamey said several Nigerien soldiers taking part in the U.N. mission were wounded in the attack.
Mali army spokesman Diarran Kone said the suicide bomber tried to force his way into the camp but was shot. However, his bomb-ladened vehicle exploded.
The United Nations has deployed some 10,000 personnel in Mali to help stabilize the Sahel nation, which was overran by al Qaeda-linked Islamists in 2012.
The militants were driven out by a French-led intervention in 2013 but there remain pockets of insurgents who have launched numerous attacks on U.N., French and Malian forces as well as civilians. suicide attack: U.N.,
"A vehicle tried to penetrate the camp and there was an explosion," Olivier Salgado told Reuters by telephone from the capital Bamako. He said the casualty figure was provisional as the wounded were still being evacuated.
A Niger security official in Niamey said several Nigerien soldiers taking part in the U.N. mission were wounded in the attack.
Mali army spokesman Diarran Kone said the suicide bomber tried to force his way into the camp but was shot. However, his bomb-ladened vehicle exploded.
The United Nations has deployed some 10,000 personnel in Mali to help stabilize the Sahel nation, which was overran by al Qaeda-linked Islamists in 2012.
The militants were driven out by a French-led intervention in 2013 but there remain pockets of insurgents who have launched numerous attacks on U.N., French and Malian forces as well as civilians. suicide attack: U.N.,
Yemen war puts 2015 crop at risk, food stocks shrink: U.N. agency
Yemen war puts 2015 crop at ri(Reuters) - Conflict in Yemen is disrupting the crop planting season and threatens to create food shortages as the war-stricken country eats into its cereal reserves, the United Nations Food and Agriculture Organization (FAO) said on Wednesday.
Yemen's cereal stocks stood at around 860,000 tonnes when Saudi-led air strikes against Iran-allied Houthi rebels started, enough for three to four months, FAO Assistant Director-General for North Africa and the Near East, Abdessalam Ould Ahmed, said.
The cereals were mostly wheat, but also included rice and maize, he said.
"We are very much concerned by the fact that this country may not be able to sustain imports while reserves of food are shrinking as conflict drags on," Ould Ahmed said by telephone.
An alliance of Arab states has been bombing Shi'ite Muslim Houthi militias and troops loyal to former president Ali Abdullah Saleh for weeks to try to stop them from seizing the southern port city of Aden.
Ould Ahmed said traffic had been disrputed since the start of the Saudi-led campaign on March 26.
"There are significant concerns that food availability will become less and less inside the country," he said.
Yemen imports about 90 percent of its wheat needs and 100 percent of its rice although nearly two-thirds of Yemenis work in agriculture.
FAO said earlier in a statement on Wednesday it was concerneYemen war puts 2015 crop at ri(Reuters) - Conflict in Yemen is disrupting the crop planting season and threatens to create food shortages as the war-stricken country eats into its cereal reserves, the United Nations Food and Agriculture Organization (FAO) said on Wednesday.
Yemen's cereal stocks stood at around 860,000 tonnes when Saudi-led air strikes against Iran-allied Houthi rebels started, enough for three to four months, FAO Assistant Director-General for North Africa and the Near East, Abdessalam Ould Ahmed, said.
The cereals were mostly wheat, but also included rice and maize, he said.
"We are very much concerned by the fact that this country may not be able to sustain imports while reserves of food are shrinking as conflict drags on," Ould Ahmed said by telephone.
An alliance of Arab states has been bombing Shi'ite Muslim Houthi militias and troops loyal to former president Ali Abdullah Saleh for weeks to try to stop them from seizing the southern port city of Aden.
Ould Ahmed said traffic had been disrputed since the start of the Saudi-led campaign on March 26.
"There are significant concerns that food availability will become less and less inside the country," he said.
Yemen imports about 90 percent of its wheat needs and 100 percent of its rice although nearly two-thirds of Yemenis work in agriculture.
FAO said earlier in a statement on Wednesday it was concerned the air strikes came at a time when farmers were preparing their land for planting and threatened the 2015 crop.
With most people living off the land and about 90 percent of Yemen's water resources used in agriculture, Yemenis are especially vulnerable when conflicts disrupt farm production.
The U.N. agency has been working since 2014 to support Yemeni farmers but it says only $4 million of the required $12 million have been made available for its livelihood programs.
Nearly half of Yemen's 26 million people are classified as severely food insecure, while 16 million are in need of some form of humanitarian aid and have no access to safe water, the FAO said.
Food imports into the Arab world's poorest country began grinding to a halt a week after the Saudi-led coalition began its operations in Yemen, putting fragile supply chains under growing strain and forcing commercial suppliers to stay away.
Yemen's National Food Security Strategy, set up as a response to a spike in global food prices in 2008, aimed to cut food insecurity by a third by 2015 and to make 90 percent of the population food secure by 2020.
But the strategy, which included plans to set up a strategic grain reserve, has been severely hampered by the instability plaguing Yemen since street protests ousted former president Al Abdullah Saleh in 2011.sk, food stocks shrink: U.N. agency, d the air strikes came at a time when farmers were preparing their land for planting and threatened the 2015 crop. With most people living off the land and about 90 percent of Yemen's water resources used in agriculture, Yemenis are especially vulnerable when conflicts disrupt farm production. The U.N. agency has been working since 2014 to support Yemeni farmers but it says only $4 million of the required $12 million have been made available for its livelihood programs. Nearly half of Yemen's 26 million people are classified as severely food insecure, while 16 million are in need of some form of humanitarian aid and have no access to safe water, the FAO said. Food imports into the Arab world's poorest country began grinding to a halt a week after the Saudi-led coalition began its operations in Yemen, putting fragile supply chains under growing strain and forcing commercial suppliers to stay away. Yemen's National Food Security Strategy, set up as a response to a spike in global food prices in 2008, aimed to cut food insecurity by a third by 2015 and to make 90 percent of the population food secure by 2020. But the strategy, which included plans to set up a strategic grain reserve, has been severely hampered by the instability plaguing Yemen since street protests ousted former president Al Abdullah Saleh in 2011.sk, food stocks shrink: U.N. agency,
Yemen's cereal stocks stood at around 860,000 tonnes when Saudi-led air strikes against Iran-allied Houthi rebels started, enough for three to four months, FAO Assistant Director-General for North Africa and the Near East, Abdessalam Ould Ahmed, said.
