US Sees Foreign Reliance on ‘Critical’ Minerals as Security Concern

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The United States needs to encourage domestic production of a handful of minerals critical for the technology and defense industries, and stem reliance on China, U.S. Interior Secretary Ryan Zinke said Tuesday.

Zinke made the remarks at the Interior Department as he unveiled a report by the U.S. Geological Survey (USGS), which detailed the extent to which the United States is dependent upon foreign competitors for its supply of certain minerals.

The report identified 23 out of 88 minerals that are priorities for U.S. national defense and the economy because they are components in products ranging from batteries to military equipment.

The report found that the United States was 100 percent net import reliant on 20 mineral commodities in 2016, including manganese, niobium, tantalum and others. In 1954, the U.S. was 100 percent import reliant for the supply of just eight nonfuel mineral commodities.

“We have the minerals here and likely we have enough to provide our needs and be a world trader in them, but we have to go forward and identify where they are at,” Zinke told reporters at an Interior Department briefing.

He also blamed previous administrations for allowing foreign competitors like China to dominate mineral production for minerals, such as rare earth elements, used in smartphones, computers and military equipment.

Zinke said the report is likely to shape Interior Department policy-making in 2018, as the agency looks to carry out its “Energy Dominance” strategy, expanding mining and resource extraction on federal lands.

The survey is the first update of a 1973 USGS report that catalogued the production of minerals worldwide. The update was started under the Obama administration in 2013.

Many of the commodities that are covered in the new volume were of minor importance when the original survey was done, since it pre-dated the global electronics boom.

The USGS and Interior Department said the report is meant to be used by national security experts, economists, private companies, the World Bank and resource managers.

It does not offer policy recommendations, but Zinke will rely on the findings as he prioritizes research into certain mineral deposit areas on federal land and plans policies to promote mining.

“We do expect that to lead to policy changes. The USGS is not involved in policy, but I suspect you will see some policy changes,” said Larry Meinert, lead author of the report.

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Greek Lawmakers Approve 2018 Budget Featuring More Austerity

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Greece’s parliament on Tuesday approved the 2018 state budget, which includes further austerity measures beyond the official end of the country’s third international bailout next summer. 


All 153 lawmakers from the left-led governing coalition backed the budget measures in a late vote, while the 144 opposition lawmakers present rejected them. Three were absent from the vote.

Prime Minister Alexis Tsipras promised that the country would smoothly exit the eight-year crisis that has seen its economy shrink by a quarter and unemployment hit highs previously unseen during peacetime.

Tsipras argued that international money markets — on whose credit Greece will have to depend once its rescue loan program ends — are showing strong confidence in the country’s prospects, with the yield on Greek government bonds dropping to a pre-crisis low of less than 4 percent.

“The way to exit [the crisis] is for our borrowing costs to return to acceptable levels so the country can finance itself without the restrictive bailout framework,” Tsipras said.

The budget promises Greece’s international lenders continued belt-tightening measures and high primary budget surpluses — the budget balance before debt and interest payments are taken into account.

It sets the primary surplus at 2.44 percent for 2017 and 3.82 percent for 2018, higher than previously estimated. The economy is forecast to grow by 1.6 percent in 2017 and 2.5 percent next year, helped by a return to growth across Europe.

Debt to hold steady

With the Greek economy worth around 185 billion euros ($271 billion) in 2018, the national debt will remain at just under 180 percent of annual GDP, roughly unchanged from the previous year.

Greeks will see new tax hikes and pension cuts over the next two years. Bailout lenders had demanded additional guarantees the Greek economy will be stabilized before considering measures to improve the country’s debt repayment terms.

Opposition parties have criticized the budget, saying it will prolong the pain for Greeks. The main opposition conservative New Democracy party said the budget was “bleeding dry” the Greek people with 1.9 billion euros’ worth of new austerity measures.

Greece’s latest international bailout officially ends in August, more than eight years after the country began receiving emergency loans from the other European Union countries that use the euro currency, as well as from the International Monetary Fund.

In return for the funds, successive governments have had to impose repeated rounds of tax hikes and spending cuts, as well as structural changes aimed at reforming the country’s moribund economy and making it more competitive.

Tsipras first was elected in 2015 on promises to quickly end the painful austerity. But negotiations with bailout creditors soon went awry and, threatened with a disastrous euro exit, he signed on to more income cuts, increased taxation and further spending cuts.

His governing Syriza party is trailing New Democracy in the polls. But Tsipras insisted Tuesday that the government would see out its mandate, which ends in 2019.

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Ex-Odebrecht CEO, Symbol of Brazil Graft Probe, Leaves Jail

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One of the most prominent people convicted in Latin America’s largest corruption scandal left prison Tuesday for house arrest after serving two-and-a-half years behind bars at a time when many Brazilians are becoming disillusioned with the graft investigation once hailed as a political game-changer.

Marcelo Odebrecht’s release came a day after Brazil’s top court halted investigations into several lawmakers, underscoring the limitations of the “Car Wash” investigation that uncovered nearly institutionalized corruption involving senior politicians in several countries and several major Brazilian companies.

Odebrecht, who was CEO of his family’s company of the same name, cooperated with prosecutors and testified that executives routinely paid bribes and made illegal campaign contributions to politicians in exchange for favors. He was originally sentenced to 19 years in prison but, once he began cooperating, that penalty was reduced to 10, with the agreement that the majority of it would be served under house arrest.

Odebrecht’s conviction and jailing were seen as a major victory for Car Wash prosecutors. The testimony of Odebrecht and other executives revealed that, for years, the company had essentially captured the Brazilian state, paying bribes and kickbacks to whoever was in power.

The corruption was so organized — and endemic — that it had its own department at Odebrecht, blandly named the Division of Structured Operations.

On Tuesday, Odebrecht left prison and went to the federal court in the southern state of Parana, where an electronic bracelet was attached, the court said. Neither the court nor his representatives would say where he was headed next, but local media have reported he will serve out his term in his home in an upscale neighborhood of Sao Paulo.

“The main objective of this new phase of his life is, I repeat, to return to the family fold, which is very dear to him, and to be effective in his collaboration” with prosecutors, Nabor Bulhoes, a lawyer for Odebrecht told reporters outside the court. “Right now, he has no other plan and no other goal.”

Lack of ‘real accountability’

While Odebrecht’s release was expected, it underscored the inequalities in Brazil’s criminal justice system, in which corruption and white-collar crimes generally receive little jail time.

“It’s terrible for the image of Brazil,” said Celcino Rodrigues Junior, a 26-year-old law student in Sao Paulo, referring to Odebrecht’s release. “It’s favorable to him because he will be in a mansion, he will be in total comfort.”

Revealing the extent of corruption in Brazil was one of Car Wash’s great achievements. The other was managing to put some of its masterminds, Odebrecht among them, in jail.

But the investigation has slowed in recent months, and there have been accusations that President Michel Temer and other senior politicians are trying to hinder it. Some fear the new chief of the federal police will be less aggressive in investigating corruption, and others bemoaned the closure earlier this year of the task force dedicated to the probe. Temer has always maintained that he supports the investigation.

Despite its success in sending several businessmen to jail, the Car Wash operation has also struggled to put senior politicians behind bars. That’s at least partially because sitting politicians have the right to be tried in the Supreme Court, where justice is slow and often deferential.

