Sprint and T-Mobile nearing merger agreement

T-Mobile and Sprint, respectively the third and fourth largest wireless carriers in the U.S., are nearing a merger agreement, undisclosed sources told Reuters Friday. A due diligence period would follow the finalization of the agreement’s terms, but the companies expect a deal by October, according to Reuters’ source.

In August, Reuters says, Sprint CEO Marcelo Claure said an announcement regarding merger talks would come in “the near future.”

The merger proposal would be the first one “with significant antitrust risk” to be submitted to the Federal Trade Commission since President Donald Trump took office, Reuters notes. The President was elected on a platform that included the deregulation of the business environment.

Mayoshi Son, the founder of Japanese venture capital firm SoftBank, which controls the Sprint Corporation, met with Trump in late December, just after the former tycoon won the election.

Son found Trump’s business policy potentially favorable for SoftBank, and promised to invest $50 billion in the U.S. economy and to create 50,000 jobs.

A merger proposal would evince Son’s confidence that the regulatory environment has become laxer since Sprint and T-Mobile abandoned a merger proposal in 2014 amidst pressure from the FTC.

Indeed, the FTC might be more receptive to a transformative merger in the telecom industry now than it was three years ago. Earlier this year, Reuters says, FTC Chairman Ajit Pai said “effective competition [exists] in the marketplace for mobile wireless services.” Thursday, the agency will vote on whether to submit Pai’s report on the state of competition in the wireless services market to the U.S. Congress, which requires such a report annually.

But, the terms of the new merger will likely be less advantageous for Son and Sprint than those reached in 2014. Under the previous deal, Sprint would have controlled the combined company, while T-Mobile’s parent company, Deutsche Telecom, would have become a minority shareholder.

Over the past three years, though, T-Mobile has outperformed Sprint. Accordingly, the terms of the new agreement will likely flip, Reuters’ source said. Deutsche Telecom and T-Mobile stockholders would own a majority of the combined enterprise, while SoftBank and the rest of Sprint’s shareholders would have a minority stake.

T-Mobile CEO John Legere, who took the reins in 2012 and has guided the company’s surge, will likely run the combined company.

The merged enterprise would have 130 million subscribers, Reuters notes, making it the United States’ third-largest wireless carrier, behind AT&T, which had 136.5 million subscribers as of July, and Verizon, which reported 147.2 million subscribers that same month.

Sprint’s market cap of approximately $34 billion, combined with T-Mobile’s $53 billion figure, would give the new company a value of around $87 billion. AT&T’s market cap is about $237 billion; Verizon’s exceeds $205 billion.

Sprint reported annual revenue of $33.3 billion for fiscal 2016, which ended March 31. T-Mobile posted $37.2 billion in annual revenue for calendar 2016. So, the combined company would likely generate over $70 billion annually.

Verizon posted consolidated revenues of $126 billion and wireless revenues of $89.2 billion in 2016. AT&T’s figure came in at $163 billion.

Analysts say the Sprint/T-Mobile merger provides ample opportunity to cut expenses as well.

In their bid for regulatory approval, the companies will likely emphasize that the combined company would create jobs by making investments in the development of 5G, the next generation of mobile internet connectivity.

But the merger will also precipitate layoffs as the new company consolidates its corporate structure, Roger Entner of Recon Analytics told Reuters.

According to Reuters, Sprint briefly pursued a merger with Charter Communications earlier this year.

The FTC continues to review another potential consolidation in the industry: AT&T’s proposed $85.4-billion acquisition of Time Warner.

Sprint shares jumped six percent Friday; T-Mobile stock rose 1.06 percent.

Toshiba board agrees to sell memory business to Bain-led group

Wednesday, the board of reeling technology giant Toshiba announced that it has approved the $18 billion sale of the company’s flash memory operation, Toshiba Memory Corporation (TMC), to a group of buyers that includes American venture capital firm Bain Capital, and a pair of government-owned Japanese organizations, the Innovation Network Corporation of Japan, the New York Times reports.

The Financial Times says the Japanese government’s involvement in the deal evinces the integrality of Toshiba’s success to the Japanese economy.

Toshiba is fighting to stay afloat after its nuclear power subsidiary, Westinghouse Electric Company, lost money on a number of ill-fated American nuclear projects. Westinghouse, which Toshiba acquired for $5.4 billion in Spring 2006, filed for bankruptcy protection in March.

Toshiba has entered survival mode, draining its cash reserves to remain operational. With the sale of TMC, the company is seeking to generate a short-term cash infusion that will facilitate a recovery.

According to the New York Times, Toshiba was in danger in March of being barred from the Tokyo Stock Exchange unless the company generated new capital.

Though Toshiba just created TMC in April, the company has been a major player in the flash memory sector since the inception of the technology.

A Toshiba engineer invented flash memory in 1980, and the company introduced the technology to the world in 1987. Since, Toshiba’s memory business has provided an integral revenue stream. Today, the company is the world’s second-largest producer of microchips, by volume, second only to South Korean competitor Samsung.

Flash memory is solid-state, meaning it stores data electronically rather than mechanically. Unlike RAM, another solid-state storage system, flash memory does not require power to preserve data, making it ideal for use in portable devices like digital cameras, video game consoles, smartphones, etc.

Even after the sale, Toshiba will likely maintain a significant amount of control over the business, though the buyers will take the lion’s share of the profits.

Toshiba has indicated plans to partner with Bain to create the special purpose company that will purchase TMC.

The new company—which Bain has dubbed Pangea, according to the Financial Timeshas received financial support from Apple, Dell, and others.

Analysts expect Toshiba to hold a minority stake in the new company, and to have considerable decision-making power.

The shareholder structure, the New York Times says, could allow Toshiba to maintain control of the new company’s operations. Buyers will get “a mix of regular shares, preferred shares — which normally do not carry voting rights — and bonds that could eventually be converted into shares.”

The sale awaits antitrust review and has attracted legal opposition from Western Digital, an American company that co-runs a joint microchip-production operation with Toshiba in Japan.

Western Digital claims that the partnership gives it a vested interest in Toshiba’s memory business and that Toshiba is not authorized to sell TMC without Western Digital’s approval. The American firm has initiated legal action to block the sale. The International Court of Arbitration is now reviewing the case.

Western Digital issued a statement Wednesday calling Toshiba’s pursuit of the selloff “troubling” and expressing confidence that the court would side with Western Digital.

Because the sale has yet to be finalized, the door remains open for Toshiba to negotiate with and field offers from other buyers.

A bidding war has been ongoing for the past several months.

Earlier this month, Taiwanese tech behemoth Foxconn, with the support of Apple, venture capital firm SoftBank and others, made a bid to buy TMC. The New York Times’ source says Foxconn offered a healthy sum, but that Japanese authorities feared selling to Foxconn would compromise the country’s leadership in the global technology market.

Western Digital been among TMC’s suitors.

Toshiba stock has dropped about 50 percent since April 2013. As of Thursday afternoon, shares are down 2.9 percent on the news.

Featured image via Wikimedia Commons

More and more Amish businesses are using technology

There are 2,000 thriving Amish businesses in the Lancaster, PA area, Donald B. Kraybill, a retired professor at Elizabethtown’s Young Center for Anabaptist and Pietist Studies, told the New York Times. Many are worth several million dollars.

More and more of those businesses are not strictly agrarian. Many now function with the aid of technology, which the Amish traditionally shun.

Amish communities are growing rapidly, the Times notes, citing an August report by researchers at Elizabethtown College near Lancaster that estimates the Amish population in the U.S. at 313,000. That figure represents a 150 percent increase from 25 years ago.

Most of the growth occurs internally. On average, the Times says, an Amish married-woman has seven children. Marriage is more common in their tight-knit communities than in America as a whole, and they tend to marry younger than the average American does.

With the population growth, farmland has become scarce and more expensive, compelling many Amish people to relocate to rural areas in places like upstate New York, and/or to adopt business trades. In many cases, the move toward such trades necessitates increased interaction with the non-Amish community and requires the Amish to commute into cities for work.

Both of those demands entail the use of modern conveniences and technology traditionally prohibited within the sect.

Moses Smucker, an Amish man who lives in Lancaster, runs a food store and sandwich shop, Smuckers Quality Meats and Grill, in Philadelphia, which lies 80 miles east of Lancaster. Six days a week, a non-Amish driver to takes Smucker, who does not drive a car, into the city.

Smucker told the Times he enjoys escaping the city after his work is done. “Philadelphia is very fast-paced,” he said. “Then I go home, and I can drive my horse. I enjoy horses. Some people don’t, but I do. It slows everything down.”

With regard to technology, Smucker said: “You have to do what you have to do to stay in business. People are starting to understand that.”

Smucker’s shop, which gets four and a half stars on 80 reviews on Yelp!, accepts credit cards as payment.

Amish Country Gazebos, which supplies landscaping structures for the Marriott, the Hilton, Harrah’s and other notable chains, operates online and makes deliveries using its own trucks.

