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The word for the night was “heat.” With that prompt, spoken word artists delivered poems about love, sex, gangs, street food, public transport and even a trip to the barbershop.

Sipping beer and rum, the fashionable 100-strong crowd in this open-air performance space just off Ariapita Avenue, the bustling heart of Trinidad’s capital, snapped, clapped and cheered on the verbal dexterity.

The monthly slam poetry event is one of several cultural offerings that have emerged in recent years to liven up the slack period between the annual Carnival celebrations that flood Port of Spain’s streets with costumed revelers.

Trinidad and Tobago’s cultural ecosystem still revolves around Carnival, hooked to Ash Wednesday in February or March.

But arts advocates, creative entrepreneurs and government officials are seeking ways to stimulate a year-round scene that could build an economic alternative for a country otherwise dependent on oil and natural gas.

“I see the creative sector as being key in diversifying our national economy,” said Calvin Bijou, chairman of state-owned cultural promotion enterprise CreativeTT.

Besides rich oil and gas reserves, the twin-island Caribbean country has a wealth of cultural talent.

It is the birthplace of steel pan, widely believed to be the only non-electric, acoustic instrument invented in the 20th century, and the origin of calypso.

Those musical traditions blend with folk crafts like wire-bending and costume design in Trinidad’s world-famous Carnival. Since 2014, it has brought an annual average of 36,000 visitors to the island, who spend some TTD 324 million ($48 million).

But spreading culturally driven economic activity throughout the year is a tough task, and has sparked debate over whether a small island state should focus on audiences at home or abroad.

Backyard Theatre

The spoken word event, “True Talk No Lie,” began in 2013 to capitalize on the Carnival off-season.

It runs from March through November, when the cultural calendar heats up again, with parties showcasing the latest soca hits ahead of the next Carnival.

Poets hit the stage at The Big Black Box, a re-purposed backyard in the former residence of a respected playwright.

Multimedia production outfit 3canal renovated the space in 2014 as a simple “black box” theater with a mango tree soaring through the roof.

In the off-season, the venue hosts weekly live shows and rehearsals for annual productions.

It has also become an incubator for taking Trinidadian arts abroad. Two of 3canal’s rising stars toured Pride and carnival events in Britain and the Netherlands this summer, and ensemble members will perform at the National Theatre of Scotland in November.

In the run-up to Carnival, there are nightly rehearsals for 3canal’s annual show, culminating in Friday night “backyard jams” where spectators can get a taste of the work in progress.

Inside the restored gingerbread house, 3canal maintains a recording studio, office and merchandise store. Having its own infrastructure has allowed the ensemble to escape the constraints of Trinidad’s seasonal cultural scene.

“The convenience of having your own base out of which to explore, express and experiment can’t be beat,” 3canal’s artistic director Wendell Manwarren told the Thomson Reuters Foundation as dancers rehearsed in the courtyard.

“With our new album, we could luxuriate and take our time – as opposed to that Carnival pressure cooker.”

The Big Black Box has joined a cluster of historic residences converted for cultural use within a few blocks of each other in the Woodbrook neighborhood.

A decade ago, a trio of creatives established an artist residency program called Alice Yard. In 2011, Medulla Art Gallery opened to showcase contemporary Caribbean art, while older establishments like the Little Carib Theatre, built in 1947, round out the scene.

Carnival remains the center of gravity for some activities like the #1000mokos project in Alice Yard, which teaches a new generation of stilt walkers – moko jumbies in Carnival parlance.

Visual art is less in thrall to the Carnival rhythm, finding a larger audience through the quiet season. In May, a show opening and talk by an up-and-coming painter packed out the subterranean Medulla gallery.

Global or Local?

But as Trinidad’s cultural scene grows, it faces a key question: should it prioritize local audiences or export abroad?

For Rubadiri Victor, president of the Artists’ Coalition of Trinidad and Tobago and a former advisor to the arts minister, the answer lies overseas.

When in government from 2013-2014, he fought unsuccessfully to expand the mission of Pan Trinbago, the world body for steel pan set up by Trinidad, to “make pan and rhythm sections the festival music of Planet Earth.”

He wanted the country’s best steel pan bands playing the world’s top festivals, including the dozens of Caribbean-style carnivals in cities globally, which he estimates generate some TTD 15 billion ($2.23 billion) in revenues per year.

He pointed to examples of Trinidadian cultural success abroad – from several Olympic opening ceremonies choreographed by Carnival artist Peter Minshall in the 1990s and early 2000s, to the popular steel pan band that accompanied fans to Germany for Trinidad’s first-ever World Cup appearance in 2006.

But exporting Trinidadian culture requires public funding and support, Victor noted. “If you don’t have those enablers, it’s just difficult,” he said.

3canal’s Manwarren is more interested in local audiences.

“We tend to focus too much on outside validation,” he said. “We need to break through to ourselves.”

The government, meanwhile, is trying to straddle both lines.

It runs youth programs to teach steel pan, maintains a national artist registry, and coordinates mentorship by master artists – including Manwarren, who teaches live show production.

It hopes to offer funding for artists to showcase their skills abroad, but lacks a national cultural policy that would streamline such opportunities, though public consultations are underway to develop one.

“The cultural has to be seen as a political tool and priority, alongside energy, trade and manufacturing,” said Ministry of Arts official Marlon De Bique.

($1 = 6.7070 Trinidad & Tobago dollars)
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Chinese officials on Monday defended Beijing’s initiative to build a “New Silk Road” of railways and other infrastructure across Asia against complaints it leaves host countries with too much debt after Malaysia canceled two high-profile projects.

The officials said President Xi Jinping’s signature foreign policy initiative is creating assets that are needed by developing countries but might take time to pay off.

The deputy chairman of the Cabinet planning agency, Ning Jizhe, rejected what he said were foreign news reports that blamed the initiative for debt problems.

“People’s livelihoods and economic development have been boosted,” Ning said at a news conference. “No ‘debt trap’ has been created.”

Other governments welcomed Xi’s initiative in 2013 in a region the Asian Development Bank says needs more than $26 trillion of infrastructure investment by 2030 to keep economies growing.

The initiative, called “One Belt, One Road” in Chinese and the “Belt and Road Initiative” in English, is a business venture, not aid. Chinese officials say financing is on commercial terms. Beijing wants to attract non-Chinese investors but that has happened only on a few of the hundreds of railway, power plant, highway and other projects.

Some governments including the United States, Japan and India worry Beijing is trying to build a China-centered structure that will erode their influence.

Some Chinese-led projects have run into complaints that they are too costly and give too little work to local contractors. Some governments including Thailand, Tanzania, Sri Lanka and Nepal have scrapped, scaled back or renegotiated projects.

This month, Malaysian Prime Minister Mahathir Mohamad canceled projects including a $20 billion railway he said his country cannot afford. Last December, Sri Lanka sold control of its port of Hambantota to a Chinese state-owned company after falling behind in repaying $1.5 billion in loans from Beijing.

Advisory board

Chinese authorities choose projects “very carefully” and examine host country finances to make sure they can repay loans, said a deputy commerce minister, Qian Keming. However, he said they would welcome the participation of developed countries and international organizations to improve transparency and guarantee “high quality” projects.

