YCLOAK

A company’s value is often tied to the message it portrays to customers. But what happens when other companies try to take advantage of your brand?

Take the Philadelphia Eagles, for instance. The American football team wants to exclusively own the phrase: “Philly Special.” That was the trick play that helped them win the Super Bowl, and the Philly Special is, by far, the most talked-about play of the Super Bowl.

Watch the play here:

It is a gutsy move. In football-speak, it is a direct-snap reverse pass to quarterback Nick Foles, who usually throws the ball. But the coach gives the OK, and Foles tells his teammates the plan in the huddle.

The team lines up, Foles runs up the field. Tight end Trey Burton throws the football, and Foles catches it in the end zone for a touchdown.

“Play of the century”

Now, the phrase, ‘Philly Special,’ has turned into a city-wide phenomena. Bakeries are making Philly Special pastries. Some people are getting the words or even a sketch of the play tattooed on themselves.

And stores, like Ashley Peel’s Philadelphia Independents, cannot keep enough Philly Special T-shirts in stock.

“It’s the ‘Nick Foles play of the century,’ as I’m dubbing it from the Super Bowl,” Peel said. “It has a layout of the [specifics] from the play. We just got it in and we’re almost already sold out of it. It’s definitely moving well.”

It’s moving well, even as several entrepreneurs are competing to be awarded a trademark — in other words, exclusive rights — to the phrase.  Many of the businesses filed their own trademark applications ahead of the Eagles.

“I do have a client that’s applied for the mark, ‘Philly Special,’” said Philadelphia-based lawyer Nancy Rubner Frandsen.

She filed a trademark application on behalf of a company called Whalehead Associates. She can’t comment too much about the application without violating attorney-client privilege, but admits the phrase goes beyond a football play.

“Obviously it brings everyone together, it was our Super Bowl championship that brought it all about,” she said. “It’s got the term ‘Philly’ in it — from the trademark standpoint, it would be deemed to be descriptive. But then you combine it with the term, ‘Special,’ and it could make a very unique trademark.”

Some of the other businesses that want to trademark the term include a sandwich maker, a gift shop manufacturer … and the Philadelphia Eagles. The team was actually the last to file a trademark application. Even so, experts say, it’s likely the rights will be awarded to the Eagles.

Newsjacking

“This particular term, ideally, should belong to the Eagles,” said Dr. Jay Sinha, an associate marketing professor at Temple University in Philadelphia.

He added the phenomenon around ‘Philly Special’ is not the first time there’s been a rush to trademark a term after a big event, like the Super Bowl. And it’s even got a name: ‘newsjacking.’

“The term, newsjacking, means where a company rides or takes advantage of some event happening in current affairs and uses it for their own commercial purposes, especially for marketing in branding,” Sinha said.

For example, think of famous movie lines, like: ‘May the force be with you,’ from “Stars Wars.” When sequels are released, other companies often try to take advantage of the film’s popularity for marketing purposes, like an ice cream shop that posts a sign reading, ‘May the swirl be with you.’

“If there’s anything which is relevant in popular culture as well as the news, companies like to ride on it,” Sinah said.

In this case, it likely will be several months before the U.S. Patent Office announces who will be awarded the rights to the now famous phrase. By then, though, another Super Bowl will be approaching and the excitement of the Philly Special could be fading.
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Dick’s Sporting Goods, one of the largest sports retailers in the U.S., will immediately end the sale of assault-style rifles in its stores and stop selling guns of any type to anyone under age 21.

The company made the announcement Wednesday, precisely two weeks after a school shooting in Parkland, Florida.

“We deeply believe that this country’s most precious gift is our children. They are our future. We must keep them safe. Beginning today, DICK’S Sporting Goods is committed to the following: http://d.sg/RTC,” the company said in a post on Twitter.

“We need to make a statement,” chairman and CEO Edward Stack said in an interview Wednesday on CNN. “We don’t want to be part of this story any longer.”

Stack said the Florida shooting suspect, 19-year-old Nikolas Cruz, legally purchased an AR-15 assault rifle from Dick’s in November, but it was not the one used to kill 14 students and 3 staff members at Marjory Stoneman Douglas High School.

Stack, who said he remains a strong advocate of the U.S. Constitution’s Second Amendment, asserted the nation’s gun laws do not prevent dangerous people from buying guns and that lawmakers must act to strengthen those laws.

The executive called on elected officials to ban assault-style firearms, high-capacity magazines and “bump stocks,” which are devices that enable semi-automatic rifles to fire hundreds of rounds per minute. Stack also proposed raising the minimum age to buy guns to 21.

He said Dick’s, which also stopped selling high-capacity magazines, is prepared for any backlash but will not change its policies on gun sales. “We’re comfortable with our decision,” he said, adding that Dick’s will continue to sell an array of hunting and sport firearms.

The announcement is one of the strongest positions taken by a major U.S. corporation since the massacre, which has reignited the national gun debate and sparked a wave of gun-control rallies across the country.

More than a dozen U.S. corporations have ended partnerships with the National Rifle Association since the mass shooting, including Delta Airlines and United Continental Holdings, Inc., which owns United Airlines.

NRA ties

Other companies that have cut ties with the NRA include Avis, Best Western International, Enterprise Rent-a-Car, Metlife, the Hertz Corporation, and Wyndham Worldwide Corporation.

The NRA is one of the country’s most powerful lobbying groups for gun rights and claims 5 million members. In the 2016 elections, the NRA gave $54 million in political donations, much of that during the presidential race.

It is not unusual for some members of Congress to have individually received hundreds of thousands of dollars — even millions — from the NRA. While some Democrats are also recipients of NRA financial support, the top benefactors are currently members of the Republican Party.

NRA reaction

Last week, NRA Executive Vice President Wayne LaPierre told the Conservative Political Action Conference outside Washington that those advocating for stricter gun control were exploiting the Florida shooting.

Gun control advocates have noted that many teenagers in America can legally purchase assault rifles before they’re eligible to vote or drink alcohol. Twenty-eight of the 50 states have no minimum age requirement for owning a rifle.

Another giant U.S. retail seller of guns, Walmart, Inc., stopped selling AR-15 rifles and other semi-automatic weapons in 2015.
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Growth in China’s manufacturing sector in February cooled to the weakest in more than 11/2 years, raising concerns of a sharper-than-expected slowdown in the world’s second biggest economy this year as regulators tighten the screws on financial risks.

The weakness was driven by disruption to business activity by the Lunar New Year holidays and curbs to factory output from tougher pollution rules, but there are worries of a bigger loss in momentum.

“Although a recovery looks possible in the short-run as the anti-pollution campaign winds down, the risk is still that the economy fares worse this year than is generally expected,” said Julian Evans-Pritchard, senior China Economist at Capital Economics.

Index raises concern

The official Purchasing Managers’ Index (PMI) released Wednesday fell to 50.3 in February, from 51.3 in January. But it remained above the 50-point mark that separates growth from contraction on a monthly basis, the 19th straight month of expansion.

The drop may raise some concerns for China’s leaders as they prepare for the start of the National People’s Congress (NPC) next week where Beijing will unveil its economic targets for this year.

Globally, solid demand has kept many export-reliant economies humming over the past year or so, though a move toward tighter policy in advanced nations could cut into growth this year.

The latest PMI’s subindex of new export orders fell to 49.0, the lowest in at least a year, as the yuan currency appreciated against the dollar.

Chen Zhongtao, an official with China Logistics Information Center (CLIC), said that “13.6 percent of firms reported concerns over the appreciating Chinese currency and greater currency fluctuations,” the highest number of companies to do so since March 2017.

CLIC said in a statement that export sluggishness is expected to continue this year as steel firms are more reluctant to ship goods in the face of rising global protectionism.

Lunar New Year effect

The index for output stood at 50.7, down from 53.5 in January as the Lunar New Year holidays disrupted factory activities, the statistics bureau said. Total new orders also expanded much slower in February.

