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Rise of the Robots
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Rise of the Robots - NYTimes.com - NYTimes.com - 0 views
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The most valuable part of each computer, a motherboard loaded with microprocessors and memory, is already largely made with robots, according to my colleague Quentin Hardy. People do things like fitting in batteries and snapping on screens.
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Robots mean that labor costs don’t matter much, so you might as well locate in advanced countries with large markets and good infrastructure (which may soon not include us, but that’s another issue)
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But the college premium hasn’t risen for a while. What has happened, on the other hand, is a notable shift in income away from labor:
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Tourists Also Tell Greece No: Drop in Summer Bookings - WSJ.com - 0 views
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Greek-vacation bookings from Germany and the rest of Europe are down sharply, as would-be tourists take fright at the prospect of strikes and street protests.
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Early reservations for this summer's tourist season are down by around 15% from a year ago. Last year's record total of 16.4 million visitors is already out of reach, he says.
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If the decline in bookings continues, it would mean about 1.5 million fewer tourists coming to Greece this year compared to last, shaving more than a percentage point off gross domestic product and jeopardizing 100,000 summertime jobs.
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Greece is one of the world's top 20 tourist destinations, traditionally drawing about half of its visitors from other European Union countries—especially from Germany and the U.K.
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Prices are down some 15% from last year, according to SETE, following a 10% cut in rates charged by hotel and tour operators in 2011.
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Leading German tour operator TUI AG says its Greek vacation bookings were down 30% up to March. European travel agency Thomas Cook TCG.LN +0.23% said German bookings for Greece so far are also down by 30% compared with 2011, despite discounts of as much as 20%.
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Tomato Imports Deal Reached by U.S. and Mexico - NYTimes.com - 0 views
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The agreement, reached late Saturday, raises the minimum sales price for Mexican tomatoes in the United States, aims to strengthen compliance and enforcement, and increases the types of tomatoes governed by the bilateral pact to four from one.
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“The draft agreement raises reference prices substantially, in some cases more than double the current reference price for certain products,
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Florida growers contended it set the minimum price of Mexican tomatoes so low that the Florida growers could not compete.
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The new agreement covers all fresh and chilled tomatoes, excluding those intended for use in processing like canning and dehydrating, and in juices, sauces and purées.
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It raises the basic floor price for winter tomatoes to 31 cents a pound from 21.69 cents — higher than the price the Mexicans were proposing in October — and establishes even higher prices for specialty tomatoes and tomatoes grown in controlled environments. The Mexicans have invested billions in greenhouses to grow tomatoes, while Florida tomatoes are largely picked green and treated with a gas to change their color.
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The dispute unfolded in the heated politics surrounding the presidential election, with Mexican growers charging that the Commerce Department was courting voters in the important swing state of Florida. Instead, the timing of the negotiations ensured that the government could win those votes and bring the controversy to a conclusion satisfactory to the Mexicans after the election was over.
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The Mexicans enlisted roughly 370 American businesses, including Wal-Mart Stores and meat and vegetable producers, to argue their cause.
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shared by Gene Ellis on 16 Jun 12
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Banks' Fire Drill for Greece Election - NYTimes.com - 0 views
dealbook.nytimes.com/...fire-drill-for-greece-election
banks fire drill greece election nytimes nytimes com com
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In New York and London, banks have set up dedicated crisis teams, and rehearsed elaborate responses.
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Citigroup has $84 billion in loans, bonds and other types of exposure to troubled European countries, plus France. The bank’s filings indicate that all but $8 billion of that exposure is offset with collateral it has collected and hedges on the portfolio.
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Some banks are testing their systems to deal with the possibility of new currencies and preparing guidance for clients on how to operate in such an environment.
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Banks like Goldman Sachs and Morgan Stanley are also looking into the severe legal challenges that would arise if a country exited the euro. Contracts that govern loans, bonds and derivatives in Europe rarely take into account such a situation.
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Consider an Italian corporation that owed a foreign bank 5 million euros, with a loan agreement struck under Italian law. If Italy left the euro, the bank might have less chance of getting euros back after the exit. In that case, the financial firm might be exposed to a new, less valuable currency.
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Recognizing that threat, some banks are trying to move contracts into new jurisdictions like the United States or Britain. By transferring such loan agreements to English law, the banks may increase the chances of getting repaid in euros after an exit, according to legal experts.
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The banks are also trying to protect their balance sheets if they do get stuck with large amounts of assets denominated in a new, weaker currency.
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By doing so, they can better match their assets (the loans) within a specific country with their liabilities (the deposits). Then if a country left the euro zone, the value of the loan might fall in euros, but the banks wouldn’t owe as much to depositors in euros.