On Monday, a Supreme Court panel voted 2-1 to stop Car Wash investigations against four members of Congress. The decision effectively shields them from investigation while they remain in office.

Supreme Court Justice Gilmar Mendes also ordered house arrest instead of jail for Adriana Anselmo, wife of former Rio de Janeiro Gov. Sergio Cabral. Cabral has been convicted of corruption and is in prison, while his wife has been in jail accused of several crimes.

“Brazilians, as a whole, are exhausted by this marathon of scandal, and it’s only natural that they would be disappointed by and exhausted by the absence of any real accountability,” said Matthew Taylor, an associate professor at the School of International Service at American University in Washington.

Even though the operation, known as Lava Jato in Portugese, hasn’t always lived up to Brazil’s highest hopes, Taylor says it has made significant progress.

“The fact that Odebrecht went to jail at all is a paradigm-shifting event in Brazilian history,” he said. “Lava Jato has moved the needle.”

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Analysis: US Tax Cut to Deliver Corporate Earnings Gift

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A planned massive Republican tax overhaul has led Wall Street strategists to revise their 2018 corporate earnings forecasts sharply higher, but the jury is out on how long the accelerating effect on profits will last.

The tax bill, which the U.S. House of Representatives approved on Tuesday, will cut the corporate income tax rate to 21 percent from 35 percent, beginning Jan. 1, and would be the biggest positive factor for U.S. earnings in 2018. A Senate vote was still awaited.

Although there is a wide range of profit estimates for 2018, the expected tax plan benefit has strategists now calling for double-digit profit gains in 2018 over 2017, compared with their forecasts for mid-single-digit gains without the tax cuts. S&P 500 earnings growth for 2017 was an estimated 11.9 percent, according to Reuters data.

“This is going to drive the earnings numbers. [Tax] is going to overwhelm everything,” said Credit Suisse Group U.S. Equity Strategist Jonathan Golub, who was waiting for the bill’s passage to adjust his own earnings estimates.

With the U.S. and world economies expanding, consumer demand strong and interest rates low, corporate profits were expected to be healthy next year. The tax law will give them an added jolt of adrenaline.

Many strategists estimate the cut in corporate tax could deliver an extra boost to earnings next year of between about 7 percent to more than 10 percent. Some of the forecasts were based on a previous version of the legislation calling for a tax cut to 20 percent.

In one of the most recent projections, UBS on Friday said it saw a potential 9.1 percent boost to S&P earnings per share because of the tax plan.

Ripple effect unclear

It is unclear how great the lasting positive impact will be.

“The retention of this benefit is unclear,” said Savita Subramanian, Bank of America-Merrill Lynch’s head of U.S. equity and quantitative strategy, who forecasts the plan could add $19, or about 14 percent, to S&P 500 earnings including potential paybacks from repatriation, with the net recurring benefit likely to be closer to $11, or 8 percent.

Subramanian, in a presentation earlier this month, said companies may look to use the benefit for short-term lifts. For example, retailers, which have been suffering from competition from Amazon, may want to pass the benefit on with bigger sales and more promotions.

“You have to wonder how much of that benefit you’re going to really see float to the bottom line on a longer-term basis,” Subramanian said.

The boost to profits goes a long way to justify some of the rapid rise in stock valuations since Donald Trump’s election as president a year ago. Stronger earnings mean less stretched price-to-earnings ratios.

The S&P 500 has gained about 5 percent since mid-November when the House passed its tax overhaul bill, and is up about 20 percent year-to-date.

Golub and others said after the initial boost to forecasts, the profit numbers could still drift higher in the months ahead as companies adjust their plans.

“We’ll get a big jump in ’18, but the ripple effect of the tax bill could be the big surprise in the second half of ’18,” said Bucky Hellwig, senior vice president at BB&T Wealth Management in Birmingham, Alabama.

“The tax cuts … will give companies a lot more flexibility to do dividend increases, buybacks and hiring, and that’s what’s difficult to get a handle on,” Hellwig said.

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Facebook to Notify Users When Photos of Them Are Uploaded

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Facebook Inc said on Tuesday it would begin using facial recognition technology to tell people on the social network when others upload photos of

them, if they agree to let the company keep a facial template on file.

The company said in a statement it was making the feature optional to allow people to protect their privacy, but that it thought some people would want to be notified of pictures they might not otherwise know about.

The feature would not immediately be available in Canada and the European Union, Facebook said. Privacy laws are generally stricter in those jurisdictions, though the company said it was hopeful about implementing the feature there in the future.

Tech companies are putting in place a variety of functions using facial recognition technology, despite fears about how the facial data could be used. In September, Apple Inc revealed that users of its new iPhone X would be able to unlock the device using their face.

Facial recognition technology has been a part of Facebook since at least 2010, when the social network began offering suggestions for whom to tag in a photo. That feature also is optional.

For those who have opted in, Facebook creates what it calls a template of a person’s face by analyzing pixels from photos where the person is already tagged. It then compares newly uploaded images to the template.

Facebook deletes the template of anyone who then opts out, Rob Sherman, Facebook’s deputy chief privacy officer, said in a statement.

Under the new feature, people who have opted in would get a notification from Facebook if a photo of them has been uploaded, although only if the photo is one they have access to.

The company plans to add an “on/off” switch to allow users to control all Facebook features related to facial recognition, Sherman said. “We thought it was important to have a really straightforward way of controlling facial recognition technology,” he said.

Facebook said it also plans to use facial recognition technology to notify users if someone else uploads a photo of them as their profile picture, which the company said may help reduce impersonations, as well as in software that describes photos in words for people who have vision loss, so that they

can tell who is in a photo.

Reporting by David Ingram; Editing by Leslie Adler.

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Amnesty: Failed and Exploited, Nepal Migrant Workers Trapped in Debt Cycle

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Nepali migrant workers are trapped in a vicious cycle of debt and exploitation due to a failure by authorities to crack down on recruitment firms that charge illegally high fees for jobs abroad, human rights group Amnesty International said on Monday.

Wages sent back by an estimated four million Nepalis – mainly employed working in construction or as domestic workers in the Middle East, Malaysia and South Korea – make up more than a quarter of the poor Himalayan nation’s gross domestic product.

Nepal permits recruitment agencies to charge 10,000 rupees ($100) from each migrant as a service charge for finding them work with foreign firms, who pay for workers’ travel and visa.

But a survey of over 400 Nepali migrants by Amnesty found workers are not only forced up to 12 times more the permitted amount to agencies, but also that most are forced to borrow the money from unscrupulous money lenders at high interest rates.

“Migrant workers all too often end up trapped in the soul-destroying situation of working abroad for years simply to pay off the huge, often illegal fees they were charged to take the job,” said Amnesty International’s James Lynch.

“The Nepali government’s weak enforcement of the law is playing straight into the hands of extortionists and loan sharks. Tackling this exploitative industry is a matter of urgency,” Lynch added in a statement.

The London-based human rights group said almost two-thirds of the migrant workers, who responded to a telephone survey conducted in Nepal and Malaysia, had paid excessive, illegal recruitment fees to hiring firms.

Workers’ calculations about how to repay these loans were often derailed by unpaid wages or other forms of labor exploitation overseas. More than half of respondents said they received lower monthly salaries than promised by the agencies.

Bhuban K.C., a senior official in Nepal’s labor ministry, said authorities had launched awareness programs for potential migrants to ensure they are not cheated by agencies, adding that compensation was being provided to victims.

