Month: November 2017

Commerce Secretary Wilbur Ross plans to completely divest from a shipping company that counts a Russian gas producer with ties to the Kremlin among its major customers.   A commerce department spokesman says Ross plans to sell all his shares of Navigator Holdings. That company ships products from Sibur, a Russian gas producer whose owners include two Russian oligarchs close to President Vladimir Putin and a businessman believed to be Putin’s son-in-law.   Details of the Ross stake in Navigator were revealed among the Paradise Papers leak of documents about offshore entities.   Critics have said Ross should not hold the stock given his public office. He has said that he disclosed his stake in reports filed with the government earlier this year and has done nothing wrong. …

The European Commission said Wednesday it wants to cut emissions of carbon dioxide from cars by 30 percent by 2030 and boost the use of electric vehicles by making them cheaper and easier to charge.   The proposal stops short of imposing fixed quotas for emission-free vehicles and is more modest than goals already set out by some EU members. Still, European automakers said the commission’s targets were too drastic, and Germany’s foreign minister warned against the proposal.   Commission Vice President Maros Sefcovic insisted that the plan is the most “realistic” compromise between Europe’s ambitions to blaze trails on clean energy and the costs that the continent’s powerful car manufacturers will have to bear to overhaul workforces and production.   Current targets require automakers to achieve the average permitted emission for new models in the European Union of 95 grams of CO2 per kilometer for cars, or 147 grams for light commercial vehicles by 2021.   The new proposal foresees a further reduction of 15 percent by 2025 and 30 percent by 2030, compared to 2021 levels.   Car companies that fail to meet those targets face substantial fines of 95 euros ($110) per excess gram of carbon dioxide – per car. Automakers that manage to equip at least 30 percent of their new cars with electric or other low-emission engines by 2030 will be given credits toward their carbon tally.   The European Automobile Manufacturers’ Association, an industry body, criticized the 2025 target, saying “it does not leave …

Emerging nations pressed developed countries Wednesday to step up cuts in greenhouse gas emissions by 2020 to kick-start the Paris climate agreement, saying the rich were wrongly focused on 2030 goals. “We came here needing to hit the accelerator, not the brakes,” Brazil’s chief negotiator Antonio Marcondes told Reuters on the sidelines of the November 6-17 negotiations in Germany on limiting global warming. In 2015, almost 200 governments agreed on the Paris accord to end the fossil fuel era by 2100 and remained united last year in declaring action “irreversible” after Donald Trump, who has called man-made climate change a hoax, won the U.S. presidential election. But that unity is fraying. Under the Paris Agreement, most governments set targets for cutting emissions by 2030, with little focus on shorter-term milestones. Brazil and nations including India, China and Iran now want to fill the gap with more action by 2020 to cut greenhouse gas emissions, especially by the rich, which have burned the most fossil fuels since the Industrial Revolution. “While action on [the] post-2020 period under the Paris Agreement has gained momentum, the discussions on pre-2020 actions have lagged behind,” India’s chief negotiator Ravi S. Prasad said this week. Actions defended Developed nations say they are acting. European Union officials pointed to proposals on Wednesday for tougher car emissions targets, including a credit system for carmakers to encourage the rollout of electric vehicles. Nazhat Shameem Khan, chief negotiator for Fiji, which is presiding at the meeting, said: “Clearly, there is …

An independent analysis has concluded the U.S. tax overhaul being advanced by Republican leaders in the House of Representatives would add $1.7 trillion to the country’s debt during the next decade, about $259 billion more than previously assumed. The Congressional Budget Office analysis was released Wednesday as lawmakers continue to consider an array of proposals aimed at cutting the country’s corporate tax rate from 35 to 20 percent and trimming tax rates for many, but not all, middle-class families, broadly defined in the United States as those with an annual household income of $49,000 to $86,000. The new analysis from the agency that is considered to be the independent scorekeeper for congressional financial policies could complicate Republican plans for the House to adopt the tax overhaul before the country’s Thanksgiving holiday on November 23. Republican lawmakers had pledged the tax cuts over the next decade would not add any more than $1.5 trillion to the country’s current and growing long-term debt of more than $20 trillion. With the CBO’s estimate the tax changes would cost more, the majority Republicans in the House would have to change their proposals to keep the additional costs within the $1.5 trillion limit they have imposed on themselves. The tax overhaul could be the country’s first substantial changes to its labyrinth tax code in more than three decades. Senate Republicans are expected to unveil their tax change proposals on Thursday, which are likely to be widely different than the House proposals. President Donald Trump has …

