YCLOAK

Tesla said Thursday that its new board chair replacing Elon Musk will be Robyn Denholm of Australia’s Telstra.

 

The appointment to the full-time position takes effect immediately though Denholm will leave Telstra, Australia’s biggest telecoms company, after a six-month notice period. Denholm already is on Tesla’s board.

 

Musk agreed to vacate his post as board chairman as part of a settlement with U.S. regulators of a lawsuit alleging he duped investors with misleading statements about a proposed buyout of the company.

 

The settlement in late September with the Securities and Exchange Commission allowed Musk to remain CEO of Tesla but required him to relinquish his role as chairman for at least three years.

 

Apart from appointing a new chairman, Tesla was required to appoint two new independent members to its board. The aim is to provide stronger oversight to match Tesla’s growing stature and market value.

 

The charismatic, visionary Musk has strived to turn Tesla into a profitable, mass-market producer of environmentally-friendly electric cars. But his impulsive streak caused him trouble when he tweeted in August that he had “funding secured” for taking Tesla private.
…

Stocks rallied Wednesday as investors were relieved to see that the U.S. midterm elections went largely as they expected they would. Big-name technology and consumer and health care companies soared as the S&P 500 index closed at its highest level in four weeks.

Democrats won control of the House of Representatives while Republicans kept a majority in the Senate, as most polls had suggested. It’s not clear how the divided Congress will work with Republican President Donald Trump, but if the possibilities for compromise and big agenda items seem limited, Wall Street is fine with that because it means politics is that much less likely to crowd out the performance of the strong U.S. economy.

“The market likes when what it expects to happen happens,” said JJ Kinahan, chief markets strategist for TD Ameritrade. “We haven’t had that happen in a little while, when you think about major events like Brexit or the presidential election.”

The S&P 500 index climbed 58.44 points, or 2.1 percent, to 2,813.89. The index has risen six out of the last seven days to recover most of the losses it suffered in October.

The Dow Jones Industrial Average rose 545.29 points, or 2.1 percent, o 26,180.30. The Nasdaq composite climbed 194.79 points, or 2.6 percent, to 7,570.75. The Russell 2000 index of smaller-company stocks added 26.06 points, or 1.7 percent, to 1,582.16. Three-fourths of the stocks on the New York Stock Exchange traded higher.

Historically markets have performed well after midterm elections and with split control of Congress.

Stocks are off to a strong start in November, and the S&P 500 is up 3.8 percent so far this month. That follows a swoon in October that knocked the S&P 500 down nearly 7 percent as investors worried about rising interest rates and the U.S.-China trade dispute.

High-growth stocks took an especially brutal beating last month. Quincy Krosby, chief market strategist at Prudential Financial, said it will be worth watching to see if investors are willing to buy those stocks again or if they continue to prefer slower-growing, more “defensive” companies like utilities and household goods makers.

On Wednesday investors bet on growth. Amazon jumped 6.9 percent to $1,755.49 and Microsoft gained 3.9 percent to $111.96, while Google’s parent company, Alphabet, picked up 3.6 percent to $1,108.24.

Steady, “defensive” stocks lagged the rest of the stock market. Those companies, which include utilities and household goods makers, tend to do well when stocks are in turmoil, but they’re less appealing when investors are betting on economic growth.

Industrial companies made strong gains, but they didn’t do as well as the rest of the market. While some investors hope that Trump and Congressional leadership will pass an infrastructure stimulus bill, they’ve had those hopes dashed more than once since he took office.

It’s not clear how the elections will affect the Trump policy Wall Street might be most concerned about: the trade dispute with China. Trump has imposed taxes of up to 25 percent on $250 billion of Chinese imports and threatened additional tariffs on top of those. Beijing has responded with tariffs on $110 billion of American goods.

A primary concern in Asia is the potential for trade tensions to hobble growth for export-reliant economies.

Economists at S&P Global, Oxford Economics and the Bank of America all agreed that government gridlock will likely result from the Democrats winning control of the House. But they don’t think a stalemate will automatically hinder economic growth.

It’s more likely that government will play less of a role in spurring economic growth in 2019 and 2020. As a result, the health of the global economy, interest rates set by the Federal Reserve, and spending by U.S. consumers and companies will have a bigger impact on determining the pace of growth.

The Federal Reserve is also meeting Wednesday and Thursday. It’s not expected to raise interest rates this month, but investors believe it will do so in December.

Banks also didn’t rise as much other stocks. Republicans had discussed a new round of tax cuts if they maintained full control over Congress, which would have expanded the government’s deficits further and required it to issue more debt. Government bond yields spiked overnight after a batch of strong early results for some GOP candidates, but then headed lower as Democrats’ fortunes improved, making a new tax cut package unlikely.

Democrats’ victory in the House also means that Rep. Maxine Waters will likely become chairwoman of the House Financial Services Committee, which oversees the nation’s banking system and its regulators. Waters has called for more regulation of banks, and has been vocal about Trump political appointees moving to roll back regulations on banks and other financial services companies.

The yield on the 10-year Treasury note rose slightly, to 3.22 percent. It spiked as high as 3.25 percent Tuesday night.

