Month: January 2019

John C. Bogle, who simplified investing for the masses by launching the first index mutual fund and founded Vanguard Group, died Wednesday, the company said. He was 89. Bogle did not invent the index fund, but he expanded access to no-frills, low-cost investing in 1976 when Vanguard introduced the first index fund for individual investors, rather than institutional clients. The emergence of funds that passively tracked market indexes, like the Standard & Poor’s 500, enabled investors to avoid the higher fees charged by professional fund managers who frequently fail to beat the market. More often than not, the higher operating expenses that fund managers pass on to their shareholders cancel out any edge they may achieve through expert stock-picking. Mutual fund industry critic Bogle and Vanguard shook up the industry further in 1977. The company ended its reliance on outside brokers and instead began directly marketing its funds to investors without charging upfront fees known as sales loads. Bogle served as Vanguard’s chairman and CEO from its 1974 founding until 1996. He stepped down as senior chairman in 2000, but remained a critic of the fund industry and Wall Street, writing books, delivering speeches and running the Bogle Financial Markets Research Center. The advent of index funds accelerated a long-term decline in fund fees and fostered greater competition in the industry. Investors paid 40 percent less in fees for each dollar invested in stock mutual funds during 2017 than they did at the start of the millennium, for example. But …

Female employees at Citigroup Inc around the world are paid just 71 percent of what men earn, the giant bank said on Wednesday, declaring its intentions to close its gender pay gap. A Citigroup shareholder group that sought data on the pay gap said the bank is the first U.S. company to disclose such figures. The U.S.-based bank employs more than 200,000 people in more than 100 countries, and more than half those employees are female, it said. Tackling the 29 percent gap means increasing the number of women in senior and higher-paying roles, promoting women to at least 40 percent of assistant vice president through managing director jobs, Citigroup said in a statement. Citigroup said it disclosed the data in response to a shareholder proposal from Arjuna Capital, an investment management firm. The bank said its “raw pay gap” showed median pay for females globally was 71 percent of the median for men. The raw gap measures the difference in median total compensation not adjusted for job function, level and geography. With those adjustments, women are paid an average of 99 percent of what men are paid, it said. “We have work to do, but we’re on a path that I’m confident will allow us to make meaningful progress,” Sara Wechter, head of human resources, said in a statement. In the United States overall, women last year working full-time year-round earned 80 percent of what men earned, according to commonly cited data from the U.S. Census Bureau. Congress outlawed …

The Ports of Los Angeles and Long Beach on Wednesday said they set all-time records for moving cargo in 2018, after U.S. retailers and manufacturers pulled forward imports to avoid higher tariffs on Chinese goods. The Port of Los Angeles, North America’s busiest container port, handled 9.46 million 20-foot equivalent units (TEUs) last year, the most in its 111-year history and 1.2 percent more than in 2017. The neighboring Port of Long Beach processed more than 8 million TEUs for the first time last year, after container cargo totals jumped 7 percent from 2017. “This is a rush of cargo based on political trade policy,” said Gene Seroka, executive director for the Port of Los Angeles, where direct trade with China accounted for just over half of the $284 billion in cargo the port handled in 2017. “Many people were fearful that we were going to go from a 10 percent tariff on certain items to 25 percent on January 1,” Seroka said. The U.S. and China in late November agreed to a 90-day cease-fire in their bitter trade war. Under that deal, the U.S. will keep tariffs on $200 billion worth of Chinese imports at 10 percent. That news came after many importers sped up orders for everything from apparel to auto parts to avoid the higher tariffs. The cargo surge at Los Angeles/Long Beach and other major U.S. ports spurred disruptions that are rippling through the supply chain. U.S. warehouses are stuffed to the rafters, forcing some importers …

Brexit has British business owners on edge — and that is great news for Lovespace, a storage and warehousing company outside London. Lovespace, which collects boxes from customers, stores them and then returns the goods when needed, says revenue from businesses doubled over the past year and inquiries quadrupled as enterprises large and small began stockpiling inventory because of concerns they will be cut off from suppliers if Britain leaves the European Union without an agreement on future trading relations. “People are working out how to store stuff — how to get things to their own customers as the year progresses,” CEO Steve Folwell said as workers moved boxes around the company’s 20,000 square-foot (1,860 square-meter) warehouse in Dunstable, about 35 miles (55 kilometers) northwest of London. “There’s uncertainty because of Brexit and there’s a lack of trust in the political process at the moment.” The risk of a no-deal Brexit is increasing amid widespread opposition to the divorce agreement Prime Minister Theresa May negotiated with the EU. While May says her deal is the only way to ensure that trade continues to flow smoothly after Britain leaves the bloc on March 29, U.K. lawmakers overwhelmingly rejected the agreement late Tuesday because opponents fear it will leave the country tied to the EU for years to come. Without an agreement on future relations, 40 years of free trade between Britain and the EU would be replaced by tariffs, border inspections and other non-tariff barriers, with potentially devastating impacts on the …