The cereals were mostly wheat, but also included rice and maize, he said.
"We are very much concerned by the fact that this country may not be able to sustain imports while reserves of food are shrinking as conflict drags on," Ould Ahmed said by telephone.
An alliance of Arab states has been bombing Shi'ite Muslim Houthi militias and troops loyal to former president Ali Abdullah Saleh for weeks to try to stop them from seizing the southern port city of Aden.
Ould Ahmed said traffic had been disrputed since the start of the Saudi-led campaign on March 26.
"There are significant concerns that food availability will become less and less inside the country," he said.
Yemen imports about 90 percent of its wheat needs and 100 percent of its rice although nearly two-thirds of Yemenis work in agriculture.
FAO said earlier in a statement on Wednesday it was concerned the air strikes came at a time when farmers were preparing their land for planting and threatened the 2015 crop.
With most people living off the land and about 90 percent of Yemen's water resources used in agriculture, Yemenis are especially vulnerable when conflicts disrupt farm production.
The U.N. agency has been working since 2014 to support Yemeni farmers but it says only $4 million of the required $12 million have been made available for its livelihood programs.
Nearly half of Yemen's 26 million people are classified as severely food insecure, while 16 million are in need of some form of humanitarian aid and have no access to safe water, the FAO said.
Food imports into the Arab world's poorest country began grinding to a halt a week after the Saudi-led coalition began its operations in Yemen, putting fragile supply chains under growing strain and forcing commercial suppliers to stay away.
Yemen's National Food Security Strategy, set up as a response to a spike in global food prices in 2008, aimed to cut food insecurity by a third by 2015 and to make 90 percent of the population food secure by 2020.
But the strategy, which included plans to set up a strategic grain reserve, has been severely hampered by the instability plaguing Yemen since street protests ousted former president Al Abdullah Saleh in 2011.sk, food stocks shrink: U.N. agency, d the air strikes came at a time when farmers were preparing their land for planting and threatened the 2015 crop. With most people living off the land and about 90 percent of Yemen's water resources used in agriculture, Yemenis are especially vulnerable when conflicts disrupt farm production. The U.N. agency has been working since 2014 to support Yemeni farmers but it says only $4 million of the required $12 million have been made available for its livelihood programs. Nearly half of Yemen's 26 million people are classified as severely food insecure, while 16 million are in need of some form of humanitarian aid and have no access to safe water, the FAO said. Food imports into the Arab world's poorest country began grinding to a halt a week after the Saudi-led coalition began its operations in Yemen, putting fragile supply chains under growing strain and forcing commercial suppliers to stay away. Yemen's National Food Security Strategy, set up as a response to a spike in global food prices in 2008, aimed to cut food insecurity by a third by 2015 and to make 90 percent of the population food secure by 2020. But the strategy, which included plans to set up a strategic grain reserve, has been severely hampered by the instability plaguing Yemen since street protests ousted former president Al Abdullah Saleh in 2011.sk, food stocks shrink: U.N. agency,
Iran says it will use influence to broker peace in Yemen LISBON
Iran says it will use influence to broker peace in Yemen
LISBON, (Reuters) - Iran's foreign minister said on Wednesday that his country would use all its influence to broker a peace deal for Yemen in order to end Saudi-led air strikes against Houthi rebel forces allied to Iran.
"We are a major force in the region and we have relations with all groups in various countries, and we are going to use that in order to bring everybody to the negotiating table, to the point that we can," Mohammed Javad Zarif told reporters in Lisbon.
"We have influence with a lot of groups in Yemen, not just the Houthis and the Shias," he said.
He added that Iran had already consulted with Turkey and Pakistan, two majority-Sunni allies of Saudi Arabia, and Oman, the Gulf country that maintains the closest ties with Iran. None has joined the Saudi-led air campaign against the Houthis.
Saudi Arabia and other Sunni-ruled Gulf powers accuse Iran of arming the Houthis, who are fellow Shi'ite Muslims, and interfering in Yemen's affairs. Tehran denies giving the Houthis military support.
Zarif said efforts to bring peace to Yemen must "start with the right premise, that we need to end this bombardment and all the bloodshed, and prevent al Qaeda from taking advantage of this nasty situation".
On Tuesday he had outlined a four-point peace plan comprising a ceasefire, humanitarian assistance, an intra-Yemeni dialogue and the establishment of a broad-based government.
Zarif urged an end to what he called "an aerial bombardment against the people of Yemen", saying there were "hardly any military targets in Yemen".
LISBON, (Reuters) - Iran's foreign minister said on Wednesday that his country would use all its influence to broker a peace deal for Yemen in order to end Saudi-led air strikes against Houthi rebel forces allied to Iran.
"We are a major force in the region and we have relations with all groups in various countries, and we are going to use that in order to bring everybody to the negotiating table, to the point that we can," Mohammed Javad Zarif told reporters in Lisbon.
"We have influence with a lot of groups in Yemen, not just the Houthis and the Shias," he said.
He added that Iran had already consulted with Turkey and Pakistan, two majority-Sunni allies of Saudi Arabia, and Oman, the Gulf country that maintains the closest ties with Iran. None has joined the Saudi-led air campaign against the Houthis.