Nepal was working with India, Bangladesh and Sri Lanka which also send migrant workers to the Middle East and Malaysia to ensure that the workers’ interests are protected, he added.

“We are raising our voice internationally to ensure that migrants are not cheated. What we are doing may not be adequate, but we are concerned about our workers welfare,” K.C. told the Thomson Reuters Foundation.

Amnesty said the Nepali government must do more to enforce laws penalizing exploitative recruitment agencies and urged overseas companies – who use the agencies to source workers – to check abuse within their supply chains.

“Companies who employ migrant workers in the Gulf and Malaysia directly or through their suppliers or subcontractors also have a responsibility,” said Lynch. “Until they take action, they are reinforcing the debt trap that is destroying so many lives in Nepal.”

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CryptoKitties Brings Blockchain to the Masses

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How do you explain the abstract concepts of blockchain technology and cryptocurrencies?

With adorable, digital kittens of course.

CryptoKitties, an online game and marketplace featuring virtual kittens, has become an entry point for curious outsiders looking to dabble in cryptocurrencies – decentralized digital monies that rely on blockchain technology to enable peer-to-peer transactions.

Company reps say their main goal is to teach people how to use blockchains; open, distributed ledgers of cryptocurrency transactions. Bitcoin is the most famous cryptocurrency and blockchain protocol, but there are others.

“As part of launching this project, we were really trying to educate people who haven’t perhaps bought Ethereum before, people who aren’t in the crypto space.” said Elsa Wilk, marketing director at Axiom Zen, the Canadian tech consultancy that created CryptoKitties.

That may have been the initial idea. But marry cute kittens and a buzzy, emerging tech phenomenon and kitten chaos ensued.

CryptoKitties’ cheerful, user-friendly interface has caused its popularity to surge among blockchain products and services. To date, there have been over $16 million USD in transactions resulting from the purchase, breeding and sale of digital kittens.

“Using something like cats is a very unintimidating, friendly, cuddly way to be introduced to a very hard, technical subject like the blockchain,” said Wilk. “We really took the approach of making the blockchain more approachable.”

How it works

CryptoKitties is built on the Ethereum blockchain. Purchases are made using the Ether cryptocurrency, which can be purchased with real money through a digital currency exchange like Coinbase. To begin buying and selling CryptoKitties, users first set up a digital wallet with MetaMask, an Ether wallet and browser for applications built on the Ethereum blockchain.

Kittens cost anywhere from .004 ether (about $3 USD) to upwards of 100,000 ether (a whopping $79.3 million USD). Wilk said the objective of the game is to make more kitties, but one of the company’s ultimate goals was to test whether a blockchain platform could support the buying and trading of unique, digital cats – what Wilk calls “crypto collectibles.”

At launch, the company released about 250 “Gen Zero” kittens, that is, those with no “parents.” Thereafter, a new kitten is released every 15 minutes. According to Wilk, the number of original kittens that will ever be released is approximately 50,000.

Critics of CryptoKitties contend that because the game is only partially decentralized, it is not a true representation of an Ethereum “DApp” or decentralized application. Despite being built on the open-source Ethereum platform, CryptoKitties’ interactions exist within a centralized database and are beholden to policies established by Axiom Zen.

“We really wanted to test the technology, to be able to put cats on the blockchain. We had to develop a new protocol in the process of doing this,” said Wilk.

The game’s popularity has also stalled traffic on the Ethereum network and created delays in the rate of Ethereum transactions processed. All blockchain transactions must first be “mined” or processed by a computer within a blockchain’s decentralized network.

“Because we’re building something that has never really been done before, just the sheer volume of traffic that we received initially caused some scaling problems,” said Wilk.

Still, for Wilk and Axiom Zen, CryptoKitties so far has been a success.

“It is one of the first, I would say, tangible use cases for a cryptocurrency project,” said Wilk, “Being able to actually take an action and have something real and tangible, I think is driving a lot of the interest that we’re seeing.”

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US Blames North Korea for Global Cyber Attack

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The United States is publicly blaming North Korea for unleashing a cyber attack that crippled hospitals, banks and other companies across the globe earlier this year.

In an op-ed piece posted on the Wall Street Journal website Monday night, Homeland Security Adviser Tom Bossert said that North Korea was “directly responsible” for the WannaCry ransomware attack, and that Pyongyang will be held accountable for it.

“The attack was widespread and cost billions, and North Korea is directly responsible,” Bossert writes. “North Korea has acted especially badly, largely unchecked, for more than a decade, and its malicious behavior is growing more egregious.”

Bossert says President Donald Trump’s administration will continue to use its “maximum pressure strategy to curb Pyongyang’s ability to mount attacks, cyber or otherwise.”

Pyongyang has previously denied being responsible for the attack.

But, the U.S. government has assessed with a “very high level of confidence” that a hacking entity known as Lazarus Group, which works on behalf of the North Korean government, carried out the WannaCry attack, senior officials told Reuters.

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Brazil Court Approves Compensation for Decades-old Depositor Losses

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A Supreme Court justice on Monday approved an agreement to compensate bank depositors for losses caused by government policies several decades ago, settling more than a million legal disputes that have hung over Brazil’s banking system since the 1980s.

Depositors who lost their savings due to economic programs applied in the 1980s and 1990s to tackle hyperinflation will have two years to sign up for the compensation deal, Justice Dias Toffoli ruled.

Those who are owed up to 5,000 reais ($1,520) will be fully reimbursed, while those with larger liabilities will get between 8 percent and 19 percent less.

Around 60 percent of the depositors covered by the agreement are owed up to 5,000 reais, according to the Brazilian Federation of Banks (Febraban). The total value of reimbursements will depend on how many depositors opt in to the scheme.

Reuters had reported in November that banks were likely to agree on reimbursing a total of around 10 billion reais, far below initial central bank estimates of up to 342 billion reais.

Fitch Ratings said earlier this month that such an agreement would be beneficial to the nation’s banks, which have made enough provisions to cover the reimbursements.

Lenders Itaú Unibanco Holding SA, Banco Bradesco SA, Santander Brasil SA, Banco do Brasil SA and Caixa Econômica Federal have signed off on the deal. Other banks can still join.

Under former Presidents  José Sarney and Fernando Collor, Brazil pursued several unorthodox policies to fight galloping inflation, such as confiscating investments in savings accounts.

Reimbursements will be paid in up to three years in as many as five installments, adjusted for the official inflation index.

($1 = 3.2922 reais)

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Facebook Reveals Data on Copyright and Trademark Complaints

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Facebook announced Monday that it removed nearly 3 million posts, including videos, ads and other forms of content, from its services during the first half of 2017 following complaints of counterfeiting and copyright and trademark infringement.

The worldwide data on intellectual property-related takedowns is a new disclosure for Facebook as part of its biannual “Transparency Report,” Chris Sonderby, a deputy general counsel at the firm, said in a blog post.

“We believe that sharing information about (intellectual property) reports we receive from rights holders is an important step toward being more open and clear about how we protect the people and businesses that use our services,” Sonderby wrote.

Transparency report

The ninth Facebook transparency report also showed that government requests for information about users increased 21 percent worldwide compared with the second half of 2016, from 64,279 to 78,890.