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Mr. Lim notes, however, that some large banks, including Deutsche Bank, still have a lot more loans than deposits in countries like Italy and Spain.
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Multinationals beach tax bills in Spanish shells - FT.com - 0 views
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From here a single employee presided over a company that from 2009 to 2011 made €9.9bn of net profits, all while earning an annual salary of only €55,000.
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Exxon’s Spanish subsidiary was structured as a so-called ETVE, a type of holding company used by many multinationals, including Hewlett-Packard, Pepsi, Eli Lilly, Anheuser-Busch InBev and Vodafone.
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According to the ETVE’s 2009 accounts, Exxon was able to transfer €3.6bn of dividends from its unit in Luxembourg to Spain. A dividend of €2.26bn was then paid on to its US parent without incurring withholding taxes that it would typically have to pay when moving money outside of the EU.
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ransfers from a Luxembourg company to the US would have typically been subject to a withholding tax. Last year, after attracting the attention of Spanish tax authorities, Exxon quietly closed down the operation.
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Spain introduced the ETVE in the mid-1990s to encourage foreign investment, and better compete with Luxembourg and Holland for international companies seeking tax-efficient European holding structures. It also allowed for foreign companies to take advantage of Spain’s strong network of bilateral tax treaties with countries in Latin America, such as Argentina, Brazil and Mexico, which can offer more favourable tax rates than other countries. Once the ETVE has been established all overseas dividends that are paid into it are exempt from tax in Spain, and can be easily moved on to a final destination, providing a small number of conditions have been met. Most importantly, corporation tax must have been paid in the country of origin on the dividends being transferred, and companies using ETVEs to house shareholdings in foreign subsidiaries must not be resident in any country identified by Spain as a tax haven.
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In fact, Linthal is an ETVE used by Ambev, a subsidiary of Anheuser-Busch InBev, the Belgian-based brewer, to distribute dividends from several Latin American beer brands, such as Argentina’s Quilmes and Cervecería Boliviana Nacional, to its holding company in Brazil.
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How Putin Forged a Pipeline Deal That Derailed - NYTimes.com - 0 views
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The pipeline, known as South Stream, was Mr. Putin’s most important European project, a tool of economic and geopolitical power critical to twin goals: keeping Europe hooked on Russian gas, and further entrenching Russian influence in fragile former Soviet satellite states as part of a broader effort to undermine European unity.
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The bill that Parliament took up on April 4 was arcane. But it swept aside a host of European regulations — rules that Mr. Putin did not want to abide by — for a pipeline that would deliver gas throughout southern Europe. Continue reading the main story Related Coverage In Diplomatic Defeat, Putin Diverts Pipeline to TurkeyDEC. 1, 2014
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In France, the leader of the far-right National Front, Marine Le Pen, recently acknowledged that her party had received a loan for 9 million euros, or about $11 million, from a Kremlin-linked bank.
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Faced with punishing sanctions, a petro-economy pushed to the brink by plunging oil prices and the wildly gyrating value of the ruble, Mr. Putin this month halted the project.
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Geological surveys suggested that Bulgaria could be sitting atop an underground ocean of natural gas, enough to be self-sufficient for years, enough to eclipse the advantages of South Stream.
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On April 4, 2014, soon after Mr. Putin annexed Crimea, Bulgaria’s Parliament gave initial passage to a bill that effectively exempted South Stream from a number of European Union regulations, most important, the one that would have forced Gazprom to allow non-Russian gas to flow through the pipeline.
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“If I hear one more word about competition, I’m going to freeze your you-know-whats off,” Mr. Putin reportedly shouted.
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The anti-fracking movement became so broad that in January 2012, Parliament banned not only the extraction of shale gas, but even exploration that would quantify the country’s reserves.
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When the Bulgarian government refused, the European Union cut off tens of millions of euros in regional development funds.
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In desperate need of the European funds, the prime minister announced the next day that South Stream would be halted until it had full European Union approval.
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While “he overreached, and he underestimated the response” to his intervention in Ukraine, said Mr. Gray, the former American diplomat, the Russian leader has been “quite effective” in countries like Bulgaria.“He won a great deal by getting Nabucco stopped,” Mr. Gray said. “Ultimately, his goal is to keep as much control over the former parts of the Soviet empire as possible.”
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A Multibillion-Dollar Question for Airbus and Its A330 - NYTimes.com - 0 views
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While the A330 continues to generate around 40 percent of Airbus’s civilian aircraft profits, new orders for the plane have slowed significantly in recent years.