John, an Amish man in his late 60s, cuts wood for the gazebo company using a computer-driven crosscut saw. (Like many people who appear in the Times article, John, in deference to Amish values of humility, declined to provide his surname.)

“We call him the computer geek sometimes,” John’s son, Junior, told the Times.

Sam, a 29-year-old Amish man, used to make deliveries for Amish Country Gazebos, but now works on a computer in the company’s shop. It was difficult for him to learn how to interact with the machine, but once he did, he saw how it could facilitate business operations.

“I thought, I need to know how this computer thinks, or the computer needs to know how I think—we need to get along!” he said, per the Times.

Now, he appreciates the efficiency of the machine. “I can easily see it helping as far as numbers go — oh my goodness — to get rid of all these papers.”

But, Sam told the Times he has “never thought about bringing a computer” onto his property in Lancaster. Like many in his community, he draws a sharp line between business and home life, especially with respect to technology.

Still, technology is becoming part of the fabric of Amish life even at home. Many members of the community use lawnmowers and other electric yard-care equipment.

Though hooking into a public utility feed remains unheard of, some Amish people electrify their homes using power generators and solar panels.

Smartphones are becoming increasingly common in the community. The opening of the Pandora’s box that is the internet has given rise to fears about pornography and excessive influence from the outside world.

Through social media, for instance, Amish children may develop romantic attachments toward non-Amish peers—Amish rules frown upon such relationships.

“There’s always a concern about what would lead our young folk out of the church and into the world,” said John.

“Amish life is about recognizing the value of agreed-upon limits,” Erik Wesner, an author who studies the Amish way of life and runs a blog called Amish America, “and the spirit of the internet cuts against the idea of limits.”

While Marilyn, an 18-year-old Amish woman, values limits—she said she made an effort to respect church leaders’ wishes by limiting her cell phone usage in church—she says there must be a limit to the Amish’s resistance to technology.

“We can’t live like we did 50 years ago because so much has changed,” she said. “You can’t expect us to stay the same way. We love our way of life, but a bit of change is good.”

John’s wife, Lizzie, was disturbed by people’s obsession with their phones. “People are treating those phones like they are gods,” she told the Times. “They’re bowing down to it at the table, bowing down to it when they’re walking. Here we say we don’t bow down to idols, and that’s getting dangerously close, I think.”

Having lived without technology for so long, the Amish are more sensitive to its effect on human interaction than others are, Kraybill said per the Times.

Despite the concerns it raises in the community, technology is becoming more and more necessary as the Amish adapt what Kraybill calls their ““very entrepreneurial, very capitalistic” spirit for the 21st century.

“We’re not supposed to have computers; we’re not supposed to have cell phones,” said John. “We’re allowed to have a phone, but not in the house. But to do business, you need a computer, or access to one, and that phone moves into the house. So how do you balance that?”

Featured image via Wikimedia Commons

Equifax could have prevented breach with a simple patch, experts say

Last Thursday, credit-monitoring firm Equifax announced that hackers had breached its computer systems and compromised the data of as many as 143 million Americans. Thursday, the company confirmed that the perpetrators of the attack did, as rumored, exploit a weakness in Apache STRUTS.

Equifax identified the exploited vulnerability as Apache Struts CVE-2017-5638.

In March, industry experts pinpointed the CVE-2017-5368 vulnerability. That same month, Apache released a patch to correct it, the New York Times notes. Apache also published instructions describing how to implement the patch.

Three days after the Apache STRUTS weakness was discovered, reports surfaced indicating that hackers had begun taking advantage of it. At that point, it was clear that the Apache vulnerability presented a considerable security threat.

Therefore, many are scratching their heads as to why Equifax neglected to install the patch before hackers accessed the company’s systems in mid-May. Ars Technica notes that implementing the update would have been labor-intensive because after downloading the patch, one would need to rebuild all applications built with older, vulnerable versions of the software.

Still, Bas van Schaik, a product manager and researcher at Semmle, an analytics security firm, points out, it is Equifax’s responsibility to take the measures necessary to protect its customers’ data.

“This vulnerability was disclosed back in March. There were clear and simple instructions of how to remedy the situation. The responsibility is then on companies to have procedures in place to follow such advice promptly,” says per WIRED. “The fact that Equifax was subsequently attacked in May means that Equifax did not follow that advice. Had they done so this breach would not have occurred.”

But, Avivah Litan, a security analyst with the research firm Gartner, told the Times a high-profile company like Equifax needs a multi-faceted security system so that if one aspect fails, others provide reinforcement.

“You have to have layered security controls,” she said. “You have to assume that your prevention methods are going to fail.”

Apache STRUTS is an open-source web development framework used to create Java applications that run Web servers, Ars Technica explains. The software is free, and about 65 percent of Fortune 100 companies, including Lockheed Martin, Citigroup, Vodafone, Virgin Atlantic, Reader’s Digest, Office Depot, and Showtime, use it, per the New York Post. Banks and government agencies—including the IRS—also use the software.

Generally speaking, though, open-source software is particularly vulnerable to hacks.

Developers use Apache STRUTS to develop applications for front-end as well as back-end servers. Front-end servers contain code that translates the website’s content into something the user can see, while back-end ones contain the building blocks of a website and are only accessible to site administrators.

Equifax has not said whether the hackers exploited the company’s back-end or its front-end servers. Accessing the back-end would have required access to the company’s private network, the Times notes.

Several hacking experts have already noted the sophistication of the attack—the sheer amount of data stolen is sufficient to indicate the intricacy of the operation.

Investigators have yet to identify the perpetrators of the attack. A group calling itself the PastHole Hacking Team has claimed responsibility and threatened to release the seized data Friday unless a 600-bitcoin ($2.5-million) ransom is paid.

Several people have concluded that PastHole’s claiming responsibility was a hoax. The leading theory among investigators, the Times says, holds that a nation-state, or a group of hackers sponsored by a nation-state, carried out the attack. A government holding animosity toward the U.S. could cull the stolen data in search of information that could be used for espionage or blackmail.

Investigators note that the amount of data stolen casts further doubt on the notion that a small, financially motivated group of hackers perpetrated the attack.

Such a group would likely sell the information on the Dark Web. While there is a market amongst cyber-criminals for sensitive data, particularly permanent information, like birth dates and social security numbers one can use to access a victim’s bank account, medical records, etc., the market likely would not support such a massive amount of data.

“Are cybercriminals going to try and sell circa 150 million records in dark web auctions? That’s nearly half the population of the United States,” said Thomas Boyden, president of GRA Quantum, a company that specialized in cyberattack incident response, per the Times. “Are there standard cybercriminals out there with the purchasing power for that type of data?”

Equifax said in a statement Wednesday: “We continue to work with law enforcement as part of our criminal investigation, and have shared indicators of compromise with law enforcement.”

Featured image via Pexels

Boeing wins $600 million deal to design the next Air Force One

The U.S. Air Force announced Wednesday that on Tuesday it awarded Boeing a $600 million contract to design two new aircraft for the President’s Air Force One fleet. Both planes will be 747-8 models; they will replace a pair of aging VC-25A (747-200B) aircraft. President Obama ordered the replacement during his second term, according to LiveScience.com.

The Air Force expects the new planes to be operational by 2024.

The VC-25As have been in use since 1990, and have carried five different presidents.

The Air Force agreed to purchase the replacement planes from Boeing in early August. The la Times quotes a Boeing spokeswoman as saying at the time that the company sold the planes to the Air Force “at a substantial discount from the company’s existing inventory.”

“Following the award of the contract to purchase two commercial 747-8 aircraft, this [i.e. Tuesday’s] contract award is the next major step forward toward ensuring an overall affordable program,” said Maj. Gen. Duke Richardson, Presidential Airlift Recapitalization program executive officer.

Under the contract, Boeing will “complete the initial design of the future Air Force One,” according to the Air Force’s statement.” The design will need to meet “presidential airlift mission requirements,” and the cost of the contract cannot exceed a ceiling President Trump will define.

According to the Times, Trump said via Twitter in December that the then-$4-billion budget for the design and implementation of the new Air Force One aircraft was “out of control.” In January, Defense Secretary James Mattis ordered a review of the Air Force One budget.

The Air Force has asked Boeing to incorporate the following elements into the design: “a mission communication system, electrical power upgrades, a medical facility, an executive interior, a self-defense system and autonomous ground operations capabilities.”

The current contract covers only the design of the Presidential planes. The Air Force says it is working with Boeing on a follow-up contract, which will govern additional design efforts, as well as the modification, testing and delivery of the aircraft. The military expects to award that contract in Summer 2018.

The 747-8 models feature numerous upgrades over the 747-200Bs the President uses now, Boeing says. The new planes boast a range of 7730 nautical miles (8895.53 miles), meaning they can fly from Washington D.C. to Hong Kong without refueling. The 747-200Bs had a range of 6735 nautical miles (7750.5 miles)—roughly the distance from D.C. to Tokyo.

