May 24, 2018

Raising taxes on poor is a ‘good thing for those people’ – billionaire Michael Bloomberg

Bloomberg says he wants to decide on what is good for low-income people. “The question is do you want to pander to those people? Or do you want to get them to live longer? There’s just no question,” he said.

Soros says he wants to pay more taxes, but prefers Ireland where he paid less than $1,000

“If you raise taxes on full sugary drinks, for example, they will drink less and there’s just no question that full sugar drinks are one of the major contributors to obesity and obesity is one of the major contributors to heart disease and cancer and a variety of other things,” he said at the IMF discussion panel talking to the IMF Chief Chrisine Lagarde.

The billionaire went on to compare the US army with the coal industry. “We have a lot of soldiers in the United States in the US Army, but we don’t want to go start a war just to give them something to do and that’s exactly what you’re saying when you say ‘well, let’s keep coal killing people because we don’t want coal miners to lose their jobs.’”

“The truth of the matter is that there aren’t very many coal miners left anyways and we can find other things for them to do. But the comparison is: a life or a job. Or, taxes or life? Which do you want to do? Take your poison.”

Bloomberg has been a fierce proponent of soda taxes. Last year, he spent $3 million on an advertising campaign that backs a Chicago-area soda tax. When he was a New York City mayor, he tried to ban super-sized sugary drinks in the city, but failed.

He has also criticized the recent tax cuts by US President Donald Trump. Bloomberg believes they are an  “economically indefensible blunder” and will not lead to significantly higher wages and growth.

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Dying Californian takes Monsanto to court for hiding cancer-causing effect of Roundup weedkiller

DeWayne Johnson, 46, who has just a few months left to live, will take the stand against Monsanto in San Francisco County Superior Court. The landmark trial is scheduled to begin June 18.

EU to approve ‘marriage made in hell’ between Bayer Monsanto

Johnson, a father of three, was diagnosed with non-Hodgkin lymphoma at the age of 42. He had earlier worked for a school district, “where his responsibilities included direct application of Roundup and RangerPro, another Monsanto glyphosate product, to school properties,” the lawsuit claims.

“Monsanto does not want the truth about Roundup and cancer to become public,” Johnson’s attorney, Michael Miller, said in an interview with the Guardian. “We look forward to exposing how Monsanto hid the risk of cancer and polluted the science.”

The corporation attempted to bar experts, hired by Johnson, from testifying and his legal team from using certain research. Monsanto insists that the cancer the man suffers from hasn’t been caused by exposure to its products.

According to the order signed by San Francisco Superior Court judge Curtin Karnow last week, some of Monsanto’s requests were granted. However, the judge allowed Johnson’s lawyers to deploy various peer-reviewed studies and expert evidence during the trial.

The state of California and the International Agency for Research on Cancer (IARC), a branch of the World Health Organization (WHO), have previously labelled glyphosate as a probable human carcinogen. However, US and EU watchdogs haven’t banned the chemical from widespread agriculture use.

Monsanto has rejected all allegations and scientific findings of carcinogenicity of the chemical. In the meantime, around 4,000 plaintiffs have filed similar lawsuits, claiming that they or their relatives were sick from the exposure to Monsanto’s Roundup.

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Silicon Valley’s biggest ever tech bubble about to burst

“It’s going to be all downhill from here,” he wrote in an opinion piece for CNBC. “Massive losses are coming in venture capital-funded start-ups that are, in some cases, as much as 50 percent overvalued.” 

The peak in the tech unicorn bubble has already been reached, he said, referring to unicorns as defined by venture capitalist Aileen Lee. The term unicorn, which was created in 2013, refers to privately-held startups valued at over $1 billion.

According to a recent study by the National Bureau of Economic Research, unicorns on average are roughly 50 percent overvalued. The research examined 135 unicorns and found that nearly half of them should be more fairly valued at less than $1 billion.

Analysts say that while most unicorn companies are not producing billions of dollars in revenue, up to 80 percent of them are set to fail within two years. The highest-valued private technology company Uber, which has rapidly growing revenue, still remains highly unprofitable. The firm’s revenue was $6.5 billion as of 2016 but still it registered a net loss of $2.8 billion.