Raw material input prices fell for the second consecutive month to the lowest since July 2017, indicating cost pressure from price rises on manufacturing firms is easing.

“I think besides the Lunar New Year factor, the stricter pollution measures in the north before the National People’s Congress might have weighed on activities as well,” said Betty Wang, Senior China Economist at ANZ.

Wang expects momentum to pick up in the months ahead as the pollution crackdown tapers off.

Still, there are signs that China may continue with the pollution crackdown, with top steelmaking city of Tangshan proposing new restrictions on production once the current curbs expire in March.

The weeklong Lunar New Year holidays, which fell in February this year but January in 2017, tend to distort data early in the year.

Many factories and offices start to scale back operations ahead of time before shutting for the entire holiday or longer, while some manufacturers front-load shipments or replenish inventories ahead of the break.

Moderating growth in 2018

Boosted by government infrastructure spending, a resilient property market and unexpected strength in exports, China’s manufacturing and industrial firms helped the economy post better-than-expected growth of 6.9 percent in 2017.

A sister survey showed activity in China’s service sector slowed to lowest since October last year in February. The official non-manufacturing Purchasing Managers’ Index (PMI) fell to 54.4 from 55.3 in January.

The services sector accounts for more than half of China’s economy, with rising wages giving Chinese consumers more spending clout.

Chinese policymakers are counting on growth in services and consumption to rebalance their economic growth model from its heavy reliance on investment and exports.

Economists polled by Reuters expected China’s economic growth will moderate to around 6.5 percent this year as the property market cools and as authorities press ahead with a clamp down on riskier financial activity that is driving up borrowing costs.

Analysts and financial markets are widely expecting the government to announce a 2018 growth target of around 6.5 percent at the NPC, the same as last year.

A composite PMI covering both the manufacturing and services activity stood at 52.9 in February, down from January’s reading of 54.6.

“Looking ahead, we think growth is likely to fall short of expectations this year, with many underestimating the headwinds from slower credit growth and a cooling property sector,” Capital Economics’ Evans-Pritchard said.
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The U.S. Commerce Department on Tuesday recommended raising import duties on Chinese-made aluminum foil it said is being sold at unfairly low prices due to improper subsidies to producers.

The ruling was praised by the Aluminum Association, a trade group that pressed the case and said cheap imports were threatening thousands of jobs.

Beijing faces complaints from the United States, European Union and other trading partners that a flood of Chinese aluminum, steel and other exports are being sold at unfairly low prices, threatening jobs abroad.

The Commerce Department said it concluded Chinese exporters were selling aluminum foil at 49 to 106 percent below fair value and were receiving unfair subsidies of 17 to 81 percent of the goods’ value.

Importers will have to post cash bonds to pay potentially higher duties while the recommendation goes to the U.S. International Trade Commission for a final decision, said a Commerce statement.

China’s Ministry of Commerce complained Washington was harming Chinese exporters and said Beijing was ready to take unspecified “necessary measures” to defend its interests.

Beijing has accused Trump’s government of disrupting global trade regulation by taking action under U.S. law instead of through the World Trade Organization.

“China will take necessary measures to defend its interests in response to the wrong practice of the United States,” said a Commerce Ministry official, Wang Hejun, in a statement.

The Trump administration earlier raised duties on Chinese-made washing machines, solar modules and some aluminum and steel products to offset what it said were improper subsidies.

The American Chamber of Commerce in China says Chinese officials have warned of possible unspecified retaliation if Washington took excessive steps in trade disputes.
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The chairman of the U.S. House Transportation and Infrastructure Committee said Tuesday that there was not enough support in Congress to move forward with a plan backed by President Donald Trump to privatize the air traffic control system.

Republican Representative Bill Shuster of Pennsylvania said in a statement that the “air traffic control reform provisions did not reach the obvious level of support needed to pass Congress.”

But Shuster vowed to work with the Senate to move forward with legislation to reauthorize the Federal Aviation Administration, which expires at the end of March. Without authorization, the FAA would not be able to collect aviation taxes, and many of its employees would have to be laid off.

In June, Trump unveiled a plan to privatize air traffic control, saying it would modernize the system and lower flying costs.

Democrats contended it would hand control of a key asset to special interests and big airlines, and some Republicans opposed it.

On Tuesday, the Aircraft Owners and Pilots Association, nearly 250 general aviation organizations, state and local aviation officials, labor unions, consumer groups and airports said they had sent a letter to congressional leaders vowing to oppose any effort to privatize air traffic control.

United Airlines, Hawaiian Airlines, American Airlines and Southwest Airlines, all represented by the Airlines for America lobbying group, backed the plan.

Under the proposal, air traffic control would be spun off from the FAA and put under the oversight of a nonprofit corporation.

The FAA spends nearly $10 billion a year on air traffic control funded largely through passenger user fees, and has spent more than $7.5 billion on next-generation air traffic control reforms in recent years.

Trump has said current air traffic reform efforts have failed and were a “total waste of money.”

Opponents said the U.S. system is so large that privatization would not save money, would drive up ticket costs and could create a national security risk. Opponents also said technology upgrades would be sidetracked while the private entity was set up, potentially adding years to awarding contracts.
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Three of President Donald Trump’s senior economic aides are expected to meet this week with a top Chinese economic official to discuss trade disputes between the United States and China.

White House spokeswoman Sarah Huckabee Sanders told Reuters that Treasury Secretary Steven Mnuchin, U.S. Trade Representative Robert Lighthizer and Trump’s economic adviser, Gary Cohn, are expected to meet Chinese economic adviser Liu He in Washington.

The talks are likely to cover a range of differences including intellectual property and steel.

Trump has long called for a more balanced trade relationship with China and threatened to impose a big “fine” against China to protect American intellectual property. U.S. officials said Trump has been discussing imposing a global tariff on imports of steel from China, the world’s largest steel producer, and other countries.

The talks with Liu may help determine the trajectory of the U.S.-Chinese trade relationship, which Trump believes is heavily tilted in favor of China.

A senior U.S. official said there was skepticism on the U.S. side that a trade breakthrough could be achieved any time soon.

“We’re trying to treat this with an open mind. But the Chinese don’t really want to make a deal. They like the status quo,” the official said.

There was no plan for Trump himself to meet Liu, but officials did not rule it out if progress was being made.

Liu, a Harvard-trained economist and trusted confidant of Chinese President Xi Jinping, has emerged as the front-runner to be the next governor of China’s central bank, according to sources with knowledge of the situation. Liu is the top adviser to Xi on economic policy and is also expected to become vice premier overseeing the Chinese economy.

Steel

A source close to the White House said Trump had expressed interest in imposing a tariff on steel imports of at least 24 percent. The White House said no final decision had been made.

The Commerce Department on Feb. 16 recommended that Trump impose stiff curbs on steel imports from China and other countries and offered the president several options ranging from global and country-specific tariffs to broad import quotas.

A blanket tariff on steel would cover every steel and aluminum product entering the American market from China.

China has expressed concerns over excessive protectionism in the U.S. steel sector and urged restraint. It has also said it will oppose any “unfair and unreasonable” trade measures by countries such as the United States.
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The head of the World Trade Organization diplomatically took issue with U.S. President Donald Trump’s description of the WTO as a catastrophe on Tuesday, pointing out that the United States actually had a better deal than other countries in the club.

“World Trade Organization — a catastrophe,” Trump said on Monday at a meeting with U.S. governors, according to a White House transcript.

“The World Trade Organization makes it almost impossible for us to do good business. We lose the cases, we don’t have the judges. We have a minority of judges. It’s almost as bad as the 9th Circuit,” Trump said.

Asked about Trump’s remarks, WTO Director General Roberto Azevedo, a former Brazilian trade negotiator, told reporters in Sofia that it was not news that the United States had concerns about the work of the WTO. 

