June 25, 2017

Supersonic air travel may be back within decade

© NASA Langley Research CenterNASA seeks to revive supersonic air travel with quiet passenger jet initiative

Scholl said five airlines had ordered the planes, including Virgin. The names of the other four customers will be announced at special events.

“Airlines are excited for something new and different to offer their passengers, and we’re thrilled that major world airlines share our vision for a future of faster, more accessible supersonic travel. We look forward to sharing more about these partnerships in the future,” said Scholl at a Paris Air Show news conference.

He added the new aircraft orders are backed by “tens of millions” of dollars in non-refundable payments.

The plane will have a list price to customers of $200 million.

According to Boom, the average length of the flight from Paris to New York will fall from seven to three and a half hours when the airliner flies at its top speed of Mach 2.2. A flight from San Francisco to Tokyo will take a little over five hours, compared to the current eleven.

A business class ticket from London to New York is estimated at $5,000.

The new plane comes with two configurations of either 55 business class seats or 15 business with 30 first class seats on longer flights.

The company plans to have the aircraft in the skies by 2023 but is first developing a smaller supersonic jet to test the technology.

The XB-1 Supersonic Demonstrator will fly in Denver late next year after passing a significant performance and safety test, said Scholl.

He added that the new development technology makes Boom’s jet faster and less costly for passengers than the British-French supersonic jet Concorde which flew passengers across the Atlantic for 27 years before retiring in 2003.

“Concorde was designed half a century ago with slide rules and wind tunnels. Today we’ve got better aerodynamics, new materials, better engines, and all that adds up to a 75 percent reduction in operating cost,” he said.

The company expects around 1,300 supersonic airliners will be built over ten years.

Article source: https://www.rt.com/business/393223-supersonic-return-airline-orders/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

Bank of England nemesis George Soros warns Brexit is ‘lose-lose’ scenario

Georges Soros, Chairman of Soros Fund Management. © Charles PlatiauSoros’s bad bet against Trump cost his clients $1bn

“We are fast approaching the tipping point that characterizes all unsustainable economic developments,” Soros wrote in an op-ed published Monday on the website of the Project Syndicate news organization.

“The fact is that Brexit is a lose-lose proposition, harmful both to Britain and the European Union. It cannot be undone, but people can change their minds. Apparently, this is happening,” the businessman wrote.

Soros predicts mounting debt and falling living standards for Britons.

“Economic reality is beginning to catch up with the false hopes of the general population. They believed the promises of the popular press that Brexit would not reduce their living standards, so they managed to maintain those standards by running up their household debts,” explained the billionaire.

“Once the experience of June is repeated in subsequent months, households will realize that their living standards are falling and they will have to adjust their spending habits,” warned Soros.

“To make matters worse, they will also realize that they have become over-indebted and they will have to pay back their debts. This will reduce the household consumption that has sustained the economy even further,” he added.

On 16 September 1992, Soros’ $10 billion short position on the British pound forced the Bank of England to withdraw Sterling from the European Exchange Rate Mechanism (ERM) after it was unable to keep the currency above its agreed lower limit in the ERM.

Soros pocketed $1 billion on the deal and gained a reputation as the premier currency speculator in the world.

Article source: https://www.rt.com/business/393221-soros-brexit-eu-uk/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

Barclays charged with fraud over Qatar-backed rescue

© Toru HanaiEx-Barclays banker charged for leaking insider info to plumber

The announcement by the Serious Fraud Office (SFO) marks the culmination of a five-year investigation into the emergency action Barclays took in 2008 to avoid a state bailout when Britain’s banking system was on the verge of collapse.

The case revolves around the £322 million ($410 million) in fees the British bank paid to Qatari investors for a loan as part of a wider £12 billion fundraising during the 2008 financial crisis. The Barclays deal with Qatar also included a $3 billion loan.

The SFO said Barclays former Chief Executive Officer John Varley, former chairman of investment banking for the Middle East Roger Jenkins, ex-deputy head of investment banking Richard Boath and ex-wealth chief Thomas Kalaris face charges along with the bank.

Varley and Jenkins both face three counts of conspiracy to commit fraud and unlawful financial assistance.

A lawyer for the 61-year-old Jenkins said his client would “vigorously defend against these charges.”

“As one might expect in the challenging circumstances of 2008, Mr. Jenkins sought and received both internal and external legal advice on each and every subject mentioned in the accusations leveled by the SFO today,” said Jenkins’ US-based lawyer Brad Kaufman.

The four defendants are to appear in a London court on July 3.

The bank said in a statement it was “considering its position.”

Since the financial crisis, Barclays has faced different investigations, including into the manipulation of the main benchmark rates and the way executives dealt with whistleblowers.