Saudi Arabia and other Sunni-ruled Gulf powers accuse Iran of arming the Houthis, who are fellow Shi'ite Muslims, and interfering in Yemen's affairs. Tehran denies giving the Houthis military support.
Zarif said efforts to bring peace to Yemen must "start with the right premise, that we need to end this bombardment and all the bloodshed, and prevent al Qaeda from taking advantage of this nasty situation".
On Tuesday he had outlined a four-point peace plan comprising a ceasefire, humanitarian assistance, an intra-Yemeni dialogue and the establishment of a broad-based government.
Zarif urged an end to what he called "an aerial bombardment against the people of Yemen", saying there were "hardly any military targets in Yemen".
Ten Colombian soldiers killed in attack blamed on FARC rebels
Ten Colombian soldiers killed (Reuters) - Ten soldiers were killed in southwestern Colombia on Wednesday after being shot at and attacked with grenades by FARC rebels, the army said, raising questions over whether the leftist group had broken a unilateral ceasefire it declared four months ago.
The Revolutionary Armed Forces of Colombia, or FARC, have been in peace negotiations with the government for more than two years and declared a ceasefire in December as talks advanced, saying they would only open fire if attacked.
The army "reproaches this act, whose authors were the narco-terrorists of the fourth commission of the Miller Perdomo mobile column of the FARC," General Mario Valencia told journalists, referring to the drug trafficking activity that funds the group.
He said one FARC member had alsoTen Colombian soldiers killed (Reuters) - Ten soldiers were killed in southwestern Colombia on Wednesday after being shot at and attacked with grenades by FARC rebels, the army said, raising questions over whether the leftist group had broken a unilateral ceasefire it declared four months ago.
The Revolutionary Armed Forces of Colombia, or FARC, have been in peace negotiations with the government for more than two years and declared a ceasefire in December as talks advanced, saying they would only open fire if attacked.
The army "reproaches this act, whose authors were the narco-terrorists of the fourth commission of the Miller Perdomo mobile column of the FARC," General Mario Valencia told journalists, referring to the drug trafficking activity that funds the group.
He said one FARC member had also been killed in the attack which took place as the army carried out "territorial control operations" to protect civilians in the area. At least nine government troops were also injured.
President Juan Manuel Santos said on Twitter he would travel on Wednesday to Cauca province where the attack took place. Just days ago, he extended a halt to air raids on FARC jungle hide-outs, a gesture aimed at de-escalating the 50-year-old war.
"I am with the military leadership consulting about the events," he said. "This is exactly the war that we want to end."
The attack is unlikely to derail the peace negotiations that have taken place in Cuba since late 2012 even while battlefield combat continued at home. But it is the first major clash blamed on the FARC since their ceasefire declaration.
FARC negotiator Felix Antonio Munoz, known as Pastor Alape, did not confirm whether the FARC was involved but he appeared to blame the government for the clashes.
The confrontation "seems to be caused by the incoherence on the part of the government - ordering military operations against a rebel force in ceasefire," he told reporters in Havana, reiterating the FARC's demand for a bilateral ceasefire.
Despite halting air raids against the FARC, Santos has refused to call a complete end to attacks against the rebels despite their unilateral ceasefire, reiterating the government's constitutional duty to protect civilians.
The FARC exploited a ceasefire period during a previous peace process more than a decade ago to regroup and build up military strength.
Santos also has to tread a fine line between pursuing peace while trying to avoid accusations that he is capitulating to a group Western governments deem terrorists.in attack blamed on FARC rebels, been killed in the attack which took place as the army carried out "territorial control operations" to protect civilians in the area. At least nine government troops were also injured. President Juan Manuel Santos said on Twitter he would travel on Wednesday to Cauca province where the attack took place. Just days ago, he extended a halt to air raids on FARC jungle hide-outs, a gesture aimed at de-escalating the 50-year-old war. "I am with the military leadership consulting about the events," he said. "This is exactly the war that we want to end." The attack is unlikely to derail the peace negotiations that have taken place in Cuba since late 2012 even while battlefield combat continued at home. But it is the first major clash blamed on the FARC since their ceasefire declaration. FARC negotiator Felix Antonio Munoz, known as Pastor Alape, did not confirm whether the FARC was involved but he appeared to blame the government for the clashes. The confrontation "seems to be caused by the incoherence on the part of the government - ordering military operations against a rebel force in ceasefire," he told reporters in Havana, reiterating the FARC's demand for a bilateral ceasefire. Despite halting air raids against the FARC, Santos has refused to call a complete end to attacks against the rebels despite their unilateral ceasefire, reiterating the government's constitutional duty to protect civilians. The FARC exploited a ceasefire period during a previous peace process more than a decade ago to regroup and build up military strength. Santos also has to tread a fine line between pursuing peace while trying to avoid accusations that he is capitulating to a group Western governments deem terrorists.in attack blamed on FARC rebels,
The Revolutionary Armed Forces of Colombia, or FARC, have been in peace negotiations with the government for more than two years and declared a ceasefire in December as talks advanced, saying they would only open fire if attacked.
The army "reproaches this act, whose authors were the narco-terrorists of the fourth commission of the Miller Perdomo mobile column of the FARC," General Mario Valencia told journalists, referring to the drug trafficking activity that funds the group.
He said one FARC member had also been killed in the attack which took place as the army carried out "territorial control operations" to protect civilians in the area. At least nine government troops were also injured.
President Juan Manuel Santos said on Twitter he would travel on Wednesday to Cauca province where the attack took place. Just days ago, he extended a halt to air raids on FARC jungle hide-outs, a gesture aimed at de-escalating the 50-year-old war.