For intellectual property disputes, Facebook offers monitoring tools that alert rights holders to suspected copies of their videos and songs on Facebook and use of their brand.

Rights holders can send takedown requests for unauthorized uses to a team of Facebook content analysts.

Entertainment and media industry groups have long expressed frustration with the process, contending that they bear too much of the internet policing burden and that online services should be more proactive about stemming infringement.

377,400 complaints

Facebook did not supply data about earlier periods or release individual requests, a level of detail that advertising rival Alphabet Inc provides for requests to remove Google search results.

Aggregate data shows Facebook received about 377,400 complaints from January through June, with many referencing multiple posts. About 60 percent of the reports related to suspected copyright violations on Facebook.

A “small fraction” of requests were excluded because they were not sent through an official form, Facebook said.

The company removed user uploads in response to 81 percent of filings for counterfeiting, 68 percent for copyrights and 47 percent for trademarks, according to its report. The percentages were roughly similar for Instagram.

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US Bars Drones Over Nuclear Sites for Security Reasons

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The Federal Aviation Administration said Monday it will bar drone flights over seven major U.S. nuclear sites, including Los Alamos National Laboratory in New Mexico.

The move is the latest in a series of growing restrictions on unmanned aerial vehicles over U.S. sites that have national security implications.

The new restrictions begin Dec. 29 and include the Hanford Site in Washington State, Idaho National Laboratory, Savannah River National Laboratory in South Carolina, Pantex Site in Texas, and the Y-12 National Security Site and Oak Ridge National Laboratory in Tennessee.

The FAA said it is considering additional requests from other federal security agencies to bar drones.

Earlier this year, the FAA banned drone flights over 133 U.S. military facilities. The Pentagon said in August that U.S. military bases could shoot down drones that endanger aviation safety or pose other threats.

The FAA also banned drone flights over 10 U.S. landmarks in September, including the Statue of Liberty in New York and Mount Rushmore National Memorial in South Dakota, at the request of national security and law enforcement agencies.

It separately barred drone flights over the USS Constitution in Boston, the Gateway Arch in St. Louis and Independence National Historical Park in Philadelphia. The list also includes Glen Canyon Dam in Arizona, Hoover Dam in Nevada and Grand Coulee Dam in Washington state.

Last week, the National Transportation Safety Board said a September collision between a small civilian drone and a U.S. Army helicopter was caused by the drone operator’s failure to see the helicopter because he was intentionally flying the drone out of visual range.

The incident between a U.S. Army UH-60M Black Hawk helicopter and a DJI Phantom 4 drone near Staten Island, New York, occurred as concerns mount over the rising number of unmanned aircraft in U.S. airspace.

The helicopter landed safely, but a 1 1/2-inch (3.8-cm) dent was found on the leading edge of one of its four main rotor blades and parts of the drone were found lodged in its engine oil cooler fan. The Army said previously the helicopter was not targeted and that it was struck by a drone being operated by a hobbyist.

Government and private-sector officials are concerned that dangerous or even hostile drones could get too close to places like military bases, airports and sports stadiums.

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Apple’s 2017 iPhone Models Give Taiwan’s Weary Tech Sector a Reprieve

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A boom in production of Apple iPhones is helping lift the economy of Taiwan, an industrial center that still relies on high-tech manufacturing contracts despite increasing competition from offshore.

Apple’s phone sales in the third quarter this year grew 5.7 percent over the same period of 2016, ahead of a cross-brand increase of 3 percent to 383 million units, market research firm Gartner says.

Orders for older iPhones as well as the iPhone X, which is seen taking off next year, have solidified orders for parts supplied by tech firms in Taiwan, analysts say.

Tech specialists say the Silicon Valley icon is looking this year to Taiwanese firms for chip production, camera modules, displays and final assembly.

Taiwanese-owned Foxconn Technology often assembles Apple gear at sprawling factories in China, for example. Taiwan Semiconductor Manufacturing Co., the world’s biggest chipmaker, is building the A11 processor for the iPhone 8, local media reports say.

“It’s a good shot in the arm,” said John Brebeck, Taipei-based managing director of the Hong Kong investment consultancy Peace Field. “If you’ve got Apple making a new chip, if you’ve got the OLED (display) guys and if you’ve got Foxconn with the assembly, the camera module guys, that’s a pretty big chunk of Taiwan GDP.”

A reprieve as offshore competition intensifies

Officials in Taipei worry that China will take a growing share of the world’s hardware manufacturing business, a trend spotted in 2013 when Taiwan’s tablet PC assembly began moving across the strait. China’s costs are generally lower and production scales higher.

Taiwanese high-tech, an aging industry worth about one-fifth of the island’s $528 billion GDP, has long depended on Apple among other developers for orders.

Tech hardware contracts often follow from years of trusted relationships based on quality supplies or assembly, Gartner’s Taipei-based research vice president Tracy Tsai said, citing orders for Macs as an example.

Mac shipments should grow 4 percent this year and 3 percent in 2018 as users replace older devices, she said.

“Notebooks are a something that’s very focused on previous quality and the numerous standards maintained by suppliers, what they measure up to,” Tsai said. “It’s not so easy to change it all, so (it’s) still mainly about Taiwan.”

Apple declined to comment for this report, and its Taiwanese contractors seldom discuss the sources of their business.

Cycles in global demand for consumer electronics highlight Taiwan’s dependence on high-tech. When demand sagged in 2015 and early 2016, Taiwan’s income from exports shrank for 17 straight months. It has stabilized since then.

A tale of cameras and displays

Taiwan-based Largan Precision has made iPhone modules over at least the past six years, analysts believe. But the iPhone X comes with three-dimensional cameras equipped for face recognition, and given the depth of that new technology Largan may share orders.

Apple is expected to tap several suppliers for the related parts, said Bryan Ma, devices analysis vice president with market research firm IDC in Singapore.

Production of smartphone displays also shows pressure from China. Taiwanese display makers AU Optronics and Innolux ranked among IDC’s top five firms for market share in the third quarter.

But BOE Technology of Beijing reached the top spot with a 23.5 percent market share.

BOE gets subsidies from local government in China. It has held prices down and splits its business between higher-end OLED smartphone screens and the basic LCD type used by a range of consumer electronics, said Hattie He, an analyst for mobility service at Canalys in Shanghai. The Apple X uses OLED displays.

“To many Chinese vendors, BOE provides an affordable alternative to the international suppliers, gaining an edge in the OLED transition phase,” He said. “As display is part of the solution, being a leading provider will help BOE continue its growth.”

Chinese PC maker Lenovo and telecom equipment manufacturers Huawei Technologies and ZTE are reaching “sufficient scale to take their businesses worldwide,” Strategy&, a consulting group under PwC, said in a report. “They will be joined, in turn, by hundreds and then thousands more.”

Gains in 2018 from the iPhone X

Apple’s iPhone shipments next year will rise 8 percent to 240 million largely because of the X model, Ma with IDC says.

Apple had already returned to growth in China in the third quarter while posting “strong sales” in emerging markets such as India, Gartner says. The iPhone X got off to a late start, extending benefits to suppliers into next year.

“The expectation always has been that this 10th anniversary edition is going to hit big and clearly as the product came out it was obvious that they had done a lot in the product to make it dramatically different from generations of the past,” Ma said.

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Bitcoin Futures Begin Trading on CME, Price Declines

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Another security based on the price of bitcoin, the digital currency that has soared in value and volatility this year, began trading on the Chicago Mercantile Exchange on Sunday.