The new planes also emit 16 tons less CO2 than the current models.

The current planes cruise at a speed of .84 Mach (644.5 mph)—the new ones do so at .855 Mach (656 mph). Mach One, the speed of sound, is 767.269 mph.

The new planes are six yards longer than their predecessors from head-to-tail and almost 29 feet longer in terms of wingspan.

They can support 987,000 pounds at takeoff; 154,000 (18.5 percent) more than their predecessors.

That last attribute is important given that today’s Air Force One includes a conference/dining room, two offices (one of which converts into a medical facility), and two galleys (kitchens) that can accommodate 100 guests.

The new Air Force One will be the seventh Boeing has designed since 1942.

The company routinely partners with the U.S. military to develop weapons and other defense implements. In late August, the Air Force announced that it had awarded Boeing, as well as Northrop Grumman, contracts to design new, land-based, nuclear ICBMs. The Air Force will likely choose the better of the two designs, or take elements from both.

Boeing’s defense operations represent a significant portion of its revenue. In 2016, the company generated over $12.5 billion through the sale of military aircraft. In 2015, the figure was $13.4 billion.

By comparison, Boeing generated over $65 billion through the sale of commercial planes in 2016 and more than $66 billion a year earlier.

So, in 2016, 16 percent of the revenue Boeing generated through the sale of commercial and military aircraft came from sales of the latter. In 2015, that figure was marginally higher.

At the market’s close Thursday, Boeing stock was up more than 3 percent since Wednesday morning.

Featured image via Wikimedia Commons

Equifax stares down almost two dozen class actions after cyberattack

Credit reporting and monitoring company Equifax is facing at least 23 proposed class action lawsuits in the wake of its announcement Thursday that a cyber attack compromised the personal information of up to 143 million Equifax customers, USA Today reports.

Various law firms have filed suits in 14 different states as well as D.C., according to USA Today. More suits will likely come. Victimized customers may receive a pretrial settlement from Equifax, and/or may be entitled to some portion of any financially pejorative judgment levied against the firm.

“Equifax probably injured 143 million people, which is kind of a record…with 143 million people it doesn’t surprise me there are already 23 suits,” said John Coffee, who directs the Center on Corporate Governance at Columbia Law School.

USA Today notes that the number of people the breach potentially victimized represents 44 percent of the U.S. population.

“Assume that if you’re an American with a credit card or a mortgage, your data has been leaked,” Zach Whittaker, security editor for CBS’s ZDNet, tweeted.

Hackers carried out the attack from mid-May through July, seizing customers’ names, social security numbers, birth dates, addresses and, in some cases, driver’s license numbers. Equifax says it became aware of the breach in late July. The company alerted the public of the incident on September 7. In the interim, Equifax hired third-party consultants to investigate the crime and provide suggestions as to how the company might bolster its cyber-defenses.

Many of the lawsuits take issue with the lag time between Equifax’s discovery of the attack and the firm’s notification of the public. USA Today says one suit calls the delayed disclosure “willful, or at least negligent.” Another argues that the delay “deprived [consumers] of their opportunity to meaningfully consider and address issues related to the potential fraud, as well as to avail themselves of the remedies available under the FCRA (U.S. Fair Credit Reporting Act) to prevent further dissemination of their private information.”

The company would presumably argue that it was justified in assessing the nature and extent of the attack before alarming the public.

A third suit notes that Equifax fell victim to similar attacks earlier this year, as well as in 2013 and 2016. Therefore, said suit argues, Equifax “knew and should have known of the inadequacy of its own data security.”

Other filings take aim at TrustedID, an Equifax service that provides identity theft protection and credit monitoring. One document says the company “failed to disclose to consumers that it owned TrustedID,” and baited customers into signing up for the service.

To help customers identify whether their information was compromised by the attack, Equifax is offering free TrustedID service to all U.S. customers

New York Attorney General Eric Schneiderman, who is investigating the Equifax case, took issue with a clause in the agreement Equifax requires TrustedID members sign. The clause in question says that in signing up for TrustedID, a user waives his/her “right to bring or participate in any class action…or to share in any class action awards.”

“This language is unacceptable and unenforceable,” Schneiderman tweeted Friday. “My staff has already contacted @Equifax to demand that they remove it.”

Equifax subsequently explained that the waiver does not prohibit TouchID members from participating in class actions regarding the cyber security incident.

In addition to Schneiderman, other government entities are pursuing the Equifax case. USA Today obtained a copy of a letter Senators Omin Hatch and Ron Wyden, both of whom hold key positions on the Senate Committee on Finance, sent to Equifax requesting details about the attack and the manner in which the company is handling it.

The letter requests a timeline of the breach and asks how Equifax is identifying affected customers and what measures the company is taking to limit consumer harm. The document also asks Equifax to clarify the amount of information that was compromised.

Legal arguments must take place before the proposed suits achieve class action status. If the court grants class action status, USA Today says, a “federal panel on multi district litigation” will likely consolidate the suits into a single case, then assign that case to a judge, who would, in turn, appoint one law firm or a group of law firms as plaintiff counsel.

At the market’s close Tuesday, Equifax stock has dipped 18.7 percent since the original announcement. 4.7 percent of the drop has come since Monday morning when news of the proposed class actions broke.

Featured image via Pixabay

Harvey and Irma combined could prove more expensive than Katrina

Moody’s Analytics estimates that Irma will cost the U.S. economy between $64 billion and $92 billion, CNN reports. Insured losses resulting from the storm will range between $20 billion and $40 billion, the firm said.

Moody’s estimated Harvey-related costs between $86 billion and $108 billion, CNBC notes.

Harvey and Irma will likely cost a combined $150 billion to $200 billion, Moody’s chief economist Mark Zandi says, per CNN.

Hurricane Katrina cost the U.S. about $160 billion (adjusted for inflation) when that storm hit in 2005. It was the most expensive natural disaster in U.S. history. Irma’s and Harvey’s combined economic damage will likely exceed the Katrina figure.

Irma has crippled Florida’s tourism industry, turning much of the state into the kind of water park nobody wants to see. Miami and Tampa saw four feet of storm surge, and three to five feet of storm surge, along with a foot of rain, inundated Jacksonville. The extent of the damage to business operations remains largely unknown but is presumably considerable.

Meanwhile, oil refinery operations in Texas continue to reel in the wake of Harvey. About 13 percent of the United States’ refinery capacity remains offline in Texas, according to CNN.

Last Thursday, the federal government said joblessness claims rose by 62,000, to 298,000, in the days following Harvey, CNBC notes.

The two storms together could cost the U.S. between $20 billion and $30 billion in economic output, Moody’s said per CNBC. The firm has dropped its third-quarter forecast of the nation’s GDP growth by half a percentage point, to 2.5 percent.

Zandi notes that the recovery of the nation’s economy will depend on the speed with which Florida and Texas can revive their tourism and oil industries, respectively, but says he expects the rebuilding effort to provide an economic boost that will put the U.S. economy back on track by the year’s end.

“The longer-term economic impact of the storms should be nil,” said Zandi per CNN.

William Dudley, the president of the New York Federal Reserve, echoed Zandi’s analysis. While natural disasters such as Irma and Harvey disrupt industry, create scarcity and raise prices in the short-term, the rebuilding effort boosts the economy, he said per CNBC.

“The long-run effect of these disasters unfortunately is it actually lifts economic activity because you have to rebuild all the things that have been damaged by the storms,” Dudley said in a live interview with CNBC.

He added: “I would expect that by the time we get to the end of the year and early 2018, the transitory negative effects of this storm I think will be over and we actually will start to see some of the benefits of the rebuilding efforts in terms of boosting the economy.”

Recovery efforts following a natural disaster create jobs, compel the government to increase infrastructure spending, and bring other economic stimuli.

For instance, Congress and President Trump agreed last week to raise the debt limit for three months to facilitate relief efforts in the wake of the storms, and the House approved $7.85 billion aid package for Harvey relief last Tuesday, the New York Post reports.

According to Reuters, Vice President Mike Pence said Sunday that the government would use all of its resources to aid Irma victims.

While the storms’ long-term impact on the economy at large may be negligible or even positive, their financial impact on a small scale can, of course, be devastating. Irma and Harvey have destroyed homes, businesses, valuables and other crucial assets.

“Think of the wealth destruction created by these hurricanes,” said Dan North, chief economist for Euler Hermes, North America, per CNBC.

In discussing Irma relief, President Trump was quick to point out that human considerations outweigh economic ones. “Right now, we are worried about lives, not cost,” he said, per Reuters.

Irma’s death toll in the U.S. rose to 12 Monday, ABC News reports. The Associated Press reported last Thursday that Harvey has killed 70. The hardship the storms have brought is incalculable; as one small example, Irma left 2 million Floridians without power. They regained power Tuesday morning.