“Just one clarification,” he said.

“No member has more than one judge at the WTO. The members of the Appellate Body, they are seven, and they come from different regions, so no country has a majority there. The United States, in fact, has always had one of the Appellate Body members with U.S. nationality, which is very unusual, but it is the situation.”

Since last year, the United States has been vetoing the appointment of new judges to the WTO’s Appellate Body, in effect the supreme court of world trade.

The lack of judges has slowed down the handling of trade disputes and could halt the appeals process altogether after the next judge retires in September.

Trump has said he thinks the United States does not get a fair deal, but trade negotiators from other countries say he has not yet set any conditions for resuming judicial appointments, making it impossible to meet U.S. demands.

“This is a very serious situation that we are trying to discuss with members, to see how we can overcome this,” Azevedo said.

Former WTO chief Pascal Lamy said last week that Trump’s view of trade was “medieval,” and the U.S. win/lose rate in WTO disputes was similar to that of other countries.

“The question is whether the U.S. problem is trying to fix a number of issues or whether the U.S. strategy is trying to wreck the system,” Lamy said.
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The U.S. negotiator for regional content requirements in autos flew back to Washington from a NAFTA round in Mexico on Monday to talk with car companies, officials said, in a development some hoped would lead to progress on the contentious issue.

Three Mexican, Canadian and U.S. trade officials said the negotiator, Jason Bernstein, had been called back, with two of the officials saying he was there to meet U.S. automakers. Another said he would also meet U.S. Trade Representative Robert Lighthizer, and was due back later in the week.

The change in plans disrupted a schedule for talks early in the week about a proposal by the administration of U.S.

President Donald Trump to make automakers source more from the region and the United States, a major sticking point the industry warns would disrupt supply chains and raise costs.

Mexican negotiators have said the auto content issue must be resolved in large part between the White House and the Big Three Detroit automakers that dominate the industry.

“What I’ve heard is that he’s back in Washington because apparently they are meeting with the Detroit three. If that’s the case, that’s really positive,” said Flavio Volpe, president of the Toronto-based Automotive Parts Manufacturers Association.

“The timing is awkward. But if USTR is finally talking to those companies it’s something that we’ve been asking for for months,” Volpe said, referring to the United States Trade Representative (USTR).

U.S. trade officials and a Mexican auto industry official in Mexico City said they also believed the fact Bernstein had been called to Washington was a positive development for the talks to renegotiate the 1994 North American Free Trade Agreement.

A seventh round of talks began on Sunday with the three sides aiming to finish reworking less contentious chapters while also meeting to discuss the trickiest subjects blocking progress to rework the pact that underpins $1.2 trillion in annual trade.

“We’re hopeful to make quite a bit if progress this round. So we’ll see how it goes,” said Steve Verheul, Canada’s chief

negotiator as he arrived at the negotiations on Monday.

Two auto lobbyists in the United States, who spoke on background, said they did not believe there was a joint meeting scheduled with the Detroit auto companies but individual consultations might happen.

Mexico’s government is concerned that a lack of progress on the automotive content issue could hurt the wider renegotiation, a former official still familiar with the process said.

Seeking to break the deadlock, the Mexican government has said it would put forward a proposal on rules of origin during the current round of talks, but a Mexican official said on Monday no new ideas had been presented so far.

The renegotiation began last year at the behest of Trump who said the agreement must be overhauled to better favor American interests or Washington would quit the accord. The latest round has been clouded by renewed tension between Mexico and Trump over his planned border wall.

Mexico has consistently rejected paying for the wall, and its government had hoped to arrange a meeting between President Enrique Pena Nieto and Trump in the next few weeks. However, a senior U.S. official said over the weekend that plan had been postponed after a phone call between the two soured over the wall earlier this month.

Mexico’s government has not commented officially on the derailment of the Trump-Pena Nieto meeting, but Juan Pablo 

Castanon, head of the powerful CCE business lobby, was less reticent as he took stock of the unfolding NAFTA negotiations in Mexico City.

“Obviously, the cancellation of the Mexican president’s trip to the United States is an important element in the negotiations: it’s politics that can help us resolve the technical issues we’re moving forward on,” Castanon said.

Castanon said several chapters are close to being finished, including measures on e-commerce, telecommunications and sanitary standards for agricultural products. Others close to the talks believe the energy chapter could also be concluded.

Officials do not anticipate major breakthroughs on other intractable issues such as agriculture and dispute resolution mechanisms in the Mexico City round, due to run until March 5.

There was little sign of compromise on any issues early on, with a senior Canadian agriculture official pushing back against U.S. demands to dismantle Canadian protections for the dairy and poultry sectors known as supply management.

“When it comes to supply management, we believe there can be no concession,” said Jeff Leal, the minister of agriculture, food and rural affairs for the province of Ontario. 
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Comcast Corp, the biggest cable operator in the United States, offered on Tuesday to pay $31 billion to buy Sky, challenging Rupert Murdoch’s Fox and Bob Iger’s Walt Disney for the European pay-TV jewel.

Comcast, a $184 billion media giant which owns NBC and Universal Pictures, said it was offering 12.50 pounds per share, significantly higher than the 10.75 pounds per share agreed by Fox. Shares in Sky soared 18 percent.

Present in 23 million homes across Europe and known for its technological innovation, Britain’s Sky has already agreed to be sold to Murdoch’s 21st Century Fox but the takeover has been delayed by concerns over the media tycoon’s influence in Britain.

That has complicated a separate $52 billion deal by Disney to buy Fox assets including Sky.

“Sky and Comcast are a perfect fit: we are both leaders in creating and distributing content,” Comcast Chief Executive Officer Brian L. Roberts, 58, said. “We think Sky is an outstanding company.”

The latest round of major deals indicates the pressures being felt by traditional cable television networks which have been losing customers to streaming services like Netflix Inc and Amazon.com Inc..

Media rivalries

Shares in Sky rose to 13.08 pounds as investors hoped the ensuing bid battle would push both sides to offer a higher price.

“The initial share price reaction suggests that this story has further to run, with Sky’s price leaping above the level of the already increased Comcast offer,” said Richard Hunter, Head of Markets at Interactive Investor.

The proposed offer pits Comcast’s Roberts against Murdoch, the 86-year-old tycoon who helped to launch Sky in Britain, and who has been edging towards finally getting his hands on Sky after he first bid for the company eight years ago.

It also pits Roberts against Disney’s Iger, a longtime rival after Comcast tried to buy Disney for $54 billion in 2004.

Comcast said it had not yet engaged with Sky over the proposal and nearly 90 minutes after the statement came out, Sky was yet to respond.

“We would like to own the whole of Sky and we will be looking to acquire over 50 percent of the Sky shares,” Comcast CEO Roberts said.

“Innovation is at the heart of what we do: by combining the two companies we create significant opportunities for growth,” he said.

All eyes on Sky

Sky’s chairman is Murdoch’s son James, who is the chief executive of 21st Century Fox, so Comcast will have to gain the support of the independent shareholders for its better offer if it does not make a hostile bid.

Fox agreed to buy the 61 percent of Sky it did not already own in December 2016 but the takeover has been repeatedly held up by regulatory concerns that Murdoch controls too much media in Britain.

Some Sky shareholders have also started to complain that the offer was too low. In December, hedge fund manager Crispin Odey argued that Sky was being sold too cheaply.

Britain’s competition regulator said in January that Murdoch’s planned takeover should be blocked unless a way was found to prevent him from influencing the network’s news operation, Sky News.

The Competition and Markets Authority (CMA) said that the deal would give Murdoch too much influence and so would not be in the public interest.

Murdoch’s news outlets are watched, read or heard by nearly a third of Britons and have a combined share of public news consumption that is significantly greater than all other news providers, except the BBC and commercial TV news provider ITN.