“These physical facilities will play a long-term role,” said Qian. “But we don’t necessarily see a return in the short run.”

A deputy foreign minister, Zhang Jun, said “Belt and Road” officials were preparing to appoint an advisory board of former political leaders, academics and experts. He said an “international commercial expert committee” was appointed this week to give legal advice.

“Belt and Road” is a loosely defined umbrella for Chinese-built or financed projects across 65 countries from the South Pacific through Asia to Africa and Europe. They range from oil drilling in Siberia to construction of ports in Southeast Asia, railways in Eastern Europe and power plants in the Middle East.
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Turkey warned on Monday that U.S. trade sanctions against it could destabilize the Middle East and ultimately bolster terrorism and the refugee crisis, underscoring the regional impact of Ankara’s deepening rift with Washington.

Turkish Finance Minister Berat Albayrak, who is President Recep Tayyip Erdogan’s son-in-law, used a visit to Paris to both take aim at the United States and highlight Ankara’s push for better ties with Europe, given the standoff with Washington.

The rift with the United States over an American evangelical Christian pastor detained in Turkey on terrorism charges has helped accelerate a crisis in the Turkish lira, which is down about 40 percent this year. U.S. President Donald Trump this month authorized a doubling of duties on aluminum and steel imported from Turkey.

Investors are also worried about a U.S. Treasury investigation into majority state-owned Turkish lender Halkbank, which faces a potentially hefty fine for allegations of Iran-sanctions busting. The bank has said all of its transactions were legal.

“These steps taken with political motivation will not only impact the global financial system but also global trade and regional stability,” Albayrak told a news conference following a meeting with his French counterpart, Bruno Le Maire.

“With the damage [the measures] will cause to regional stability, they will unfortunately contribute to chaotic problems that feed terrorism and also the refugee crisis.”

With the dollar stronger globally, the lira weakened as far as 6.2960 from 6.00 on Friday, when a holiday to mark the Muslim festival of Eid al-Adha came to an end. It stood at 6.1200 at 1529 GMT.

“The exchange rate sensitivity created by the tension between us and the United States continues,” said Seda Yalcinkaya Ozer, an analyst at brokerage Integral.

Diverging interests

Turkey and the United States are also at odds over diverging interests in Syria and U.S. objections to Ankara’s ambition to buy Russian defense systems.

The United States has expressed concern that NATO member Turkey’s planned deployment of the Russian-made S-400 could risk the security of some U.S.-made weapons and other technology used by Turkey, including the F-35 jet.

A committee from the U.S. Congress visited Turkey on Monday and held meetings with officials regarding the F-35 program, Turkey’s foreign ministry said.

In a conference call earlier this month, Albayrak told investors that Turkey would emerge stronger from the crisis, insisting its banks were healthy but that the authorities were ready to provide support to the sector if needed.

Turkey’s central bank and banking watchdog have taken steps to underpin the lira in recent weeks, including cutting limits for Turkish banks’ swap transactions. On Monday, the Istanbul stock exchange said it had started work on setting up a swap market as part of efforts to make the city an international finance center.

Investors remain concerned about the lira, given Erdogan’s opposition to high interest rates and with inflation near 16 percent in July, its highest in more than 14 years.

August inflation data will be released next Monday and the central bank will hold a policy-setting meeting Sept. 13, having left rates on hold at its last meeting, contrary to expectations.

Erdogan has cast the lira slide as the result of an “economic war” against Turkey, a comment echoed by his spokesman last week when Trump ruled out concessions to Ankara in return for Brunson’s release.

The main BIST 100 share index was up 1.22 percent at Monday’s close. The yield on the benchmark 10-year bond dipped to 21.95 percent from 21.98 percent a week earlier.
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Governments and corporations are increasingly using legal persecution to portray indigenous activists as criminals and terrorists, putting them at heightened risk of violence, the United Nations said Monday.

Indigenous leaders and campaigners fighting to protect land from development are being stymied and silenced by rising militarization, national security acts and anti-terrorism laws, according to a report submitted to the U.N. Human Rights Council.

Globally, up to 2.5 billion people live on indigenous and community lands, which make up more than half of all land worldwide, but they legally own just 10 percent, according to rights groups.

The U.N. report cited a “drastic increase” in violence against indigenous people actively opposing large-scale projects such as mining, infrastructure, hydroelectric dams and logging.

“It’s a new war,” said Victoria Tauli-Corpuz, U.N. Special Rapporteur on the Rights of Indigenous Peoples, who authored the report.

“It’s getting worse because many of the remaining resources in the world are found in indigenous territories,” Tauli-Corpuz told Reuters.

This month, an indigenous leader was murdered in Brazil, part of a battle over logging in the Amazon.

In Guatemala, seven indigenous members of farmers’ organizations advocating for land rights and political participation were killed, it said.

Last year, more than 200 activists were killed, the highest since 2002, according British campaign group Global Witness.

“In the worst instances, escalating militarization, compounded by historical marginalization, results in indigenous peoples being targeted under national security acts and antiterrorism legislation, putting them in the line of fire, at times literally, by the army and the police,” it said.

No global numbers

Governments and corporations are using legal means to designate indigenous people as trespassers subject to eviction, while arrests are made on vague charges or uncorroborated witness testimony, followed by long periods of pretrial detention.

Criminal charges have been filed against activists, showing prosecutors and judges colluding with companies and landowners in some cases, it said.

In Ethiopia, indigenous land rights defenders have been prosecuted and imprisoned under antiterrorist legislation, it said.

There are no tallies of criminal charges filed against indigenous peoples worldwide, but Tauli-Corpuz cited recent upticks in the Philippines, Brazil, Colombia, Ecuador, Guatemala, Honduras, India, Kenya, Mexico and Peru.

“What disarticulates a community? Arresting its leaders, criminalizing the leaders,” said Dinaman Tuxa, executive coordinator of Brazil’s Articulation of the Indigenous Peoples known as Apib, an umbrella group of advocacy groups.
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The United States told the World Trade Organization on Monday it would block the reappointment of one of the WTO’s four remaining appeals judges next month, confirming trade experts’ fears of a crisis in the system for

settling global rows.

U.S. President Donald Trump has railed against the WTO, calling it a catastrophe and a disaster. He has said the United States loses cases because other countries have most of the judges.

In fact, trade experts say, the United States has a similar, if not better, lose-win rate than other countries that have taken complaints to the WTO, and it has a rare privilege in that the judges on the WTO’s Appellate Body have always included one American.

Trump faces a barrage of disputes at the WTO against his trade policies, including global tariffs on steel and a tariff war with China. Since he came to power, Washington has blocked all appointments to the appeals chamber as existing judges’ terms end.

There are normally seven WTO appeals judges, but if Shree Baboo Chekitan Servansing, a trade judge from Mauritius, is not reappointed when his term expires on September 30, only three will remain — the minimum for the system to function.

It looks set to break down finally when two more judges’ terms expire in December 2019, but it could seize up sooner if any judges need to recuse themselves from a case for legal reasons.

If the U.S. veto paralyses the dispute system, it would end 23 years of WTO enforcement, the keystone of international efforts to prevent trade protectionism, at a time of heightened global trade tensions.

At the WTO’s monthly dispute settlement meeting, 67 member states have repeatedly petitioned Washington to drop its veto and keep the system working.