Featured image via Wikimedia Commons

Markets rise as Irma weakens, North Korea anniversary passes without nuke test

Markets around the world are rising as Florida missed the worst of Irma this weekend, and as North Korea’s founding celebration, which took place Saturday, did not include a missile test, Reuters reports.

Irma hit the Florida keys Sunday as a Category 4 hurricane, then came into Miami, damaging several buildings and creating a storm surge that caused flooding in the downtown area of the city, The Wall Street Journal reports. The full extent of the damage remains unknown, as many of the hardest-hit areas are still inaccessible. The Journal points out that the National Weather Service expects severe conditions to persist in central and western Florida.

Irma continues to lose strength, The Washington Post notes. By Tuesday, experts expect it to weaken to a tropical depression. But, the storm remains capable of producing hurricane-force gusts, and will likely create a “life-threatening” storm surge, cautions the National Hurricane Center. A storm surge warning is in effect across much of the Atlantic and Gulf coasts.

The Post cites a National Weather Service tweet that says Irma’s storm surge produced record flooding in downtown Jacksonville Monday morning.

Nonetheless, Floridians caught something of a break over the weekend. On Friday, the Journal says, some models projected that the storm would hit Miami and east coast Florida head-on—instead, the storm turned toward the gulf coast.

“For now, we’re seeing a bit of a relief rally [in the market]. It does appear that the worst-case scenario for Florida has been evaded,” said Peter Cardillo, chief market economist at First Standard Financial in New York, per Reuters.

Meanwhile, North Korea tested no missiles over the weekend, though, according to the New York Times, leaders did hold a massive gala for the country’s nuclear scientists Saturday, in conjunction with national anniversary celebrations.

Last Sunday, North Korea successfully detonated its sixth nuclear bomb.

The MSCI AC World Equity Index, MIWD00000PUS, which tracks 2,400 stocks in 47 countries, according to Reuters, surged to a new high Monday morning, and as of 1:27 Eastern Monday. DXY, an index that compares the U.S. dollar to six other currencies, has jumped 33 cents (0.36 percent) since 11:59 p.m. Sunday. DXY is recovering after having hit a two-and-a-half-year low Friday.

Meanwhile, stock markets in Tokyo had their best session since June, according to Reuters. Relief about the situation in North Korea, as well as a weakening yen, spurred the surge.

In the U.S., shares are up one percent across Wall Street, Reuters says. As of 2:30 p.m. EST Monday, the DOW Jones Industrial Average has risen 260.19 points (1.19 percent) since it closed Friday. The S&P 500 has jumped 1.06 percent since Friday’s close, and now sits at 2487.67.

Demand for gold is falling, as investors are, according to Reuters, more inclined to assume risk given the relative stability of the U.S.’s relationship with North Korea and the relatively mild damage Irma wreaked upon Florida. As of 2:47 Eastern Monday, one troy ounce of gold is worth $1330.61, a decrease of $10.64 (0.8 percent).

Oil investments are falling out of favor as well, as the market frets over Irma’s and Harvey’s impacts on the supply of oil in the U.S., which Reuters says consumes more oil than any other nation.

“Brent crude oil futures for November delivery LCOc1 were down 66 cents [1.23 percent] at $53.12 a barrel, while benchmark U.S. West Texas Intermediate crude CLc1 declined by 33 cents [0.7 percent] to $47.15,” Reuters writes.

Jim Paulsen, chief investment strategist at the Leuthold Group in Minneapolis, said that a weaker dollar, along with lower interest rates, will provide more fuel to the U.S. economy in the near future.

“We are massively stimulating this economy that’s already doing pretty well,” he said. “That’s likely to accelerate an already-good economy even further the next 12 months.”

Featured image via Wikimedia Commons

Starting school later could boost the U.S. economy by $83 million over 10 years

A recent study conducted by the RAND Corporation suggests that delaying the start of the school day until 8:30 a.m. could boost the U.S. economy by $83 billion over the course of a decade, madison.com reports.

Pediatric health experts have long argued that a later start to the school day would better accommodate teenagers’ sleep needs, and would improve students’ concentration, as well as their mental and physical health.

According to madison.com, up to 60 percent of teens do not sleep for the recommended eight to 10 hours per night. Researchers have correlated lack of sleep with suicidal thoughts and other adverse mental and physical health conditions.

Policymakers have been reluctant to delay the start of the school day, citing costs associated with rerouting bus schedules and making other necessary changes. However, RAND’s study finds that over the course of a few years, the economic benefits derived from a later beginning to the school day would outweigh the costs of implementing the change.

“A small change could result in big economic benefits over a short period of time for the U.S. In fact, the level of benefit and period of time it would take to recoup the costs from the policy change is unprecedented in economic terms,” said Marco Hafner, a senior analyst at RAND Europe who co-wrote the report.

The study identifies two primary factors that would precipitate economic growth if school started later. First, traffic fatalities would decrease. Therefore, more children would grow to adulthood and contribute to the country’s workforce.

The RAND study cites CDC and AAA data indicating that one in five fatal traffic accidents involves a tired driver. RAND also cites a study conducted in 2008 that found that starting school later would reduce the rate of traffic accidents by 16.5 percent.

Second, academic performance would improve, boosting high school graduation and college attendance rates. Another study indicated that giving students an additional hour of sleep would increase their likelihood of graduating high school by 8.6 percent, on average, and their likelihood attending college by 13.4 percent, on average.

Students who graduate high school stand to earn a higher income than those who do not. Those who attend and/or graduate college generally make higher wages than those who do not. Higher income means more spending and, therefore, increased economic contribution.

The economic benefits of the policy shift would increase at an accelerating rate over the first 15 years following the implementation of the policy. There would be no change in economic output one year after the shift, for the students graduating that year would have benefited from just one year of enhanced academic performance. After two years, though, the economy would grow by $9 billion; after five, by $37 billion; and after 15, by $140 billion.

RAND claims to have been conservative in many aspects of the study,

“Throughout the cost-benefit projections, we have taken a conservative approach when establishing the economic gains,” Hafner said. “We have not included other effects from insufficient sleep — such as higher suicide rates, increased obesity and mental health issues — which are all difficult to quantify precisely. Therefore, it is likely that the reported economic and health benefits from delaying school start times could be even higher across many U.S. states.”

Still, RAND says, the study supports the conclusion that a later school start time would benefit the nation’s economy as well as the health of students.

“From a policy perspective, the potential implications of the study are hugely important. The significant economic benefits from simply delaying school start times to 8.30 a.m. would be felt in a matter of years, making this a win-win, both in terms of benefiting the public health of adolescents and doing so in a cost-effective manner,” says said Wendy Troxel, a senior behavioral and social scientist at RAND who co-wrote the report.

Featured Image via Wikimedia Commons

Carpooling service Via closes investment round, plans U.S. and oversea expansion

Carpooling service Via just completed a funding round, the proceeds of which the company intends to use to expand its service in the U.S. and to establish a presence in Europe, TechCrunch reports. Via will begin London operations in the near future, and Paris service soon after.

The amount of the funding round remains undisclosed, but a source told TechCrunch the number was $250 million.

Prior to the investment round, Zirra estimated the company’s value between $450 million and $500 million, TechCrunch notes. Following the round, then, Via could be worth as much as $750 million.

Via provides carpool service to riders seeking a cheaper alternative to operations like Uber and Lyft. A single Via vehicle carries up to five passengers at a time, so customers can book rides for as little as $5 plus tax. An algorithm determines routes in real-time as customers request rides, so unlike conventional public transit systems, Via is not constrained by a preset schedule. The company’s website says the average wait time is five minutes.

Today, Via runs 24-hour service in its hometown of New York City and also operates in Washington, D.C. and Chicago. TechCrunch says the service gives about one million rides per month.

In addition to running its own operation, Via licenses its platform to other transportation companies, including Arriva—a subsidiary of German-based railway company Deutsche Bahn AG—which operates buses, trains, and other mass transit options across 14 countries in Europe, and Keolis, a subsidiary of France-based SNCF, which offers similar service worldwide.

Daimler AG, which owns Mercedes-Benz, led Via’s most recent funding round, and the two companies plan to intensify their partnership. In addition to its contribution to the funding round, Daimler will provide $50 million towards a joint venture project with Via.

The two companies have been collaborating for years, TechCrunch notes. In late 2015, Via joined forces with Mercedes-Benz Research and Development North America, Inc. to launch a pilot program in Orange County, CA, a suburb of Los Angeles. Mercedes provided Via with Metris passenger vans for that trial program.

Daimler and Mercedes will likely provide vehicles for Via’s European expansion as well. The partnership with Via will give Daimler a ready-made sales connection and will provide a platform through which Daimler can develop and test vehicles optimized for carpooling.

As tech-based transportation start-ups change the way consumers approach moving around, automakers are seeking the most efficient ways to adapt to the changes in the industry.

“One big question is, ‘what is the right vehicle?’” Via CTO and co-founder Oren Shoval told TechCrunch “There are the seating arrangements, how you connect the sensors, what kind of door it should have. This is a big piece of mobility.”