Last week, Fox made further concessions, with a promise to maintain and fund a fully independent Sky-branded news service for 10 years.

Comcast said it had only a minimal presence in the British media market and did not see any plurality concerns over its proposal.

Comcast said it recognized that Sky News was an “invaluable part of the UK news landscape” and it intended to maintain Sky News’ existing brand and culture, as well as its strong track record for high-quality impartial news and adherence to broadcasting standards.

“Our strong market positions are complementary with Sky’s leadership in Europe enhancing our preeminent position in the U.S.,” Comcast’s Roberts said.
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A surge in sales of Cuba’s legendary cigars in China helped manufacturer Habanos S.A.’s global revenue rise 12 percent to hit a record of around $500 million last year, the company said on Monday at the start of Cuba’s annual cigar festival.

Habanos S.A., a 50-50 joint venture between the Cuban state and Britain’s Imperial Brands Plc, said sales in China, its third export market after Spain and France, jumped 33 percent in value in 2017.

“Without doubt, there is potential for China to become the biggest market at a global level,” Habanos Vice President of Development Jose María Lopez told Reuters after the company’s annual news conference, while puffing on a smoke.

The Cuban monopoly cigar company’s hand-rolled cigars, which include brands such as Cohiba, Montecristo and Partagas, are considered by many as the best in the world, and the festival attracts wealthy tobacco aficionados and retailers from all over for a week of extravagant parties and tours of plantations and factories.

Lopez said that growth in global sales of Cuban cigars last year outpaced the luxury goods market, which expanded 5 percent, according to consultancy Bain & Co. He put sales growth down to several good tobacco harvests and new products.

The Habanos executive said the outlook was also positive, given solid demand and “excellent” climatic conditions.

Hurricane Irma, which wrought havoc throughout much of Cuba last year, left the western, prime tobacco-growing state of Pinar del Rio mostly unscathed.

Cigars are one of the top exports for the Cuban economy, which is otherwise struggling with decreasing aid from key ally Venezuela, a cash crunch and a push back against market reforms.

However, the Caribbean island cannot sell its signature export to the biggest market worldwide for cigars, the United States, due to the decades-old U.S. trade embargo.

Improved U.S.-Cuba relations under former U.S. President Barack Obama stoked a boom in international travel to Cuba and boosted cigar sales on the island, with American visitors able to take home as many cigars as they wanted.

Lopez said U.S. President Donald Trump’s more hostile policy toward Cuba, including tighter restrictions on U.S. travel, did not appear to have impacted sales so far. Domestic revenue rose around 15 percent last year.

“We trust that despite Trump’s measures the Cuban market will continue to grow in 2018,” he said.

Cigars have been Cuba’s signature product ever since Christopher Columbus saw natives smoking rolled up tobacco leaves when he first sailed to the Caribbean island in 1492.

Late revolutionary leader Fidel Castro was often seen puffing on his favored kind, the long and thin ‘lancero’ until he quit in 1985.
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It promised ample snow and sunny weather on a normally bare, rocky peak easily accessible by “super highway,” thousands more hotel rooms than existed, and a cross-country ski course that looked good on paper but would have cut through some people’s backyards.

The airbrushed pitch worked, but after Denver won a bid to host the 1976 Winter Olympics, its plan unraveled amid questions about the environmental impact, ballooning costs and logistics of hosting such a big event in a quickly growing state.

Now, over four decades after Denver became the only city to withdraw as an Olympic host after winning a bid, it is exploring whether to try again after many cities have decided it’s just not worth it.

The city is again growing, with low unemployment and a booming economy, and this time has a bigger airport, light rail, more hotels, seven professional sports teams and multiple stadiums. But the highway touted in ’76 — Interstate 70, which connects Denver to the Rockies — has essentially remained the same. As the population of outdoor-loving Colorado has grown, the largely four-lane route is often gridlocked on weekends.

Meanwhile, the city also is trying to lure Amazon to open its second headquarters in the metro area, which already has many worried about growth, tax breaks and the rising cost of living.

The Olympic exploratory committee convened by Mayor Michael Hancock — which includes leaders of companies like Vail Resorts and Liberty Global, along with former Denver Broncos quarterback Peyton Manning and ex-Denver Nugget Chauncey Billups — is mulling a privately funded games, estimated to cost $2 billion, without any mega projects. Organizers say the strategy could even leave the state with a surplus to fund I-70 improvements or other work.

Denver already faces stiff competition from Salt Lake City, which became the first U.S. city to announce its plans to bid for the 2030 Winter Olympics this month. Salt Lake said it could host without losing money thanks to existing venues and its expertise in putting on the 2002 Olympics. Reno, Nevada, is also considering a bid.

While some worry the Olympics will distract Denver from urgent problems like affordable housing and transportation, committee members stress that the games won’t take money from those priorities and could potentially net $100 million to $200 million thanks to proceeds from ticket sales, sponsorships and merchandise.

The panel had been in a rush to decide in March whether to pursue the 2026 or 2030 games but is now focused on 2030. The U.S. Olympic Committee announced in Pyeongchang that it will not pursue a 2026 bid unless the International Olympic Committee decides to award bids for both years at once. Denver’s group now plans to make a recommendation to the mayor and governor by late April or early May, although chairman Rob Cohen said the exploratory committee would readjust its timeline if a dual bid becomes a possibility.

The International Olympic Committee is encouraging fewer billion-dollar projects and more facilities already in place after the lavish 2014 Olympics in Sochi. The three venues that would need to be built for a Denver-based Olympics — for Nordic skiing, ski jumping, bobsledding, luge and skeleton — would be temporary structures, said Cohen, CEO of insurance and wealth management company IMA Financial Group. The events could be spread around the state or concentrated along the Front Range.

The exploratory committee has been criticized for its lack of grass-roots representation for meeting behind closed doors, but it recently invited community activists to serve on advisory groups and held online meetings with the public.

Traffic jams

Architect Michael Wenham pondered the prospect of a Denver Olympics recently while at a park near downtown, noting it could be interesting to come up with environmentally friendly ways to host the Olympics. But he reconsidered when he thought about I-70 traffic. He can’t remember the last time he headed to the mountains to snowboard on a weekend because of its traffic jams.

“High-speed buses with their own lane. That is the only way they’re going to be able to do it,” Wenham said.

Cohen said buses would be one possibility for moving people to the mountains quickly during the Olympics, as would giving truckers incentives to bypass I-70. He said some of the surplus could be used to improve the interstate or on another project that would benefit the state long-term, and noted the federal government helped pay to fix highways for Salt Lake City’s 2002 Games.

Glamour vs. mundane

In the years since Denver said no thanks, more cities have become wary of pursuing the Olympics in the face of public opposition and financial concerns.

Innsbruck, Austria, which hosted the 1976 Games after Denver backed out, decided against pursuing a 2026 bid when its promise to organize low-cost and sustainable games failed to convince residents. Other cities that have considered but dropped Olympic aspirations in recent years include St. Moritz and Davos, Switzerland, Krakow, Poland and Oslo, Norway.

Former Colorado Gov. Dick Lamm, whose political career took off after he helped fight the 1976 Olympics, is trying to keep an open mind about Denver’s latest go-around. The committee studying the issue includes savvy people with a track record of successful economic development projects, he said.

But even if Denver could pull it off, he’s not sure what’s in it for the city.

Lamm thinks officials tend to get seduced by the Olympics’ glamour when they could spend their attention on the mundane things that support the economy, such as finding money for education and roads. That takes more campaigning and alliance-making in Colorado because of its strict tax and spending limits, which require voters to approve any tax hikes.

“There’s many opportunities to make this a better state, and I don’t see how the Olympics fit into that,” he said.
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The governor of Sao Paulo and likely centrist presidential candidate Geraldo Alckmin said on Monday that he would privatize Brazil’s state-run oil company Petroleo Brasileiro SA if he wins the elections in October.