“We are now officially in a tech bubble larger than March of 2000,” said Wright.

Some 76 percent of the companies that went public in 2017 were unprofitable on a per-share basis in the year leading up to their initial offerings, data compiled by Jay Ritter, a professor at the University of Florida’s Warrington College of Business, has shown. It’s the largest number since the peak of the dot-com boom in 2000, when 81 percent of newly-public companies were unprofitable.

The number of IPOs filed in the United States has dropped to the lowest since 2012. Some 275 IPOs have been filed in 2014; the figure fell to 105 in 2016. There were just a few successes in the 2017 IPO market.

Several high-profile billion-dollar start-ups such as BuzzFeed missed their 2017 year-end revenue targets, according to the Wall Street Journal.

“If you intend to invest in a unicorn IPO anytime soon, think twice,” Wright warned. “And if you haven’t taken a close look at your 401(k) or IRA retirement plan investments, check to see what those mutual funds have been dabbling in.”

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BP suspends work on gas field shared with Iran

The company, which agreed to sell its stake in Rhum to another UK-based company, Serica Energy, said, as quoted by The Independent, “BP has decided to defer some planned work on the Rhum gas field in the North Sea while we seek clarity on the potential impact on the field of recent US government decisions regarding Iran; Rhum is co-owned by an Iranian company. BP always complies with applicable sanctions.”

China ready to replace Total in Iran – report

Both BP and Serica are in talks with UK and US authorities to make sure they are not in breach of the sanctions announced on May 8th as President Trump pulled the Untied States out of the Joint Comprehensive Plan of Action, commonly referred to as the Iran nuclear deal.

BP discovered the Rhum field back in the 1970s. Production was suspended in the early 2000s as the US and several European countries imposed sanctions on Iran for its nuclear program. BP, whose chief executive Robert Dudley is an American citizen, struck a deal with smaller Serica to sell its 50 percent in the field for US$400 million.

At the moment, BP operates the field under a license granted it by the Office of Foreign Asset Control—the Treasury Department’s sanction-enforcement division—which was renewed last September and will expire and the end of September this year.

Read more on Trade war truce with China boosts oil prices

In the meantime, the BP/Serica deal is going according to plan, seen to wrap in the third quarter of the year. A condition for the successful completion of the acquisition was Serica getting its own license from the OFAC. Reuters reported earlier today the company is still awaiting one.

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US fiscal outlook ‘not good’ as ballooning debt threatens economy – Goldman Sachs

The bank’s chief economist Jan Hatzius forecast the federal deficit to increase from $825 billion (or 4.1 percent of gross domestic product) to $1.25 trillion (5.5 percent of GDP) by 2021. The number will balloon to $2.05 trillion (seven percent of GDP) over 10 years, he said.

“An expanding deficit and debt level is likely to put upward pressure on interest rates, expanding the deficit further,” said Hatzius. “While we do not believe that the US faces a risk to its ability to borrow or repay, the rising debt level could nevertheless have three consequences long before debt sustainability becomes a major obstacle.”

The Congressional Budget Office (CBO) said in April debt could equal GDP within a decade if Congress extends the tax cuts. That’s a level not seen since World War II.

According to CBO, economic growth should jump above three percent this year thanks to the stimuli. Nevertheless, debt held by the public will soar to $28.7 trillion by the end of fiscal 2028.

“Lawmakers might hesitate to approve fiscal stimulus in the next downturn in light of the already-substantial budget deficit,” said Hatzius. “While we would expect some additional loosening of fiscal policy during the next downturn, there is a good chance in our view that it would be less aggressive than it was in the last few recessions.”

Goldman analysts’ team explained that even if the debt and deficit levels don’t prevent lawmakers from approving countercyclical fiscal stimulus during the next recession, a political desire to stabilize the debt level would likely hamper growth during the next recovery. “The current fiscal expansion … must at some point give way not just to a neutral stance, which we expect by 2020, but to a tightening of fiscal policy that could restrict growth,” Hatzius wrote.

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Why Trump’s Intense Focus on the Trade Deficit Could Cost the Economy in the Long Run

The administration’s approach might quickly reduce the headline level of the trade deficit, but it largely ignores the frustrations of American sectors that are the most promising sources for creating future good export-related jobs.