Shoval adds that the Via-Mercedes partnership will streamline and solidify Via’s service. “We also believe that the vehicles in the network, at the end of the day, it’s not just an app but a whole service that you are getting. It makes sense to have these things converge,” said Shoval.

Volker Mornhinweg, head of Mercedes-Benz Vans, echoed Shoval’s sentiment that the partnership would improve Via’s service, and added that the collaboration was important to Daimler’s long-term strategy in the changing transportation sector.

“Via is one of the most successful providers in the growing ride-sharing sector while Mercedes-Benz Vans has the perfect vehicles that are being continuously optimized for this job,” he said. “By deepening our cooperation with Via, we are thus taking the next logical step in the context of our strategy for the future and are expanding our range of new mobility services.”

Daimler launched Car2Go, which allows users to rent cars parked in various places around a city and then return those cars to one of many drop zones around town, in 2008. Now, Car2Go operates in 26 cities across North America, Europe and Asia, and serves 2.5 million registered members.

Daimler, in tandem with Audi and BMW, bought GPS mapping service Here in late 2015 and has independently acquired a number of ride-sharing companies, including Germany’s MyTaxi, the U.K.’s Hailo, and Taxibeat in Greece. All three of those services have merged under the MyTaxi umbrella since Daimler acquired them.

Featured Image via Wikimedia Commons

Chinese authorities crackdown on cryptocurrency ICOs

Monday, the Chinese government banned the practice of creating and selling new cryptocurrencies, Reuters reports

With the rise of Blockchain technology, initial coin offerings (ICOs)—which give investors the opportunity to buy newly-created cryptocurrencies—have gained popularity. In total, Reuters says, ICOs have raised $2.32 billion since the inception of the cryptocurrency market; $2.16 billion of that amount has come in 2017.

In China this year, 65 ICOs have raised a combined 2.62 billion yuan ($394.6-million) and attracted 105,000 investors, according to Reuters.

The value of Ethereum, the cryptocurrency in which most ICOs are transacted, has plummeted on the news. On Sunday, one Ethereum token was worth $349.93. Late Monday, that figure had fallen 14.3 percent to $299.72. As of 1:33 p.m. Eastern Tuesday, Ethereum has recovered slightly; the USD-Ethereum exchange rate sits at 307.56 to one.

The Bitcoin-USD exchange rate has dropped 5.9 percent since midnight Monday morning on China’s news. Late Sunday night, one bitcoin was worth $4,632.46. As of 1:39 Eastern Tuesday, the value of a single bitcoin token is $4,359.07.

The market capitalization of the cryptocurrency industry as a whole dropped 11.66 percent Monday, from $165.095 billion to $145.833 billion. Since midnight Tuesday morning, though, the industry’s market cap has gained 1.7 percent. As of 1:55 p.m. Eastern, the industry is worth $148.358 billion.

“The large price falls can be attributed to panic amongst traders and profit-taking,” said Cryptocompare founder Charles Hayter, per Reuters.

Indeed, China’s announcement had many investors across the internet predicting doom and gloom. A participant in one chatroom set up for an upcoming ICO said “the music has stopped” for the cryptocurrency boom, Reuters reports.

“Sell all your bitcoins now,” another advised, again per Reuters.

The organizer of the ICO to which the chatroom was dedicated, which was meant to launch a new cryptocurrency called SelfSell, has suspended the project.

Regulators around the world are struggling to understand cryptocurrency investment and the risks associated with it, said Zennon Kapron, director of the Shanghai-based financial technology consultancy Kapronasia, per Reuters.

Prior to China’s announcement, the U.S. Securities and Exchange Commission, as well as similar agencies in Singapore and Canada, warned that regulations would likely be needed to control the cryptocurrency market.

The lack of regulation governing cryptocurrency and investment in it is unprecedented. Blockchain, the backbone of cryptocurrency transactions, functions without a centralized overseer.

The nature of investment in cryptocurrency is also unconventional. When one contributes to a fundraiser for a traditional company, one generally receives a share in the company and/or a security. ICO investors, Reuters notes, receive neither.

Therefore, Reuters points out, an investment in a cryptocurrency is little more than a bet that demand for that currency will exceed supply, driving up value. It is a risky bet, considering the volatility of cryptocurrencies.

With risks to investors so high, government regulators are purportedly taking strides to protect their citizens. Cryptocurrency expert and Blockchain proponent Oliver Bussman said, per Reuters, that the lack of private financial advice firms in China obligates the government to be especially vigilant in protecting the finances of its constituents.

Of course, many would argue that it is an investor’s own responsibility to protect him/herself.

Despite some predictions that China’s move spells the beginning of the end of the cryptocurrency boom, many experts believe the regulatory shutdown is but a temporary measure designed to give the country’s government time to develop a strategy by which to handle cryptocurrencies.

“China, in many ways, is no different than the U.S. or Singapore in saying, ok, we need to push back on these for now until we figure out how to deal with them,” Kapron said, per Reuters, adding that he expected regulators in China to eventually ease the ICO ban.

Bussman says, per Reuters, that cryptocurrency technology is too revolutionary, too integral to the future of global economics, to be shutdown. Cryptocurrency, he says, has already worked itself into the fabric of modern investment.

“The initial coin offering is a new business model leveraging blockchain technology and it will remain. This is not the end of the ICO – absolutely not,” he said.

Featured Image via Flickr/BTC Keychain

U.S. Labor Department releases August 2017 employment data

Friday, the U.S. Labor Department released hiring and unemployment data for August, The New York Times reports. Employers created 156,000 jobs last month—less than analysts expected.

Employers added more than 200,000 in June and July (the Department revised each of those figures downward by 41,000 in this most recent report). August’s figure marks a sequential decrease of 22%. Analysts anticipated a dip, but not one so pronounced. August job-creation figures have come in below analyst expectations in four of the last five years.

Still, job creation rose 50 percent year-over-year last month.

The unemployment rate saw a marginal sequential increase, up to 4.4 percent in August from 4.3 percent in July. Joblessness continues to hover around a 16-year low. The so-called participation rate, which reflects the percentage of able workers who are either working or looking for work, came in at 62.9 percent. It has remained more or less static over the past 12 months.

Average hourly wages rose just 0.1 percent, coming in below analyst expectations. Wages generally rise with hiring rates, but the data has gone against that trend in recent years.

As wages rise, theTimes notes, the Federal Reserve raises the federal funds rate—that is, the interest rate at which banks lend money to one another—so as to guard against inflation. But the flatness of hourly wages means inflation is minimal.

“There’s no sign of inflation, which keeps the Federal Reserve on hold in terms of interest-rate hikes, and it suggests stocks should keep doing well,” Torsten Slok, chief international economist at Deutsche Bank, said, per the Times.

Stocks are up slightly today. The DOW Jones Industrial Average is up 0.18 percent, and the Nasdaq Composite is up 0.10 percent.

There is a 30 percent chance the Federal Reserve will raise the federal funds rate when it meets in December. The Fed will also meet later this month, but will not modify the interest rate.

The Federal Reserve is watching whether workers who exited the workforce during the latest recession (which took place from January 2008 through May 2009) are re-entering now. In 2010, ten percent of Americans were unemployed. That figure has dropped by more than 50 percent as of today.

The hiring and unemployment report comes on the heels of the Department of Commerce’s publication Wednesday of national economic data for the second quarter of the year. The Department reported 3.0 percent GDP growth, up from 1.2 percent in quarter one.

Last recession hit the manufacturing sphere particularly hard. Two million jobs (just under 15 percent of the industry’s workforce) vanished. Since January 2010, though, have of those jobs have come back.

The growth is accelerating. Over the first seven months of 2017, the Times notes, factories hired 101,000 workers. In August, 36,000 more employees came on board.

Mack Truck is hiring in at its assembly plant in Pennsylvania’s Lehigh Valley, the Times notes. in illustration of the rebound of the manufacturing sector. Since 1905, Mack has built every truck it sells in North America at the Lehigh Valley plant.

In 2016, Mack lost nearly a third of its workers at the plant: the facility employed 1,875 workers at the end of 2015 and 1,287 after 2016.

Today, 1,800 people take a paycheck home from the plant, which is currently offering 26 jobs.

Because the failure of the housing market largely spurred the recession, the construction industry took arguably the biggest hit. At the beginning of 2008, 7.49 million people held construction jobs in America. The recession slashed that figure by almost 25 percent, and the industry continued to decline in the recession’s wake. At the end of January 2011, employment across the sector hit a ten-year low. 5.45 million people held construction jobs—37 percent less than of at the end of 2007.

Today, the industry employs 6.9 million people—just under 27 percent more than on March 1, 2011. It has added 101,000 jobs in 2017, including 28,000 in August.

Featured Image via Pixabay

Harvey will rank among most expensive storms ever to hit U.S.