Last year four former Barclays’ traders were found guilty of Libor rigging between 2005 and 2007. The verdicts came four years after Barclays received a hefty fine over rate-fixing. The case provoked political and public reaction forcing the bank’s CEO Bob Diamond to resign.

Article source: https://www.rt.com/business/393177-barclays-qatar-fraud-fine/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

Are Russia and the Saudis planning a natural gas cartel?

Russian President Vladimir Putin (L), Saudi Deputy Crown Prince Mohammed bin Salman (R) © Pavel GolovkinPutin meets Saudi Prince after oil production cuts deal extension

At the same time, Russia and Saudi continue to give indications of a possible OPEC 2.0 scenario, in which a possible Russian membership is on the table. This would confront the market with a renewed and stronger oil cartel, although the overall strategies need to be adjusted.

At the same time, Saudi Arabia, via its oil giant Aramco has openly stated to be interested in global gas investment opportunities, starting in Russia’s Siberian region. While the media still looks at the current discussions as a pure crude oil cooperation strategy, some see another development on the horizon.

The real power of OPEC, non-OPEC cooperation would increase if they would not only include a crude oil production cut, but also integrate the other (hidden) cartel, the Gas Exporting Countries Forum (GECF). An OPEC 2.1, including gas exporters, would really block any negative developments in the market, even shale oil and gas.

At present, international analysts and media sources are hyping the story about Saudi Arabia’s multi-billion dollar investments in Russia’s oil and gas sectors. Statements made by Saudi minister of petroleum Khalid Al Falih are only making headlines at present if he indicates that oil giant Aramco will be targeting natural gas projects and even LNG in future.

LNG tanker © Haryadi Be / Global Look PressSaudi beef with Qatar may be about gas, not terrorism

Certain analysts think that Aramco is taking the same road as Shell, BP and other oil majors, have taken, diversifying away from oil and into gas. The ‘Golden Age of Gas’, as reported by the IEA has not yet become reality. Riyadh now seems interested in becoming a convert of the gas era, but reality is not as simple. There is more between the lines than currently is being discussed in the media.

First of all, Saudi Aramco has always been heavily involved in the gas sector, as it is already a very large gas producer. Recent figures show that Saudi Arabia’s total proved natural gas reserves are set to be around 8500 bcm, which means it holds the sixth most proved natural gas reserves globally and the third most in the Middle East.

In 2014, Aramco produced around 102.4 bcm of natural gas, which made them the eighth largest natural gas producer in the world. Additionally, it marked the fifth consecutive year of increasing natural gas production in Saudi Arabia, illustrating that Saudi Arabia has emphasized growing their domestic production in order to continue to meet their energy demand.

The Kingdom also is not only a huge producer of natural gas, its local consumption is also impressive. The kingdom consumed 108.2 bcm in 2014, making it the 5th largest consumer worldwide. In 2014, natural gas made up ~40.7 percent of Saudi Arabia’s primary energy consumption.

Read more on Oilprice.com: Iraq Dethrones Saudi Arabia As India’s No.1 Oil Supplier

The country’s natural gas consumption has continued to grow as has natural gas’s role in Saudi Arabia’s current energy mix. In 2014, natural gas made up ~40.7 percent of Saudi Arabia’s primary energy consumption. For the next years this will increase substantially.

© Reuters Qatar may be Russia’s trump card to boost gas supplies to Europe

Currently, Saudi Arabia does not import or export natural gas and therefore they have not established themselves as a global natural gas supplier even though they produce significant amounts of it. Additionally, Saudi Arabia has been able to achieve important security of supply due to the fact that they only rely on themselves for their natural gas needs.

However, this also means that Saudi Arabia will have to continue to produce at high levels going forward to meet their domestic demand. To counter growing demand for natural gas, Aramco is even pursuing shale gas in the future, with first production expected around 2020-2021.

A rapid development of reserves is necessary, as not only will the Kingdom need more gas to compensate for its current crude oil usage, which is a direct financial pressure on the budget, but current diversification plans also imply increased natural gas consumption in the petchem industry. Next to this, increased gas production is crucial for power generation and water desalination in the near future.

Technically, gas production is also of importance to support crude oil production, partly via gas reinjection projects on ageing oil fields. The above painted situation was part of the EP strategy of Aramco, when it took in several IOCs (Shell) and independents to search for new gas reserves, especially in the Rub Al Khali (Empty Quarter). The latter until now has been rather disappointing, and most international parties have left.