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But with the wait times to receive new planes now stretching to more than six years, airlines have been slower to reach for their checkbooks.
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Analysts say a revamped A330 would probably not be able to compete with the fuel economy of Boeing’s three-year-old 787 Dreamliner or with the updated 777, which in addition to new engines will have lighter wings made of carbon fiber instead of aluminum.
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A more attractive price tag, combined with earlier availability — analysts say a revamped A330 could be ready for service in four years — would probably attract a wide range of customers.
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Still, a revamped A330 would burn around 15 percent more fuel than its newer competitors, meaning that it could be a tough sell, even at a discount.
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"Will you end up selling any more than you would have if you stuck with the old version and cut the price?” asked Mr. Cunningham, the London analyst. He noted that the current low interest-rate environment was already reducing customers’ sensitivity to list price, while the recent instability in the Middle East was refocusing attention on the risk of rising oil prices.
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“There is much more fragmentation” of the wide-body jet market, Mr. Lasou said. “Each aircraft type is covering a smaller range of routes. The market is becoming much more specialized.”
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Learning about global value chains by looking beyond official trade data: Part 1 | vox - 0 views
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Gross trade accounting: A transparent method to discover global value chain-related information behind official trade data: Part 1
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With the rapid increase in intermediate trade flows, trade economists and policymakers have reached a near consensus that official trade statistics based on gross terms are deficient, often hiding the extent of global value chains. There is also widespread recognition among the official international statistics agencies that fragmentation of global production requires a new approach to measure trade, in particular the need to measure trade in value-added. This led the WTO and the OECD to launch a joint “Measuring Trade in Value-Added” initiative on 15 March 2012, which is designed to mainstream the production of trade in value-added statistics and make them a permanent part of the statistical landscape.
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All the estimation methods used in recent efforts to measure trade in value-added are rooted in Leontief (1936). His work demonstrated that the amount and type of intermediate inputs needed in the production of one unit of output can be estimated based on the input-output structures across countries and industries.
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If one is only interested in estimating the domestic value-added embedded in a country’s or sector’s gross exports, applying Leontief’s insight is sufficient. However, for many economic and policy applications, one also needs to quantify other components in gross exports and their structures. In such circumstances Leontief’s original insight is not sufficient, as it does not provide a way to decompose intermediate trade flows across countries into various value-added terms according to their final absorption,
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Our gross trade accounting framework in fact allows one to further decompose each of the four major parts of gross exports above into finer components with economic interpretations
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By the gross statistics, presented in column 1 of Table 1, the trade is highly imbalanced – Chinese exports to the US ($176.9 billion in 2011) are five times that of US exports to China ($35.1 billion in 2011). If we separate exports of final goods and of intermediate goods (reported in columns 2a and 2b of Table 1), we see that most of the Chinese exports consist of final goods, whereas most of the US exports consist of intermediate goods.
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In other words, the US exports rely overwhelmingly on its own value-added (only 2.1% from China and 5.8% from other countries in 2011), whereas the Chinese exports use more foreign value-added, especially value-added from third countries (with 3.2% from the US and 23.1% from Japan, Korea, and all other countries).
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As a consequence of these differences in the structure of value-added composition, the China–US trade balance in this sector looks much smaller when computed in terms of domestic value-added than in terms of gross exports.
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By identifying which parts of the official data are double counted and the sources of the double counting, our gross trade accounting method provides a transparent way to bridge official trade statistics (in gross terms) and national accounts (in value-added terms) consistent with the System of National Accounts standard.
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Business and government: The new age of crony capitalism | The Economist - 1 views
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Rent-seeking” is what economists call a special type of money-making: the sort made possible by political connections. This can range from outright graft to a lack of competition, poor regulation and the transfer of public assets to firms at bargain prices. Well-placed people have made their fortunes this way ever since rulers had enough power to issue profitable licences, permits and contracts to their cronies.
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It identifies sectors which are particularly dependent on government—such as mining, oil and gas, banking and casinos—
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Second, the financial incentives for businesses may be changing. The share of billionaire wealth from rent-rich industries in emerging markets is now falling, from a peak of 76% in 2008 to 58% today. This is partly a natural progression.
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In China today the big money is made from the internet, not building heavy industrial plants with subsidised loans on land secured through party connections.
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Sub-Saharan Africa's Subprime Borrowers by Joseph E. Stiglitz and Hamid Rashid - Projec... - 0 views
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Taking the lead in October 2007, when it issued a $750 million Eurobond with an 8.5% coupon rate, Ghana earned the distinction of being the first Sub-Saharan country – other than South Africa – to issue bonds in 30 years.