A number of organizations have released estimates of the costs of Harvey’s destruction, The Washington Post reports. If the figures are accurate, Harvey will rank among the costliest storms ever to have hit the U.S.

A report released Wednesday by risk modeling agency RMS puts the total cost of Harvey’s devastation between $70 billion and $90 billion. The organization notes that these figures are not official estimates and that the costs will continue to rise as flooding persists.

“…with the rain still falling heavily and the waters rising, the situation is too fast-moving to be stating with certainty what the losses in Texas could be,” said Michael Young of RMS.

Flooding accounts for the lion’s share of Harvey’s damage. RMS estimates that just 10 percent of Harvey-induced economic losses are attributable to wind and storm surge damage. The remaining 90 percent is due to flooding.

Other reports support RMS’s findings. CoreLogic, another firm that gathers data on natural disasters, estimates that between $1 billion and $2 billion worth of Harvey’s damage to residential and commercial properties results from wind and storm surge damage. A third firm, S&P Global, estimated wind- and storm surge- related losses at $6 billion.

Most of the rest of the costs are, again, the result of flooding.

A standard home insurance policy, the Post notes, does not cover flood damages. Most people who elect to purchase flood coverage do so through the federal government’s National Flood Insurance Program (NFIP). But, per the Post, Federal Emergency Management Agency (FEMA) data indicates that just 17 percent of those who own property in the areas where Harvey struck hardest carry flood insurance through NFIP.

Reuters says CoreLogic’s report indicated that 70 percent of the flood damage Harvey wreaked and continues to wreak will be uninsured.

“The majority of [the financial] losses [Harvey causes] will be uninsured,” Young, of RMS, said.

Still, NFIP reports that 500,000 people who own property in Harvey’s path do carry flood insurance policies, and expects the storm to cost as much as or more than any similar disaster to date. CoreLogic estimates that between $6.5 billion and $9.5 billion worth of the flood damage Harvey wreaked on residential properties is insured.

Harvey has caused 51 inches worth of “observed cumulative” rainfall, according to RMS. No other U.S. storm has induced so much rain. Tropical Storm Allison, which hit the Gulf Coast in 2001, produced upwards of 30 inches of rain, according to AccuWeather. Hurricane Katrina produced between five and ten inches.

Like Harvey, though, Katrina caused catastrophic flooding. But, the latter storm wreaked most of its damage by virtue of a 28-foot storm surge, which smashed levees.

Katrina left $108 billion worth of damage in its wake after it ravaged Louisiana in 2009, according to a report by theBalance.com. Half of the costs were attributable to flooding in and around New Orleans.

In addition to wreaking financial devastation on property owners in its path, Harvey will likely take a toll on the larger U.S. economy. The storm has forced a shutdown of almost a third of the country’s oil and gas refinery capacity, according to CBS News, and has crippled pipelines that carry oil from the Gulf to the rest of the nation.

The Colonial Pipeline, which runs from Houston to the Northeast and provides 40 percent of the gasoline across the American South, is currently non-operational.

Gas prices are soaring in Houston and around the country. Since Harvey made landfall Friday. the average per-gallon price of gas jumped more than $0.20 in Texas and just under $0.17 across the nation, per AAA.

Former Shell Oil president John Hofmeister said oil production in the Gulf Coast is crucial to the industry.

“Without it we’d be in gas lines all the time. We need that Gulf Coast,” Hofmeister said.

He added that the refineries will not be operational until mid-September at the earliest, Thanksgiving at the latest.

Hurricanes Katrina and Rita demonstrated how damage to oil and gas production can hurt the US economy. They damaged 19 percent of U.S. oil production, shutting down 113 “offshore oil and gas platforms” and damaging 457 pipelines.

In the quarter following Katrina, U.S. economic growth fell 65 percent. But, in the subsequent quarter, the growth rate increased 270 percent and came in 26 percent higher than it had been in the quarter prior to the storms.

Granted, the deceleration of economic growth after was due only in part to oil industry slowdowns.

Featured Image via Wikimedia Commons

Fox News will no longer broadcast in the UK

21st Century Fox announced Tuesday that it will pull Fox News from UK airwaves, The Guardian reports. The network’s final broadcast across the pond took place at 4:00 p.m. local time Tuesday.

A spokeswoman told The Guardian: “[Fox] has decided to cease providing a feed of Fox News Channel in the UK. Fox News is focused on the US market and designed for a US audience and, accordingly, it averages only a few thousand viewers across the day in the UK. We have concluded that it is not in our commercial interest to continue providing Fox News in the UK.”

21st Century Fox awaits British authorities’ approval of its bid to acquire Sky TV, the UK’s top pay television network. The US media giant already owns 39% of Sky and is seeking to acquire the remaining 61% in the £11.7 billion ($15.2 billion) deal.

Sources told The Guardian the decision to pull Fox News out of the UK was strictly economical and in no way related to the pending acquisition.

But, UK media regulators and lawmakers have raised concerns about the “corporate culture” of the network. According to CNN, the British Office of Communications (Ofcom), which was tasked with reviewing the proposed takeover, said following its review that the sexual harassment allegations against former Fox News chairman Roger Ailes and former anchor Bill O’Reilly, were “deeply disturbing,” and evinced “significant failings of the corporate culture.”

O’Reilly and Ailes both denied the allegations, CNN notes.

Ofcom found no evidence that senior management at Fox had been aware of the alleged misconduct prior to July 2016. CNN reports that 21st Century Fox management (namely, Rupert Murdoch and his sons Lachlan and James)  “pressured Ailes to resign,” which he did in July 2016.

In April, Fox and O’Reilly parted ways. “After a thorough and careful review of the allegations,” 21st Century Fox said in a statement per foxnews.com, “the company and Bill O’Reilly have agreed that Bill O’Reilly will not be returning to the Fox News Channel.”

Despite its concerns regarding the sexual harassment allegations, Ofcom concluded that 21st Century Fox qualified as a “fit and proper” holder of Sky. The regulatory agency did not deem further investigation of the network’s broadcasting practices necessary.

Still, British lawmakers and lobbyist groups are urging Karen Bradley, the UK’s Secretary of State for Digital, Culture, Media and Sport, to refer the Fox-Sky deal for additional review. In response to those petitions, Bradley’s office asked Ofcom to conduct further research. Friday, the office confirmed that it has received “additional advice” from Ofcom concerning the deal, Deadline reports.

“The Secretary of State will now carefully consider that advice before making her decision on referral on the basis of all the evidence before her, and will do so as soon as is reasonably practicable,” the office says, per Deadline.

Bradley said late last month that while she saw no reason to further review 21 Century Fox’s adequateness as a broadcaster, she was likely to refer the deal for review by the UK’s Competition and Markets Authority (CMA).

“Unless new evidence…changes my mind in coming weeks, the bid will therefore be referred for a Phase 2 review on at least one ground: media plurality,” Bradley told Parliament in mid-July, per Variety.

Deadline notes that CMA reviews can take up to six months. If the deal is not finalized by the end of this year, 21st Century Fox will pay Sky shareholders £170 million ($219 million).

Twenty-two million viewers across five European countries—the UK, Ireland, Italy, Germany and Austria—pay for Sky service,

The European Union has already approved the acquisition. UK authorities represent the final regulative hurdle before finalization.

If the deal dissolves, Fox will pay Sky an additional £200 million ($258 million).

Featured Image via Flickr/Johnny Silvercloud

Indonesia extradites xiu.com founder, China continues crack down on fugitives

Chinese authorities have extradited Ji Wenhong, founder of online clothing retailer xiu.com, from Indonesia to face smuggling charges, the AP reports via New York Daily News. Indonesian officials returned Ji to China Saturday.

Authorities accuse Ji of having designed a system by which his company illegally imported goods from Europe and the US. Allegedly, the company would order goods from foreign clothing sellers and have the products shipped to Hong Kong. Then, travelers would carry the goods to mainland China, disguising them as personal belongings so as to avoid import taxes.

The AP cites Chinese authorities as saying the products were worth 438 yen ($65.5 million). Ji, authorities say, neglected to report the true value of the goods.

Ji fled China for Indonesia in May 2016 following the initial smuggling charges. His extradition is the latest fruit of Operations Fox Hunt and Sky Net, two concerted efforts by the Chinese government to repatriate a number of fugitives.

The international law enforcement operations, which President Xi Jinping launched as part of a comprehensive crusade against corruption in the government, have achieved a certain degree of success despite the reluctance of countries like the US and Hong Kong to cooperate in sending fugitives back to China. That reluctance stems from suspicions surrounding China’s human rights practices and the fairness of the country’s judicial system.

According to an AsiaToday report republished by The Huffington Post, the Sky Net and Foxhunt sent 381 alleged criminals, accused of stealing a combined 1.24 billion yuan ($186 million) from the government, back to China in the first half of 2017.

Despite their aforementioned reluctance to send fugitives back to China, the United States government has agreed to do so in cases in which China can provide sufficient proof of a criminal’s wrongdoing.