"I am with the military leadership consulting about the events," he said. "This is exactly the war that we want to end."
The attack is unlikely to derail the peace negotiations that have taken place in Cuba since late 2012 even while battlefield combat continued at home. But it is the first major clash blamed on the FARC since their ceasefire declaration.
FARC negotiator Felix Antonio Munoz, known as Pastor Alape, did not confirm whether the FARC was involved but he appeared to blame the government for the clashes.
The confrontation "seems to be caused by the incoherence on the part of the government - ordering military operations against a rebel force in ceasefire," he told reporters in Havana, reiterating the FARC's demand for a bilateral ceasefire.
Despite halting air raids against the FARC, Santos has refused to call a complete end to attacks against the rebels despite their unilateral ceasefire, reiterating the government's constitutional duty to protect civilians.
The FARC exploited a ceasefire period during a previous peace process more than a decade ago to regroup and build up military strength.
Santos also has to tread a fine line between pursuing peace while trying to avoid accusations that he is capitulating to a group Western governments deem terrorists.in attack blamed on FARC rebels, been killed in the attack which took place as the army carried out "territorial control operations" to protect civilians in the area. At least nine government troops were also injured. President Juan Manuel Santos said on Twitter he would travel on Wednesday to Cauca province where the attack took place. Just days ago, he extended a halt to air raids on FARC jungle hide-outs, a gesture aimed at de-escalating the 50-year-old war. "I am with the military leadership consulting about the events," he said. "This is exactly the war that we want to end." The attack is unlikely to derail the peace negotiations that have taken place in Cuba since late 2012 even while battlefield combat continued at home. But it is the first major clash blamed on the FARC since their ceasefire declaration. FARC negotiator Felix Antonio Munoz, known as Pastor Alape, did not confirm whether the FARC was involved but he appeared to blame the government for the clashes. The confrontation "seems to be caused by the incoherence on the part of the government - ordering military operations against a rebel force in ceasefire," he told reporters in Havana, reiterating the FARC's demand for a bilateral ceasefire. Despite halting air raids against the FARC, Santos has refused to call a complete end to attacks against the rebels despite their unilateral ceasefire, reiterating the government's constitutional duty to protect civilians. The FARC exploited a ceasefire period during a previous peace process more than a decade ago to regroup and build up military strength. Santos also has to tread a fine line between pursuing peace while trying to avoid accusations that he is capitulating to a group Western governments deem terrorists.in attack blamed on FARC rebels,
Tanzanians lynch suspected Somali militant, police arrest 10 others
Tanzanians lynch suspected Somali militant, police (Reuters) - Tanzanian security forces have arrested 10 suspected members of the Somali Islamist group al Shabaab in a raid on a mosque and another was lynched by a mob, police said on Wednesday.
Officials said Tanzania was on high alert for al Shabaab attacks after the group claimed an attack on a university in neighboring Kenya this month that killed 148 people.
Police Commissioner Paul Chagonja told Reuters the suspected members of the al Qaeda-linked group had been arrested on Tuesday night in Kilombero district, Morogoro region, about 200 km (125 miles) east of the commercial capital Dar es Salaam.
Morogoro regional police chief, Leonard Paul Lwabuzala, said in a statement that one member of the group was lynched by a mob as he was pursued by the police.
"The suspects arrested at a mosque were found in possession of 30 sticks of explosives, detonating cord, a black flag, military uniforms, masks and swords," Lwabuzala said.
Tanzania has been spared the level of assaults by al Shabaab militants seen in Kenya although there have been sporadic attacks on tourists.
Unlike Kenya, Tanzania, which is roughly evenly split between Christians and Muslims, has not sent troops to Somalia and it does not share a border with the Horn of Africa nation.
Al Shabaab has said it has targeted Kenya to punish the country for sending troops to Somalia where they have battled the militants as part of an African Union peacekeeping force. It said other contributing African nations could also be targeted.arrest 10 others,
Officials said Tanzania was on high alert for al Shabaab attacks after the group claimed an attack on a university in neighboring Kenya this month that killed 148 people.
Police Commissioner Paul Chagonja told Reuters the suspected members of the al Qaeda-linked group had been arrested on Tuesday night in Kilombero district, Morogoro region, about 200 km (125 miles) east of the commercial capital Dar es Salaam.
Morogoro regional police chief, Leonard Paul Lwabuzala, said in a statement that one member of the group was lynched by a mob as he was pursued by the police.
"The suspects arrested at a mosque were found in possession of 30 sticks of explosives, detonating cord, a black flag, military uniforms, masks and swords," Lwabuzala said.
Tanzania has been spared the level of assaults by al Shabaab militants seen in Kenya although there have been sporadic attacks on tourists.
Unlike Kenya, Tanzania, which is roughly evenly split between Christians and Muslims, has not sent troops to Somalia and it does not share a border with the Horn of Africa nation.
Al Shabaab has said it has targeted Kenya to punish the country for sending troops to Somalia where they have battled the militants as part of an African Union peacekeeping force. It said other contributing African nations could also be targeted.arrest 10 others,
Iraq's prime minister says seeks U.S. arms, with payment deferred
Iraq's prime minister says seeks U.S. arms, with payment de(Reuters) - Iraq's Prime Minister Haidar al-Abadi said on Wednesday he would seek a sustainable flow of weaponry from the United States during talks in Washington, with payment deferred, as Baghdad battles a cash crunch due to plunging oil prices.
"Arms, we need them all. If they can supply us with heavy weapons, with tanks, we need them badly," Abadi told a small group of reporters ahead of talks with U.S. Defense Secretary Ash Carter.
Asked about when Baghdad would pay: "Iraq can pay for it later, not now... I think there can be an arrangement for deferred payment."