The U.S. dollar also weakened. The ICE US dollar index fell 0.2 percent. The U.S. currency fell to 113.34 yen from 113.40 yen, and the euro climbed to $1.1455 from $1.1413.

Major indexes in Europe climbed. The French CAC 40 jumped 1.2 percent, while Britain’s FTSE 100 gained 1.1 percent. The DAX in Germany rose 0.8 percent.

October is historically a rough month for stocks, though markets usually rise after midterm elections regardless of how the political landscape may change because Wall Street is glad to have more certainty.

Democrats’ win in the House means Republicans won’t be able to take another shot at repealing the 2010 Affordable Care Act, which extended health insurance coverage to millions of Americans. Voters in Idaho and Nebraska all voted to expand Medicaid, and the winning gubernatorial candidates in Maine and Kansas also favor expanding Medicaid benefits. Voting on a Medicaid expansion proposition in Utah was too close to call.

Health insurers, hospital operators and Medicaid program operators all jumped. UnitedHealth gained 4.2 percent to $274.63 and hospital company HCA added 4.7 percent to $141.65. Molina, a provider of Medicaid-related services, surged 10.5 percent to $137.32.

Marijuana stocks jumped after Michigan voted to legalize recreational marijuana and Utah and Missouri voters approved medical marijuana measures. The stocks rose even further after the resignation of Attorney General Jeff Sessions, who promoted more aggressive enforcement of those laws. Tilray vaulted 30.6 percent to $139.60 and Canopy Growth rose 8.2 percent to $46.07.

Oil prices continued to fall. U.S. crude lost 0.9 percent to $61.67, and Brent crude, the standard for international oil prices, dipped 0.1 percent to $72.07 a barrel in London.

Wholesale gasoline lost 2.8 percent to $1.65 a gallon and heating oil rose 2.2 percent to $2.24 a gallon. Natural gas was unchanged at $3.56 per 1,000 cubic feet.

Gold rose 0.2 percent to $1,228.70 an ounce. Silver picked up 0.5 percent to $14.57 an ounce. Copper added 0.8 percent to $2.75 a pound.

In Asia, Japan’s benchmark Nikkei 225 fell 0.3 percent while South Korea’s Kospi slipped 0.5 percent. But Hong Kong’s Hang Seng edged 0.1 percent higher.
…

Global stocks were higher Wednesday after the outcome of the U.S. midterm elections met investors’ expectations.

Despite Democratic gains in the U.S. House of Representatives, few anticipate reversals of President Donald Trump’s tax cuts and the elimination of federal regulations.

Democrats captured more than the 23 seats needed to regain control of the House and Republicans extended their lead in the Senate.

Europe’s FTSE 100 Index moved 1 percent higher, to 7,117, and Asia’s Hang Seng Index climbed more than 3 percent, to 2,6147.

In afternoon trading in the U.S., the Standard and Poor’s 500 Index was nearly 1.5 percent higher, at 2,795, the Dow Jones Industrial Average gained more than 1.5 percent, to 2,629, and the NASDAQ 100 Index jumped more than 2.3 percent, to 7,150.
…

The Chinese government granted 18 trademarks to companies linked to President Donald Trump and his daughter Ivanka Trump over the last two months, Chinese public records show, raising concerns about conflicts of interest in the White House.

In October, China’s Trademark Office granted provisional approval for 16 trademarks to Ivanka Trump Marks LLC, bringing to 34 the total number of marks China has greenlighted this year, according to the office’s online database. The new approvals cover Ivanka-branded fashion gear including sunglasses, handbags, shoes and jewelry, as well as beauty services and voting machines.

 

The approvals came three months after Ivanka Trump announced she was dissolving her namesake brand to focus on government work.

 

China also granted provisional approval for two “Trump” trademarks to DTTM Operations LLC, headquartered at Trump Tower on Fifth Avenue in New York. They cover branded restaurant, bar and hotel services, as well as clothing and shoes.

 

The marks will be finalized if there is no objection during a 90-day comment period.

 

All the trademarks were applied for in 2016.

 

“These trademarks were sought to broadly protect Ms. Trump’s name, and to prevent others from stealing her name and using it to sell their products,” Peter Mirijanian, a spokesman for Ivanka Trump’s ethics attorney, said in an email. “This is a common trademark practice, which is why the trademark applications were granted.”

 

Both the president and his daughter have substantial intellectual property holdings in China. Critics worry that China, where the courts and bureaucracy are designed to reflect the will of the ruling Communist Party, could exploit those valuable rights for political leverage.

 

There has also been concern that the Trump family’s global intellectual property portfolio lays the groundwork for the president and his daughter, who serves as a White House adviser, to profit from their global brands as soon as they leave office.

 

“Ivanka receives preliminary approval for these new Chinese trademarks while her father continues to wage a trade war with China. Since she has retained her foreign trademarks, the public will continue to have to ask whether President Trump has made foreign policy decisions in the interest of his and his family’s businesses,” wrote Citizens for Responsibility and Ethics in Washington, a government watchdog group that first published the news about Ivanka Trump brand’s new Chinese trademarks.

 

Lawyers for Donald Trump in Beijing declined to comment.