The CME Group, which owns the exchange, opened up bitcoin futures for trading at 6 p.m. EST on Sunday. The futures contract that expires in January opened higher at $20,650, then declined steadily. The futures were trading at $18,775 at 9:00 p.m. EST, down $725.

The CME futures, like the ones that CME competitor the Cboe started trading last week, do not involve actual bitcoin. The CME’s futures will track an index of bitcoin prices pulled from several private exchanges. The Cboe’s futures track the price of bitcoin prices on the particular private exchange known as Gemini.

Each contract sold on the CME will be for five bitcoin.

As bitcoin’s price has skyrocketed on private exchanges this year, largely under its own momentum, interest on Wall Street has grown. The virtual currency was trading below $1,000 at the beginning of the year, and rose to more than $19,000 on some exchanges in the days leading up to its debut on the Cboe and CME. Bitcoin was trading at $18,417 Sunday evening on Coinbase.

But the growing interest in bitcoin has raised questions on whether its value has gotten too frothy. The Securities and Exchange Commission put out a statement last week warning investors to be careful with any investment in bitcoin or other digital currencies. Further, the Commodities Futures Trading Commission has proposed regulating bitcoin like a commodity, not unlike gold, silver, platinum or oil.

Futures are a type of contract where a buyer and seller agree on a price on a particular item to be delivered on a certain date in the future, hence the name. Futures are available for nearly every type of security out there, but are most familiarly used in commodities, like oil wheat, soy and gold.

Bitcoin is the world’s most popular virtual currency. Such currencies are not tied to a bank or government and allow users to spend money anonymously. They are basically lines of computer code that are digitally signed each time they are traded.

A debate is raging on the merits of such currencies. Some say they serve merely to facilitate money laundering and illicit, anonymous payments. Others say they can be helpful methods of payment, such as in crisis situations where national currencies have collapsed.

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Stake in Vietnam’s Top Brewer for Sale, But Bids Few

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Vietnam is set to auction up to a $5 billion stake in top brewer Sabeco on Monday, with Thai Beverage the only potential bidder to have expressed interest in a majority stake.

The keenly anticipated sale of the state-owned maker of Bia Saigon gained momentum in recent months after being hampered for years by political resistance, fickle policy-making and complications over valuations.

The government has set a minimum sale price of 320,000 dong or $14.10 a share for Saigon Beer Alcohol Beverage Corp (Sabeco), whose shares have nearly trebled to 309,200 dong since its listing a year ago.

Thai Beverage, through a partly owned Vietnam unit, is the only company that has expressed interest in owning more than 25 percent of the company, which has roughly 40 percent of the beer-loving Vietnamese market.

So far no formal bid had been made.

Vietnam’s young population and booming economy should make Sabeco an attractive asset for global brewers hoping to expand in Southeast Asia, but a high minimum bid price and foreign ownership limits appear to have turned off potential buyers.

Sabeco’s foreign ownership is capped at 49 percent. With 10 percent already in foreign hands, that leaves only 39 percent on the table for overseas buyers at Monday’s auction. Local bidders can bid for a majority stake of up to 54 percent. Heinken holds a 5 percent stake.

“There’s a disconnect between what the government wants to achieve and how international brewers view this auction,” said one person familiar with the matter. “In a normal auction, bidders are fully aware of what stake they’ll end up owning and bid for it accordingly,” said the person, who was not authorized to speak to the media.

Unlike similar sales in developed markets, where investors are whittled down over several rounds and offers can be adjusted, Sabeco bidders need to submit a single offer for a specific number of shares in a sealed envelope in one round.

Thai Bev, controlled by tycoon Charoen Sirivadhanabhakdi, was keen to acquire Sabeco as part of a strategy to expand outside its home market, sources told Reuters. The company had lined up bank guarantees to support the bid by its Vietnam unit, sources said.

There was no immediate response from Thai Bev to a query from Reuters.

Reuters previously reported that the auction was drawing the interest of brewing groups such as Anheuser-Busch InBev, Kirin Holdings, Asahi Group Holdings and San Miguel, but there is no clear sign of whether they have participated in the auction so far.

The government’s minimum price for the 54 percent stake on offer valued Sabeco at about 36 times core earnings, more than double the trading multiples of around 15 for some global peers, according to Reuters data.

Vietnam’s trade ministry is expected to announce the bidding result Monday afternoon.

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Trump Sells Republican Tax Bill to Job Seekers, Middle Class

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U.S. President Donald Trump continued to tout the Republican tax bill Saturday, saying “everybody’s going to benefit” if it is signed into law.

“But I think the greatest benefit is going to be for jobs and for the middle class, middle income,” Trump said to reporters on the White House South Lawn before departing for the presidential Camp David retreat in Maryland.

Republican Senate and House negotiators finalized a final version Friday of their compromise $1.5 trillion tax bill, after appeasing Republican Senator Marco Rubio, who demanded an expansion of the child tax credit that provides benefits for low-income families.

Republican lawmakers hammered out differences Wednesday between the House and Senate versions, and both chambers of Congress plan to vote on the final bill early next week, with the intent of submitting it to President Donald Trump for his signature before Christmas.  

Rubio said late Friday he would vote for the bill after saying one day earlier he would not support it unless it includes a more generous child tax credit, which has been  beneficial to lower-income families by partially offsetting the expenses of raising children.

The bill doubles the current child tax credit from $1,000 to $2,000 per child and allows parents to get a refund of up to $1,400 if the credit is greater than their federal income tax liability.

No Democratic support

No Democrats have publicly expressed their support for the legislation, which they have attacked as a giveaway to corporations and the wealthiest of taxpayers, including Trump, a billionaire.

The measure would cut taxes by $1.5 trillion over the next decade, heavily weighted toward lower corporate taxation, and perhaps add $1 trillion or more to the country’s long-term $20 trillion debt obligations to investors and foreign governments such as China – the largest owner of U.S. debt.

When asked about the debt, Trump responded by saying a new tax law will encourage inflows of overseas money. “This is going to bring money in. As an example, we think four trillion dollars will come flowing back into the country. That’s money that’s overseas, that’s stuck there for years and years.”

Trump administration officials say millions of individual taxpayers, but not everyone, would see their annual tax obligation to the government cut, in many cases by a few hundred dollars, or in the case of wealthy taxpayers, by thousands of dollars.

In  the final compromise bill, the individual tax rate for the highest income earners would be cut from 39.6 percent to 37 percent.

The country’s corporate tax rate, now at 35 percent and among the highest in the industrialized world, would be cut substantially to 21 percent.

With Democrat Doug Jones winning a special Senate election Tuesday in Alabama, Senate Minority Leader Charles Schumer has asked that the final tax vote be delayed until January after Jones is sworn in. But Republicans appear intent on voting before then while they have one more Republican vote in the Senate.

An original version of the Senate bill was approved 51-49 with Rubio’s support. So if Rubio votes against the bill, it could still pass, though with a narrower margin.

If approved and signed into law, the tax legislation would be the first major legislative achievement of Trump’s nearly 11-month presidency after he and Republicans failed earlier this year dismantle national health care policies championed by former president Barack Obama.

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New Kind of Retirement Community: A Little India in Silicon Valley 

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With people coming from around the world to work in Silicon Valley, some struggle with the best ways to care for their aging parents.