As climate change-driven storms, floods and other disasters bring escalating financial losses, how will the costs be paid? That’s a crucial question at the U.N. climate talks in Bonn this week. Researchers say losses from droughts, sea level rise and other climate-driven shocks are likely to reach hundreds of billions of dollars a year by 2030 if planet-warming emissions continue unabated. Just the cost to the United States to repair the damage caused by this year’s hurricanes Harvey, Irma and Maria — in Texas, Florida, Puerto Rico and the U.S. Virgin Islands — is estimated to be tens of billions of dollars. Attempts to curb planet-warming emissions are falling short and too little progress has been made in helping communities and countries adapt to the changes. That means “loss and damage is a reality now,” said Saleemul Huq, director of the International Center for Climate Change and Development in Bangladesh. ‘No funds’ The question of who might pay the mounting costs of disasters is a controversial one at the talks. Developed countries — as the biggest emitters of greenhouse gas emissions — have been reluctant to discuss the costs, fearing they could be held liable. “There are currently no funds set up for loss and damage — that’s the main challenge, and what we want to see happening,” said Harjeet Singh, global lead on climate change for ActionAid International. Plans for addressing loss and damage within the U.N. process are enshrined in the Warsaw International Mechanism for Loss and Damage, …

Players line up beside a small kiosk in a poor neighborhood to choose animals in a lottery game that has become a craze in Venezuela even as the oil-rich country suffers a fourth year of brutal recession. It seems more and more Venezuelans are turning to gambling in their desperation to make ends meet amid the country’s unprecedented economic crisis. Though more people lose than win overall, the illusion of a payday has become more alluring as Venezuelans endure the world’s highest inflation, shortages of basics from flour to car batteries, and diminished real-term wages.  Among multiple options from race courses to back-street betting parlors, the roulette-style “Los Animalitos” (or the Little Animals) is currently by far the most popular game on the street. “Most people I see playing the lottery are unemployed, trying to make a bit extra this way because the payouts are good,” said Veruska Torres, 26, a nurse who recently lost her job in a pharmacy and now plays Animalitos every day. Torres often plays more than a dozen times daily at the kiosk in Catia, spending between 5,000-10,000 bolivars, but sometimes making up to 50,000 or 60,000 bolivars in winnings – more than a quarter of the monthly minimum wage. When that happens, she splits the money between buying food and diapers for her baby boy, and re-investing in the lottery. The Animalitos game, whose results appear on YouTube at scheduled times, is hugely popular because it goes through various rounds, holding people’s interest, and …

The U.S. Senate Banking Committee unanimously backed new sanctions targeting Chinese banks that do business with North Korea on Tuesday, just before President Donald Trump visits Beijing for the first time since taking office. As well as strengthening existing sanctions and congressional oversight, the measure will target foreign financial institutions — in China and elsewhere — that provide services to those subject to North Korea-related sanctions by the U.S. Congress, a presidential order or U.N. Security Council resolution. All 12 Republicans and 11 Democrats on the panel voted for the “Otto Warmbier Banking Restrictions Involving North Korea (BRINK) Act,” clearing the way for its consideration by the full Senate. The bill was named after a U.S. student who died earlier this year after he was imprisoned in North Korea, further chilling already poor relations between Washington and Pyongyang. “For too long, we’ve been complacent about the growing and gathering threat from the North Korean regime,” Republican Pat Toomey, one of the bill’s authors, said after the committee voted. Democratic Senator Chris Van Hollen, another author, said that in addition to Chinese banks, Malaysian financial institutions might end up in its sights. Trump is due to wrap up a visit to Seoul on Wednesday with a major speech on North Korea, and then shift focus to China, where he is expected to press a reluctant President Xi Jinping to tighten the screws further on Pyongyang. Some of Trump’s fellow Republicans, as well as many Democrats, have been critical of Trump’s bellicose …