American companies that make automobiles, semiconductors and other complex products bemoan Chinese government requirements that force American firms to form joint ventures with Chinese companies, sharing their technology. They accuse those partners of widespread theft of intellectual property as they try to catch up in advanced technologies. Many American firms face Chinese competition that receives heavy state subsidies.

These are some of the most stubborn, longstanding issues in American-Chinese economic relations. But they aren’t likely to be fixed overnight, and even if the United States wins concessions, it won’t necessarily affect the trade deficit — especially in the next couple of years.

This helps explain why some prominent advocates of a tougher stance toward China — who applauded President Trump’s tariff threats — are critical of the turn the negotiations have taken.

The tariffs the president threatened “are designed to address China’s technology theft and their plans to dominate advanced and high technology manufacturing,” said Dan DiMicco, chairman of the Coalition for a Prosperous America, which advocates for a hard-line stance, in a statement. By contrast, “an agreement to sell agricultural and energy commodities is the result of bad negotiating and bad economic strategy.”

Exports of agriculture were directly or indirectly responsible for 524,000 jobs in 2014, according to analysis by the International Trade Administration; petroleum and coal products were responsible for an additional 255,000. But combined that is less than 7 percent of the jobs tied to exports that year.

Sectors like computers and electronic products and machinery were responsible for substantially more export-related jobs.

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‘Toilet for dirty money’: UK targets Russians because of hate for Putin

“The City of London is afloat on dirty money and for the money that’s too dirty even for the City of London, we have our own crown dependency tax heavens, which are the toilet for dirty money,” the politician-turned-broadcaster Galloway told RT.

‘Russophobic dirty money campaign’ in UK is all about unfair competition – Kremlin

Ill-gotten cash from Russia does not damage UK security more than fraudulent gains, brought to the City of London from any other state across the world, according to the former MP. “Dirty money is dirty money wherever it comes from, and thieves are thieves wherever they come from,” he said, noting the lack of concern by the British government about money coming from the Middle East.

Galloway sees the craze around Russian investments as a politically motivated. “Cracking down on Russian dirty money when you’re allowing other dirty money to buy up at least 20 percent of London, is just hypocrisy,” he said.

The commentator highlighted London’s change of attitude since the early 1990s, when rich Russians began parking huge amounts of money in Britain.

“Britain and its government and state authorities loved the Russia of the early nineties and laid a red carpet for the oligarchs, escaping here with Russia’s wealth. Britain loved Russia when its president [Boris Yeltsin – Ed.] was lying drunk on floor and its pockets being picked,” Galloway said. “They don’t love its current president, because he’s a real man, who’s standing up straight and recovering Russia’s lost strength and international prestige.”

The former politician added that he is for zero tolerance of emigre crime. “It doesn’t damage Britain’s security except in as much as it helps to pollute the economy here as the use of stolen money always does,” he said.

“I’m against dirty money, all dirty money. All money that’s stolen should be returned to the victim of the theft, to countries from which it was stolen,” Galloway said. “Russian oligarchs involved in dirty money should be sent back to Russia. So should dirty Nigerian money be sent back to Nigeria, and Nigerian oligarchs sent back to Nigeria.”

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Braking point: Elon Musk’s Tesla Model 3 lurching from one crisis to the next

The problem was pointed out by the US magazine Consumer Reports, which exposed the alleged braking issue with the Model 3 sedan.“The Tesla’s stopping distance of 152ft from 60mph was far worse than any contemporary car we’ve tested and about 7ft longer than the stopping distance of a Ford F-150 full-sized pickup,” it wrote.

Tesla bursts into flames after fatal crash in Switzerland (PHOTOS)

The Consumer Reports test is designed to determine how a vehicle performs in an emergency situation. Testers speed up a car to 60mph (96kph) and slam on the brakes until the car comes to a full stop, then measure the braking distance.

CEO Elon Musk tweeted that the situation is under control and will soon be fixed. “With further refinement, we can improve braking distance beyond initial specs. Tesla won’t stop until Model 3 has better braking than any remotely comparable car,” Musk wrote in a tweet.