 

Companies register trademarks for a variety of reasons. They can be a sign of corporate ambition, but many companies also file defensively, particularly in China, where trademark squatting is rampant. Trademarks are classified by category and may include items that a brand does not intend to market. Some trademark lawyers also advise clients to register trademarks for merchandise made in China, even if it’s not sold there.

 

China has said it handles all trademark applications equally under the law.
…

This is part of “Ocean Shock,” a Reuters series exploring climate change’s impact on sea creatures and the people who depend on them.

Creedence Clearwater Revival’s “Fortunate Son” drifts from Karroll Tillett’s workshop, a wooden shed about half a mile from where he was born.

Tillett, known as “Frog” to everyone here, has lived most of his 75 years on the water, much of it chasing summer flounder. But the chasing got harder and harder, and now he spends his time making nets for other fishermen at his workshop, at the end of a dirt path next to his ex-wife’s house.

The house is on CB Daniels Sr. Road, one of several named after two of the fishing clans that have held sway for decades in this small coastal town. Besides CB Daniels Sr. Road, there’s ER Daniels Road and just plain Daniels Road. In Frog’s family, there’s Tink Tillett Road and Rondal Tillett Road.

Once upon a time, these fishing families were pioneers. In the 1970s and 1980s, they built summer flounder into a major catch for the region. The 15 brothers and sisters of the Daniels clan parlayed the business into a multinational fishing company, and three years ago they sold it to a Canadian outfit for tens of millions of dollars.

But for Frog Tillett and almost everyone else in these parts, there’s not much money to be made fishing offshore here anymore.

Forty years ago, Tillett fished for summer flounder in December and January in waters near Wanchese, then followed the fish north as the weather warmed. In recent years, however, fewer summer flounder have traveled as far south in the winter, and the most productive area has shifted north, closer to Martha’s Vineyard and the southern shore of Long Island.

Reuters has spent more than a year scouring decades of maritime temperature readings, fishery records and other little-used data to create a portrait of the planet’s hidden climate disruption — in the rarely explored depths of the seas that cover more than 70 percent of the Earth’s surface. The reporting has come to a disturbing conclusion: Marine life is facing an epic dislocation.

The U.S. North Atlantic is a prime example. In recent years, at least 85 percent of the nearly 70 federally tracked species there had shifted north or deeper, or both, when compared to the norm over the past half-century, according to the Reuters analysis of U.S. fisheries data. But this great migration is not just off the coast of America. Pushed out of their traditional habitats by the dramatically rising ocean temperatures and other fallout from climate change, summer flounder are part of a global disruption of marine species that threatens livelihoods, cultures and the delicate balance of the oceans themselves.

A mirror image of the flotillas of desperate people trying to escape deadly conflicts, this is a refugee crisis going on beneath the surface of the seas. And much of it has happened in the time it took a child to be born and graduate from high school.

Tillett, threading lead weights onto the bottom of a net, remembers the days of plenty up and down the Atlantic coast, catching summer flounder up north but knowing there were plenty more back home.

“Then, all of a sudden, everything starts moving that way, and nothing is left down here.”

‘There ain’t no flounder around here no more’

Few tourists traveling on Route 64 from the North Carolina mainland to the Hatteras beaches venture into Wanchese.

It isn’t even a town, officially. The U.S. Census Bureau, however, says 1,600 people live here, many of them in one-story cinder-block homes, not the big beach houses on stilts, known euphemistically as cottages, a few miles away.

Most mornings, Danielses and Tilletts and Etheridges, another of the fishing clans, crowd the restaurant down by the marina.

Longtime flounder skipper Steve Daniels pulls up. Steve bought his first trawler in 1978 and started flounder fishing that summer. That was the year Wanchese fishermen decided there was money in the fish. In 1977, they had caught zero pounds. In 1978, they caught 12 million pounds, and in 1979, their catch approached 17 million pounds. And that doesn’t count the millions of pounds they landed during the warmer months in Massachusetts, Rhode Island and New Jersey ports.

Over the years, however, the longer trips north needed to find the fish, among other factors, made the fishing increasingly unprofitable.

“There ain’t no flounder around here no more — they all up there in Rhode Island,” Steve says. “I got the hell out of it three years ago.”

In the early 1990s, summer flounder stocks were on the verge of collapse after being overfished in the 1970s and 1980s, primarily by Wanchese and other North Carolina fishermen.

Today, after years of severe limits on catches, the species is relatively healthy. Unfortunately for Wanchese, it has rebounded in an area well north of where the crews here started fishing for summer flounder.

But that hasn’t made a difference to arcane rules on summer flounder catches.

Nearly a quarter-century ago, when the fishermen of Wanchese were riding high, the U.S. government set quotas for summer flounder. It dictated that about a quarter of all the flounder caught in U.S. waters must be “landed,” or brought to shore, in North Carolina, no matter where they were caught.

Some modest changes being considered for next year could reduce North Carolina’s landings to one-fifth of the national total. But the very makeup of federal fishery-management bodies has stymied greater changes.