Alckmin, who has single digit support in opinion polls, said during a television interview with Band TV that he favored private ownership of Petrobras, as Brazil’s biggest company is known, as long as the sale was conducted within a strict regulatory framework.

Once a taboo issue in Brazilian politics because of national sovereignty concerns, the privatization of Petrobras is set to become a campaign issue this year as Brazil struggles to bring an unsustainable budget deficit under control.

Brazil’s left fiercely rejects the sale of Petrobras, but the leftist leader leading early opinion polls, former President Luiz Inacio Lula da Silva, will likely be barred from running because of a corruption conviction and there are no obvious politicians who can fill his shoes.

It is not clear where the far right candidate Jair Bolsonaro, who is currently second in opinion polls, stands on relinquishing state control of Petrobras.

But his economic policy advisor Paulo Guedes told Valor newspaper in an interview published on Monday that he favored selling all state companies to raise 700 billion reais that would help pay off one fifth of Brazil’s public debt.
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U.S. President Donald Trump on Monday said he wants to bring the steel industry back to America even if it means applying tariffs to imports from other countries.

“I want to bring the steel industry back into our country.

If that takes tariffs, let it take tariffs, OK? Maybe it will cost a little bit more, but we’ll have jobs,” Trump told a meeting at the White House with state governors.

The U.S. Commerce Department has recommended Trump impose curbs on steel and aluminum imports from China and other countries. On Friday, the White House had said Trump has not yet made a final decision on the matter.
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One of the hallmarks of India’s financial capital, Mumbai, is a food delivery system that involves 5,000 lunchbox carriers, who distribute over 100,000 home cooked meals to office workers with an efficiency that has been the subject of top business school studies. These men are now using their food distribution skills to deliver leftover food to the hungry. Anjana Pasricha has this report.
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Days after saying that it would retroactively cut the profits reported over the past two years, General Electric Co. is reshaping its board of directors.

One person joining the board chaired the organization that sets accounting standards in the United States.

GE said Friday that it must cut its 2016 per-share earnings by 13 cents, and by 16 cents for 2017. It’s adopting new accounting standards for 2018.

The Securities and Exchange Commission investigating the Boston company over long-term service contracts and federal regulators are reviewing a $15 billion miscalculation that GE made within an insurance unit. GE disclosed last month that it would take a $6.2 billion charge in its fourth quarter after a subsidiary, North American Life & Health, underestimated how much it would cost to pay for the care of people who lived longer than projected.

After cutting the size of its board from 18 to 12 members, GE said Monday that a quarter of that board would consist of new members, including Leslie Seidman, former chairman of the Financial Accounting Standards Board. Also named were former Danaher Corp. CEO Lawrence Culp and one-time American Airlines CEO Thomas Horton.

CEO John Flannery, a longtime insider at GE, was tasked last year with reshaping the company, but the proposed changes at GE have grown more radical over the past several months as negative developments emerge. The company has shrunk dramatically since it became entangled in the financial crisis a decade ago and Flannery has vowed to shed $20 billion in assets quickly.

Former CEO Jeff Immelt left last June, three months early, and the company’s chief financial officer left several days later.

GE in November slashed its dividend in half and said that the sprawling conglomerate would focus on three key sectors – aviation, health care and energy. By January, after the $15 billion blunder, Flannery hinted that even more drastic changes in the makeup of the company could be on the way.

“All options on the table, no sacred cows,” Flannery said during a call with investors and industry analysts.

Shares slipped almost 2 percent to their lowest level in almost 8 years.
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Reports of massacres and the displacement of close to 700,000 Rohingya have chilled relations between Myanmar and its Western partners but the crisis has not reversed the country’s long-term economic outlook. 

Myanmar’s brand as a “frontier” destination for Western investment took a knock earlier this month with the exit of a disgruntled U.S. law firm, while doubts grow over the government’s ability to implement business-friendly reforms.

Some analysts say the crisis in Rakhine State is taking an economic toll and hurting the government’s efforts to attract more balanced foreign investment after years of over-reliance on China.

The government’s belligerent approach to Western criticism over the Rohingya crisis has allowed China to win back ground lost since Myanmar began to liberalize, economically and politically, after 2011. It remains the country’s largest trading partner, with Singapore now the largest investor. The U.S. and European countries trail far behind.

However, large Western firms that have entered in recent years—in energy, consumer goods, telecommunications, and beer, among other sectors—are digging in rather than packing up.

Tiago Coelho, editorial manager at the Oxford Business Group, a consultancy firm, told VOA that few Western companies that have committed funds and energy would seriously consider pulling out or downsizing on account of the Rohingya crisis.

Low-hanging fruit

The likes of Telenor and Heineken entered their respective markets—telecoms and beer—on the cusp of giant expansions, in a country where the cost of entry is high. Moreover, they can still count on the support of their embassies.

New sanctions, narrowly targeted at Myanmar military officers, are being enacted and discussed, but most embassies retain a pro-investment platform, in support of the civilian government of Aung San Suu Kyi and their own countries’ trade interests.

Eric Rose, lead director of New York-based Herzfeld Rubin Meyer & Rose, announced this month that the firm was leaving after five years in Myanmar, and cited stalled economic reforms. He had lobbied for the lifting of sanctions and for an American investment rush that never came.

Since 2016, only U.S. sanctions against arms deals, money laundering, and transactions with drug kingpins remained—until a regional army commander was sanctioned late last year.

In 2017, Myanmar’s investment directorate approved $5.6 billion of Foreign Direct Investment (FDI), down from $7.8 billion in 2016, prompting talk of a downturn.

But Tony Picon, Myanmar founder and director of real estate services firm Colliers International, warned against putting too much emphasis on FDI, since this index dips and surges as major infrastructure and energy projects are put to tender.

“Manufacturing FDI,” which has been robust, “is a better indicator of economic growth as this represents sustainable revenue,” he said.

The National League for Democracy government, which assumed power in early 2016, has launched few big-ticket projects compared to the previous, military-backed government, which scooped low-hanging fruit by liberalizing the oil and gas and telecoms sectors, among others.

Rebound

Although appalling in scale and intensity, the death and displacement in Rakhine is contained within an isolated border enclave of little economic consequence to the rest of the country.

Three months into the crisis, in November, visiting officials of the International Monetary Fund (IMF) hailed a “rebound” in Myanmar’s economy. Projected growth of 6.7 percent for the 2017/18 financial year, up from a post election-year dip of 5.9 percent in 2016/17, is being fueled by advances in agriculture and rising exports, they said.

Western investors seem largely convinced. In November, another international law firm, London-based Stephenson Harwood, opened an office in Yangon, Myanmar’s commercial capital. Lead partner Tom Platts declared it an “exciting time to be working in Myanmar.”

In January, the in-country managing director of Nestlé, the Swiss food and drinks giant, told Yangon-based media outlet Mizzima of plans for four-fold growth in Myanmar by 2020. A Nestlé factory near Yangon will soon go online, servicing the local market.

The similarly vast consumer goods company Unilever, headquartered in the UK and Holland, is also expanding in Myanmar. It announced a joint venture with a local company last year to build on combined annual sales of more than $120 million.

Reputational risk

As the Rohingya crisis has deepened, activists had trained their sights on Unilever as well as Telenor, the Norwegian telecoms company that has invested $2 billion in Myanmar since 2013 in a cutthroat race for mobile phone subscribers. In September, Telenor issued a statement of “grave concern,” but avoided using the word Rohingya which is politically toxic in Myanmar.

Telenor, now second in the market and not far behind a state-owned enterprise, is bracing itself for the entry this year of a new telecoms company, branded Mytel—with stakes held by the militaries of Vietnam and Myanmar—which is tipped to start a price war.