Reuters had previously reported Abadi's intention to seek billions of dollars in arms during his Washington visit, citing an unnamed Iraqi official.ferred,
"Arms, we need them all. If they can supply us with heavy weapons, with tanks, we need them badly," Abadi told a small group of reporters ahead of talks with U.S. Defense Secretary Ash Carter.
Asked about when Baghdad would pay: "Iraq can pay for it later, not now... I think there can be an arrangement for deferred payment."
Reuters had previously reported Abadi's intention to seek billions of dollars in arms during his Washington visit, citing an unnamed Iraqi official.ferred,
U.S., allies conduct 23 air strikes in Syria, Iraq against Islamic State: military
U.S., allies conduct 23 air strikes i(Reuters) - U.S.-led forces targeted Islamic State militants in Syria with six air strikes and conducted another 17 strikes against the group in Iraq from Tuesday to Wednesday morning, the U.S. military said.
In Syria, there were two strikes involving attack and fighter aircraft near Al Hasakah and four near Kobani, it said in a statement released on Wednesday. In Iraq, the strikes were conducted with fighter and attack planes as well as drones near Bayji, Fallujah, Mosul, Ramadi, Sinjar and Tal Afar, the U.S. military statement said.
"All aircraft returned to base safely," it said.n Syria, Iraq against Islamic State: military,
In Syria, there were two strikes involving attack and fighter aircraft near Al Hasakah and four near Kobani, it said in a statement released on Wednesday. In Iraq, the strikes were conducted with fighter and attack planes as well as drones near Bayji, Fallujah, Mosul, Ramadi, Sinjar and Tal Afar, the U.S. military statement said.
"All aircraft returned to base safely," it said.n Syria, Iraq against Islamic State: military,
Islamic State seizes village in Iraq's Anbar province
Islamic State seizes village in Iraq's Anbar p(Reuters) - Islamic State militants gained ground in western Iraq on Wednesday, overrunning another village near the capital of Anbar province in a dawn raid, police sources and local officials said.
Hundreds of families fled Albu Ghanim after security forces came under attack from the militants overnight and withdrew from the area, around 5 km (3 miles) northeast of the provincial capital Ramadi.
Abu Jasim, who left Albu Ghanim soon after it fell early on Wednesday, said the insurgents had set up a checkpoint at the main entrance to the village and planted their black flag there.
"IS stopped us and said we have came to liberate you from these Safavids and rejectionists," Abu Jasim said. Safavid and rejectionist are derogatory terms used by hardline Sunni Islamists to refer to Shi'ites.
"We told them we were leaving because the kids were terrified. They let us go, and we saw bodies lying in the streets, some police and others civilians."
The militants have been making inroads on Ramadi's northern periphery since the government announced the start of a new offensive last week to recapture the Sunni heartland of Anbar.
Two federal police battalions arrived in Ramadi on Wednesday to reinforce the beleaguered forces, according to a colonel and a policeman.
Another resident who left Albu Ghanim said the jihadists had declared their victory via loudspeaker in the village mosque. Abu Amar said his son, a policeman, was missing, and he had heard the militants had a list of conscripts whom they had already begun executing.
Large parts of Anbar had slipped from the government's grasp even before Islamic State seized the northern city of Mosul last June and proclaimed a caliphate straddling the border between Iraq and Syria.
Security forces and Shi'ite paramilitaries have since regained some ground in Iraq, although core Sunni territories remain under Islamic State control, including Nineveh province, of which Mosul is capital, and most of Anbar.
The new Anbar campaign was intended to build on a victory in the city of Tikrit, which Iraqi security forces and Shi'ite paramilitaries retook this month.
But the Sunni jihadists have struck back in Anbar as well as Baiji, where they blasted through the security perimeter around Iraq's largest refinery several days ago.
The operations command for Salahuddin province in which Baiji is located said skirmishes between security forces and the militants continued on Wednesday inside the refinery compound.
The U.S.-led coalition said in a statement on Wednesday it had conducted air strikes in support of Iraqi forces in both Baiji and around Ramadi.rovince,
Hundreds of families fled Albu Ghanim after security forces came under attack from the militants overnight and withdrew from the area, around 5 km (3 miles) northeast of the provincial capital Ramadi.
Abu Jasim, who left Albu Ghanim soon after it fell early on Wednesday, said the insurgents had set up a checkpoint at the main entrance to the village and planted their black flag there.
"IS stopped us and said we have came to liberate you from these Safavids and rejectionists," Abu Jasim said. Safavid and rejectionist are derogatory terms used by hardline Sunni Islamists to refer to Shi'ites.
"We told them we were leaving because the kids were terrified. They let us go, and we saw bodies lying in the streets, some police and others civilians."
The militants have been making inroads on Ramadi's northern periphery since the government announced the start of a new offensive last week to recapture the Sunni heartland of Anbar.
Two federal police battalions arrived in Ramadi on Wednesday to reinforce the beleaguered forces, according to a colonel and a policeman.
Another resident who left Albu Ghanim said the jihadists had declared their victory via loudspeaker in the village mosque. Abu Amar said his son, a policeman, was missing, and he had heard the militants had a list of conscripts whom they had already begun executing.
Large parts of Anbar had slipped from the government's grasp even before Islamic State seized the northern city of Mosul last June and proclaimed a caliphate straddling the border between Iraq and Syria.
Security forces and Shi'ite paramilitaries have since regained some ground in Iraq, although core Sunni territories remain under Islamic State control, including Nineveh province, of which Mosul is capital, and most of Anbar.
The new Anbar campaign was intended to build on a victory in the city of Tikrit, which Iraqi security forces and Shi'ite paramilitaries retook this month.
But the Sunni jihadists have struck back in Anbar as well as Baiji, where they blasted through the security perimeter around Iraq's largest refinery several days ago.