But U.S. Ambassador Dennis Shea told Monday’s meeting that the Appellate Body had consistently over-stepped its authority by reviewing and reversing factual findings by trade arbitration panels, and by interpreting WTO members’ domestic laws.

“The invention of an authority to review panel fact-finding … has added complexity, duplication and delay to every WTO dispute,” he told the meeting, according to a transcript of his prepared remarks.

Shea has previously promised to be “disruptive where necessary” to reform the WTO and has said the United States may choose not to accept appeals if they take longer than the allowed 90 days.

The United States has not followed through on the threat, but since legal rulings are routinely delayed, it effectively signaled that Washington reserved the right to ignore rulings that Washington does not like.
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Mexico’s Economy Minister Ildefonso Guajardo said on Sunday that bilateral negotiations with the United States about the North American Free Trade Agreement (NAFTA) were in the “final hours.”

Speaking as he arrived for talks at the U.S. Trade Representative’s office, Guajardo said the negotiators would need at least a week to work with Canada, the third country in the trilateral trade pact, pushing any possible final deal into at least September.

U.S. President Donald Trump said on Saturday that the United States could reach a “big Trade Agreement” with Mexico soon as incoming Mexican trade negotiators signaled possible solutions to energy rules and a contentious U.S. “sunset clause” demand.

 

 
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John Cronin has never been one to let disability hold him back. The 22-year-old from Long Island, N.Y., was born with Down syndrome, a genetic disorder that causes developmental and intellectual delays. Motivated by his family’s love and encouragement, Cronin teamed up with his father 18 months ago to open a business. But not just any business. John’s Crazy Socks sells, you guessed it, socks. And as Faiza Elmasry reports, it’s a business worth $4 million. Faith Lapidus narrates.
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Tesla Inc. CEO Elon Musk says investors have convinced him that he shouldn’t take the company private, so the firm will remain on the public stock markets.

The eccentric and sometimes erratic CEO said in a statement late Friday that he made the decision based on feedback from shareholders, including institutional investors, who said they have internal rules limiting how much they can sink into a private company.

Musk met with the electric car and solar panel company’s board on Thursday to tell them he wanted to stay public and the board agreed, according to the statement.

In an Aug. 7 post on Twitter, Musk wrote that he was considering taking the company private. He said it would avoid the short-term pressures of reporting quarterly results.
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U.S. Commerce Secretary Wilbur Ross has appointed a former federal prosecutor to monitor China’s ZTE Corp — after people familiar with the matter said he rescinded an offer to a former U.S. official for signing a “Never Trump” letter before the 2016 presidential election.

A new monitor for ZTE is required as part of a June settlement that ended a ban on U.S. companies selling components to China’s No. 2 telecommunications equipment maker. The ban threatened ZTE’s survival and became a source of friction in trade talks between Washington and Beijing.

Roscoe Howard, a former U.S. attorney in Washington, will lead a compliance team designed to help ensure that ZTE does not illegally sell products with American parts to Iran and other sanctioned countries.

Howard, who got his law degree from the University of Virginia in 1977, is a partner in Barnes & Thornburg’s litigation department in Washington, and served as associate independent counsel during the Clinton and George H. W. Bush administrations.

Howard was not the first choice of Commerce Department officials.

Peter Lichtenbaum, a former assistant secretary for export administration at the Commerce Department, received a letter on Aug. 15 offering him the post, sources said.

Ross then learned that Lichtenbaum was among the dozens of former national security officials who signed a letter in August 2016 saying Trump was not qualified to be president and they would never vote for him, the sources said on condition of anonymity.

Last Friday, two days after making the offer, the department withdrew it, the sources said.

“This is the final decision. Period,” a Commerce Department spokesman said about Ross’ decision to rescind the offer to Lichtenbaum and choose Howard.

Trump, a former real estate magnate and reality television star, drew opposition from establishment Republicans who opposed his candidacy during the 2016 presidential campaign. His administration has been known to reject people who opposed him.

Violations by ZTE

ZTE, which relies on American-origin components for its smartphones and computer networking gear, pleaded guilty last year to violating U.S. sanctions by illegally shipping U.S. goods and technology to Iran.

The ban on ZTE was imposed in April after officials said the company made false statements about disciplining 35 employees tied to the wrongdoing.

As part of the 2017 guilty plea, ZTE paid nearly $900 million. To lift this year’s ban, it paid an additional $1 billion penalty, placed $400 million in escrow in case of future violations, and installed a new board and senior management.

Two monitors​

Under the latest agreement, the Commerce Department is selecting a monitor to oversee compliance for ZTE and its worldwide affiliates for 10 years. Howard will have a staff of at least six people funded by ZTE, including at least one expert in export controls, the Commerce spokesman said.

The government monitor has been designated as a “special compliance coordinator” to distinguish from another monitor for ZTE appointed by a U.S. judge in Texas when the company pleaded guilty last year.

That monitor, James Stanton, a lawyer who has handled personal injury cases among others, was picked by U.S. District Judge Ed Kinkeade, sources told Reuters last year. Kinkeade has control over that monitor.

A key reason the Commerce Department sought a second monitor, according to sources, was to have a qualified person police the company and report directly to the department and the company.
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Federal Reserve Chairman Jerome Powell will not lack for urgent topics to address when he gives the keynote speech Friday to an annual gathering of global central bankers in Jackson Hole, Wyoming.

Fed watchers will be listening for anything Powell has to say about financial turmoil in emerging markets, the economic threats posed by the growing trade war launched by President Donald Trump, and Trump’s criticism of the Fed’s recent interest rate hikes.

Investors will especially want to hear whether Powell addresses the central question of whether any of those developments might lead the Fed to alter its plan to raise interest rates two more times this year and to keep raising them next year as well.

If Powell sounds confident that the economy won’t be unduly hurt by the administration’s tariffs on imports and the retaliatory tariffs they have provoked or by a currency crisis in developing markets, Fed watchers will likely conclude that the central bank will maintain a course of gradual rate hikes to reflect a robust economy.

But if Powell strikes a message of concern, it could be read as a sign that the Fed is considering slowing its hikes. A slower pace of rate increases would be intended to encourage continued borrowing and spending by companies and individuals to drive economic growth.

​Political pressure

Amid the grandeur of the Grant Teton Mountains, Powell will be the lead-off speaker at the conference, which has been sponsored for more than three decades by the Federal Reserve Bank of Kansas City.

It will be Powell’s first chance to respond publicly to Trump’s recent criticism, which critics say amounted to an intrusion on the Fed’s longstanding independence from political influence. Two top Fed officials made clear Thursday that Trump’s criticism won’t affect their decisions on whether to continue raising rates. The Fed is widely expected to resume doing so at its next policy meeting late next month.

“Our job at the Fed is to make decisions on monetary policy and supervision without regard to political considerations, and I’m confident we’ll continue to do that,” Robert Kaplan, head of the Fed’s Dallas regional bank, said in an interview with CNBC. Kaplan said he foresees three to four more rate hikes over the next nine to 12 months.

Similarly, Esther George, head of the Kansas City Fed, said she expects the central bank to raise rates twice more this year, with more next year.

“Expressions of angst about higher interest rates are not unique to this administration,” she said in a separate interview with CNBC.