Inflation in Venezuela’s crisis-hit economy was 826 percent in the 10 months to October and may end 2017 above 1,400 percent, the opposition-controlled National Assembly said Friday. The government stopped releasing price data more than a year ago but congress has published its own figures since January and they have been close to private economists’ estimates. As well as the alarming Jan-Oct cumulative rise, the legislative body, which has been sidelined by President Nicolas Maduro’s government, put monthly inflation at 45.5 percent for October, compared with 36.3 percent in September. Opponents say Maduro and his predecessor, Hugo Chavez, have wrecked a once-prosperous economy with 18 years of state-led socialist policies from nationalizations to currency controls. The government says it is victim of an “economic war” including speculation and hoarding by pro-opposition businessmen, combined with U.S. sanctions and the fall in global oil prices from mid-2014. OPEC member Venezuela relies on crude oil for more than 95 percent of its export revenues. Prices in Venezuela, which has long had one of the highest inflation rates in the world, rose 180.9 percent in 2015 and 274 percent in 2016, according to official figures, although many economists believe the real data was worse. Announcing the October calculations, opposition lawmaker Angel Alvarado told the National Assembly that inflation next year could reach 12,000 percent. “This is dramatic, this is Venezuelans’ big problem, it’s what keeps workers awake at night, it’s what’s killing the people with hunger,” Alvarado said. In a research note this week, …

Unless emissions can be drastically and quickly curbed, efforts by small island nations to adapt to climate change may be in vain, a leader of a group of small island nations said Tuesday. Hurricanes that hit the Caribbean this year were like nothing seen before, with Hurricane Irma so strong it was picked up by seismic machines that detect earthquake tremors, officials said. National plans to curb planet-warming emissions, drawn up ahead of the Paris Agreement, currently add up to a projected temperature rise of 3 degrees Celsius above pre-industrial levels by 2100 — well above the 1 degree Celsius rise already seen. That may bring climate impacts that are impossible for small island nations to deal with, their leaders warned Tuesday at the U.N. climate talks in Bonn. If ambition to curb climate remains modest, “have we created a situation for small island developing states where resilience may not necessarily be … achievable?” asked Janine Felson, Belize ambassador to the United Nations and vice chair of the Alliance of Small Island States. This year, Hurricane Maria destroyed broad swaths of homes and infrastructure on the Caribbean island of Dominica and stripped its trees bare. Barbuda island was left temporarily uninhabitable when Irma whipped through the region. “In the Caribbean we’re used to hurricanes, but … for the first time we’ve seen storms turbocharge and supersize in a matter of hours,” she said, speaking on the sidelines of the climate talks. The storms’ impact was “quite apocalyptic,” and magnified the …

The United States and other countries hoping to host the 2026 World Cup should provide government guarantees on visa-free travel plus work permit and tax exemptions for their bids to be accepted, according to documents published by FIFA on Tuesday. The U.S wants to host the 2026 tournament in a joint bid with Canada and Mexico, who would also have to commit to the government guarantees for their proposal to be accepted by soccer’s world governing body. Morocco is currently the only other country to have indicated they will bid for the finals, which will be the first to feature an expanded 48-team field. FIFA wants a visa-free environment, or at least non-discriminatory visa procedures, while the work permit exemptions apply to anyone involved with the World Cup and tax exemptions relate to the soccer governing body and its subsidiaries. While FIFA has asked for — and received — similar exemptions in the past, their inclusion in a revamped World Cup bid process will mean the current U.S. administration of President Donald Trump will need to sign off on the exemptions. Sunil Gulati, chairman of the joint U.S, Mexican and Canadian “United Bid Committee” has previously stated that Trump supports the attempt to bring the World Cup to the United States, which hosted the 1994 finals. FIFA produced new bidding criteria after the organization was heavily criticized over the selection process for the 2018 and 2022 World Cup finals, won by Russia and Qatar respectively. Formal submission of the completed …

The restive Spanish region of Catalonia faces a potential $500 million financial hit in the fourth quarter as business-related travel dips following the attack in Barcelona and the uncertainty generated by the disputed independence referendum.   In an interview Monday with The Associated Press at the World Travel Market in London, Catalonia’s top tourism official Patrick Torrent said the region will likely see a 10-12 percent fall in tourist numbers during the fourth quarter, which would equate to around 450 million euros. The large bulk of that fall is related to a drop-off in business travel to events such as conventions.   Despite the anticipated fourth-quarter decline, the executive director at the Catalan Tourist Board, said Catalonia is set to see revenues this year outstrip those last year and that the expectation is that revenues will rise again next.   However, more insight will emerge at the turn of the year when the bulk of pre-reservations are made. His staff, he said, are “on alert” about the impact on the main booking season.   The worry among many economists is that deteriorating business environment in Catalonia, which has seen around 1,500 firms move their headquarters out of the region, could worsen further amid all the uncertainty. Credit ratings agency Moody’s has warned that the region’s financial recovery is being jeopardized   “Moody’s believes that the political instability will negatively affect the region’s economy, in particular foreign investor sentiment and the tourism sector, and add pressure to the region’s already weak …