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Nine other countries – Gabon, the Democratic Republic of the Congo, Côte d’Ivoire, Senegal, Angola, Nigeria, Namibia, Zambia, and Tanzania – followed suit. By February 2013, these ten African economies had collectively raised $8.1 billion from their maiden sovereign-bond issues, with an average maturity of 11.2 years and an average coupon rate of 6.2%. These countries’ existing foreign debt, by contrast, carried an average interest rate of 1.6% with an average maturity of 28.7 years.
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So why are an increasing number of developing countries resorting to sovereign-bond issues? And why have lenders suddenly found these countries desirable?
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recent analyses, carried out in conjunction with the establishment of the new BRICS bank, have demonstrated the woeful inadequacy of official assistance and concessional lending for meeting Africa’s infrastructure needs, let alone for achieving the levels of sustained growth needed to reduce poverty significantly.
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the conditionality and close monitoring typically associated with the multilateral institutions make them less attractive sources of financing. What politician wouldn’t prefer money that gives him more freedom to do what he likes? It will be years before any problems become manifest – and, then, some future politician will have to resolve them.
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So, are shortsighted financial markets, working with shortsighted governments, laying the groundwork for the world’s next debt crisis?
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he risks will undoubtedly grow if sub-national authorities and private-sector entities gain similar access to the international capital markets, which could result in excessive borrowing.
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Nigerian commercial banks have already issued international bonds; in Zambia, the power utility, railway operator, and road builder are planning to issue as much as $4.5 billion in international bonds.
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Signs of default stress are already showing. In March 2009 – less than two years after the issue – Congolese bonds were trading for 20 cents on the dollar, pushing the yield to a record high. In January 2011, Côte d’Ivoire became the first country to default on its sovereign debt since Jamaica in January 2010.
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In June 2012, Gabon delayed the coupon payment on its $1 billion bond, pending the outcome of a legal dispute, and was on the verge of a default. Should oil and copper prices collapse, Angola, Gabon, Congo, and Zambia may encounter difficulties in servicing their sovereign bonds.
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They need not only to invest the proceeds in the right type of high-return projects, but also to ensure that they do not have to borrow further to service their debt.
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But borrowing money from international financial markets is a strategy with enormous downside risks, and only limited upside potential – except for the banks, which take their fees up front. Sub-Saharan Africa’s economies, one hopes, will not have to repeat the costly lessons that other developing countries have learned over the past three decades.
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If You Think China's Air Is Bad ... - NYTimes.com - 0 views
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China contains only about 7 percent of the world’s fresh water while sustaining nearly 20 percent of its population. In stark contrast, Lake Michigan in the United States holds about 4 percent of the world’s freshwater (the Great Lakes combined contain about 20 percent).
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Financial Globalization in Reverse? by Martin N. Baily and Susan Lund - Project Syndicate - 0 views
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Cross-border capital flows abruptly collapsed. Almost five years later, they remain 60% below their pre-crisis peak.
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After expanding across national borders with the creation of the euro, eurozone banks have now reduced cross-border lending and other claims within the eurozone by $2.8 trillion since the end of 2007. Other types of cross-border investment in Europe have fallen by more than half. The rationale for the euro’s creation – the financial and economic integration of Europe – is now being undermined.
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Current trends seem to be leading toward a more fragmented global financial system in which countries rely primarily on domestic capital formation. Sharper regional disparities in the availability and cost of capital could emerge, particularly for smaller businesses and consumers, constraining investment and growth in some countries. And, while a more balkanized financial system does reduce the likelihood of global shocks creating volatility in far-flung markets, it may also concentrate risks within local banking systems and increase the chance of domestic financial crises.
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Where Factory Apprenticeship Is Latest Model From Germany - NYTimes.com - 0 views
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Working with five local high schools and a career center in Aiken County, S.C. — and a curriculum nearly identical to the one at the company’s headquarters in Friedrichshafen — Tognum now has nine juniors and seniors enrolled in its apprenticeship program.
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Since 2008, the number of apprentices has fallen by nearly 40 percent, according to the Center for American Progress study.
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Some 330 types of apprenticeships are accredited by the government in Berlin, including such jobs as hairdresser, roofer and automobile electronics specialist. About 60 percent of German high school students go through some kind of apprenticeship program, which leads to a formal certificate in the chosen skill and often a permanent job at the company where the young person trained.
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In South Carolina, apprenticeships are mainly funded by employers, but the state introduced a four-year, annual tax credit of $1,000 per position in 2007 that proved to be a boon for small- to medium-size companies.