Summer flounder is managed by the Mid-Atlantic Fishery Management Council, one of three federally mandated councils that operate along the East Coast. Each council has about 20 members made up of fishermen, scientists, regulators, ecologists and a strong bloc of wholesale fish dealers. The councils’ size and the members’ competing interests make them slow to act. And often, the fishermen and especially the dealers are reluctant to shift an economic benefit from one region to another, as in the case of summer flounder, whose stock has shifted away from mid-Atlantic waters.

Kiley Dancy, a fishery management specialist with the mid-Atlantic council, says there has been much resistance to shifting the landings to states closer to where the fish are now located.

“Many would like for it to stay the same,” she says. The proposed changes, she says, “better reflect the location of the biomass” — that is, the area where the species is most likely to be found.

If adopted, the changes could take effect in late 2019 or early 2020.

In the meantime, summer flounder continue their inexorable move north. Is it, as with so many other species, because of the warming of the water?

“Absolutely. Looking at the data panorama, actually, I think this is fairly well established. I think that any intelligent conversation kind of starts with that just as a matter of fact,” says Joel Fodrie of the Department of Marine Sciences at the University of North Carolina.

Rutgers University fish ecologist Malin Pinsky has been studying how fisheries have shifted around the North Atlantic for the better part of a decade. It was his work, adapting federal trawler sampling dating to 1968, that first identified where the centers of various species were located and illustrated the wholesale shift of species north.

Pinsky is well aware that fish, which can swim wherever they want, live in complex ecosystems, and attributing those shifts simply to climate change would be oversimplifying matters.

Still, he says, his work shows that temperature change is almost certainly the single largest factor. In 2013, he published a research paper that calculated that 40 percent of the northerly shift was attributed to temperature change.

“Actually, that’s impressively high … that something as simple as temperature explained a lot of the pattern, given that there’s fishing, there’s predators, there’s prey, de-oxygenation, pollution and changing currents. There’s so much going on.”

In the case of flounder, the slow rebuilding of the stock has also resulted in a more mature population than the one that existed in the 1980s, according to trawling surveys conducted by the federal government. And older and larger summer flounder tend to live farther north than younger fish, says Fodrie, the UNC professor, who’s been working these waters for the better part of 20 years.

Regulators vs. fishermen

Among the Wanchese breakfast crowd, few names elicit a lengthier string of expletives than Louis Daniel, former executive director of the North Carolina Division of Marine Fisheries. Many fishermen feel he imposed overly strict management of the local catches when he was in charge.

Daniel, unrelated to the Daniels family, knows he is an unpopular man among commercial fishermen. “They think I wanted to put them out of business, that profit should always be put ahead of protecting the resource,” he says.

But, he says, there is little doubt that there are fewer fish in this region than there once were. And some species have clearly been affected by climate change in the region.

Consider striped bass, which he says is a perfect example of how climate change can dislocate fisheries management.

There was a time, not too long ago, when recreational anglers routinely caught striped bass along the beaches in North Carolina. But since the beginning of the century, the number of striped bass has steadily declined.

“North Carolina has not caught any striped bass in five or six years or more,” he says. “There has been nothing on the beach.”

They are, however, routinely found in Canadian waters, which was unheard of a generation ago.

In early 2010, a small population of the fish was still wintering off the Carolina coast. Steve Daniels took his trawler three miles offshore into federal waters. Over a 10-day period, he illegally caught about 12,000 pounds of striped bass, landing the fish here in Wanchese, according to the United States Attorney’s Office.

Last August, Steve pleaded guilty to the charges and agreed to pay $95,000 in restitution. He was sentenced to five years’ probation.

Gambles pay off

Through the years, the families in Wanchese haven’t been afraid to gamble on a hunch.

Mikey Daniels was in high school when a local named Willie Etheridge Jr. decided to make a go at longlining for swordfish.

“That was ’63, ’64,” he says. “We were stacking them up like cordwood. I mean, three or four hundred fish in a stack, and they did it by hand.”

On Dec. 23, 1970, however, the Food and Drug Administration announced that tests showed that swordfish flesh was tainted with extremely high levels of mercury, a toxic metal. And overnight, the swordfish boom went bust.

It took a few years, but Wanchese’s entrepreneurial fishermen got to work on summer flounder. This time it was Mikey’s father, Malcolm Daniels, who took the lead, after struggling for years. At one point, Mikey remembers, his father was so poor there was a collection in town to raise money to help the family.

Eventually, though, his father bought a 65-foot wooden boat that he converted into a trawler that could drag large nets behind it. And before long, he was buying metal shrimp boats from Texas and converting them to trawlers too.

The family also added a trucking company to drive fish to New York and Boston.

“I was 16 years old driving tractor-trailers. My brothers were too,” he says. “We would get to New York, traveling in a group, you know.

The Daniels siblings took over the Wanchese Seafood Company when their father died in 1986. By the time their mother died in 2006, the family had expanded into boats and seafood wholesalers in Virginia, Massachusetts, Alaska and Argentina. When they sold up, they all became millionaires — a rarity in Wanchese.

The Wanchese fishermen fought hard for their place in the flounder business, but they started fading this decade.

In 2013, fishermen from North Carolina accounted for 64 percent of the summer flounder landed in the state, down from 80 percent just a few years earlier.