Two weeks ago the glitzy Ritz Carlton hotel in Riyadh was the site of an international conference promoting Saudi Arabia as an investment destination, with over 3,000 officials and business leaders attending. Now the hotel is temporarily serving as a luxury prison where some of the kingdom’s political and business elite are being held in a widening crackdown on corruption that may change the way the economy works. By detaining dozens of officials and tycoons, a new anti-corruption body headed by Crown Prince Mohammed bin Salman is seeking to dismantle systems of patronage and kick-backs that have distorted the economy for decades. But it is a risky process, because the crackdown is hurting some of the kingdom’s top private businessmen — leaders of family conglomerates who have built much of the non-oil economy over the past few decades. Many industries could suffer if investment by these families dries up in coming months, at a time when the economy has already fallen into recession because of low oil prices and austerity policies. New breed of companies Meanwhile, a new breed of state-backed companies is rising to compete with the old guard; many of the new enterprises are linked to the Public Investment Fund (PIF), the kingdom’s top sovereign wealth fund. But it is not clear how smoothly the transition to these firms will happen. “The rules of the game are changing. But they’re changing indiscriminately,” said one financial analyst in the region, declining to be named because of political sensitivities. “Even …

A revamping of the Federal Reserve’s leadership is widening with the announcement Monday that William Dudley, president of the New York Fed and the No. 2 official on the Fed’s key interest rate panel, will retire next year.   Just last week, President Donald Trump chose Fed board member Jerome Powell to replace Janet Yellen as Fed chair in February. The post of Fed vice chair remains vacant. So do two additional seats on the Fed’s seven-member board. And a fourth seat may open as well next year. The unusual pace of the turnover has given Trump the rare opportunity for a president to put his personal stamp on the makeup of the Fed, which operates as an independent agency. Investors are awaiting signals of how Trump’s upcoming selections might alter the Fed’s approach to interest rates and regulations.   Trump has made it known that he favors low interest rates. He has also called for a loosening of financial regulations. The Fed has played a key role in overseeing the tighter regulations that were enacted after the 2008 financial crisis, which nearly toppled the banking system.   The uncertainty surrounding the Fed’s top policymakers has been heightened by the slow pace with which the Trump administration has moved to fill openings. To date, the administration has placed one new person on the Fed board: Randal Quarles, a veteran of the private equity industry who is thought to favor looser regulations, was confirmed as the first vice chairman for supervision. …

Chipmaker Broadcom made an unsolicited $103 billion bid for Qualcomm on Monday, setting the stage for a major takeover battle as it looks to dominate the fast-growing market for semiconductors used in mobile phones. Qualcomm said it would review the proposal. The San Diego-based company is inclined to reject the bid as too low and fraught with risk that regulators may reject it or take too long to approve it, people familiar with the matter told Reuters. A Broadcom-Qualcomm deal would create a dominant company in the market for supplying chips used in the 1.5 billion or so smartphones expected to be sold around the world this year. It would raise the stakes for Intel Corp, which has been diversifying from its stronghold in computers into smartphone technology by supplying modem chips to Apple. Qualcomm shareholders would get $60 in cash and $10 per share in Broadcom shares in a deal, according to Broadcom’s proposal. Including debt, the transaction is worth $130 billion. GBH Insight analyst Daniel Ives said bullish investors were hoping for $75 to $80 per share. “Now it’s a game of high-stakes poker for both sides,” he said. Shares of Qualcomm, whose chips allow phones to connect to wireless data networks, traded above $70 as recently as December 2016 and topped $80 in 2014. Qualcomm’s shares were up 2 percent at $63.09 at mid-afternoon, suggesting investors were skeptical a deal would happen. Broadcom shares fell 0.3 after hitting a record high of $281.80. Regulatory scrutiny Qualcomm’s largest …