This week, Trump complained in an interview with Reuters that he was “not thrilled” with Powell’s Fed for raising rates. It marked the second time this summer that Trump had publicly criticized the policymaking of the Fed.

That broke a tradition that the White House should refrain from attacks on the Fed because such criticism can shake the confidence of financial markets and that the Fed is committed to keeping inflation under control without regard to political considerations.

Seven interest rate hikes

The Fed has raised its key policy rate seven times since late 2015 after seven years of keeping the rate at a record low near zero to help the economy recovery from the Great Recession. Five of those rate hikes, including two this year, have occurred with Trump in the White House. In June, the Fed boosted its projection for expected hikes this year from three to four.

The Fed’s policy rate stands in a range of 1.75 percent to 2 percent. The rate hikes are intended to prevent the economy from overheating and inflation from accelerating. But higher rates make borrowing costlier and can depress stock prices. Trump has complained that the Fed’s efforts are hampering his attempts to boost growth with his $1.5 trillion tax cut, deregulation and tougher enforcement of trade agreements.
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Federal Reserve Chairman Jerome Powell signaled Friday that he expects the Fed to continue gradually raising interest rates if the U.S. economic expansion remains strong.

Powell added that while annual inflation has risen to near the Fed’s 2 percent target rate, it doesn’t seem likely to accelerate above that point. That suggests that he doesn’t foresee a need for the Fed to step up its rate hikes. Late next month, the Fed is widely expected to resume raising rates.

Speaking to an annual conference of central bankers in Jackson Hole, Wyoming, Powell said the Fed recognizes that it needs to strike a careful balance between its mandates of maximizing employment and keeping price increases stable. He said a gradual approach is the best way for the Fed to navigate between the risks of raising rates too fast and “needlessly shortening the expansion” and moving too slowly and risking an overheated economy.

“My colleagues and I,” the Fed chairman said in his speech, “are carefully monitoring incoming data, and we are setting policy to do what monetary policy can do to support continued growth, a strong labor market, and inflation near 2 percent.”

Powell made no mention of the recent public criticism from President Donald Trump, who has said he’s unhappy with the Fed’s rate hikes. The president has complained that the Fed’s tightening of credit could threaten the continued strong growth he aims to achieve through the tax cuts enacted late last year, a pullback of regulations and a rewriting of trade deals to better serve the United States.

Many have seen Trump’s complaints about the Fed’s rate hikes as an intrusion on the central bank’s longstanding independence from political influence. On Thursday, two top Fed officials made clear Thursday that Trump’s criticism won’t affect their decisions on whether to continue raising rates.

Powell also made no mention in his speech of what many economists see as the most serious threat to the economy: The trade war that Trump has launched with America’s main trading partners — a conflict that risks depressing U.S. and global economic growth the longer it goes on.

The Fed chairman focused his remarks in part on the difficulty the Fed faces in setting interest-rate policies at a time when the economy seems to be undergoing changes that challenge long-standing beliefs of how low unemployment can fall before it ignites inflation pressures. He said there is also much uncertainty over the “neutral” rate of inflation —  the point at which the Fed’s policy rate is neither stimulating economic growth or holding it back.

The Fed’s economic projections, compiled from estimates of all Fed officials, estimates the current neutral rate at 2.9 percent. But Powell noted that there’s a wide difference of opinion about it.

After having kept its key policy rate near zero for seven years to help lift the economy out of the Great Recession, the Fed has raised rates seven times, most recently in March and June this year. Most Fed watchers foresee two more hikes this year — next month and then in December.

Powell said the Fed’s incremental approach to raising rates has so far succeeded.

“The economy is strong,” he said. “Inflation is near our 2 percent objective and most people who want a job are finding one. We are setting policy to do what monetary policy can do to support continued growth, a strong labor market and inflation near 2 percent.”
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A new set of tit-for-tat tariffs imposed by the United States and China on each other’s goods took effect Thursday.

The U.S. announced earlier this month that it would impose 25 percent tariffs on $16 billion worth of Chinese goods, on top of the 25 percent tariffs it imposed on $34 billion worth of Chinese products in early July. Beijing has followed suit in each case with an identical percentage of tariffs in retaliation.

The penalties, previously announced, apply to $16 billion of goods from both sides including automobiles and metal scrap from the United States and Chinese-made factory machinery and electronic components, according to the Associated Press.

China’s commerce ministry issued a statement Thursday criticizing the U.S. tariffs as a violation of World Trade Organization rules, and says it will file a legal challenge under the WTO’s dispute resolution mechanism.

The new round of tariffs took effect the day after delegations from both nations met in Washington for first of two days of talks aimed at resolving the dispute, the first such formal discussions since June.

U.S. President Donald Trump told Reuters in an interview this week he does not expect much progress from the discussions.

The Trump administration is demanding that Beijing change its practice of heavily subsidizing its technology sector and open its markets to more U.S. goods.

The U.S. Trade Representative’s office on Monday began six days of public hearings on the president’s plans to impose tariffs on a wider array of Chinese imports, affecting an additional $200 billion worth of Chinese goods.

Economists warn that the trade war between the world’s biggest economies would reduce global economic growth by around 0.5 percent through 2020.
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French President Emmanuel Macron will make the tough political choices needed to meet his deficit commitments, his government spokesman said, as he looked to put a bodyguard scandal behind him at his first Cabinet meeting after the summer break.

Macron and his ministers in all likelihood need to find savings in next year’s budget, to be presented to parliament next month, if they are to prevent the deficit from ballooning once again.

The president faced his first crisis in the summer when video surfaced of bodyguard Alexandre Benalla beating a protester. Macron’s own aloof response fanned public discontent.

Now the 40-year-old leader returns to work facing difficult political choices as he embarks on a new wave of reforms to reform the pensions system, overhaul public healthcare and shake-up the highly unionized public sector — tasks complicated by forecasts that economic growth is slower than expected.

“A budget is not only figures, but a strategy, and strong political choices,” Griveaux said, without giving details on the budget negotiations. “There will be [spending] increases and then we will require efforts from other sectors.”

The French economy eked out less growth than expected in the second quarter as strikes and higher taxes hit consumer spending, official data showed in July.

Macron has linked fiscal discipline to restoring France’s credibility in Europe, and while the budget deficit — forecast at 2.3 percent of GDP this year and next — should not surpass the EU-mandated 3 percent limit, it is still expected to be one of the highest in the euro zone.

“The budget equation is becoming more complicated,” Denis Ferrand, economist at COE-Rexecode told Reuters.

The Bank of France has revised 2018 growth down to 1.8 percent from 1.9 percent. Budget rapporteur Joel Giraud in July said that a revision down to 1.7 percent could see the public deficit slip by 0.2 percentage points.

Beyond raising eyebrows in Brussels and Berlin, it would also complicate Macron’s efforts to make transfers towards social policies that might help him dispel the impression among leftist critics that he is a “president of the rich.”

“It would be more difficult to find resources for social spending,” Ferrand said.

Elysee officials acknowledge growth was lower than expected in the first half, and say the housing and subsidized jobs portfolios will see sharp cuts to help finance Macron’s priorities in education, security and the environment.