Increasingly, the solution is an “affinity” retirement community, where older people from places like India and China can live near — but not with — their adult children. These communities break from traditional custom that parents and children live together.

“The children are so busy these days, they are all the time working, taking care of their kids, so we do not want to interfere in their lives,” said Asha RaoRane, an Indian national who wanted to move to the U.S. to be near her three daughters who had immigrated to San Francisco.

Her daughters started exploring the idea of a traditional senior retirement community, but were having trouble finding an American community they thought their mother would fit into.

In July, RaoRane, 70, moved into Priya Living, an affinity-living community, meaning it caters to people with similar interests, such as yoga and meditation.

Arun Paul founded Priya Living as a place for his parents to live. The couple moved from Los Angeles four years ago and are still in a ground floor apartment.

“In living here in America, as the son of immigrants, I’ve realized that there’s very unique needs that immigrants have,” said Paul, a real-estate developer.

“That old system was based on a different time when women were in the house, really taking care, in many cultures, of their husband’s parents,” Paul said. “Obviously the role of women in society has changed globally.”

New friends

For Bhagyashree RaoRane, 38, finding Priya Living for her mother has been a dream come true.

“We walked in and instantly it was like walking into an Indian community in India,” said RaoRane, a filmmaker. “Even the building is painted the same color as so many of the buildings in India are painted.”

This type of independent senior community came as a shock to Nagendra Prasad, 62, and Manjula Neelakantaiah, 53, who came to Priya on a two-month visit from Bangalore, India, to see their daughter, an intern at Google.

“Really, in the beginning we were surprised,” Neelakantaiah said. “In India the younger people, they definitely take care of the aged people.”

Not always a good fit

For a few residents, Priya is not the perfect fit. Dr. Byravan Viswanathan and his wife, Lakshmi, were born and raised in India but spent much of their adult lives in a small town in Pennsylvania.

“We had oodles and oodles of good friends and they were not Indians — regular Americans,” he said. “We had become so Westernized, we have to adapt to Indian living again. Look around. There are six different Indian languages spoken right now at this table, languages I have never spoken or haven’t spoken in decades.” Viswanathan’s daughter is looking into finding a more American community for them.

All are welcome

While the vast majority of residents are from India, Paul stressed that Priya Living welcomes people of all backgrounds. There are a few non-Indians who call Priya home.

Carlos McCann, an 89-year-old WW II veteran, has been living in the complex for almost 20 years, long before it was purchased and remodeled to become the primarily Indian community.

“Everything has sort of come together at this location it’s like it’s the center of the world,” he said.

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Indian Retirees Maintain Independence, Fun and Freedom Later in Life

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Young people come from around the world to work in Silicon Valley, California. As these workers build a life away from home, many struggle with how to bring their aging parents to their new community. But what happens to foreign parents entering their later years in a new country? VOA’s Deana Mitchell visits a unique community in Silicon Valley that caters to retirees from India.

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Britain Seeks ‘Bespoke’ EU Trade Deal, Pact With China

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British Finance Minister Philip Hammond said Saturday it is likely Britain will want to negotiate a bespoke arrangement for a future trade deal with the European Union, rather than copying existing arrangements like the Canada-EU deal.

The European Union agreed Friday to move Brexit talks onto trade and a transition pact, but some leaders cautioned that the final year of divorce negotiations before Britain’s exit could be fraught with peril.

Summit chairman Donald Tusk said the world’s biggest trading bloc would begin “exploratory contacts” with Britain on what London wants in a future trade relationship, as well as starting discussion on the immediate post-Brexit transition.

No off-the-shelf deal

Speaking in Beijing, Hammond it was probably not helpful to think in terms of off-the-shelf models like the Canada-EU deal.

“We have a level of trade and commercial integration with the EU 27 which is unlike the situation of any trade partner that the EU has ever done a trade deal with before,” he told reporters.

“And therefore it is likely that we will want to negotiate specific arrangements, bespoke arrangements,” Hammond added.

“So I expect that we will develop something that is neither the Canada model nor an EEA model, but something which draws on the strength of our existing relationship.”

The Brexit negotiations have been a vexed issue for the global economy as markets feared prolonged uncertainty would hit global trade and growth.

A transition period is now seen as crucial for investors and businesses who worry that a “cliff-edge” Brexit would disrupt trade flows and sow chaos through financial markets.

China visit

Hammond’s China visit is the latest installment in long-running economic talks between the two states, but it has now taken on new importance for Britain as it looks to re-invent itself as a global trading nation after leaving the EU in 2019.

China is one of the countries Britain hopes to sign a free trade agreement with once it leaves the EU, and London and Beijing have been keen to show that Britain’s withdrawal from the bloc will not affect ties.

Hammond sought to offer reassurance to Chinese firms post-March 2019 when Britain formally leaves the EU.

“We won’t technically or legally be in the customs union or in the single market, but we’re committed as a result of the agreement we’ve made this week to creating an environment which will effectively replicate the current status quo,” he said.

Addressing the press after Hammond had spoken, Chinese Vice Finance Minister Shi Yaobin said China hopes Britain and the EU can reach a win-win agreement.

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Huge Tax Bill Heads for Passage as GOP Senators Fall in Line

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After weeks of quarrels and qualms and then 11th-hour horse-trading, Republicans revealed their huge national tax rewrite late Friday, along with announcements of support that all but guarantee approval next week.

The legislation would slash tax rates for big business and lower levies on the richest Americans in a massive $1.5 trillion bill that the GOP plans to pass through Congress before the year-end break. Benefits for most other taxpayers would be smaller.

“This is happening. Tax reform under Republican control of Washington is happening,” House Speaker Paul Ryan of Wisconsin told rank-and-file members in a conference call. “Most critics out there didn’t think it could happen. … And now we’re on the doorstep of something truly historic.”

According to the 1,097-page bill, today’s 35 percent rate on corporations would fall to 21 percent, the crown jewel of the measure for many Republicans. Trump and GOP leaders had set 20 percent as their goal, but added a point to free money for other tax cuts that won over wavering lawmakers in final talks.

Party’s first achievement of 2017

The legislation represents the first major legislative achievement for the GOP after nearly a full year in control of Congress and the White House. It’s the widest-ranging reshaping of the tax code in three decades and is expected to add to the nation’s $20 trillion debt. The debt is expected to soar by at least $1 trillion more than it would without the tax measure, according to projections.

Support is now expected from all Senate Republicans, ensuring narrow approval. Democrats are expected to oppose the legislation unanimously.

“Under this bill, the working class, middle class and upper middle class get skewered while the rich and wealthy corporations make out like bandits,” said Senate Minority Leader Chuck Schumer of New York. “It is just the opposite of what America needs, and Republicans will rue the day they pass this.”

The bill would drop today’s 39.6 percent top rate on individuals to 37 percent. The standard deduction, used by about two-thirds of households, would be nearly doubled.

Those who itemize their taxes face mixed results. The $1,000-per-child tax deduction would grow to $2,000. The bill makes a smaller amount — $1,400 — available to families even if they owe no income tax. The money would come in the form of a tax refund, which is why it’s called a “refundable” tax credit. In an earlier verison of the bill, the amount was $1,000.

But the deduction that millions use in connection with state and local income, property and sales taxes would be capped at $10,000. Deductions for medical expenses that lawmakers once considered eliminating would be retained.