However, the worst effects of the crisis on investment may be the hardest to trace: that of foreign companies eyeing the Myanmar market and choosing, on assessment, to opt for countries with more favorable headlines and less risk to reputations. 

“Before any economic impact, you see a political impact,” said Coelho of the Oxford Business Group, noting the widening political gulf between Myanmar and the West.
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President Emmanuel Macron on Saturday faced heckles and whistles from French farmers angry with reforms to their sector, as he arrived for France’s annual agricultural fair.

For over 12 hours, Macron listened and responded to critics’ rebukes and questions — only to return home to the Elysee Palace with an adopted hen.

“I saw people 500 meters away, whistling at me,” Macron said, referring to a group of cereal growers protesting against a planned European Union free-trade pact with a South American bloc, and against the clampdown on weedkiller glyphosate.

“I broke with the plan and with the rules and headed straight to them, and they stopped whistling,” he told reporters.

“No one will be left without a solution,” he said.

Macron was seeking to appease farmers who believe they have no alternative to the widely used herbicide, which environmental activists say probably causes cancer.

Mercosur warning

He also wanted to calm fears after France’s biggest farm union warned Friday that more than 20,000 farms could go bankrupt if the deal with the Mercosur trade bloc (Brazil, which is the world’s top exporter of beef, plus Argentina, Uruguay and Paraguay) goes ahead.

Meanwhile, Macron was under pressure over a plan to allow the wolf population in the French countryside to grow, if only marginally.

“If you want me to commit to reinforce the means of protection … I will do that,” he responded.

And he called on farmers to accept a decision on minimum price rules for European farmers, “or else the market will decide for us.”

But it wasn’t all jeers and snarls for Macron at the fair.

He left the fairground with a red hen in his arms, a gift from a poultry farm owner.

“I’ll take it. We’ll just have to find a way to protect it from the dog,” he said, referring to his Labrador, Nemo.

It was a far cry from last year, when, as a presidential candidate not yet in office, Macron was hit on the head by an egg launched by a protester.
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Investor Warren Buffett says Wall Street’s lust for deals has prompted CEOs to act like oversexed teenagers and overpay for acquisitions, so it has been hard to find deals for Berkshire Hathaway.

In his annual letter to shareholders Saturday, Buffett mixed investment advice with details of how Berkshire’s many businesses performed. Buffett blamed his recent acquisition drought on ambitious CEOs who have been encouraged to take on debt to finance pricey deals.

“If Wall Street analysts or board members urge that brand of CEO to consider possible acquisitions, it’s a bit like telling your ripening teenager to be sure to have a normal sex life,” Buffett said.

Berkshire is also facing more competition for acquisitions from private equity firms and other companies such as privately held Koch Industries.

Sticking with guideline

Buffett is sitting on $116 billion of cash and bonds because he’s struggled to find acquisitions at sensible prices. And Buffett is unwilling to load up on debt to finance deals at current prices.

“We will stick with our simple guideline: The less the prudence with which others conduct their affairs, the greater the prudence with which we must conduct our own,” Buffett wrote.

He said the conglomerate recorded a $29 billion paper gain because of the tax reforms Congress passed late last year. That helped it generate $44.9 billion profit last year, up from $24.1 billion the previous year.

Investors left wanting

Buffett’s letter is always well-read in the business world because of his remarkable track record over more than five decades and his talent for explaining complicated subjects in plain language. But this year’s letter left some investors wanting more because he didn’t say much about Berkshire’s succession plan, some noteworthy investment moves or the company’s new partnership with Amazon and JP Morgan Chase to reduce health care costs.

Edward Jones analyst Jim Shanahan said he expected Buffett to devote more of the letter to explaining his decision to promote and name the top two candidates to eventually succeed him as Berkshire’s CEO. Buffett briefly mentioned that move in two paragraphs at the very end of his letter.

That surprised John Fox, chief investment officer at FAM Funds, which holds Berkshire stock.

“He didn’t say a lot about succession. I was expecting more,” Fox said.

Greg Abel and Ajit Jain joined Berkshire’s board in January and took on additional responsibilities. Jain will now oversee all of the conglomerate’s insurance businesses while Abel will oversee all of the conglomerate’s non-insurance business operations.

Bet pays off for charity

Buffett, 87, has long had a succession plan in place for Berkshire to ensure the future of the conglomerate he built even though he has no plans to retire. Until January, he kept the names of Berkshire’s internal CEO candidates secret although investors who follow Berkshire had long included Jain and Abel on their short lists.

Shanahan said it also would have been nice to read Buffett’s thoughts on why he is selling off Berkshire’s IBM investment but maintaining big stakes in Wells Fargo and US Bancorp.

But Buffett did offer some sage investment advice based on his victory in a 10-year bet he made with a group of hedge funds. The S&P 500 index fund Buffett backed generated an 8.5 percent average annual gain and easily outpaced the hedge funds. One of Buffett’s favorite charities, Girls Inc. of Omaha, received $2.2 million as a result of the bet.

Buffett said it’s important for people to invest money regularly regardless of the market’s ups and downs, but watch out for investment fees, which will eat away at returns.

Succeeding in the stock market requires the discipline to act sensibly when markets do crazy things. Buffett said investors need “an ability to both disregard mob fears or enthusiasms and to focus on a few simple fundamentals. A willingness to look unimaginative for a sustained period — or even to look foolish — is also essential.”

Buffett said investors shouldn’t assume that bonds are less risky than stocks. At times, bonds are riskier than stocks.

Berkshire owns more than 90 subsidiaries, including clothing, furniture and jewelry firms. It also has major investments in such companies as Coca-Cola Co. and Wells Fargo & Co.
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Australia appears to be failing in its efforts to crack down on bribery, according to the latest survey conducted by Transparency International, a non-governmental organization based in Germany.

The group said developed countries – including Australia – appeared to be lagging in their efforts to combat corruption in the public sector.  It pointed to an inadequate regulation of foreign political donations in Australia, conflicts of interest in planning approvals, revolving doors and improper industry lobbying in large-scale mining projects.  

While Australia’s ranking is unchanged – it remains ranked 13th out of 180 countries – its corruption score has slipped eight points since the index started in its current form in 2012.

Concern about Australia’s ranking comes as debate continues about the need for a nationwide anti-corruption body similar to the Independent Commission Against Corruption in the state of New South Wales.  It was set up in 1989 and has scored many notable victories, including the jailing of corrupt state politicians.

Professor A.J. Brown, who leads a project called “Strengthening Australia’s National Integrity System” for Transparency International, says much more work needs to be done.

“We do not have a federal anti-corruption body amongst other things, so it is also about the fact that our track record in terms of government commitment to controlling foreign bribery or money laundering and some of the things that the private sector is also involved in internationally is not that strong.  We are moving but we have been moving very slow and very late, and not very comprehensively,” Brown said.

This year, New Zealand and Denmark were ranked highest in the Transparency International survey, the U.S. is ranked 16th, while South Sudan and Somalia were the lowest-ranked nations. The best performing region was Western Europe, while the most corrupt regions were Sub-Saharan Africa, followed by Eastern Europe and Central Asia.

The survey found that more than 6 billion people live in countries that are corrupt. Transparency International said most countries failed to protect the independence of the media, which plays a crucial role in preventing corruption.

 
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Three more companies say they have ended marketing programs with the National Rifle Association (NRA), as gun control advocates stepped up pressure on firms to cut ties to the gun industry following last week’s school shooting in Florida.

Activists have posted petitions online, identifying businesses that offer discounts to NRA members, in a push to pressure the companies to cut ties to the gun rights organization.

Corporations that ended their discount programs with NRA members on Friday included insurance company MetLife, car rental company Hertz, and Symantec Corp., the software company that makes Norton Antivirus technology.

The move comes after several other companies cut their ties to the NRA earlier this week, including car rental company Enterprise, First National Bank of Omaha, Wyndham Hotels and Best Western hotels.