“We continue to encourage China to provide strong evidence and intelligence to ensure that our law enforcement agencies can properly investigate and prosecute cases related to the alleged corruption,” US State Department spokeswoman Jen Psaki told Business Insider in March 2015.

In September 2015, the US extradited Yang Jinjun to China to face bribery and graft charges, according to Reuters.

In early June of this year, US authorities extradited Zhu Haiping, former general manager of Shenzen Yuwei Industry Corporation, to face charges of what the Chinese government calls “violations of personal rights,” per Reuters.

AsiaToday reports that Zhu had been living in the US for 18 years. Immigration officials detained him in January, according to Reuters.

Reuters cites China’s Ministry of Public Security as saying the extradition was the first result of a cross-border law enforcement cooperation agreement forged between Xi and U.S. President Donald Trump in early April at Trump’s estate at Mar-a-Lago, a Florida resort.

Zhu’s repatriation, the Ministry added, per Reuters, was a “major achievement,” and a “model example” of things to come as a result of the Xi-Trump agreement.

China, Reuters says, is pursuing the extradition of Gun Wengei, a billionaire living in New York whom Chinese authorities have accused of making corruption allegations against top Chinese political officials.

According to AsiaToday, the Chinese government expects to apprehend 300 more fugitives by the end of 2017. Skynet relies upon the collaborative effort of at least four agencies in the Chinese government: the Central Organization Department, the Supreme People’s Procuratorate, the Ministry of Public Security, and the People’s Bank of China, BusinessInsider says.

The People’s Bank, according to BusinessInsider, aims to locate and shut down bank accounts criminals use to harbor illicit funds.

“There is no longer safety zone for criminals on the planet. This is even more so due to the development of information and communication. The day when we don’t have to foxhunt will come soon,” said Wang Defu, executive of the Public Security Bureau of Chaoyang District in Beijing, of Skynet, per AsiaToday.

Xiu.com, the AP reports, has acknowledged that some members of the company are under investigation but did not mention Ji by name. The company said it is operating normally.

Featured Image via Pixabay

Icelandic airline WOW brings cheap transatlantic flights to four midwestern US cities

Icelandic budget airline WOW Air announced Wednesday that it will expand its service to four Midwestern US cities—St. Louis, Cleveland, Cincinnati, and Detroit—beginning in Spring 2018, USA Today reports.

WOW will run four flights a week between each city and the airline’s hub, Keflavik International Airport near Reykjavik, Iceland. One-way tickets will start at $99.99. Passengers will have the option of scheduling connecting flights from Reykjavik to any of 12 other cities in Europe, including Paris, Amsterdam, London, Berlin, Frankfurt, Copenhagen, and more. Connection itineraries originating in the US will start at $149.99

“Our unique opportunity is to use Iceland as a hub. We can then distribute the traffic to our main destinations in Europe,” said WOW Air founder and CEO Skúli Mogensen, per USA Today. “…That’s really the key. Instead of having a single point-to-point flight, we actually give you a very affordable flight to multiple destinations in Europe via Iceland.”

WOW already serves seven other cities in the US. In 2015, the airline began serving Boston and Baltimore/Washington (BWI). Later, it expanded its service on the east coast, adding flights in and out of Newark, NJ and Miami, FL, and made inroads on the west coast in LA and San Francisco.

Now, WOW is looking to establish a presence in the Midwest. Earlier this year, it announced plans to serve Pittsburgh and Chicago.

Some doubt whether there exists an adequate market for trans-Atlantic travel in WOW’s four newest cities. Morgensen, who says his company is “very excited about these cities,” expects low fares to spur demand.

“With those kind of prices, we have seen in other markets that we enter that we have stimulated the market significantly,” he said, adding: “We like the region. We think there’s opportunity there. We think it’s under-served.”

Indeed, competition is sparse. Though trans-Atlantic service in and out of Detroit is common, WOW will be the only airline to fly between St. Louis and Europe, according to USA Today. Moreover, only Delta flies between Cincinnati and Europe.

WOW will battle for the Cleveland market with fellow Icelandic airline Icelandair, which announced Cleveland-Reykjavik service Tuesday. According to USA Today, no commercial airplane has flown across the Atlantic from Cleveland Hopkins International Airport since 2009, when United, which was based out of CHIA until 2014, discontinued a flight from Cleveland to London Heathrow.

Like WOW, Icelandair will run four flights a week between Cleveland and Reykjavik, with connections available from Reykjavik to other destinations throughout Europe. Icelandair, though, will serve more than twice as many European destinations as WOW.

But, Mogensen is confident WOW’s low fares will give the company an edge over Icelandair and other competitors.

“We welcome competition from all airlines,” he said. “No other airline has offered as low fares as we have done over the Atlantic.”

For comparison, a one-way Icelandair ticket from Denver to Reykjavik costs upwards of $250. WOW’s one-ways to Iceland from the Midwest, as mentioned, will cost less than $100.

Icelandair plans to fly Boeing 757s in and out of Cleveland, while WOW intends to use the single-aisle Airbus A321.

Tickets for WOW flights out of its four new US service cities went on sale Wednesday. Detroit service will begin April 26, 2018; Cleveland flights will start on May 4, 2018; Cincinnati service will commence May 10, 2018, and St. Louis service will begin May 17, 2018.

Icelandair says its Cleveland service will begin May 2018, but has yet to provide specific dates.

Mogensen says WOW will make more announcements regarding expanded US service in the near future.

“We will continue to add destinations in the U.S. in the next weeks and as always offer the lowest fares.”

Featured image via Wikimedia Commons

Boeing, Northrop to compete to design new land-based nukes for US

The US Air Force announced Monday that it has awarded two defense companies—Boeing and Northrop Grumman—each a $359 million contract to design new, land-based, nuclear Intercontinental Ballistic Missiles (ICBMs), CNBC reports. The companies will compete in what the Pentagon calls the “technology maturation and risk reduction” phase of development, which CNBC describes as the “preliminary design” phase.

The development of the new missiles is part of the US Military’s Ground-Based Strategic Deterrent (GBSD) intercontinental ballistic missile (ICBM) weapon system program.

A third potential contractor, Lockheed Martin, has dropped out of the running. The narrowing of the design-competition field marks a step forward for the GBSD program, notes Jefferies analyst Howard Rubel, per CNBC.

Said Rubel: ”You went from three competitors to two. You went from what I call broad concepts to now, two competing designers, who will come up with an industrialization concept that will…probably have some testing done to prove certain points along the way.”

The contract also represents a “win” for the Boeing’s defense operation, Rubel says, pointing out that Boeing lost a long-range strike bomber contract to Northrop, and has faced setbacks on an aerial tanker project.

Boeing hasn’t selected subcontractors yet, and Northrop has released just a partial list. Rubel told CNBC he expects Orbital ATK and Aerojet Rocketdyne, two manufacturers of rocket motors, to “split the propulsion work in some fashion.”

The new missiles, which the military expects to begin producing and deploying in the late 2020s, may replace the United States’ current nuclear ICBM, dubbed Minuteman III, the development of which Boeing led in the 1970s.

“Things just wear out, and it becomes more expensive to maintain them than to replace them,” Secretary of the Air Force Heather Wilson said of the aging missiles in a statement. “We need to cost-effectively modernize.”

China and Russia are both modernizing their nuclear fleets, and North Korea is becoming a credible nuclear threat to the US and others.

Still, some experts debate whether the GBSD project is cost-effective and whether modernization of the country’s land-based missiles is an effective defense strategy.

The Air Force originally estimated the cost of “acquiring” the new missiles at $62 billion, but now expects costs between $85 billion and $140 billion. Per CNBC, Reif Kingston, director of disarmament and threat reduction policy for the ACA, called the pricing information on which the Air Force and the Pentagon have based the fiscal projections “old and incomplete.”

“We [i.e. the US] haven’t built a new intercontinental ballistic missile in decades. As the program proceeds, they will have start to get a better sense of the costs. But at this point, there’s a lot of uncertainty, and the Air Force’s [first] estimate [of $62 billion] by all accounts is unrealistically low,” Kingston told CNBC.

Kingston also disputes Wilson’s claim that the development of new missiles would be cheaper than the continued maintenance of Minuteman III. At least in the short term, he says, there is an economic reason to delay GBSD.

“Sustaining the Minuteman III for a period of time (say 10-15 years) beyond 2030 would be cheaper than GBSD over that period,” he said. “The case for deferring a decision on GBSD and pursuing another life extension of the Minuteman III is strong.”

Were the Pentagon to defer the development of Minuteman III replacements, Kingston concedes, the nation’s supply of land-based ICBMs would indeed diminish. “A smaller force,” however, “would not diminish the overall strength and credibility of the U.S. nuclear deterrent,” said Kingston.

The US currently deploys a “nuclear triad”: a combination of land, sea, and air weapons.

Some critics of the GBSD project say nuclear land missiles are not as effective in a defense capacity as nuclear bombs and torpedoes. Air and sea weapons, such critics argue, are more suited to dispersion and avoidance of detection than land weapons.