The operations command for Salahuddin province in which Baiji is located said skirmishes between security forces and the militants continued on Wednesday inside the refinery compound.
The U.S.-led coalition said in a statement on Wednesday it had conducted air strikes in support of Iraqi forces in both Baiji and around Ramadi.rovince,
Islamic State withdraws from Yarmouk camp, Nusra remains: residents
Islamic State withdraws from Yarmouk camp, Nusra remains: residents, (Reuters) - Islamic State fighters have largely withdrawn from a Palestinian refugee camp on the outskirts of Damascus after expelling their main rival, several residents and a Palestinian official said on Wednesday.
The pull-out from Yarmouk leaves al Qaeda-linked Nusra as the main group inside the camp.
The sources said hundreds of fighters of the hardline Islamic State had returned to their stronghold in neighboring Hajar al Aswad, from where they had launched their attack earlier this month.
"Most of them have withdrawn in mostly to-and-fro skirmishes that took place between them and their adversaries," resident Abu Ahmad Hawari said.
Alongside seeking to capture the camp, they sought to defeat their rival, the Hamas-linked Aknaf al Maqdis, an opposition group that was ideologically opposed to them.
Islamic State's arrival in Yarmouk had given the jihadist group a significant foothold a few kilometers from Syrian President Bashar al-Assad's seat of power.
The group was still fighting some of the remaining Aknaf al Maqdis fighters in the northern entrance of the camp at the junction of the main Palestine and Yarmouk streets, two residents said.
The withdrawal leaves al-Qaeda offshoot al Nusra as the biggest force in the camp, many of whose residents have fled since Islamic State launched its offensive, they added.
RELATED COVERAGE
› U.S., allies conduct 23 air strikes in Syria, Iraq against Islamic State: military
› Fighting adds to plight of destitute refugees in Syrian camp
› Islamic State seizes village in Iraq's Anbar province
The Palestine Liberation Organisation envoy to Damascus said that Nusra was now the main group in the camp.
"They and Nusra are one. They are changing positions," Anwar Abdul Hadi told Reuters.
Nusra was accused by its rivals of facilitating the entry of Islamic State militants into the camp. Although they are rivals elsewhere in Syria, both share a loathing for Aknaf al Maqdis.
But Nusra, unlike Islamic State, was not ready to push its rivalry to a military confrontation and did not engage in the latest round of fighting in Yarmouk, according to residents.
The camp was home to some 160,000 Palestinians before the Syrian conflict began in 2011, refugees from the 1948 war of Israel's founding, and their descendents.
The pull-out from Yarmouk leaves al Qaeda-linked Nusra as the main group inside the camp.
The sources said hundreds of fighters of the hardline Islamic State had returned to their stronghold in neighboring Hajar al Aswad, from where they had launched their attack earlier this month.
"Most of them have withdrawn in mostly to-and-fro skirmishes that took place between them and their adversaries," resident Abu Ahmad Hawari said.
Alongside seeking to capture the camp, they sought to defeat their rival, the Hamas-linked Aknaf al Maqdis, an opposition group that was ideologically opposed to them.
Islamic State's arrival in Yarmouk had given the jihadist group a significant foothold a few kilometers from Syrian President Bashar al-Assad's seat of power.
The group was still fighting some of the remaining Aknaf al Maqdis fighters in the northern entrance of the camp at the junction of the main Palestine and Yarmouk streets, two residents said.
The withdrawal leaves al-Qaeda offshoot al Nusra as the biggest force in the camp, many of whose residents have fled since Islamic State launched its offensive, they added.
RELATED COVERAGE
› U.S., allies conduct 23 air strikes in Syria, Iraq against Islamic State: military
› Fighting adds to plight of destitute refugees in Syrian camp
› Islamic State seizes village in Iraq's Anbar province
The Palestine Liberation Organisation envoy to Damascus said that Nusra was now the main group in the camp.
"They and Nusra are one. They are changing positions," Anwar Abdul Hadi told Reuters.
Nusra was accused by its rivals of facilitating the entry of Islamic State militants into the camp. Although they are rivals elsewhere in Syria, both share a loathing for Aknaf al Maqdis.
But Nusra, unlike Islamic State, was not ready to push its rivalry to a military confrontation and did not engage in the latest round of fighting in Yarmouk, according to residents.
The camp was home to some 160,000 Palestinians before the Syrian conflict began in 2011, refugees from the 1948 war of Israel's founding, and their descendents.
U.S. and EU optimistic that Congress will pass Iran deal
U.S. and EU optimistic that Congress will pass Iran deal, (Reuters) - U.S. Secretary of State John Kerry made clear at a meeting of G7 foreign ministers that he was optimistic an Iran deal will get through Congress, Germany's foreign minister said, while the EU's foreign policy chief was also upbeat.
U.S. President Barack Obama had agreed on Tuesday that Congress should have the power to review any deal with Iran, bowing to pressure from Republicans and some in his own Democratic party. Negotiations are aimed at curbing Tehran's nuclear program in exchange for sanctions relief.
On Wednesday, Frank-Walter Steinmeier told reporters, "The view is that, if you reach an agreement on the basis of the framework, then that is a position that you can push through Congress."
Earlier on Wednesday Kerry had told reporters he was confident Obama would be able to get Congress to approve a deal.
Speaking in Luebeck, European Union foreign policy chief Federica Mogherini said that in the coming weeks it would be necessary to "do a good job" in working on the details for a final deal with Iran and in creating the political conditions that countries involved in the negotiations needed to get consensus for such an accord.
"I'm confident that this will be the case both in the United States and in other countries," she told reporters, noting that she was sure it would be understood in the United States that the deal was "an agreement in the interests of the security of everybody in the region and also worldwide".