The present and future gas cooperation between Russia and Saudi Arabia should be assessed in this light. Aramco’s internationalization strategy includes investments and operations in Russia or FSU republics the coming years. These actions are part of a diversification drive in Aramco, but should not be looked at with only attention for the Russian opportunities.

Taking into account the current Saudi situation, Aramco has been looking for access to technology, RD and cooperation since decades with the usual suspects. Gazprom, Lukoil and Rosneft were not included at that time in the inner circle, as the geopolitical situation and the clash between communism and Wahhabism prevented an opening. This has changed, and both sides are now showing an increased willingness to cooperate in both their territories, Russia but also Saudi Arabia.

The Saudi offer to invest in Russia will have very strong strings attached. Investing in Russian oil and gas operations, including LNG, will be linked to receiving an in depth insight and access to Russian gas technology and RD. Aramco will without any doubt have direct research links and investments with Gazprom VNIIGAZ (Scientific-Research Institute of Natural Gases and Gas Technologies) — with its research operations in Saratov, next to the Volga River could substantially support “In Kingdom” gas operations and production projects in the future.

The bottom line at present for Saudi Arabia’s geopolitical and economic power drive is an increased economic diversification effort at home. All instruments, including the multibillion investments by the Saudi sovereign wealth fund PIF, which will include Saudi Aramco IPO revenues in 2018, in the RIDF (Russian Direct Investment Fund) should be seen in that light. The meetings between Saudi deputy crown prince Mohammed Bin Salman or Saudi minister of petroleum Khalid Al Falih with Russian president Putin and his cohorts are linked to the internal drive of the Kingdom.

Read more on Oilprice.com: Solar And Wind Revolution Happening Much Faster Than Expected

CEO of Russia's state gas giant Gazprom Alexei Miller © Sergei KarpukhinGazprom CEO sees Russian dominance of European gas market

This cooperation could also be driven by another issue. In addition to the historic cooperation between the two oil producers, as shown in the OPEC non-OPEC production cut agreements the last years, both have been discussing since years also a global gas cooperation. Even that the oil price plunge has pushed both former adversaries to cooperate, an expansion to gas could even be strategically very interesting.

For Russia, a combined market approach of OPEC and the Gas Exporting Countries Forum (GECF), labelled sometimes as the gas cartel, would increase its global power. The same is the case for Saudi Arabia, as the OPEC leader, holding vast reserves of natural and associated gas, understands that a combined OPEC-GECF strategy could have several main strategic advantages.

Not only would this create a power bloc that could have a much higher impact on the U.S. shale revolution, blocking part of the global market if necessary, but also it would increase pressure on Saudi’s main rival at present Qatar, the world’s leading LNG exporter.

By cooperating with Russia, Saudi Arabia could kill two birds with one stone. Riyadh’s strategy with OPEC – Russia could be solidified, while at the same time it holds power over the world’s gas sector.

Moscow’s support for Riyadh’s plans will not only benefit the Kingdom’s natural gas development, but also corner Qatar fully. A combined Russian-Saudi power play in global gas could change it dramatically. Putin and MBS could be looking for a kill.

This article was originally published on Oilprice.com

Article source: https://www.rt.com/business/393062-russia-natural-gas-saudi-arabia/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

Lockheed Martin about to close $37bn+ deal for F-35 jets

The contract will be the biggest yet for the F-35 jets and will consist of three tranches over fiscal years 2018-2020.

According to people familiar with the talks, the pricing of the jets is not final, although the average price of the 440 jets was expected to be $85 million each.

Touted as the fifth-generation fighter jet with a modular design, the F-35 comes in three variants.

U.S. President-elect Donald Trump © Shannon StapletonLockheed CEO promises cheaper F-35 1,800 jobs after meeting with Trump

The average price for the F-35 “A” variant could be $85 million in 2019 and could drop below $80 million in 2020, the sources said.

A Lockheed representative said the company does not discuss negotiations on contracts and any deal involving a “block buy” would be announced by the US government.

One of the sources told Reuters the US Defense Department expects to spend $379 billion, down from $391 billion, to develop and buy 2,443 of the supersonic warplanes through 2039.

“This is part of an ongoing process. If it gets done, it would be a plus for Lockheed, allowing for better long-term production management,” said Robert Stallard, an analyst at Vertical Research.

The F-35 program has been widely criticized for being too expensive, including by US President Donald Trump who tweeted in December the cost was “out of control.” A month later Lockheed Martin CEO Marillyn Hewson met with Trump projecting “thousands and thousands of jobs” at the Lockheed plant in Texas, where the F-35 is built, and cheaper costs.

In February, the Pentagon agreed to a deal for a tenth batch of fighter aircraft and to pay below $95 million per jet for the first time, compared with $102 million in the previous purchase.