As part of what CNBC calls a “nuclear posturing review,” the Trump administration will examine whether the triad remains an efficient strategy.

Featured image via Wikimedia Commons

Wisconsin State Assembly approves bill to incentivize proposed in-state Foxconn factory

Thursday, by a vote of 59-30, Wisconsin’s Republican-controlled State Assembly approved legislation that would provide $3 billion worth of incentives—mostly cash—to technology manufacturer Foxconn over 15 years, Reuters reports.

Foxconn, based in Taiwan, has proposed to build a 20 million square-foot liquid-crystal display (LCD) plant on a 1,000-acre plot in the southeastern sector of the state. The company’s initial investment in the plant, which would be operational by 2020 will be $10 billion.

The bill still awaits approval by the state senate and a joint finance committee, both of which Republicans control. Republicans generally support the bill, while Democrats oppose it, but the Assembly’s vote Thursday did not strictly follow party lines; two Republicans voted against, and three Democrats in favor, according to Reuters.

Proponents point out that the plant would bring tens of thousands of jobs to the area, and “transform Wisconsin’s economy,” as Foxconn said in a statement. The facility would create 10,000 construction jobs and 22,000 ancillary jobs, according to Reuters. Initially, it would employ 3,000, but could ultimately employ 13,000.

“We are ready to take advantage of this historic opportunity … and build a long-lasting relationship with Foxconn,” Wisconsin Governor Scott Walker, a Republican who was instrumental in the orchestration of the deal, said in a statement, per Reuters.

“We look forward to continuing to work with them [i.e. legislators] to transform Wisconsin’s economy and make it a center of worldwide high-tech manufacturing,” Foxconn said in a statement.

President Donald Trump, who made the domestication of jobs a primary platform of his campaign, has played a large part in negotiating with the company for the plant. Trump met with Foxconn’s founder and chairman, Terry Gou, three times to discuss the plan, according to Fortune.

“I would see Terry, and I would say, ‘Terry, you have to give us one of these massive places you do great work with,’” Trump said, per The Washington Post. The president says he also told Gou, “The American worker will not let you down.”

In a testament to the importance of the deal for the Trump Administration’s economic agenda, Gou, Trump, Walker and others announced the completion of the negotiations in the East Room of the White House, the Post reports,

“The construction of this facility,” said Trump late last month, “represents the return of LCD electronics—and electronic manufacturing—to the United States.”

The bill’s detractors point out that the incentives would put Wisconsin’s government in considerable debt. The government would not break even on the deal for almost 25 years, according to a legislative analysis released last week, Reuters says.

Critics have called the incentives a “corporate welfare” project (Reuters’ words), and believe policymakers are rushing the bill.

“I think we need more time,” Democratic Representative Jill Billings said. “I want a better deal and more guarantees for my taxpayers.”

Early in the debate, Reuters says, the legislative body nixed a motion by Democrats to allow the finance committee to review the bill prior to the vote. The Assembly also shot down three amendments proposed by Democrats.

Many worry about the impact the making of LCDs has on the environment. According to a 2008 CNET article, the “chemical vapor deposition” process that produces LCDs, semi-conductors and synthetic diamond relies on a “missing greenhouse gas” known as nitrogen trifluoride, the globe-warming effect of which could be as much as 17,000 times stronger than that of CO2, according to an independent report cited by CNET.

Foxconn builds electronics for Apple, Google, Amazon, and a host of other tech giants.

The Washington Post points out that the move to build a factory on American soil is unprecedented for Foxconn, which stations most of its production operations in underdeveloped countries, where the cost of labor is cheaper.

The Post further notes that the company has a reputation for overworking employees and for dangerous work environments. In 2011, an explosion at a Foxconn factory in China killed three workers and injured 16. Some Foxconn workers report working seven days a week, living in cramped dorms, and standing so long that their legs would swell.

Featured image via Wikimedia Commons

Right-wing protestors postpone anti-Google demonstration

Right wing protesters have a march on Google due to what the group’s website calls “credible Alt Left terrorist threats,” CNET reports.

The demonstration, which conservative activist Jack Posobiec organized to protest the firing of engineer James Damore, who distributed this in-house memo about gender and business, was set for Saturday, August 19. The group, known by the monicker March on Google, planned to organize at Google’s headquarters in Mountain View, CA, as well as at Google facilities in eight other cities around the country.

“We hope to hold our peaceful march in a few weeks’ time,” the group said.

The postponement comes in the wake of violence at an alt-right protest in Charlottesville, VA this past Saturday. During the march, a number of skirmishes allegedly broke out. After the rally had dissipated, an alleged neo-Nazi drove his car into a crowd of counter-demonstrators, injuring several and killing one.

One prospective “terrorist” allegedly threatened “to use an automobile to drive into the March on Google protest,” according to the group’s site, which also says “relevant authorities have been notified.”

The Mountain View police department told CNET that despite the postponement, law enforcement plan to “maintain a heightened presence” in the area “in an abundance of caution.”

Following the Charlottesville incident, March on Google posted a message condemning the events and asserting that March on Google was “in no way associated with any group who organized [in Charlottesville].”

“The March on Google condemns and disavows violence, hatred, and bigotry and all groups that espouse it such as White Nationalists, KKK, Antifa, and NeoNazis,” the group wrote in another post, which goes on to say that the protest event is “open to [those] from all backgrounds, ethnicity, and walks of life.”

The group claims its tenants were misrepresented by the media. “CNN and other mainstream media made malicious and false statements that our peaceful march was being organized by Nazi sympathizers,” the group’s website says.

Damore, whose memo, according to CNET, attributed the gender gap at Google to “biological differences between men and women” (CNET’s words) rather than institutional sexism, gave an interview to Stefan Molyneux, whom The Washington Post has described as “one of the alt-right’s biggest Youtube stars.”

fundraiser for Damore has raised almost $50,000. The text describing the fundraiser indicates that it is sponsored by a far-right group. The fundraiser’s description says Damore was attacked by “the radical Left,” which “has been whipping up hate mobs to get independents, libertarians, conservatives, and simple contrarians publicly shamed, bullied, and fired from their jobs for years.”

However, CNET points out that Damore described himself as a centrist in a Reddit AMAand told CNN after Charlottesville that he “does not support the far right,”

Google, meanwhile, is taking flak from both sides of the political aisle. While groups on the right say the company’s termination of Damore violated his freedom of speech, others on the left blame Google for firing the engineer only after the issue went public.

Last Thursday, Google CEO Sundar Pichai canceled an “all-hands” meeting meant to address the memo controversy, after numerous employees reportedly voiced concerns about their privacy and personal safety. Several members of Google’s staff have been subject to online harassment of late, according to Wired.

“In recognition of Googlers’ [i.e. Google employees’] concerns, we need to step back and create a better set of conditions for us to have the discussion,” Pichai wrote to employees, per Recode, adding that “in the coming days” the company would “find several forums to gather and engage with Googlers, where people can feel comfortable to speak freely.”

Pichai has said the memo violated his company’s Code of Conduct and crossed “the line by advancing harmful gender stereotypes in our workplace.”

Recode further quotes the CEO as saying: “To suggest a group of our colleagues have traits that make them less biologically suited to that work is offensive and not OK.”

 Featured image via Wikimedia Commons

Markets lurch as Trump talks and NEC director Gary Cohn considers leaving

The euro has been weakened against the dollar since the release of the minutes of the European Central Bank’s last meeting. But the dollar is having its own problems. The dollar has fallen since the Federal Reserve released the minutes of its last meeting in July, during which policymakers expressed concern about weak U.S. dollar inflation.

The recent attack in Barcelona compounded matters for the dollar, as did certain remarks made by President Trump regarding the recent violent white-supremacist rallies in Virginia. In the fallout from this drama, Trump disbanded two advisory councils of prominent businessmen, a move which some people think violates his promise to work alongside industry leaders.

To make matters worse for the dollar, recent speculation rumors that Gary Cohn, current director of the National Economic Counsel, is considering leaving his post. Cohn was one of many business leaders to denounce Trump’s remarks on the violence in Virginia.

Aside from his duties as director of the NEC, Cohn also acts as a particular advisor of President Trump’s on tax reform and spending, as does Treasury Secretary Steve Mnuchin. Cohn previously served as an executive at Goldman Sachs.

Cohn seems to play a key role in keeping the U.S. economy and currency stable. That’s why the rumors circulating about his possible imminent departure caused the markets to lurch. Traders rushed to abandon the dollar for more secure currencies.

An anonymous White House adviser maintains that Cohn will remain and the status quo will not be broken. This news has calmed the markets somewhat.

On Wednesday, the dollar fell O.55 percent to the yen and 0.4 percent to the Swiss franc. The dollar has since gone up incrementally.

On the whole, most analysts don’t seem to see much immediate cause for worry about the U.S. dollar.

Featured Image via Pixabay