U.S. President Barack Obama had agreed on Tuesday that Congress should have the power to review any deal with Iran, bowing to pressure from Republicans and some in his own Democratic party. Negotiations are aimed at curbing Tehran's nuclear program in exchange for sanctions relief.
On Wednesday, Frank-Walter Steinmeier told reporters, "The view is that, if you reach an agreement on the basis of the framework, then that is a position that you can push through Congress."
Earlier on Wednesday Kerry had told reporters he was confident Obama would be able to get Congress to approve a deal.
Speaking in Luebeck, European Union foreign policy chief Federica Mogherini said that in the coming weeks it would be necessary to "do a good job" in working on the details for a final deal with Iran and in creating the political conditions that countries involved in the negotiations needed to get consensus for such an accord.
"I'm confident that this will be the case both in the United States and in other countries," she told reporters, noting that she was sure it would be understood in the United States that the deal was "an agreement in the interests of the security of everybody in the region and also worldwide".
Be aware of possible flu outbreak in dogs
Be aware of possible flu outbreak in dogs, Most of you consider your dogs to be beloved family members so when they are not acting in a normal fashion, showing ill signs, such as those in recent dog flu outbreaks, it is very troubling and bothersome. You alone know your pet’s normal habits and behaviors. If and when you note your dog is not his or her usual self, be sure to contact your local Rockford-area veterinarian as list below or a vet closest to your home for an exam and diagnosis.
Three states in the Midwest, such as Illinois, Indiana and Wisconsin have had documented cases of canine influenza. More than a 1,000 have been affected, with five known deaths thus far. In order to protect your animals, it is best that you know what to look for and how to protect your dog(s). This recent outbreak has no relation to kennel cough.
The dog flu can affect any dog of any age although it can be more severe in the younger animals under age 1 and the seniors over age 7. The typical symptoms of canine influenza is lethargy, fever, a lack of appetite and often a persistent cough. If you note any of these symptoms, please do not assume it is just something minor because, in its neglected and accelerated stage can quickly become fatal.
Once you have attended to your dog’s symptoms or if you are trying to prevent the occurrence of this disease, ensure you avoid presenting your pet to possible affected places such as dog parks, doggy day cares, group dog training facilities or any other areas with multiple animals. Veterinarians have stated that dogs can be contagious even if they do not show specific symptoms. It is better to be cautious and safe.
For further information, it is best to contact your personal veterinarian and discuss how to protect your dog(s) and prevent this disease, including the possibility of a vaccine. Keep your pet(s) safe from the onset and/or spread of the influenza virus.
Three states in the Midwest, such as Illinois, Indiana and Wisconsin have had documented cases of canine influenza. More than a 1,000 have been affected, with five known deaths thus far. In order to protect your animals, it is best that you know what to look for and how to protect your dog(s). This recent outbreak has no relation to kennel cough.
The dog flu can affect any dog of any age although it can be more severe in the younger animals under age 1 and the seniors over age 7. The typical symptoms of canine influenza is lethargy, fever, a lack of appetite and often a persistent cough. If you note any of these symptoms, please do not assume it is just something minor because, in its neglected and accelerated stage can quickly become fatal.
Once you have attended to your dog’s symptoms or if you are trying to prevent the occurrence of this disease, ensure you avoid presenting your pet to possible affected places such as dog parks, doggy day cares, group dog training facilities or any other areas with multiple animals. Veterinarians have stated that dogs can be contagious even if they do not show specific symptoms. It is better to be cautious and safe.
For further information, it is best to contact your personal veterinarian and discuss how to protect your dog(s) and prevent this disease, including the possibility of a vaccine. Keep your pet(s) safe from the onset and/or spread of the influenza virus.
Netflix's first serial superhero drama is devilishly great
Netflix's first serial superhero drama is devilishly gOn April 10th, 2015, Netflix and Marvel released the first of their combined superhero ventures: Daredevil.
For those not in the know Daredevil, played on the show by Charlie Cox, is secretly Matthew Murdock, a tough , young lawyer from Hell's Kitchen trying to make his neighborhood and his city a better place. Sure, we have lots of crusading lawyers on TV but how many are blind, have superhuman senses, advanced martial arts training, with perfect balance and a criminal gangster Kingpin, played by Vincent Dinofrio, to boot.
Well, this show does, using plenty of elements from the comics, with a dash of background in the Avengers/SHIELD franchises, we get a street level, dark action drama that greets us with conflict, loss, and hope with our characters. Grittier than Arrow, and as unafraid of it's comic book roots as The Flash, this series has upped the game on comic book TV.
Riffing from the Batman Begins playbook, and rebuilt from comic book shorthand to a wonderful, in depth, character driven series.
Daredevil's comic book nickname is 'the man without fear', but this series has shown what it's not afraid of:
-Honest, non side taking exploration of faith, God, and purpose
-Breakdown, reforging, and building of friendships and found 'families'.
-Consequences of dealing with the hold of wealth, power, and anger when misused
-Conflict of the blurred lines between law and justice
Although, the boundaries of ugly language and visceral, graphic violence are pushed to the limits of Netflix and the small screen, the production team decided to keep some boundaries with their characters to differentiate them from each other and how they are played.
Also, unique, all thirteen episodes are available at once for binge or leisurely perusal, late night watch party or couch time between dinner and bed viewing.
If you have Netflix, this is a must see series, well worth an add to your watchlist.
If you would like to meet some of the creators and artists who have have their hands on Daredevil in one way or another, you might want to head down to Comicpalooza Memorial Day weekend to meet Stan Lee, Sam DeLaRosa, J.M.DeMatteis and others.