Some 1 billion euros ($1.14 billion) is expected to be saved by changing rules for widely-enjoyed housing benefits, junior minister Julien Denormandie told BFM TV earlier on Wednesday.

Last year, a cut of five euros ($6) per month to the same allowance contributed to a sharp slump in the president’s popularity, which opinion polls show plumbing lows.
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Saudi Arabia has called off both the domestic and international stock listing of state oil giant Aramco, billed as the biggest such deal in history, four senior industry sources said on Wednesday.

The financial advisors working on the proposed listing have been disbanded, as Saudi Arabia shifts its attention to a proposed acquisition of a “strategic stake” in local petrochemicals maker Saudi Basic Industries Corp., two of the sources said.

“The decision to call off the IPO was taken some time ago, but no-one can disclose this, so statements are gradually going that way — first delay then calling off,” a Saudi source familiar with IPO plans.

Saudi Aramco did not immediately respond to an emailed request for comment. The Saudi Royal Court had no immediate comment.

The proposed listing of the national champion was a central part of Crown Prince Mohammed bin Salman’s reform drive aimed at restructuring the kingdom’s economy and reducing its dependence on oil revenue.

The prince announced the plan to sell about 5 percent of Aramco in 2016 via a local and an international listing, predicting the sale would value the whole company at $2 trillion or more. Several industry experts however questioned whether a valuation that high was realistic, which hindered the process of preparing the IPO for the advisors.

Stock exchanges in financial centers including London, New York and Hong Kong had been vying to host the international tranche of the share sale.

An army of bankers and lawyers started to fiercely compete to win advisory roles in the IPO, seen as a gateway to a host of other deals they expected to flow from the kingdom’s wide privatization program.

International banks JPMorgan, Morgan Stanley and HSBC, were working as global coordinators, boutique investment banks Moelis & Co and Evercore were chosen as independent advisors and law firm White & Case as legal adviser, sources had previously told Reuters.

More banks were expected to be named but no bookrunners were formally appointed despite banks pitching for the deal.

Lawyers, bankers and auditors are all essential in the drafting the prospectus, a formal document that provides essential details on the company.

“The message we have been given is that the IPO has been called off for the foreseeable future,” said one of the sources, a senior financial advisor.

“Even the local float on the Tadawul Stock Exchange has been shelved,” the source added.

Saudi energy minister and Aramco chairman Khalid al-Falih said in the company’s 2017 annual report, released in August, that Aramco “continued to prepare itself for the listing of its shares, a landmark event the company and its board anticipate with excitement.”

Aramco had a budget which it used to pay advisors until the end of June. This has not been renewed, one of sources said.

“The advisors have been put on standby,” a third source, a senior oil industry official said.

“The IPO has not been officially called off, but the likelihood of it not happening at all is greater than it being on.”

Sources have previously told Reuters that in addition to the valuations, disagreements among Saudi officials and their advisers over which international listing venue to be chosen had slowed down the IPO preparations.
…

Disney is offering to pay full tuition for hourly workers who want to earn a college degree or finish a high school diploma.

The Walt Disney Co. said Wednesday it will pay upfront tuition to workers who want to take classes starting in the fall.

Disney initially will invest $50 million into the “Disney Aspire” program and up to $25 million a year after that.

Other large corporations have begun paying tuition for workers in a job market with low unemployment.

In May, Walmart said it will offer workers the chance to get a college degree at three universities with online programs.

Disney is rolling out its program in phases, with the first limited to online classes. It is being administered by Guild Education, the same firm operating Walmart’s program.
…

The U.S. economy likely created 43,000 more jobs in the 12 months through March than previously estimated, the Labor Department said on Wednesday.

The marginal increase, which the Labor Department said represented less than a 0.05 percent gain versus current estimates, is a preliminary estimate of the government’s annual “benchmark” revision to nonfarm payrolls data.

Job growth in the U.S. economy remains relatively strong despite the labor market being near full employment.

Once a year, the government compares its nonfarm payrolls data, based on monthly surveys of a sample of employers, with a much more complete database of unemployment insurance tax records.

A final benchmark revision will be published in February along with the employment report for January. Government statisticians will use the final benchmark count to revise payrolls data for months both prior to and after March 2018.
…

When reforms began in Myanmar in 2011, its tourism sector was considered as one of those most likely to take advantage of the economic opportunities as the country looked to reconnect with the outside world. 

Authorities and businesspeople were confident that foreign tourists would be drawn to Myanmar, eager to see such sites as the ancient temples of Bagan, the unique culture of Inle Lake, or the picturesque beaches overlooking the Bay of Bengal. 

For a while it worked, as Myanmar’s international reputation improved in-line with the reforms happening at the time, the country was at the top of many visitors’ wish lists. Official figures showed that more than 4.68 million tourists visited the country in 2015, up from 816,000 in 2011. In 2017, 3.4 million tourists visited. 

But the situation has changed again. The tourism sector has been heavily impacted by the crisis in Rakhine State, which has seen 700,000 Rohingya cross into Bangladesh to flee a brutal army crackdown. Myanmar’s military has been accused of ethnic cleansing the Rohingya, leading many tourists to stay away because of ethical concerns. 

Myanmar’s government recognizes the need to take action, and in early August held a meeting for stakeholders to discuss what measures can be taken to improve the situation. 

At that event, de facto leader Aung San Suu Kyi said the country should focus on measures such as improving rail and water transport, providing clean accommodation and developing more community-based tourism projects.

“Tourists can get many opportunities such as viewing the beautiful scenery and enjoying new experiences,” Aung San Suu Kyi said. “That is why roads, water ways and railways should be considered aside from air travel.” 

Tourist operators in the country welcomed the remarks, but said that there are more short-term measures that can be made, and have also called for a nationwide strategic plan to tackle the malaise the industry is currently undergoing. 

“What is needed is a comprehensive integrated approach from [the government] and the private sector to improve the tourism sector,” said Aung Kyaw Swar, former principal of the Inle Heritage Foundation. “This should include infrastructure, products, channels of communication, public relations, marketing and sales.” 

He said he welcomed Aung San Suu Kyi’s speech, particularly the calls to improve infrastructure, but said a cohesive plan should be formed, including one that ensures that the respective ministries work closely together. 

He also said that the government should invest in research teams, in order to effectively research potential clients’ expectations when they visit the country.

Foreign visitors to Myanmar have traditionally been drawn towards the major cities of Yangon and Mandalay, as well as Bagan and Inle Lake, but new destinations are emerging, and tourist development in lesser known areas could bring economic benefits. 

U Bawla, a hotelier in Kale, the gateway to Chin State, one of Myanmar’s most scenic but underdeveloped regions, said that government support for tourism development would bring huge improvements for the lives of Chin people. 

“When people come to Chin State, [they say] it is an amazing, and beautiful place,” he said, adding that only a handful of tourists visit each month. “I think that if the government concentrates on [developing tourism] in Chin State, that will bring many improvements for the Chin people, including improvements in roads and transportation.” 

Bertie Lawson, managing director of Yangon-based Sampan Travel, said that Aung San Suu Kyi’s recommendations were “a good start”, but that much more needed to be done. 

As examples, he highlighted the practice by domestic airlines of charging foreigners double the price of Myanmar citizens, and the fact that buses to tourist destinations are often scheduled to arrive in the middle of the night, rather than at times more convenient for visitors. 