Only on Friday did Republicans cement support for the major overhaul, securing endorsements from wavering senators.

Rubio, Corker relent

Marco Rubio of Florida relented in his high-profile opposition after negotiators expanded the child tax credit, and he said he would vote for the measure next week.

Rubio had been holding out for a bigger child tax credit for low-income families. After he got it, he tweeted that the change was “a solid step toward broader reforms which are both Pro-Growth and Pro-Worker.”

Senator Bob Corker of Tennessee, the only Republican to vote against the Senate version earlier this month, made the surprise announcement that he would back the legislation. Corker, the chairman of the Senate Foreign Relations Committee, has repeatedly warned that the nation’s growing debt is the most serious threat to national security.

Although he deemed the bill far from perfect, he said it was a once-in-a-generation opportunity.

“I realize this is a bet on our country’s enterprising spirit, and that is a bet I am willing to make,” Corker said.

Members of a House-Senate conference committee signed the final version of the legislation Friday, sending it to the two chambers for final passage next week. They have been working to blend the different versions passed by the two houses.

Republicans hold a 52-48 majority in the Senate, including two ailing senators who have missed votes this past week.

John McCain of Arizona, 81, is at a Washington-area military hospital being treated for the side effects of brain cancer treatment, and Thad Cochran, 80, of Mississippi had a non-melanoma lesion removed from his nose earlier this week. GOP leaders are hopeful they will be available next week.

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Facebook Highlights Dangers of Using Facebook

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With nearly 2 billion users, Facebook’s survival depends on people continuing to use its service. 

That’s why observers were surprised by an unusual company blog post Friday that highlighted some of the potential harm of using the social media service. 

Titled Hard Questions: Is Spending Time on Social Media Bad for Us?,

the company cited studies that suggested some of the possible downsides of using social media. 

In one study, people who passively read about others’ lives reported feeling worse about themselves. One possibility is “negative social comparison” when reading about others online, the company said, because “people’s posts are often more curated and flattering” than how they are in their real, offline lives. 

But there’s a potential solution, according to Facebook, which reported $10 billion in revenue — its highest ever — in the last quarter: Don’t be a bystander to others’ lives. Use Facebook more and with friends and family.

Facebook users who spend more time on Facebook — actually post and interact with close friends — experienced more positive effects, according to a company study conducted with Carnegie Mellon University.

“Simply broadcasting status updates wasn’t enough,” the post said. “People had to interact one-on-one with others in their network.”

New features

The Facebook post came as some former top executives have spoken about Facebook’s potential negative effects on society and individuals. Facebook exploits a “vulnerability in human psychology,” Sean Parker, Facebook’s founding president, said recently.

To aid in supporting people’s well-being while using its service, the company recently tweaked its News Feed — what people see when they sign on — to promote friendships and demote what the firm called “clickbait headlines.” 

Also, it launched a new feature called “Snooze” that lets a user hide a person, Facebook page or group for 30 days without having to “unfollow.” It gives a Facebook user more control of what he or she sees, the company said. 

Effects on kids

The company acknowledged that people are worried about the short- and long-term effects of Facebook use on young people. It pledged $1 million toward research to “better understand the relationship between media technologies, youth development and well-being.”

Observers praised the company for acknowledging that using social media may have unintended, negative consequences, but noted that it was unusual for a corporation, one that typically presents itself as a force for good, to point out some of the risks of using its service. 

One unanswered question is whether Facebook with new features and tweaks can offset potential negative effects. 

Or will people put a Snooze button on Facebook? 

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Powerful CEOs Demand DACA Fix

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Two titans of U.S. business have come together to demand that Congress find an immediate solution for DACA recipients, whose legal immigration status will come to an end in March without intervention.

Charles Koch, chairman and chief executive of Koch Industries, and Tim Cook, chief executive of Apple, wrote in an opinion piece published Thursday in The Washington Post that “we strongly agree that Congress must act before the end of the year to bring certainty and security to the lives of dreamers. Delay is not an option. Too many people’s futures hang in the balance.”

Dreamers is another term for participants in the Deferred Action for Childhood Arrivals program, which has protected undocumented young people who were brought to the U.S. as children and provided them with work permits.

President Donald Trump ended the DACA program in September although it will not begin to phase out until March, 2018.

His action put the ball in Congress’ court to find a long term solution for dreamers.

In their op-ed piece, the two CEOs note that both of their companies employ DACA recipients. “We know from experience that the success of our businesses depends on having employees with diverse backgrounds and perspectives. It fuels creativity, broadens knowledge and helps drive innovation.”

Koch Industries encompass a variety of companies including manufacturing and refining of oil and chemicals. Forbes Magazine lists Koch as the second largest privately held company in the U.S. Apple is the world’s largest information technology company, producing such familiar products as the iPhone and the Mac computers.

‘Firmly aligned’ on DACA issue

Koch and Cook are as different politically as their companies. Deeply conservative, Charles Koch has made significant financial contributions to rightwing causes and mostly Republican candidates. Tim Cook has been more bipartisan in his donations but did host a fundraiser for Democrat Hillary Clinton when she was running for president.

“We are business leaders who sometimes differ on the issues of the day,” the two concede in their piece. “Yet, on a question as straightforward as this one, we are firmly aligned.”

Congress seems unlikely to provide a DACA solution by the end of the year.

While some Democrats have remained firm in linking the spending legislation to a measure that would allow nearly 800,000 DACA immigrants to continue to work and study in the United States, the effort seems to have lost momentum.

Speaking Wednesday to a group of DACA recipients, Democratic Senator Richard Durbin of Illinois said he wished he could “tell you that we’re totally confident we can get it done. I can’t say that. I don’t want to mislead you.” Durbin is a co-sponsor of the DREAM Act which would protect DACA recipients.

Republican lawmakers have maintained that there is no reason to act on DACA in 2017.

“There is no emergency. The president has given us until March to address it,” Senate Majority Leader Mitch McConnell, a Kentucky Republican, said Sunday on ABC’s This Week program. “I don’t think Democrats would be very smart to say they want to shut down the government over a nonemergency that we can address anytime between now and March.”

But that was said before a major Republican donor urged immediate action.

“We have no illusions about how difficult it can be to get things done in Washington, and we know that people of good faith disagree about aspects of immigration policy,“ Koch and Cook write.

“By acting now to ensure that dreamers can realize their potential by continuing to contribute to our country, Congress can reaffirm this essential American ideal.

“This is a political, economic and moral imperative.”


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US Prosecutors Move to Cash in on $8.5M in Seized Bitcoin

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U.S. attorneys in Utah prosecuting a multimillion-dollar opioid drug-ring are moving quickly to sell seized bitcoin that’s exploded in value to about $8.5 million since the alleged ringleader’s arrest a year ago.

The U.S. Attorney’s Office for Utah cites the digital currency’s volatility in court documents pressing for the sale. The bitcoin cache was worth less than $500,000 when Aaron Shamo was arrested on drug charges, but the value of the digital currency has skyrocketed since then.

Bitcoin was created as a digital alternative to the traditional banking system, and is prone to swings in value based on what people believe its worth.

For federal prosecutors in Utah, sales of seized assets like cars are routine, but bitcoin is new territory, spokeswoman Melodie Rydalch said Thursday.