By 2016, it was less than half. Fishermen from New Jersey and Massachusetts accounted for 35 percent that year, up from nothing a decade earlier.

A winner in New England

On a cold December day hundreds of miles north of Wanchese, snow whips through the New Bedford, Mass., fishing fleet. The wind howls and bangs through the rigging of the boats docked two or three deep along the city’s working piers.

Most of the boats are dark. But the Sao Paulo’s wheelhouse glows orange. Inside, skipper Antonio Borges is preparing to leave as soon as the weather breaks.

The 60-year-old has just returned from 11 days at sea. It could have been a three-day trip if he were allowed to land his catch in Massachusetts, but the law prohibits that.

Instead, he left New Bedford and steamed less than a day before reaching the waters south of Long Island. He dragged his nets in about 50 fathoms of water and filled his hold with summer flounder. Then he turned south for a couple of days to offload some fish in Virginia. Two days after that, he offloaded flounder at the Beaufort, N.C., docks, before turning around and heading home.

A day after tying up in New Bedford, he’s back on the boat getting ready to go to sea.

Borges is fortunate that he can even catch the summer flounder: He bought landing permits from North Carolina and Virginia fishermen. In a perfect world, he says, Massachusetts and other New England and mid-Atlantic states would have a bigger quota.

Still, Borges says he doesn’t mind. He owns a boat large enough to make those trips, even in the foulest of winter weather. And besides, he’s invested in the status quo — he paid for one of those landing permits.

So, even though his time on the seas would be much shorter, he said the distributions of landings shouldn’t change. “It’s not going to happen, and it shouldn’t happen,” he says. “Because the states that we bought the license from, we already knew that we had to go to those states and deliver the fish.”

Traveling the distance from the Northeast to North Carolina benefits fishermen like Borges in bigger boats. At 75 feet and specifically designed for fishing on the high seas, his would loom over many of the flounder trawlers that steamed out of Wanchese in the 1980s.

Plus, he says, the Wanchese fishermen established the business and the North Carolina economy is entitled to benefit from that work, even if it’s no longer feasible for the fishermen to work the waters as much as they once did, he said.

“We go to North Carolina, we bring jobs,” he says. “Wherever we go, we bring business: lumpers to unload the fish, truckers to truck the fish, fuel, food. The economy grows wherever a fishing boat goes. It brings business, and we shouldn’t change that.”

Outside, the snow turns the docks and the decks white. The Portuguese immigrant shrugs.

“Look, it is 21 degrees today. Oh my God, it’s cold. You know what? This harbor used to freeze every single winter. It would freeze for weeks on end.”

Now it doesn’t.

Borges was 18 when his father took delivery of the Sao Paulo in 1977 from a Louisiana shipyard.

Since then, he has married and had two daughters. They married and had three daughters. Now, at the tail end of his career, he reflects on what has changed.

“Forty-two years I have been doing this, 60 years old, and I still love it.”

The most notable change, he says, is that fishermen are no longer the biggest threat to fisheries.

“We were the problem, in the ’70s and ’80s. We grew so much that we became a problem, and if the laws didn’t change, yeah, we were going to catch the last fish, I guarantee you we were.

“But you know what? We’re not the problem now. Climate change is the problem now. It is climate; it is water temperature. There are southern species that are coming north, and the species that were here have moved north.”
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Key to Jair Bolsonaro’s recent election victory was the support of Brazil’s business community, which coalesced around him because he promised to overhaul Latin America’s largest economy and address its worrying budget deficit. But the president-elect has been stingy with the details, and many wonder if he’ll stick to his recent conversion to market-friendly reforms or if the dormant nationalist in him might reappear.

 

Even if he holds fast to the agenda set forth by his economic guru Paulo Guedes, a University of Chicago-trained economist and the man who convinced many investors to take a chance on Bolsonaro, the former army captain could face fierce opposition in Congress and from labor unions to what will be undoubtedly unpopular measures. His economic agenda will also have to compete for priority with his better-known promises to crack down on crime and corruption, and the latter are much dearer to his heart — and his base.

 

“It’s really unclear what Bolsonaro is when it comes to economic policy,” said Matthew Taylor, an associate professor at American University’s School of International Service. “He himself has admitted to ignorance on the economic front, but he’s also an extraordinary statist and a nationalist.”

 

For years, Bolsonaro, who will be inaugurated Jan. 1, supported heavy involvement of the state in the economy, and he remains an admirer of Brazil’s 1964-1985 military regime, which supported nationalist policies. But during the campaign, he espoused free-market principles.

 

It’s not clear how complete his conversion is. For instance, after Guedes told reporters that he supported privatizing all of Brazil’s dozens of state companies, Bolsonaro walked that back, saying he would sell off many but keep “strategic” ones, including big names like Petrobras and Banco do Brasil.

 

Amid this swirl of doubt, one thing is clear: Brazil must quickly cut its deficit or it risks heading back into crisis. A World Bank analysis concluded last year that Brazil spends more than it can afford and spends poorly.