“This might seem small and petty, but they add up and make people wonder if Myanmar is really worth it, when they could go elsewhere and not have to deal with this,” he told VOA. 

“People aren’t complaining about the lack of CBT projects, or waterways. They’re complaining about the price, or about the issues they have traveling around the county. Those things can be changed, and should be looked at first,” he said. 

Lawson said he believed the impact of the Rakhine crisis on tourism would likely be long-term, but said there was still reason to be optimistic. 

“Repairing that reputation will take quite a long time,” he said. “I don’t think that means that tourism can’t do well, I just don’t think it will grow quite at the rate many were previously expecting.” 
…

Mexico risks losing long-term passenger growth and billions of dollars if it fails to go through with building a new hub in the capital to alleviate congestion, an executive with the International Air Transport Association (IATA) said on Tuesday.

Mexico’s incoming government last week postponed a decision on whether to complete a partially constructed new airport in Mexico City, saying the public should be consulted on the fate of the $13-billion hub, which the next president initially opposed.

President-elect Andres Manuel Lopez Obrador said the project was tainted by corruption prior to his July 1 landslide election victory, and had pressed for an existing military airport north of the capital to be expanded instead.

Without the new airport, around 20 million fewer passengers would fly to Mexico City starting in 2035, year over year, said Peter Cerda, regional vice president in the Americas for IATA.

It would also mean a long-term loss of $20 billion from Mexico’s GDP and cost the country 200,000 jobs, according to an airline-industry study on the financial impact of not building the new airport, Cerda said.

IATA, the Montreal-based trade association, has 290 member airlines which together transport about 82 percent of global air traffic.

Passenger traffic is expected to double by 2035 on a global basis, including Latin America, Cerda said in an interview.

“If you don’t build an airport that’s able to meet the needs of the next 50 years you just cannot continue to grow,” Cerda said on the sidelines of the International Aviation Forecast Summit in Denver. “And that has financial implications for the country.”

Work began on the new airport, which is a few miles northeast of the current one, in 2015. The present airport, located in the east of Mexico City, has become increasingly saturated by rising air traffic and has no room to expand.

“This is an airport that was built for 32 million passengers a year and currently we have 45 million passengers traveling through,” Cerda said.

Cerda urged Mexico to make any decision on “technical justifications” rather than “public outcry that may not fully understand the consequences.”
…

For Mazen Rahhal, a shop owner in a bustling district of Beirut, Lebanon’s economy has seldom felt more precarious. In one store, he sells clothes at a fraction of their previous price. Another, which he rented to a rival business, now lies empty.

Years of gradual stagnation have in 2018 merged with several newer trends: high interest rates, falling house prices and questions about the currency at a moment of profound uncertainty as politicians wrangle over forming a new government.

For Lebanese businesses and people, economic unease and the lack of a government to take firm control over policy — some three months after they voted in a general election — have become ceaseless sources of worry.

“We are struggling just to manage the costs we have to pay: from electricity, employee wages, everything,” said Rahhal. His family has owned shops on Hamra Street, the main business thoroughfare of west Beirut, since the 1970s.

As Lebanon rebuilt after its 15-year civil war ended in 1990, there was a period of economic growth, and as in its 1950s and 60s heyday, it drew Gulf Arab tourists ready to open their wallets as they escaped the stifling summer heat of home.

But problems were never far away.

In 2005 prime minister Rafik al-Hariri was assassinated, opening up wide divisions over the roles of the Iran-backed Hezbollah group, and of powerful neighbor Syria.

Syria’s own war since 2011 has aggravated those rifts, while cutting off much of Lebanon’s overland trade and scaring off the mostly Sunni Muslim Gulf tourists, who feared the growing power of the heavily armed Shi’ite Hezbollah movement.

Sclerosis ensued. After Hariri’s death, the government did not pass another state budget until last year. Parliamentary elections in 2009 were not held again until this May.

Economic growth, which averaged 8-10 percent before the Syria war, has averaged 1-2 percent since it began, and a purchasing managers’ index for Blom Bank has shown business activity in decline every month since 2013.

The state owes about 150 percent of the gross domestic product, much of it to local banks, whose own business is partly based on remittances paid into them by Lebanese working abroad, in turn partly drawn by attractive interest rates.

Difficulties 

Khoury Home is a major business in Lebanon. Its shops, a familiar sight across the country, sell home appliances. 

Romen Mathieu said he had told his staff every year since becoming the company’s chairman in 2013 that the coming year would be more difficult than the last.

“Now we reached 2018, and this year is disastrous, and I think we still didn’t see the tough part of this year,” he said. “If I have to say it in 2019, there won’t be anyone listening to me any more.”

Compounding Mathieu’s difficulties, the government last year scaled back a series of incentives to banks for home loans, which contributed to a dip in the housing market. As fewer people bought houses, fewer wanted new fridges or televisions.

“Let’s not make fools of each other. There is no money in the market and we need to adapt to this situation and get used to it,” said Mathieu.

Not all businesses are suffering. Supermarket chain Spinneys has increased sales volumes because many of its goods are imported from Europe, and currency fluctuation has brought prices down, said chief executive Michael Wright.

“We are selling more, our volumes are going up. But that’s balanced by a price drop,” he said.Since May’s election the rival political parties have squabbled over forming a new national unity government — one that contains enough of the major parties to ensure political backing across the country.

Without a new government, Lebanon cannot institute the fiscal reforms needed to get its debt under control or unlock billions of dollars in pledged foreign investment in infrastructure to get the economy moving.

Everybody Reuters interviewed said it was critical for Lebanon to form a government soon.

Meanwhile, interest rates have risen as the authorities increasingly try to attract higher levels of the bank deposits on which government debt relies.

Those high rates are hurting too.

Jessy Kojababian has been engaged for two years. Her wedding was fixed for September. But as interest rates rose, and the government incentives for banks to offer housing loans were scaled back, she and her fiance could no longer afford to buy a house.

They have now cancelled the wedding.

“We were already booking everything for the wedding. The roses, the restaurant, the church. Everything. We paid a deposit of $6,000, so how can we get it back?” she said.
…

U.S. and Mexican trade ministers were set to resume talks over the North American Free Trade Agreement in Washington on Tuesday in a final push for a deal on autos that would open the door for Canada to return to negotiations this week.

If Mexican Economy Minister Ildefonso Guajardo and U.S. Trade Representative Robert Lighthizer can resolve remaining bilateral issues, “the plan is to try to incorporate Canada into the discussions,” possibly as early as Thursday, said a Mexican source close to the talks.

Though NAFTA is a trilateral trade deal, “there are issues that are really bilateral issues between Mexico and the United States,” said the source. In rules of origin for autos “Mexico clearly had to look for flexibilities because Canada was relatively comfortable with the original [U.S.] proposal.”

In the meantime, Canada has remained sidelined from the talks.

“We are making progress in the chapters that will modernize our agreement, and Mexico will continue working constructively on all fronts,” Mexico’s chief NAFTA negotiator Kenneth Smith said Tuesday on Twitter.

The United States and Mexico are close to a deal to increase North American automotive content thresholds, with substantial requirements for content produced in high-wage areas, namely the United States and Canada, said the source.