Shamo is accused of selling pills containing the powerful opioid fentanyl on the dark web — an area of the internet often used for illegal activity — to thousands of people all over the U.S., at one point raking in $2.8 million in less than a year.

The 500,000-pill bust ranked among the largest of its kind in the country, and authorities also found $1 million of cash stuffed into trash bags.

Shamo has pleaded not guilty to a dozen charges.

The proceeds of the bitcoin sale will be held until the case is resolved, and then decisions will be made about where the money goes, Rydalch said. Seized asset sale proceeds usually goes to the agency that investigated, like the Drug Enforcement Administration.

Defense attorney Greg Skordas is not contesting the sale of his client’s bitcoins.

Although there’s no global consensus over the status of bitcoin — debate rages whether the virtual money is an asset or a currency — that hasn’t stopped officials in the U.S. and elsewhere from cashing in on the digital hauls seized from cybercriminals.

In 2014 the U.S. Marshals Service announced the auction of nearly 30,000 bitcoins seized from notorious dark web drug marketplace Silk Road. Other seizures have since netted the American government millions of dollars in a series of sales.

Other governments — from Australia to South Korea — have set up similar auctions over the years.

Associated Press writer Raphael Satter in London contributed to this report.

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German Government Says It Backs ‘Open and Free Internet’

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The German government says it backs an “open and free internet” following the U.S. decision to repeal net neutrality rules.

A spokeswoman for the Economy Ministry said Friday that Germany had “taken note” of the U.S. move but declined to comment directly on it.

However, spokeswoman Beate Baron said the German government supports rules introduced across the European Union last year forbidding discriminatory access to the internet.

Baron told reporters in Berlin that “an open and free internet is indispensable for the successful development of a digital society that everyone wants to take part in.”

The Republican-controlled U.S. Federal Communications Commission on Thursday repealed Obama-era rules requiring all web traffic to be treated equally.

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Scientists Working on Writing Five-day Forecast for Solar Storms

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Charged particles from the sun are responsible for the brilliant auroras at the earth’s poles. But there can be cases of too much of a good thing. When huge solar storms push massive waves of energized particles into Earth’s path, they can wreak havoc on our satellites and electric grid. That is why researchers are trying to figure out what causes solar storms. VOA’s Kevin Enochs reports.

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Trump Touts Progress on Slashing Federal Regulations

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U.S. President Donald Trump has touted progress on slashing federal regulations, which he says cost America trillions with no benefit. Speaking Thursday from the White House, the president said his administration had exceeded its goal of removing two federal regulations for every new one, by removing 22 for every new one. Opponents have criticized some of the deregulation, especially dismantling of the net neutrality rules that guarantee equal access to the internet. VOA’s Zlatica Hoke reports.

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What Is Net Neutrality?

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“Net neutrality” regulations, designed to prevent internet service providers like Verizon, AT&T, Comcast and Charter from favoring some sites and apps over others, have been repealed. On Thursday, the Federal Communications Commission voted to dismantle Obama-era rules that have been in place since 2015, but will forbid states to put anything similar in place.

Here’s a look at what the developments mean for consumers and companies.

What is net neutrality?

Net neutrality is the principle that internet providers treat all web traffic equally, and it’s pretty much how the internet has worked since its creation. But regulators, consumer advocates and internet companies were concerned about what broadband companies could do with their power as the pathway to the internet — blocking or slowing down apps that rival their own services, for example.

What did the governments do about it?

The FCC in 2015 approved rules, on a party-line vote, that made sure cable and phone companies don’t manipulate traffic. With them in place, a provider such as Comcast can’t charge Netflix for a faster path to its customers, or block it or slow it down.

The net neutrality rules gave the FCC power to go after companies for business practices that weren’t explicitly banned as well. For example, the Obama FCC said that “zero rating” practices by AT&T violated net neutrality. The telecom giant exempted its own video app from cellphone data caps, which would save some consumers money, and said video rivals could pay for the same treatment. Pai’s FCC spiked the effort to go after AT&T, even before it began rolling out a plan to undo the net neutrality rules entirely.

A federal appeals court upheld the rules in 2016 after broadband providers sued.

The telcos

Big telecom companies hated net neutrality’s stricter regulation and have fought them fiercely in court. They said the regulations could undermine investment in broadband and introduced uncertainty about what were acceptable business practices. There were concerns about potential price regulation, even though the FCC had said it won’t set prices for consumer internet service.

Silicon Valley

Internet companies such as Google have strongly backed net neutrality, but many tech firms were more muted in their activism this year. Netflix, which had been vocal in support of the rules in 2015, said in January that weaker net neutrality wouldn’t hurt it because it’s now too popular with users for broadband providers to interfere.

What happens next

With the rules repealed, net-neutrality advocates say it will be harder for the government to crack down on internet providers who act against consumer interests and will harm innovation in the long-run. Those who criticize the rules say the repeal is good for investment in broadband networks.

But advocates aren’t sitting still. Some groups plan lawsuits to challenge the FCC’s move, and Democrats — energized by public protests in support of net neutrality — think it might be a winning political issue for them in 2018 congressional elections.

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US Dismantles Internet Neutrality Regulation

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The U.S. on Thursday dismantled two-year-old “net neutrality” rules that guaranteed equal access to the internet in favor of policies that would reduce regulation of major internet service providers and hand them sweeping powers to decide what web content consumers can access.

The Federal Communications Commission voted 3-2 to adopt a plan advanced by chairman Ajit Pai, appointed to his position by President Donald Trump, for a “light touch” on regulating major telecommunication companies and end what he says is the federal government’s “micromanaging” of the internet.

The meeting was briefly interrupted for security reasons before the vote took place. A video feed of the meeting showed law enforcement officers enter the room with dogs. No reason was immediately given for the disruption.

WATCH: What is ‘net neutrality’?

Pai’s controversial changes unravel 2015 policies championed by former President Barack Obama. The overturning of net neutrality rules that treat all web traffic equally drew hundreds of public protests and more than a million calls to members of Congress in opposition to Pai’s plan. Some consumer groups vowed to file legal challenges of the new rules.

They roll back restrictions that have kept broadband providers like Comcast, Verizon and AT&T from blocking or charging fees to services they don’t like and would bar the country’s 50 states from enacting their own rules.

Pai said his plan will end unnecessary regulation and give more Americans access to the internet. It will give the large internet service providers the right to block rival apps, slow down competing services and offer faster internet connection to companies willing to pay for it.

“Prior to 2015, before these regulations were imposed, we had a free and open internet,” Pai told NBC ahead of the vote. “That is the future as well under a light touch, market-based approach. Consumers benefit, entrepreneurs benefit. Everybody in the internet economy is better off with a market-based approach.”

Tim Berners-Lee, the British engineer and creator of the World Wide Web, opposed changing the U.S. policy. He said on the online platform Medium this week, “Net neutrality – the principle that internet service providers treat all traffic equally – underpins the internet as we know it today.”

Berners-Lee said with Pai’s rules, “ISPs will have the power to decide which websites you can access and at what speed each will load. In other words, they’ll be able to decide which companies succeed online, which voices are heard – and which are silenced.”

But a lobbyist for the major telecom firms, Jonathan Spalter, head of the trade group USTelecom, dismissed concerns of opponents of the changes.

“I genuinely look forward to the weeks, months, years ahead when none of the fire and brimstone predictions comes to pass,” Spalter said.

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