International tensions and nationalist politics can further weigh on the global economy this year and hinder efforts to deal with big issues such as climate change, the organizers of next week’s Davos forum warned Wednesday. In its annual Global Risks Report, the World Economic Forum said the world is evolving into “a period of divergence following a period of globalization.”  A “darkening” economic outlook, in part fostered by geopolitical tensions between the United States and China, “looks set to further reduce the potential for international cooperation in 2019,” it said.   “With global trade and economic growth at risk in 2019, there is a more urgent need than ever to renew the architecture of international cooperation,” said Borge Brende, President of the World Economic Forum, which hosts an annual gathering of business and political leaders in the Swiss ski resort of Davos.   “We simply do not have the gunpowder to deal with the kind of slowdown that current dynamics might lead us towards,” he added.   In 2018, the global economy slowed more than most experts had predicted and stock markets posted their worst year in a decade. Much of that has been blamed on the standoff between the U.S. and China over trade that has led to both sides imposing tariffs on hundreds of billions worth of goods.   The report, which is based on the views of around 1,000 experts and decision-makers from around the world, found that 88 percent of respondents expect a “further erosion” of …

A Gillette ad for men invoking the #MeToo movement is sparking intense online backlash, with accusations that it talks down to men and groups calling for a boycott. But Gillette says it doesn’t mind sparking a discussion. Since it debuted Monday, the Internet-only ad has garnered nearly 19 million views on YouTube, Facebook and Twitter — a level of buzz that any brand would covet. The two-minute ad from Procter & Gamble’s razor brand shows men and boys engaging in bullying and sexual harassment and encourages men to “say the right thing” and “act the right way.” Taking on bullying, sexual harassment and toxic masculinity is a big task for a razor brand. Many critics took to social media saying it was insulting to men and laden with stereotypes. The uproar comes as Gillette battles upstarts like Harrys Razors, Dollar Shave Club, and others for millennial dollars. Gillette controlled about 70 percent of the U.S. market a decade ago. Last year, its market share dropped to below 50 percent, according to Euromonitor. Allen Adamson, co-founder of branding firm Metaforce, called the ad a “hail Mary” pass from the 117-year-old company. But he added that online buzz, whether positive or negative, rarely makes a long-term difference for a marketer since memory fades quickly. “Getting noticed and getting buzz is no easy task, and they’ve managed to break through,” Adamson said. “Most advertisers advertise, and no one notices because there is so much noise in the marketplace, so just getting noticed Is …

More than 3,200 government, business, academics and civil society leaders will address issues of globalization, climate change and other matters of world importance next week at the annual World Economic Forum in the plush Swiss Alpine village of Davos. The list of participants reads like the Who’s Who of the most powerful, successful and inventive movers and shakers in the world. They will be rubbing shoulders during hundreds of formal sessions and workshops, as well as in private bilaterals on the sidelines of the meeting. They will discuss and seek solutions to some of humanity’s most vexing problems. The theme of this year’s gathering is Globalization “4.0: Shaping a Global Architecture in the Age of the Fourth Industrial Revolution.” That refers to the emerging technology breakthroughs in such fields as artificial intelligence and robotics. Founder and executive chairman of the World Economic Forum Klaus Schwab says this fourth wave of globalization needs to be human-centered. He says globalization in its present form is not sustainable. He says globalization must be made more inclusive. “Globalization produced winners and losers, and so there were many more winners in the last 24, 25, 30 years. But now we have to look after the losers — after those who have been left behind…what we need is a moralization, or re-moralization, of globalization,” he said. The program is very wide-ranging. For example, U.N. Secretary-General Antonio Guterres will discuss the state of the world. He will broach issues like climate change, fighting poverty and sustainable development. …

Although it is unclear if the United States and China will be able to meet a 90-day deadline and strike a deal on trade by March 2, the tussle is clearly adding to uncertainty about the future fate of the Chinese government’s strategic plan named “Made in China 2025.” The plan itself is much like other countries’ goals to move up the industrial value chain. According to Beijing’s plan, China aims to make the country a world leader in 10 key sectors such as robotics, information technology, and artificial intelligence by 2025. However, what has raised concerns is how China is going about reaching that goal. Foreign companies and governments have voiced growing concern about the plan and the Chinese policy and practice of forcing companies to hand over technology in exchange for access to the country’s massive economy. At the same time, analysts believe Beijing has done little to stop Chinese companies from stealing technology through their operations overseas. Dilute or delay? Pushback from abroad has already impacted the implementation of Made in China 2025, said Anna Holzman, a junior research associate with the Berlin-based Mercator Institute of China Studies (MERICS). “The tough stance followed by actions taken by the United States has notably increased the sense of urgency amongst Chinese policymakers to speed-up the development of domestic capabilities,” she said. Aside from the trade deficit, forced technology transfers are a key reason why President Donald Trump launched the trade war. It is also the main component of ongoing …

French President Emmanuel Macron is formally launching a “grand debate” to try to appease the yellow vest movement following weeks of anti-government protests. Macron heads Tuesday to Grand Bourgtheroulde, a small town in Normandy, where he is to meet about 600 mayors and local officials.   Despite a high security presence, a ban on traffic and restricted access to the town, dozens of yellow vests protesters gathered outside the town to express their discontent.   “We are being prevented from accessing the village,” said protester Florence Clement. “I was crossing the road with my yellow vest but I was asked to remove it because it’s forbidden.”   Macron started his journey with a stop in the small town of Gasny to attend a local officials’ meeting, where some expressed their concerns over the loss of purchasing power of retirees and civil servants. Macron addressed this week a “letter to the French” to encourage people to express their views on a series of economic and political matters during a three-month “grand debate.”   The consultation will take place through local meetings and on the internet. The debate will focus on taxes, public services, climate change and democracy.   The French leader, whose popularity ratings hit record lows at the end of last year, hopes the process will help quell anger over his economic policies. About 84,000 people turned out last weekend for the ninth round of anti-government demonstrations across France, according to the French Interior Ministry.   The yellow vest movement, …