The deal is expected to lift the requirement for North American content in regionally made vehicles to at least 70 percent from the current 62.5 percent. It will also likely require that some 40 percent of the value come from high-wage locations paying at least $16 an hour, meaning the United States and Canada.

Mexican and U.S. negotiators were also close to agreeing on a 5-year phase-in period for implementing the changes in the auto industry, the source said.

Opposition

Still, foreign-brand automakers with U.S. plants oppose the move to raise the amount of local content in North American-made vehicles and could throw a monkey wrench in negotiators’ plans to secure a bilateral deal this week.

The carmakers, including Toyota, Volkswagen AG and Hyundai, sent a letter to top trade-focused members of U.S. Congress expressing their concern.

The letter could spark resistance to a revamped NAFTA from lawmakers in southern states, where foreign manufacturers have built auto plants.

U.S. President Donald Trump, who launched the renegotiation of the 1994 pact a year ago, has said he wants the reworked deal to bring manufacturing jobs back to the United States, particularly in autos and auto parts.

Other key unresolved issues include the dispute settlement mechanism and a U.S. demand for a “sunset” clause that forces a renegotiation every five years, which critics argue would make long-term investment decisions more difficult.

Guajardo last month expressed hope that there could be a preliminary NAFTA deal by the end of August, but he has since appeared to pull back from that position.
…

Large real-estate developments in India should be subject to the same scrutiny as industrial projects given their environmental impact, according to city planners and campaigners.

A proposal to redevelop parts of New Delhi that required the felling of thousands of trees recently provoked fierce protests, court petitions and night patrols to guard the trees.

While projects measuring more than 20,000 square meters require impact assessments, exemptions are often made and public hearings are never held, analysts said.

“Large construction projects have a huge environmental and social footprint, and deserve scrutiny for their impact on energy and water use, and urban infrastructure,” said Kanchi Kohli at New Delhi think tank Centre for Policy Research.

“Cities are already dealing with severe air pollution, water shortages and traffic congestion. Residents deserve a say in these projects,” she told Reuters.

Worldwide, cities occupy 2 percent of the land mass, but account for more than 70 percent of carbon dioxide emissions.

India is forecast to overtake China by 2024 as the world’s most populous country, with tens of millions of citizens cramming into already crowded cities.

As developers rush to cash in, unplanned urban sprawl is leading to congestion, flooding and more slums, analysts say.

Authorities have introduced stricter environmental laws for businesses in recent years, but analysts say they are poorly implemented in a rush to lure investors.

But it is not all one way.

Chirayu Bhatt, an urban planner at CEPT University in Ahmedabad, said large developments — be they residential or commercial — can be good for future generations even if today’s city dwellers often pay the price.

“While the costs of a project are borne by current residents, the benefits accrue to future residents — migrants, our children and grandchildren. We must recognize that,” he said.

In New Delhi, the National Green Tribunal — which decides on environmental matters — last week ordered that no trees be felled while the redevelopment case is examined.

Developers say subjecting real estate projects to the same scrutiny as large industrial developments is “not justified.”

“There are already stringent environmental clearances that are required, and measures such as rain water harvesting and sewage treatment plants have been made mandatory,” said Anuj Puri, chairman of Anarock Property Consultants.

But excluding citizens is not right, Kohli said.

“Citizens must be a part of the review process; more so now, because the drawing of ground water, the discharge of effluents, the use of public spaces affects us all.”
…

Washington is prepared to impose more economic pain on Russia if it does not change its behavior, Trump administration officials said on Tuesday, as U.S. lawmakers pushed for stronger measures to counteract “malign” Russian activities.

“Though Russia’s malign activities continue, we believe its adventurism undoubtedly has been checked by the knowledge that we can bring much more economic pain to bear using our powerful range of authorities — and that we will not hesitate to do so if its conduct does not demonstrably and significantly change,” Acting Deputy Treasury Secretary Sigal Mandelker told the Senate Banking Committee.

U.S. President Donald Trump has repeatedly said he would like better ties with Moscow, but although he met Russian President Vladimir Putin last month, relations between the two countries have come under further strain.

Members of Congress, where both chambers are controlled by Trump’ fellow Republicans, have called for more action — including threatening sanctions “from hell” — to punish Russia for actions including its annexation of Crimea, involvement in Syria’s civil war and cyberattacks seeking to influence U.S. elections.

Two U.S. Senate committees held simultaneous hearings on Russia on Tuesday, where some lawmakers chastised administration officials for failing to sufficiently answer their questions, and for sending conflicting messages and doing too little to change Russian behavior.

Both Republicans and Democrats in Congress have criticized Trump, particularly after his summit with Putin in Helsinki last month, for failing to stand up to Moscow on issues including what they see as Trump’s failure to hold the Russian president accountable for Moscow’s meddling in the 2016 U.S. election.

Microsoft Corp said late Monday that hackers linked to the Kremlin sought to launch cyberattacks on the Senate and conservative American think tanks, warning of broader attacks ahead of congressional elections in November. 

The Kremlin rejected the Microsoft allegations and said there was no evidence to support them. Moscow has repeatedly denied attempting to influence U.S. elections, including the 2016 presidential vote that brought Trump into office. U.S. intelligence agencies have concluded that Russia interfered in the 2016 campaign, seeking to tilt the vote in Trump’s favor.

Cost to Russia

U.S. administration officials told the Senate hearings that existing sanctions were having an effect on Russia’s economy, despite continuing behavior that concerns Washington.

Separately, the Treasury Department imposed new sanctions on two Russians, one Russian company and one Slovakian firm over actions it said helped another Russian company avoid sanctions over cyber-related activities.

The United States also announced sanctions on Russian shipping over the transfer of refined petroleum products to North Korea in violation of U.N. restrictions.

Assistant Secretary of State Wess Mitchell told the Foreign Relations Committee that concern about sanctions has cost Russia $8 to $10 billion in arms deals. Without the American measures, Moscow’s behavior would be further “off the charts,” Mitchell said.

Mitchell also said foreign direct investment in Russia has fallen by 80 percent since 2013, “which is a pretty stunning number.”

“I think this administration has been clear that we are prepared to take additional steps,” Mitchell said. “There is an escalatory ladder to sanctions. We are aware of what additional steps would be needed to make an even bigger point.”

Marshall Billingslea, assistant Treasury secretary for terrorism financing, told the Foreign Relations panel it was important that European allies, particularly in eastern Europe, do more to combat money laundering.

“There is an enormous amount of money that is still being exfiltrated from Russia by both organized crime and cronies surrounding Putin,” Billingslea said.

In an interview with Reuters on Monday, Trump said he would only consider lifting sanctions against Russia if it were to do something positive for the United States, for instance in Syria or in Ukraine.
…

South Africa’s state-owned Land Bank said on Monday a plan to allow the state to seize land without compensation could trigger defaults that could cost the government 41 billion rand ($2.8 billion) if the bank’s rights as a creditor are not protected.

Land Bank is a specialist bank providing financial services to the commercial farming sector and other agricultural businesses.

President Cyril Ramaphosa announced on Aug. 1 that the ruling African National Congress (ANC) is forging ahead with plans to change the constitution to allow the expropriation of land without compensation, as whites still own most of South Africa’s land more than two decades after the end of apartheid.