The report comes at a time when Tesla’s safety is being questioned following the accident involving a Tesla Model S driving in “autopilot” mode when it crashed into a stopped firetruck in Utah.

Tesla’s braking problems described in the Consumer Reports have been previously covered by Car and Driver. The magazine published a test, which said Tesla Model 3’s one stop from 70mph took “an interminable 196ft.”

“I’ve been testing cars for 11 years… And in 11 years, no car has stood out with inconsistent braking like this. Some trucks have. . . . It was just weird,” Car and Driver Testing Director K.C. Colwell said in an interview with Consumer Reports.

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White South African farmers claiming persecution at home seek refuge in Australia

“The type of criteria they of course have to meet – or the key one – is evidence of persecution, so that’s exactly what we will be looking at,” Home Affairs Deputy Secretary Malisa Golightly said. Home Affairs said 89 refugee visa applications relating to 213 people had been received, although they did not specify their ethnicity or any other details.

South African politician attacks ‘racist’ Australia for sheltering fleeing white farmers

News reports emerged earlier this year revealing that white farmers in South Africa had faced persecution after the country’s government approved a new law allowing for the confiscation of their lands, which would be transferred to black citizens.

Following the reports, Australian Home Affairs Minister Peter Dutton announced his willingness to start fast-tracking humanitarian visas for South Africans who had endured violent rural crime at home and wished to move Down Under. The step was slammed by the South African opposition, which called Australia, and those willing to escape there, ‘racist.’

The controversial legislation was endorsed by South African President Cyril Ramaphosa, who pledged to hand the lands owned by white farmers since the 1600s to black citizens of the country without compensation for the owners. South Africa’s 50 million citizens are predominantly black, but 72 percent of farmland reportedly belongs to whites.

The legislation evoked strong disapproval both in the country and internationally, with a reported upsurge in violence against white farmers. Last year, some 82 people were killed in a record 423 farm attacks, and there have been 109 attacks and more than 15 murders in 2018, Afriforum, a South African civil rights group reported in March.

The controversial reform may jeopardize commercial farming in the country, according to the Transvaal Agricultural Union of South Africa. Experts say that the South African government may repeat the mistake made by the government of Zimbabwe, which had passed through a state-sanctioned purge of white farmers in 1999-2000. The measure plunged the country into famine.

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Trump’s Charm and Threats May Not Be Working on China. Here’s Why.

China’s problems in the area of technology could get worse. American officials are investigating whether a much bigger Chinese tech company, Huawei Technologies, also flouted American trade controls. Huawei has said it adheres to international conventions and local laws.

Despite that vulnerability, China has plenty of negotiating strengths.

White House trade officials have more expertise with trade law, but China has a small but cohesive team of negotiators who report directly to Liu He, a vice premier and nearly lifelong friend of Xi Jinping, the country’s top leader. The group has also streamlined Beijing’s ability to make economic policy decisions, a benefit in evaluating the impact of any concessions to the United States. Policy decisions that once took a month can now take as little as a day, said a person with a detailed knowledge of the process who insisted on anonymity because of the political sensitivity of the issue.

By contrast, the United States has shifted its demands and struggled to send out a consistent message.

The internal divisions were on display again on Sunday. Mr. Mnuchin said in the morning that any tariffs were on hold. Later that day, Robert E. Lighthizer, the United States trade representative, issued a statement in which he said, “As this process continues, the United States may use all of its legal tools to protect our technology through tariffs, investment restrictions and export regulations.”

In March and early April, Mr. Trump and his trade advisers threatened to impose tariffs unless Beijing agreed to curb long-term subsidies for high-tech industries.

The president then shifted to conciliation.

His financial policy advisers, led by Mr. Mnuchin, sought a fixed reduction of up to $200 billion in the $375 billion American trade deficit with Beijing. China’s trade negotiators resisted again, and the administration ended the weekend with a joint statement by officials from the two countries that did not commit China to any specific concessions.

Chinese and American officials did exchange lists last week of extra goods that China might buy to narrow the deficit. But China only committed to continue buying ever-rising quantities of American food and fossil fuels, a position reflected in the joint communiqué issued at the close of the talks.

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