For more information on Comicpalooza click here. For Netflix info, click here.reat, Netflix's first serial superhero drama is devilishly gOn April 10th, 2015, Netflix and Marvel released the first of their combined superhero ventures: Daredevil.
For those not in the know Daredevil, played on the show by Charlie Cox, is secretly Matthew Murdock, a tough , young lawyer from Hell's Kitchen trying to make his neighborhood and his city a better place. Sure, we have lots of crusading lawyers on TV but how many are blind, have superhuman senses, advanced martial arts training, with perfect balance and a criminal gangster Kingpin, played by Vincent Dinofrio, to boot.
Well, this show does, using plenty of elements from the comics, with a dash of background in the Avengers/SHIELD franchises, we get a street level, dark action drama that greets us with conflict, loss, and hope with our characters. Grittier than Arrow, and as unafraid of it's comic book roots as The Flash, this series has upped the game on comic book TV.
Riffing from the Batman Begins playbook, and rebuilt from comic book shorthand to a wonderful, in depth, character driven series.
Daredevil's comic book nickname is 'the man without fear', but this series has shown what it's not afraid of:
-Honest, non side taking exploration of faith, God, and purpose
-Breakdown, reforging, and building of friendships and found 'families'.
-Consequences of dealing with the hold of wealth, power, and anger when misused
-Conflict of the blurred lines between law and justice
Although, the boundaries of ugly language and visceral, graphic violence are pushed to the limits of Netflix and the small screen, the production team decided to keep some boundaries with their characters to differentiate them from each other and how they are played.
Also, unique, all thirteen episodes are available at once for binge or leisurely perusal, late night watch party or couch time between dinner and bed viewing.
If you have Netflix, this is a must see series, well worth an add to your watchlist.
If you would like to meet some of the creators and artists who have have their hands on Daredevil in one way or another, you might want to head down to Comicpalooza Memorial Day weekend to meet Stan Lee, Sam DeLaRosa, J.M.DeMatteis and others.
For more information on Comicpalooza click here. For Netflix info, click here.reat,
For those not in the know Daredevil, played on the show by Charlie Cox, is secretly Matthew Murdock, a tough , young lawyer from Hell's Kitchen trying to make his neighborhood and his city a better place. Sure, we have lots of crusading lawyers on TV but how many are blind, have superhuman senses, advanced martial arts training, with perfect balance and a criminal gangster Kingpin, played by Vincent Dinofrio, to boot.
Well, this show does, using plenty of elements from the comics, with a dash of background in the Avengers/SHIELD franchises, we get a street level, dark action drama that greets us with conflict, loss, and hope with our characters. Grittier than Arrow, and as unafraid of it's comic book roots as The Flash, this series has upped the game on comic book TV.
Riffing from the Batman Begins playbook, and rebuilt from comic book shorthand to a wonderful, in depth, character driven series.
Daredevil's comic book nickname is 'the man without fear', but this series has shown what it's not afraid of:
-Honest, non side taking exploration of faith, God, and purpose
-Breakdown, reforging, and building of friendships and found 'families'.
-Consequences of dealing with the hold of wealth, power, and anger when misused
-Conflict of the blurred lines between law and justice
Although, the boundaries of ugly language and visceral, graphic violence are pushed to the limits of Netflix and the small screen, the production team decided to keep some boundaries with their characters to differentiate them from each other and how they are played.
Also, unique, all thirteen episodes are available at once for binge or leisurely perusal, late night watch party or couch time between dinner and bed viewing.
If you have Netflix, this is a must see series, well worth an add to your watchlist.
If you would like to meet some of the creators and artists who have have their hands on Daredevil in one way or another, you might want to head down to Comicpalooza Memorial Day weekend to meet Stan Lee, Sam DeLaRosa, J.M.DeMatteis and others.
For more information on Comicpalooza click here. For Netflix info, click here.reat, Netflix's first serial superhero drama is devilishly gOn April 10th, 2015, Netflix and Marvel released the first of their combined superhero ventures: Daredevil.
For those not in the know Daredevil, played on the show by Charlie Cox, is secretly Matthew Murdock, a tough , young lawyer from Hell's Kitchen trying to make his neighborhood and his city a better place. Sure, we have lots of crusading lawyers on TV but how many are blind, have superhuman senses, advanced martial arts training, with perfect balance and a criminal gangster Kingpin, played by Vincent Dinofrio, to boot.
Well, this show does, using plenty of elements from the comics, with a dash of background in the Avengers/SHIELD franchises, we get a street level, dark action drama that greets us with conflict, loss, and hope with our characters. Grittier than Arrow, and as unafraid of it's comic book roots as The Flash, this series has upped the game on comic book TV.
Riffing from the Batman Begins playbook, and rebuilt from comic book shorthand to a wonderful, in depth, character driven series.
Daredevil's comic book nickname is 'the man without fear', but this series has shown what it's not afraid of:
-Honest, non side taking exploration of faith, God, and purpose
-Breakdown, reforging, and building of friendships and found 'families'.
-Consequences of dealing with the hold of wealth, power, and anger when misused
-Conflict of the blurred lines between law and justice
Although, the boundaries of ugly language and visceral, graphic violence are pushed to the limits of Netflix and the small screen, the production team decided to keep some boundaries with their characters to differentiate them from each other and how they are played.
Also, unique, all thirteen episodes are available at once for binge or leisurely perusal, late night watch party or couch time between dinner and bed viewing.
If you have Netflix, this is a must see series, well worth an add to your watchlist.
If you would like to meet some of the creators and artists who have have their hands on Daredevil in one way or another, you might want to head down to Comicpalooza Memorial Day weekend to meet Stan Lee, Sam DeLaRosa, J.M.DeMatteis and others.
For more information on Comicpalooza click here. For Netflix info, click here.reat,
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