The NRA is one of the country’s most powerful lobbying groups for gun rights and claims 5 million members.

Florida shooting renews debate

Last week’s shooting at a Florida high school that left 17 people dead has renewed the national debate about gun control.

Gun control activists have been mounting a campaign on Twitter, including using the hashtag #BoycottNRA as well as using social media to pressure streaming platforms, including Amazon, to drop the online video channel NRATV, which features gun-friendly programming produced by the NRA.

On Thursday, NRA Executive Vice President Wayne LaPierre told the Conservative Political Action Conference (CPAC) that those advocating for stricter gun control are exploiting the Florida shooting.

Receiving a rousing reception, LaPierre said, “There is no greater personal individual freedom than the right to keep and bear arms, the right to protect yourself and the right to survive.”

Arming teachers

On Friday, President Donald Trump reiterated to CPAC for the third time this week the need to arm teachers with concealed weapons to prevent more shootings in U.S. schools.

“It’s time to make our schools a much harder target for attackers. We don’t want them in our schools,” Trump said.

Trump has also proposed raising the age to buy assault-style rifles from 18 to 21, which is opposed by the NRA.

In his speech to CPAC, Trump indicated he does not intend to battle the powerful organization.

“They’re friends of mine,” Trump said of the NRA, which gave more than $11 million to his presidential campaign in 2016 and spent nearly $20 million attacking his Democratic Party general election challenger, Hillary Clinton.

The mass shooting in Florida on Feb. 14 has sparked a wave of rallies in Florida, Washington and in other areas of the United States in an attempt to force local and national leaders to take action to prevent such attacks.

 
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The heaviest, the largest, the most impactful —  those were the superlatives the Trump administration used to describe its latest sanctions against North Korea.

But were the Treasury Department designations of more than 50 companies and ships accused of illicit trading with the pariah nation really the toughest action yet by the U.S. and the wider world?

Probably not.

Here’s a look at how President Donald Trump and a top lieutenant described Friday’s sanctions to punish the North for its development of nuclear weapons and ballistic missiles — and how they stack up against past economic restrictions that have been piled on Kim Jong Un’s government in response to its illegal weapons tests.

Treasury Secretary Steven Mnuchin: “The Treasury Department is announcing the largest set of sanctions ever imposed in connection with North Korea.”

Trump: “I do want to say, because people have asked, North Korea — we imposed today the heaviest sanctions ever imposed on a country before.”

As for Trump’s blanket assertion, in sheer dollar terms, the U.S. has actually imposed much costlier restrictions on countries such as Iran, a far richer economy than North Korea’s. Washington and its allies cut off tens of billions of dollars’ worth of Iranian oil exports and shut the country’s central bank out of the international financial system, among other steps, before eliminating those restrictions under a 2015 nuclear deal.

Correct on number

In terms of the number of entities targeted Friday, Mnuchin is probably correct about the history of sanctions on North Korea.

The department blacklisted “one individual, 27 entities and 28 vessels” located, registered or flagged in North Korea, China, Singapore, Taiwan, Hong Kong, Marshall Islands, Tanzania, Panama and Comoros. That appeared to be the most companies or individuals designated by the U.S. at a single time. According to Mnuchin, there are now more than 450 U.S. sanctions against North Korea, about half of them levied in the last year.

But in purely economic terms, both Mnuchin and Trump are well wide of the mark.

The latest designations are primarily intended to crack down on North Korea’s evasion of wider-ranging sanctions adopted by the U.N. Security Council and the United States that are more economically significant.

Over the past year, the council has adopted three sets of sanctions banning North Korean exports of coal, iron ore, textiles, seafood products and other goods. If those measures are properly implemented, that would reduce the North’s export revenues by 90 percent from 2016 levels, or by $2.3 billion annually. Those sanctions are also heavily restricting North Korean fuel supplies. They capped refined oil imports at 500,000 barrels a year. That’s a reduction from the 4.5 million barrels North Korea imported in 2016.

It’s because of those draconian restrictions that North Korea wants to conduct trade on the quiet with “ship-to-ship” transfers that the U.S. is determined to stop. With Friday’s measures, Mnuchin said, the U.S. has gone after “virtually all their ships that they’re using at this moment.”

That’s certainly a significant increase in pressure on North Korea as its foreign trade diminishes. But the Treasury Department did not give an overall figure for how much revenue the North would be deprived of because of the latest actions, other than to say that nine of the newly blacklisted foreign vessels “are capable of carrying over $5.5 million worth of coal at a time.”

‘Underwhelming’ in scope

The conservative-leaning Heritage Foundation did not think much of the new steps.

“As impressive as the list is in length, it is underwhelming in its scope and fails to live up to the hype,” it said. “Like his predecessors, President Trump remains reluctant to go after Chinese financial entities aiding North Korea’s prohibited nuclear and missile programs.”

China is said to account for about 90 percent of North Korea’s external trade and be its main access point to the international financial system. Past U.S. sanctions that have targeted Chinese companies have probably had a much bigger impact on North Korea’s revenue streams.

In November, the Treasury Department blacklisted three Chinese companies that it said had “cumulatively exported approximately $650 million worth of goods to North Korea and cumulatively imported more than $100 million worth of goods from North Korea.”

An even bigger Chinese trading partner of the North was blacklisted in September 2016: Dandong Hongxiang Industrial Development Co. According to a report by the U.S.-based research group C4AD and South Korea’s Asan Institute for Policy Studies, Hongxiang carried out imports and exports worth a total of $532 million in 2011-15. It had also supplied aluminum oxide and other materials that can be used in processing nuclear bomb fuel.
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Federal Reserve policymakers fretted on Friday that they could face the next U.S. recession with virtually the same arsenal of policies used in the last downturn and, with interest rates still relatively low, those will not pack the same punch.

In the midst of an unprecedented leadership transition, Fed officials are publicly debating whether to scrap their approach to inflation targeting, how much of its bond portfolio to retain, and how much longer they can raise interest rates in the face of an unexpectedly large boost from tax cuts and government spending.

After years of near-zero rates and $3.5 trillion in bond purchases all meant to stimulate the economy in the wake of the 2007-09 recession, the Fed has gradually tightened policy since late 2015. Its key rate is now in the range of 1.25 to 1.5 percent, and while the Fed plans to hike three more times this

year it has also forecast that it is about halfway to its goal.

That could leave little room to provide stimulus when the world’s largest economy, which is heating up, eventually turns around.

“We would be better off, rather than thinking about what we would do next time when we hit zero, making sure that we don’t get back there. We just don’t want to be there,” Boston Fed President Eric Rosengren told a conference of economists and the majority of his colleagues at the central bank.

Rosengren, one of only a few sitting policymakers who also served during the last downturn, said the expanding U.S. deficits could further erode the government’s ability to help curb any future recession. “With the deficits we are running up, it’s not likely [fiscal policy] will be helpful in the next

recession either,” he said.

Since mid-December, the Republican-controlled Congress and U.S. President Donald Trump aggressively cut taxes and boosted spending limits, two fiscal moves that are expected to push the annual budget deficit above $1 trillion next year and expand the $20 trillion national debt.

Overheating

That stimulus, combined with synchronized global growth, signs of U.S. inflation perking up, and unemployment near a 17-year low could set the stage for overheating that ends one of the longest economic expansions ever.

“We want more shock absorbers out there and really … the main shock absorber is the ability to reduce the fed funds rate, which means that you want to get to a higher inflation rate so that the pre-shock fed funds rate is 4 and not 2,” said Paul Krugman, the Nobel Prize-winning economist and professor at City University of New York.

In a speech to the conference hosted by the University of Chicago Booth School of Business, Krugman said every recession since 1982 has been caused by “private sector over-reach” and not Fed tightening, as in decades past.

The conference’s main research paper argued the central bank should focus on cutting rates in the next recession and avoid relying on asset purchases that are less effective in stimulating investment and growth than previously thought.