 

Brazil’s central government deficit was 7 percent of gross domestic product in 2017, according to the Central Bank, and has been above 5 percent in recent years. A large portion is interest payments on debt, but even excluding those, Brazil still had a primary deficit of 1.8 percent of GDP last year — which economists say is unsustainable because it means the already high debt level will continue to grow.

 

The new administration will have only a narrow window to show investors that it’s serious about addressing this problem — by cutting spending or raising taxes — before they will begin to balk, making an adjustment more difficult because it could drive up borrowing costs.

 

Compounding the challenge, Brazil is only just beginning to emerge from a two-year-long recession, and growth remains stagnant. That means it can’t rely on big increases in tax revenues to help it plug the hole — and Bolsonaro has even promised to cut tax rates.

Guedes, who will lead the Economy Ministry, appeared to be sending just that signal hours after Bolsonaro’s victory on Oct. 28. He laid out a three-part plan to reduce Brazil’s public spending by passing a pension reform, privatizing state companies to draw down the debt and enacting other unspecified reforms that will reduce “privileges and waste.”

 

Pension reform will be the linchpin in reducing Brazil’s state spending for two reasons: Brazil’s government spends more on pensions than anything else, and many other parts of the budget can’t be altered because they’re mandated by the constitution.

 

Attempts to reform the pension system will likely face stiff resistance from labor unions and other groups since any measure will force Brazilians to work longer and receive fewer benefits. Bolsonaro, who in 27 years in Congress didn’t show any particular gift for building consensus, will have to build a broad coalition to get a reform through. His Social Liberal Party holds about 10 percent of the seats in next Congress, but so does the Workers’ Party, which is against such a reform and has vowed tough opposition.

President Michel Temer, who is known for his ability to negotiate with Congress, failed at that task. Still, Glauco Legat, the chief analyst at the brokerage Spinelli, points out that Bolsonaro’s decisive win gives him more legitimacy than Temer, who came to power after his predecessor was impeached in controversial proceedings.

 

Any reform will be whittled away at in order to win votes, but Monica de Bolle, director of Latin American Studies at Johns Hopkins University, says she fears Bolsonaro’s proposal will lack ambition right out of the gate since he has indicated he will leave military personnel out of it. That could also mean he will exclude other civil service sectors, which are key to taking a bite out of the problem.

 

“The watering down process is going to take place on the basis of an already diluted reform,” she said.

 

Beyond pension reform, Bolsonaro has promised to reduce the size of the state, including halving the number of ministries, and selling off state companies. Reducing the number of ministries could yield some savings, but other presidents have struggled to do that in more than name. And Bolsonaro has already taken off the table many state companies that would yield the most cash.

 

Instead, economists say that many of the savings lie in eliminating inefficiencies. Guedes didn’t give details, but if he’s serious about reducing waste, there’s plenty of it: The World Bank analysis highlighted Brazil’s high civil service salaries, a constitutional mandate on education spending that often results in spending for spending’s sake, overlapping social welfare programs and a proliferation of small hospitals in the public health system.

 

Despite the challenges, Legat said it’s important to remember that just by virtue of saying he’ll take on Brazil’s thorny issues, Bolsonaro has built momentum, which can have real-world effects.

 

“He brings optimism that’s very important for the economy in this moment,” he said. “This increase in confidence is reflected in real numbers.”
…

The top U.S. diplomat has granted an exception to certain U.S. sanctions that will allow the India-led development of a port in Iran as part of a new transportation corridor designed to boost Afghanistan’s economy, a State Department spokesman said Tuesday.

The exception granted by Secretary of State Mike Pompeo to U.S. sanctions reimposed on Iran on Monday also will permit the construction of a railway line from Chabahar port to Afghanistan, and for shipments to the war-torn country of non-sanctionable goods, like food and medicines, the spokesman said.

In addition, Afghanistan will be allowed to continue importing Iranian petroleum products, the spokesman said.

“These activities are vital for the ongoing support of Afghanistan’s growth and humanitarian relief,” the spokesman said in a statement emailed to Reuters.

The sanctions reimposed on Iran’s oil exports — its main revenue source — and financial sector were triggered by U.S. President Donald Trump’s May 8 decision to abandon the 2015 international deal designed to block Tehran’s development of nuclear weapons.

Trump denounced the deal, which lifted sanctions on Iran in return for limits on its nuclear program. He argued that it would not prevent Tehran from developing weapons and failed to address other activities, such as its ballistic missile program and support for extremist groups.

The sanctions, however, threatened India’s ability to obtain financing for the development of Chabahar, which could potentially open the way for millions of dollars of trade for land-locked Afghanistan and end its dependence on Pakistan’s port of Karachi.

Building Afghanistan’s economy also could reduce Kabul’s dependence on foreign aid and put a major dent in the illicit opium trade, the main revenue source of the Taliban insurgency.

The sanctions exception granted to the Chabahar project aims to further U.S. ties with Afghanistan and India “as we execute a policy of maximum pressure to change the Iranian regime’s destabilizing policies in the region and beyond,” the State Department spokesman said.
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China is set to overtake France as the world’s top tourist destination by 2030 as a growing middle class in Asia looks to spend more on travel, according to experts at market research group Euromonitor International. 