The Pentagon said the price of a jet could fall 16 percent to around $80 million in future purchases.

Article source: https://www.rt.com/business/393015-lockheed-deal-jets-sale/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

Hawaii may become first US state to adopt basic income

© Dean TremlKiwis consider paying people for doing nothing

The bill, titled House Concurrent Resolution 89, was brought by Hawaii State Representative Chris Lee and was passed by both houses of the state legislature in a unanimous vote.

The resolution declares that all the islanders “deserve basic financial security.”

It also orders government offices to weigh the state’s economy and find ways to ensure all families have basic financial security, including an evaluation of different forms of a full or partial universal basic income.

“As innovation and automation and inequality disrupt our economy, we want to make sure that everybody benefits and nobody is left behind. It’s past time that we had a serious talk about not just tweaking our economic policies, but having a new discussion from the ground up about what our values and priorities are,” said Lee as quoted by US online magazine Mother Jones.

According to Lee, the measure is necessary due to Hawaii’s excessive cost of living, which is reportedly the highest in the country, as well as the state’s heavy reliance on low-paid service industry jobs.

The bill reportedly keeps focus on Hawaii’s service-focused economy, vulnerable to any disruptions that might be brought by job-killing tech change, including e-trading and automation of basic service processes.

The idea of a UBI, first proposed in the US by former President Richard Nixon in 1969, is widely debated with critics saying that free money may lead to more lax attitude about work. Moreover, such a program is almost impossible to finance.

READ MORE: Swiss voters overwhelmingly reject $2,500 basic income proposal in national referendum

At the same time, some experts advocate the system due to potential to improve social welfare programs and diminish unemployment created by automation.

“Planning for the future isn’t politically sexy and won’t win anyone an election. But if we do it properly, we will all be much better off for it in the long run,” Lee wrote in a Reddit post.

Article source: https://www.rt.com/business/392573-hawaii-pass-bill-basic-income/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

Google faces record fine from EU over market dominance

© Elijah Nouvelage Google Russia agrees to pay $8mn antitrust fine

According to the Financial Times, citing its sources, EU officials are expected to announce in the coming weeks that the company has been guilty of manipulating its search engine results to favor its new Google Shopping service, which offers price comparisons on products.

If enacted, the bill could top the record abuse penalty handed out to chipmaker Intel in 2009, people familiar with the case told FT.

The fine will be capped at a maximum of 10 percent of the company’s total revenues, which in case of Google’s parent Alphabet stood at $90 billion last year.

Google will also have a set time to propose how it intends to operate in the future in building its shopping business. If the company fails to reach a deal with the regulators over that period, it could be fined up to 5 percent of average daily turnover for each day of delay.

The regulators’ decision could also open the way for shopping comparison competitors or customers to file damages claims against Google.

In another case, the EU is investigating whether Google unfairly banned competitors from websites that used its search bar and advertisements. It is also examining how the firm pays and limits mobile phone providers who use its Android software and Play app store.

Last year, Europe’s competition commissioner Margrethe Vestager ruled that US technology giant Apple should pay €13 billion back tax to Ireland. The regulator found that Apple’s tax regime in Ireland had been a form “illegal state aid.”

Since 2000, European regulators have investigated Microsoft, Intel, Apple, Google, Facebook and Amazon over a range of antitrust issues. The probes raised suggestions that Brussels was mounting a campaign against US companies which it had rejected.

Article source: https://www.rt.com/business/392571-google-record-fine-eu/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

Global overcapacity drags oil prices down to six-month lows

North Sea Brent crude was trading at $47.30 per barrel at 09:25 GMT. US benchmark West Texas Intermediate rose 0.56 percent, trading at $44.71 per barrel.

© Essam Al-SudaniSaudi Arabia may be targeting US inventories to prop up oil prices

Slight increases were prompted by a partial export halt in Libya, according to traders quoted by Reuters.

However, prices are still down by nearly 13 percent since May 25, when the Organization of the Petroleum Exporting Countries (OPEC), Russia, and other oil producers agreed to extend production cuts.

The agreement to curb output by 1.8 million barrels per day (bpd) has been prolonged through March 2018.

The effectiveness of the OPEC-led cuts has been undermined by increasing US oil production, mostly from shale drillers.

“Oil is unlikely to find solace into the weekend either, with tonight’s Baker Hughes Rig Count expected to deliver its now weekly increase of operational rigs,” said Jeffrey Halley, senior market analyst at futures brokerage OANDA in Singapore, as quoted by Reuters.

“A relentless build in the US rig count, weekly builds in US inventories, rising production in Nigeria and Libya, and weak compliance by key OPEC members Iraq and the UAE” are among the main reasons for falling oil prices, according to analysts at US investment bank Jefferies.