In October the Fed began trimming some of its assets and it has yet to decide how far it will go. William Dudley, president of the New York Fed, told the conference that, to be sure, the ability to again purchase bonds if and when rates hit zero “seems like a good tool to have.”

The Fed’s approach to any economic slowdown would likely be to cut rates, pledge further stimulus, and only then buy bonds.

Rosengren and others dismissed the possibility of adopting negative interest rates, as some other central banks have done.

Yet five years of below-target inflation, combined with an aging population and slowdown in labor force growth, has sparked a debate over ditching a long-standing 2 percent price target.

Some see this month’s succession of Fed Chair Janet Yellen by Jerome Powell as ideal timing to consider new frameworks that could help drive inflation, and rates, higher. Cleveland Fed President Loretta Mester, whom the White House is considering for Fed vice chair, told the conference the central bank could begin to reassess the framework later this year, though she added that the threshold for change should be high.
…

European Union leaders staked out opening positions Friday for a battle over EU budgets that many conceded they are unlikely to resolve before Britain leaves next year, blowing a hole in Brussels’ finances.

At a summit to launch discussion on the size and shape of a seven-year budget package to run from 2021, ex-communist states urged wealthier neighbors to plug a nearly 10 percent annual revenue gap being left by Britain, while the Dutch led a group of small, rich countries refusing to chip in any more to the EU.

Germany and France, the biggest economies and the bloc’s driving duo as Britain prepares to leave in March 2019, renewed offers to increase their own contributions, though both set out conditions for that, including new priorities and less waste.

Underlining that a divide between east and west runs deeper than money, French President Emmanuel Macron criticized what he said were poor countries abusing EU funds designed to narrow the gap in living standards after the Cold War to shore up their own popularity while ignoring EU values on civil rights or to undercut Western economies by slashing tax and labor rules.

Noting the history of EU “cohesion” and other funding for poor regions as a tool of economic “convergence,” Macron told reporters: “I will reject a European budget which is used to finance divergence, on tax, on labor or on values.”

Poland and Hungary, heavyweights among the ex-communist states which joined the EU this century, are run by right-wing governments at daggers drawn with Brussels over their efforts to influence courts, media and other independent institutions.

The European Commission, the executive which will propose a detailed budget in May, has said it will aim to satisfy calls for “conditionality” that will link getting some EU funding to meeting treaty commitments on democratic standards such as properly functioning courts able to settle economic disputes.

But its president, Jean-Claude Juncker, warned on Friday against deepening “the rift between east and west” and some in the poorer nations see complaints about authoritarian tendencies as a convenient excuse to avoid paying in more to Brussels.

At around 140 billion euros ($170 billion) a year, the EU budget represents about 1 percent of economic output in the bloc or some 2 percent of public spending, but for all that it remains one of the bloodiest subjects of debate for members.

Focus on payments

The Commission has suggested that the next package should be increased by about 10 percent, but there was little sign Friday that the governments with cash are willing to pay that.

“When the UK leaves the EU, then that part of the budget should drop out,” said Dutch Prime Minister Mark Rutte, who leads a group of hawks including Sweden, Denmark and Austria.

“In any case, we do not want our contribution to rise and we want modernization,” he added, saying that meant reconsidering the EU’s major spending on agriculture and regional cohesion in order to do more in defense, research and controlling migration.

On the other side, Czech Prime Minister Andrej Babis said his priorities were “sufficient financing of cohesion policy” a good deal for businesses from the EU’s agricultural subsidies.

German Chancellor Angela Merkel said there had been broad agreement that new priorities such as in defense, migration and research should get new funding and she called for a “debureaucratization” of traditional EU spending programs.

Summit chair Donald Tusk praised the 27 leaders — Prime Minister Theresa May was not invited as Britain will have left before the new budget round starts — for approaching the issue “with open minds, rather than red lines.” But despite them all wanting to speed up the process, a deal this year was unlikely.

Quick deal unlikely

Although all agree it would be good to avoid a repeat of the 11th-hour wrangling ahead of the 2014-20 package, many sounded doubtful of a quick deal even early next year.

“It could go on for ages,” Rutte said. He added that it would be “nice” to finish by the May 2019 EU election: “But that’s very tight.”

Among the touchiest subjects will be accounting for the mass arrival of asylum-seekers in recent years. Aggrieved that some eastern states refuse to take in mainly Muslim migrants, some in the west have suggested penalizing them via the EU budget.

Merkel has proposed that regions which are taking in and trying to integrate refugees should have that rewarded in the allocation of EU funding — a less obviously penal approach but one which she had to defend on Friday against criticism in the east. It was not meant as a threat, the chancellor insisted.

In other business at a summit which reached no formal legal conclusions, leaders broadly agreed on some issues relating to next year’s elections to the European Parliament and to the accompanying appointment of a new Commission for five years.

They pushed back against efforts, notably from lawmakers, to limit their choice of nominee to succeed Juncker to a candidate who leads one of the pan-EU parties in the May 2019 vote. They approved Parliament’s plan to reallocate some British seats and to cut others altogether and also, barring Hungary, agreed to a Macron proposal to launch “consultations” with their citizens this year on what they want from the EU.
…

U.S. stocks rallied on Friday, lifted by gains in technology stocks and a retreat in Treasury yields as the Federal Reserve eased concerns about the path of interest rate hikes this year.

The U.S. central bank, looking past the recent stock market sell-off and inflation concerns, said it expected economic growth to remain steady and saw no serious risks on the horizon that might pause its planned pace of rate hikes.

Investors largely expect the Fed to raise rates three times this year, beginning with its next meeting in March, the first under new Chair Jerome Powell. Traders currently see a 95.5 percent chance of a quarter-percentage-point hike next month, according to Thomson Reuters data.

“Certainly bond yields pulling back today is helpful for stocks, at least for the short term, that has been the narrative that is out there — that higher bond yields are weighing on stocks and this preoccupation with three percent,” said Willie Delwiche, investment strategist at Baird in Milwaukee. “So moving away from that, for today at least, provides a bid for equities.”

Powell’s first public outing will be on Tuesday, when he will testify separately before the House and Senate committees.

The Dow Jones Industrial Average rose 347.51 points, or 1.39 percent, to 25,309.99, the S&P 500 gained 43.34 points, or 1.60 percent, to 2,747.30 and the Nasdaq Composite added 127.30 points, or 1.77 percent, to 7,337.39.

Benchmark 10-year U.S. Treasury notes last rose 13/32 in price to yield 2.8714 percent, from 2.917 percent late on Thursday.

The dip in yields helped boost bond proxy sectors such as utilities, up 2.66 percent, and real estate, up 1.72 percent. The sectors have been among the worst performers so far this year on expectations of climbing rates.

Tech shares climbed 2.17 percent led by gains in Hewlett Packard Enterprise, which rose 10.5 percent and HP Inc, up 3.5 percent.

The two companies created from the split of Hewlett Packard Co in 2015, reported strong results and HPE also announced a plan to return $7 billion to shareholders.

For the week, the Dow rose 0.37 percent, the S&P advanced 0.56 percent and the Nasdaq gained 1.35 percent.

Blue Buffalo Pet Products jumped 17.23 percent after General Mills said it would buy the natural pet food maker for $8 billion. General Mills was the biggest percentage decline on S&P 500, falling 3.59 percent.

Advancing issues outnumbered declining ones on the NYSE by a 4.54-to-1 ratio; on Nasdaq, a 2.82-to-1 ratio favored advancers.

The S&P 500 posted 10 new 52-week highs and one new low; the Nasdaq Composite recorded 64 new highs and 57 new lows.

Volume on U.S. exchanges was 6.05 billion shares, well below the 8.38 billion average over the last 20 trading days.

Reporting by Chuck Mikolajczak.
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