In a report published Tuesday at an industry conference in London, Euromonitor said it was predicting that 1.4 billion trips would be taken in 2018, up 5 percent from last year. Stronger growth in many major economies means industry receipts will rise by an estimated 11 percent. 

By 2030, international arrivals are expected to have risen by another billion, corresponding to around $2.6 trillion in receipts. China is expected to have overtaken France by then to become the world’s No. 1 destination. 

Much of the sustained boom in travel and tourism, which has outpaced growth in the global economy for eight years, is centered in the Asia-Pacific region, where trips are expected to grow by 10 percent this year. The region has benefited from rapidly growing economies as well as an expanding middle class that seeks to spend disposable income on leisure. 

Euromonitor’s senior travel analyst, Wouter Geerts, said the gradual process of loosening visa restrictions has made traveling in the region easier, with 80 percent of arrivals in Asia originating from the region. He also said sporting events would most likely further boost the region, with Tokyo hosting the 2020 Summer Olympic Games and Beijing the 2022 winter event. 

“Tourism is a key pillar of the Chinese economy, and much investment has been made to improve infrastructure and standards, in addition to tourism-friendly policies and initiatives,” he said. 

Egypt doing well

Other bright spots in the forecast are countries like Egypt, Tunisia and Turkey, which have seen sharp falls in tourist numbers over the past few years linked to security concerns. 

Egypt, in particular, appears to be doing well, following a long period of decline largely linked to the political upheaval since a popular uprising in 2011 and the downing of a Russian passenger plane over Egypt’s Sinai Peninsula in 2015 by an affiliate of the Islamic State group, killing 224 people. 

Though Egypt’s bookings were up 134 percent in 2017-18 from the year before, according to Euromonitor, the industry is still short of where it was in 2010. Egyptian government figures show 8 million tourists visited the country last year, well down from the 14 million recorded in 2010. 

Europe is also proving resilient and growing strongly despite economic and political turmoil in some countries and a slew of extremist attacks in recent years. 

One source of uncertainty for the outlook centers on Brexit. A “no-deal” Brexit, which would see Britain crashing out of the European Union in March, would see millions opt to stay at home — an estimated 5 million in 2022 — rather than book overseas holidays, the report says. That would have a ripple effect across many destinations, notably in Spain, where U.K. travelers account for around a fifth of the tourist-related revenues. 

Euromonitor also warned that the U.S. tourism industry could face a hit if the trade tensions between the U.S. and China escalate. 
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Amazon isn’t commenting on reports that it plans to split its new headquarters between facilities in two cities rather than choosing just one.

The New York Times, citing unnamed people familiar with the decision-making process, said the company is nearing deals to locate in Queens in New York City and in the Crystal City area of Arlington, Va., outside Washington, D.C. The Wall Street Journal, which also reported the plan to split the headquarters between two cities, says Dallas is still a possibility as well.

Spokesman Adam Sedo said Amazon, which will also keep its original headquarters in Seattle, would not comment on “rumors and speculation.”

Amazon’s decision to set up another headquarters set off an intense competition to win the company and its promise of 50,000 new jobs. Some locations sought to stand out with stunts, but Amazon emphasized it wanted incentives like tax breaks and grants. It also wanted a city with more than 1 million people, an airport within 45 minutes, direct access to mass transit and room to expand.

The company received 238 proposals before narrowing the list to 20 in January.

The unexpected decision to evenly divide the 50,000 jobs between two cities will allow the company to recruit enough talent and also relieve pressures from demand for housing and transportation, the Wall Street Journal reported.

The New York Times said Amazon executives met last month with New York Gov. Andrew Cuomo and the state had offered possibly hundreds of millions of dollars’ worth of subsidies. They also met with New York City Mayor Bill de Blasio, it said.

“I’ll change my name to Amazon Cuomo if that’s what it takes,” the report cited Cuomo as saying.

Amazon has said it could spend more than $5 billion on the new headquarters over the next 17 years, about matching the size of its current home in Seattle, which has 33 buildings, 23 restaurants and 40,000 employees.

Amazon founder and CEO Jeff Bezos has said the new headquarters will be “a full equal” to its current home.

Amazon already employs 600,000 people. That’s expected to increase as it builds more warehouses across the country to keep up with online orders. The company recently announced that it would pay all its workers at least $15 an hour, but the employees at its second headquarters will be paid a lot more — Amazon says they’ll make an average of more than $100,000 a year.
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Nigerian trade unions and the government agreed to a new minimum wage proposal on Tuesday, in an attempt to avert a planned nationwide strike following threats to shutdown Africa’s biggest economy, a union official said.

Unions, which have been discussing with the government a new minimum wage proposal, had planned to commence a strike on Tuesday.

Nigerian Labor Congress (NLC) General Secretary Peter Ozo-Eson said a committee set up with the government was recommending 30,000 naira as the new monthly minimum wage, after a series of meetings, up from the current minimum of 18,000 naira.

He said the proposal, which was negotiated by senior government officials including Labor Minister Chris Ngige, would be recommended to President Muhammadu Buhari on Tuesday.