Land Bank Chairman Arthur Moloto said in the company’s 2018 annual report that the bank has approximately 9 billion rand of debt, which includes a standard market clause on “expropriation” as an event of default.

Moloto said if expropriation without compensation were to materialize without protection of the bank’s rights as a creditor, it would be required to repay 9 billion rand immediately.

“A cross default clause would be triggered should we fail to pay when these debts fall due because of inadequate liquidity or lack of alternative sources of funding,” Moloto said.

“This would make our entire 41 billion rand funding portfolio due and payable immediately, which we would not be able to settle. Consequently, government intervention would be required to settle our lenders.”

Moloto said the bank was generally funded by the local debt and capital markets, and more recently international multilateral institutions such as the African Development Bank and World Bank.

“A poorly executed expropriation without compensation could result in the main sources of funding drying up as investors might not be willing to continue funding Land Bank in particular, or agriculture in general,” he said.

Some investors are concerned that the ANC’s reforms will result in white farmers being stripped of land to the detriment of the economy, as happened in Zimbabwe, although Ramaphosa has repeatedly said any changes will not compromise food security or economic growth.

Since the end of apartheid in 1994, the ANC has followed a “willing-seller, willing-buyer” model under which the government buys white-owned farms for redistribution to blacks. Progress has been slow.

($1 = 14.6363 rand)
…

The bull market in U.S. stocks is about to become the longest in history.

 

If stocks don’t drop significantly by the close of trading Wednesday, the bull market that began in March 2009 will have lasted nine years, five months and 13 days, a record that few would have predicted when the market struggled to find its footing after a 50 percent plunge during the financial crisis.

 

The long rally has added trillions of dollars to household wealth, helping the economy, and stands as a testament to the ability of large U.S. companies to squeeze out profits in tough times and confidence among investors as they shrugged off repeated crises and kept buying.

 

“There was no manic trading, there was no panic buying or selling,” said Jack Ablin, chief investment officer of Cresset Wealth Advisors. “It’s been pretty steady.”

 

The question now is when the rally will end. The Federal Reserve is undoing many of the stimulative measures that supported the market, including keeping interest rates near zero. There are also mounting threats to global trade that have unsettled investors.

 

For such an enduring bull market, it shares little of the hallmarks of prior rallies.

 

Unlike earlier rallies, individual investors have largely sat out after getting burned by two crashes in less than a decade. Trading has been lackluster, with few shares exchanging hands each day. Private companies have shown little enthusiasm, too, with fewer selling stock in initial public offerings than in previous bull runs.

 

Yet this bull market has been remarkably resilient. After several blows that might have killed off a less robust rally — fears of a eurozone collapse, plunging oil prices, a U.S. credit downgrade, President Donald Trump’s trade fights — investors soon returned to buying, avoiding a 20 percent drop in stocks that by common definition marks the end of bull markets.

 

“I don’t think anyone could have predicted the length and strength of this bull market,” said David Lebovitz, a global market strategist at JPMorgan Asset Management.

One of the market’s biggest winners in recent years, Facebook, wasn’t even publicly traded when the bull market began. Facebook’s huge run-up of more than 350 percent since going public in 2012, Apple’s steady march to $1 trillion in value, and huge gains by other tech companies like Netflix have helped push the broader market higher.

 

Since the rally officially began on March 9, 2009, the Standard and Poor’s 500 has risen 321 percent. In the 1990s bull market, the current record holder for the longest, stocks rose 417 percent.

 

From the start, the Federal Reserve was a big force pushing markets higher. It slashed short-term borrowing rates to zero, then began buying trillions of dollars of bonds to push longer-term rates down, too. Investors frustrated with tiny interest payments on bonds felt they had no alternative but to pile into stocks.

 

Companies moved fast to adapt to the post-financial-crisis world of sluggish U.S. growth.

 

They slashed costs and kept wage growth low, squeezing profits out of barely growing sales. They bought back huge amounts of their own stock and expanded their sales overseas, particularly to China’s booming economy. Profit margins reached record levels, as wages sunk to record lows as measured against the size of economy.

 

“What people missed was how quickly U.S. corporations were restructuring and right-sizing themselves to regain profitability,” said money manager James Abate, who publicly urged investors to start buying stocks in early 2009 when most were dumping them. “It was really a catalyst for turning things around.”

 

China’s surging growth helped the market, too. Its boom drove up the price of oil and other commodities, helping to lift stocks of U.S. natural resource companies — for a while at least.

 

Then came a downgrade of the U.S. credit rating in August 2011, which caused stocks to swoon, and 2013 brought another fall as Fed Chairman Ben Bernanke talked of easing off stimulus policies. In the second half 2014, oil plunged 50 percent, which rattled investors again.

 

Profits started falling the next year, but investors kept their nerve and didn’t sell and waited for profits to rise again. In 2016, stocks gained 10 percent then jumped 19 percent the next year. Since the start of 2018, they have risen 6.6 percent, boosted by surging profits following the massive cut in corporate tax rates earlier this year.

 

Several dangers threaten the rally.

 

The Fed has hiked its benchmark lending rate twice since January, and is expected raise it twice more by the end of the year.

 

Stocks could suffer as higher interest on bonds convinces investors to start shifting money into this safer alternative. Higher rates also increase costs for business and make expanding operations more difficult.

More worrisome, rising rates can trigger recessions, which often kill bull markets. Three of the past five recessions were preceded by rate hikes by the Federal Reserve.

 

With stocks richly priced, there isn’t much room for things to go wrong.

 

The prices investors are paying per share for companies are 2.2 times revenue per share, near historic peaks. And prices compared to long-term earnings are much higher than in 2007 before the market crashed.

 

For all its longevity and gains, the final verdict on the bull market won’t be known until it ends.

 

The financial crisis of 2008 that ended the last bull market laid bare just how much debt and risk-taking had fueled gains in the previous seven years. The dot-com bust that ended the 90s rally showed how reckless investors had been.

 

This time, many of the unanswered questions concern the Fed’s monetary stimulus.

 

How much did it help boost stocks, and thus the broader economy? Will the gains it helped manufacture prove ephemeral? What are the long-term costs of its unprecedented economic rescue effort as it faces the tricky task of unwinding its stimulus program?

 

Another question is the wisdom of so many buybacks. Companies have spent trillions in recent years repurchasing their own stock, which has helped lift prices in the short term but does nothing to expand operations, train workers and generally improve their business. Many of the purchases were made with borrowed money, adding to already sizable debts.

 

Abate, the money manager who urged people to buy early in 2009, says stock prices are too high given the threat to profits from higher borrowing costs as rates climb, higher input costs from Trump’s tariffs and, possibly, bigger raises for workers in the future.

 

“Profits are peaking and valuations are extreme,” said Abate, chief investment officer of Centre Asset Management.

 

His prediction is that stocks will plunge by the end of the year and a bear market will begin.

 

Others are more optimistic.

 

JPMorgan’s Lebovitz takes comfort in the fact investors have been skeptical of the rally all along, which he says has allowed none of the excesses of prior bull markets to build up.

 

“This is a bull market that people love to hate,” he said. “Blind exuberance hasn’t been a characteristic.”

 

Asked how much longer the rally will last, he said: “At least another year, but two might be a bit of stretch.”
…