High levels of production and exports from Russia are reportedly contributing to the ongoing glut as well.

According to data compiled by Reuters, Russia will export 61.2 million tons of oil through pipelines in the third quarter, which is nearly five million bpd, compared to 60.5 million tons in the previous quarter. Along with tanker shipments, Russia is likely to export over nine million bpd.

US crude production has increased over 10 percent within the past year, to 9.3 million bpd. The Energy Information Administration (EIA) forecasts that American output will surpass 10 million bpd next year.

Article source: https://www.rt.com/business/392545-oil-up-us-supply-opec/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

EU strikes deal on €8.5bn bailout loan for Greece

© Alkis Konstantinidis Greece fails to reach bailout deal with eurozone finance ministers

The international creditors said the bailout fund will disburse €8.5 billion (US$9.5 billion) to Greece and that the payment still has to be parliamentary approved in some countries.

“It’s a very constructive decision that will help Greece, also on the international market, to gradually get more credibility,” Luxembourg Finance Minister Pierre Gramegna said as cited by Bloomberg. “The goal is for Greece to go back to the markets in the coming months or year.”

The latest tranche will help Athens to avoid a default next month when it faces debt repayments of nearly €7.3 billion.

After two years of hesitation, the International Monetary Fund (IMF) said it was ready to participate in the country’s third bailout. IMF head Christine Lagarde said the fund could join the program with financial support “in the range of $2 billion” only after a full deal on additional measures of debt relief for Greece.

To get a new installment of bailout funds, Athens has promised to cut pensions in 2019 and reduce the tax-free threshold in 2020 to produce savings worth two percent of GDP. The authorities also agreed to sell coal-fired power plants and coal mines equal to about 40 percent of the capacity of state-run power utility Public Power Corporation.

Last month Greek lawmakers passed new legislation with over €4 billion in new austerity measures.

A rising Greece slides back into recession as bailout talks drag on growth

The eurozone group has praised the financial and structural reforms enacted by Athens.

“I am pleased to announce we have achieved an agreement on all elements,” said Eurogroup head Jeroen Dijsselbloem.

According to German Finance Minister Wolfgang Schaeuble, the Bundestag will discuss the bailout deal on Friday.

“Greece has to become competitive to get access to debt markets so it can stand on its own two feet,” Schaeuble said, adding “for that Greece has to carry out reforms.”

Greek Finance Minister Euclid Tsakalotos said the agreement would allow market access “in due course.”

“There is now light at the end of the tunnel,” he said.

Article source: https://www.rt.com/business/392536-eurozone-greece-creditors-agreement/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

Alternative cryptocurrency ‘ethereum’ looks to topple bitcoin

According to a chart presented by CoinMarketCap, bitcoin currently accounts for nearly 39 percent of the combined market capitalization for all cryptocurrencies, though that figure is down sharply from late February’s 87 percent.

READ MORE: Bitcoin helps marijuana growers sidestep banking issue

At the same time, ethereum, which accounted for over 31 percent of the combined market cap of virtual currencies, saw just a five percent drop over the past four months.

Bitcoin has enjoyed the largest share of the cryptocurrency market since it was first introduced in 2009, with no serious rivals in sight – up till now.

Ethereum, which has been around for less than two years, is becoming bitcoin’s biggest rival.

The currency was developed by Russian-born programmer Vitalik Buterin, who launched an open-source computing platform called ethereum based on blockchain technology.

In the event ethereum’s market value overtakes bitcoin’s, experts expect a shift in market forces called “The Flippening” to occur, after which ethereum may become the biggest, most valuable, and most important cryptocurrency.

According to data from CoinDesk, the current market cap of bitcoin is slightly above $40 billion, with the price swinging around $2,400, while ethereum’s market cap is over $29 billion, with a price of around $315 per coin.

Some experts say ethereum is definitely set to overtake its rival. The young cryptocurrency “has almost five times as many nodes in its network as bitcoin, meaning more people are using their computers to support it,” according to the Motherboard.vice.com news outlet.

At the same time, banking industry giants have rendered conflicting opinions on digital currencies so far.

READ MORE: Bitcoin could hit $100,000 in decade, says analyst who predicted current high

Earlier this week, a Goldman Sachs technical expert issued a bearish forecast on bitcoin and Morgan Stanley analysts expect the massive rally for cryptocurrencies to stall until they receive some governmental acceptance.

Article source: https://www.rt.com/business/392418-ethereum-overtake-bitcoin-market-cap/?utm_source=rss&utm_medium=rss&utm_campaign=RSS