“Following … the signing of the final report recommending 30,000 naira as the recommended new national minimum wage … the strike called to commence tomorrow has been suspended,” Ozo-Eson said.

“We all need to stand ready in a state of full mobilization in case future action becomes necessary to push for the timely enactment and implementation of the new minimum wage.”

Nigeria’s main unions launched a strike in September after the wage talks broke down. Unions initially wanted the monthly minimum wage raised to about 50,000 naira ($164). But the government, which is facing dwindling revenues due to lower oil prices, declined the proposal.

Unions later suspended strikes on their fourth day, saying the government had agreed to hold talks to discuss raising the minimum wage.

Buhari had vowed to review the wage due to a fuel price hike and currency devaluation in the last two years aimed at countering the effects of a global oil price plunge that hit the country hard. Nigeria is Africa’s biggest crude producer.

Buhari plans to stand for a second term at an election next February and his economic record will come under scrutiny, given previous pledges to raise living standards, tackle corruption and improve security.
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When Han Siyuan first decided to apply for a job as a pilot cadet in 2008, she was up against 400 female classmates in China on tests measuring everything from their command of English to the length of their legs.

Eventually, she became the only woman from her university that Shanghai-based Spring Airlines picked for training that year. She is now a captain for the Chinese budget carrier, but it has not become much easier for the women who have come after her.

Han is one of just 713 women in China who, at the end of 2017, held a license to fly civilian aircraft, compared with 55,052 men. Of Spring Airlines’ 800 pilots, only six are women.

“I’ve gotten used to living in a man’s world,” she said.

China’s proportion of female pilots — at 1.3 percent — is one of the world’s lowest, which analysts and pilots attribute to social perceptions and male-centric hiring practices by Chinese airlines.

But Chinese airlines are struggling with an acute pilot shortage amid surging travel demand, and female pilots are drawing attention to the gender imbalance.

Chinese carriers will need 128,000 new pilots over the next two decades, according to forecasts by planemaker Boeing, and the shortfall has so far prompted airlines to aggressively hire foreign captains and Chinese regulators to relax physical entry requirements for cadets.

“The mission is to start cutting down the thorns that cover this road, to make it easier for those who come after us,” said Chen Jingxian, a Shanghai-based lawyer who learned to fly in the United States and is among those urging change.

‘Token Efforts’

Such issues are not confined to China; the proportion of female pilots in South Korea and Japan, where such jobs do not conform to widespread gender stereotypes, is also less than 3 percent.

But it is a sharp contrast to the situation in India, which, like China, has a fast-growing aviation market. But thanks to aggressive recruiting and support such as day care, India has the world’s highest proportion of female commercial pilots, at 12 percent.

China’s airlines only hire cadets directly from universities or the military. They often limit recruitment drives to male applicants and very rarely take in female cohorts.

In addition, unlike in other markets, such as the United States, China does not allow people to convert private flying licenses to commercial certificates for flying airliners.

Li Haipeng, deputy director of the Civil Aviation Management Institute of China’s general aviation department, said many airlines were also dissuaded to hire women by generous maternity leave policies. That has been further aggravated by Beijing’s move in 2015 to change the one-child policy, he added.

“Male pilots do not have the issue of not being able to fly for two years after giving birth, and after the introduction of the second-child policy, airlines are not willing to recruit and train a pilot only to have her not being able to fly for about five years,” he said.

He said Air China, China Eastern Airlines and China Southern Airlines had all made some effort to recruit female pilots, adding “nearly all other companies do not.”

China Eastern  and China Southern declined to comment while Air China did not respond to Reuters’ requests for comment.

Pilots said that hiring decisions were usually left to individual airlines and did not appear to be driven by the country’s regulator, the Civil Aviation Administration of China, whose recruitment requirements do not mention gender.

Xiamen Airlines, a China Southern subsidiary, told Reuters it offers up to 540 days of maternity leave. It started recruiting female pilots in 2008, and paused for a few years in between before resuming last year. Out of its 2,700 pilots, 18 are women while another 18 are in training.

“Allowing more women to become pilots is undoubtedly a good way to supplement (an airline’s) flying capability,” a spokesman for the carrier said.

Persuasion and Publicity

The strongest calls for change are coming mostly from Chinese female pilots, thanks to a slew of returnees who learned how to fly while living abroad in countries like the United States.

In March, the China Airline Pilots Association (ChALPA) established a female branch at an event attended by pilots from the People’s Liberation Army Air Force and local airlines, according to media reports.

Chen, the lawyer who also serves as a vice president of the ChALPA’s women’s branch, said she and others have been trying to spread the word by speaking about the issue at air shows in China.

Eventually, she said, the organization hopes to persuade Chinese airlines to adjust their recruitment and maternity policies.

Another key obstacle to tackle, she added, was the inability of general aviation pilots to shift to the commercial sector.

“It’s a systemic issue,” she said. “We hope that change can happen in three to five years, but this is not something that is up to us.”

Others like Han, who in recent months has appeared in Spring Airlines promotional videos, said she hoped the growing publicity would help to raise awareness.

“I can’t personally give people opportunities,” she said.

“But I hope that (the publicity) can slowly help open the door for companies or for girls with dreams to fly.”
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