March 22, 2019

Corner Office: Indra Nooyi: ‘I’m Not Here to Tell You What to Eat’

We bought Quaker Oats in 2000 because we had no food brand that could play in the morning. It was also clear that beverage habits were changing. Our own employees’ consumption was changing. It went from regular Pepsi to Diet Pepsi and Pepsi Max. Everywhere you looked, you could see that consumption of low-calorie, zero-calorie products was increasing.

How do you get a big multinational company to buy into such a dramatic change in strategy?

If the C.E.O. doesn’t feel the change, as opposed to just talking about the change, people will see right through it. So the first thing I had to do was make sure that whenever I talked to employees about it, I shared experiences, observations, data. I talked about water shortages in parts of the world. I would show them examples of plastic waste, the lack of recycling programs and what that could do to the environment. And I would talk about people’s consumption of fat, sugar and salt.

We had town halls and invited the spouses of employees to come. At one in Egypt, a lady stood up and said, “My husband’s going to be mad I’m saying this, but I have a kid who’s 2, and I read every label, and I’m not willing to give my child all PepsiCo products.”

Plenty of people questioned the strategy. What made you stick with it?

Our board bought into the strategy. If your board is not on your side, it doesn’t work. But they said, “What you’re doing with the portfolio, what you’re doing with the whole environment and sustainability issue, what you’re going to do with the focus on diversity — this is the right way to move the company forward.”

And I told them: “This means that I’m not going to focus on beating every index. I’m going to focus on duration of returns, rather than level of returns for a short time.” And the board said, “Yes, that’s the right way to go at it.”

But if you’re really committed to health, why keep selling soda and chips?

Mountain Dew is a fantastic brand. It’s a great franchise. I’m not here to tell you what to eat or drink. My job is to give you a choice of products, between fun for you, better for you and good for you. I’ll give you nutritious products. I’ll give you low-calorie products. I’ll give you indulgent products.

I have to make sure that the good-for-you products aren’t more expensive than the fun-for-you products, and that the good-for-you products don’t taste awful while the fun-for-you products taste great. But if I make all the products ubiquitously available, priced reasonably the same and they all taste great, ultimately it’s a consumer choice. And if I put the right amount of advertising dollars between the whole portfolio, I’m letting the consumer decide.

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Gawker Names Dan Peres as Editor in Chief, Hoping to Breathe Life Back Into Site

Mr. Goldberg said in an interview that the company had hired a law firm to investigate the claims and that its review had “cleared” Ms. Griffith. Mr. Goldberg confirmed that Ms. Griffith would stay on under Mr. Peres.

“I am deeply saddened about the allegations that were brought forth by two former staff members,” Ms. Griffith said Thursday. “With the conclusion of a rigorous and in-depth third-party investigation, I look forward to rolling up my sleeves and getting down to work with our new editor in chief, Dan Peres, who I very much admire.”

In 2004, a satirical article in Details titled “Gay or Asian” drew outrage. Mr. Peres apologized at the time, admitting that the story had crossed a line, and stayed on as editor until 2015.

“I regretted it at the time and I regret it still,” Mr. Peres said Thursday. “I remain deeply apologetic. It was tone deaf, juvenile, and offensive.”

Mr. Goldberg said he believed that Mr. Peres, who has a memoir coming out about his career in media and overcoming an addiction to opiates, was a talented editor who would not be daunted by the spotlight that Gawker’s relaunch would inevitably bring.

Founded in the early 2000s as one of Gawker Media’s first two blogs, initially covered news and gossip about New York City media and society.

But Gawker Media’s legal battle against Hogan, whose real name is Terry Bollea, starved the company of cash and resulted in its selling itself to Univision. Gawker eventually settled for $31 million.

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Tech Fix: Facebook Did Not Securely Store Passwords. Here’s What You Need to Know.

Ultimately, a company as large, rich and well staffed as Facebook should have known better.

There’s no easy way to know. Facebook is still investigating, and will begin alerting people who might have had their passwords stored in the plain text format.

Facebook is not requiring users to change their passwords, but you should do it anyway.

There are many methods for setting strong passwords — for example, do not use the same password across multiple sites, and do not use your Social Security number as a username or a password. You can set up security features such as two-step verification as well.

There are a few other steps to take. I recommend also setting up your Facebook account to receive alerts in the event that an unrecognized device logs in to the account. To do so, go to your Facebook app settings, tap Security and Login, and then tap Get alerts about unrecognized logins. From here, you can choose to receive the alerts via messages, email or notifications.

An audit of devices that are logged in to your account may also be in order, so that you know what laptops, phones and other gadgets are already accessing your account. On Facebook’s Security and Login page, under the tab labeled “Where You’re Logged In,” you can see a list of devices that are signed in to your account, as well as their locations.

If you see an unfamiliar gadget or a device signed in from an odd location, you can click the “Remove” button to boot the device out of your account.

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Faster Tax Cuts Could Be Backfiring on Republicans

Independent analyses consistently show that the 2017 law gave most Americans a tax cut, and few families will end up paying more than under the previous rules.

Federal officials faced a choice about how to pass those savings on to taxpayers. One option would have been to make most people wait until they filed tax returns this spring, delivering a tax-season windfall but essentially delaying the cut by a year.

Instead, the I.R.S. chose to begin withholding less from workers’ paychecks early last year. That put more money in workers’ pockets right away, but made the effects of the tax cut harder to see, since the savings amounted to just a few dollars per pay period for many people.

Administration officials said this week that they stood by their decisions on how to update withholding tables. They said their goal was to make the tables as accurate as possible, and to encourage taxpayers to use a calculator on the I.R.S. website to estimate their liability or refund at the end of the year and decide whether to change how much was being withheld.

But for some people, the I.R.S. decision has resulted in a nasty shock come tax season. The new law made numerous changes to the tax code — eliminating and capping some deductions and credits while increasing others — and the revised withholding rules did not account for every situation. As a result, government auditors warned last year that the withholding changes would reduce refunds for several million Americans.

It is not yet clear how many Americans will end up paying more. As of last week, I.R.S. statistics showed that the average refund had not changed for those who had filed. But total filings were down, and the share of returns producing a refund had declined by 0.5 percentage points, or about 300,000 filers. (Experts caution against reading too much into tax statistics before the April filing deadline.)

“You can see people potentially being frustrated if the tax season isn’t playing out the way they expected,” said Michelle Meyer, chief United States economist for Bank of America Merrill Lynch. “Other people might be quite pleased. It is quite split how people are being impacted by the tax cut.”

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Brexit uncertainty forces European company to stockpile toilet paper

Wepa has also opted to charter ship deliveries for importing raw materials into Britain instead of using trucks, according to the company’s managing director Mike Docker, as quoted by the BBC.

The tissue-maker reportedly owns production facilities in Bridgend, in South Wales. Wepa is said to lease extra premises of nearly 20,000 kilometers to store finished product and raw material. The firm also shipped in extra cardboard and tissue.

© Global Look Press Exorbitant toilet paper use by Americans wiping out Canadian forests

Wepa is one of major suppliers of toilet paper and kitchen rolls that are used by the biggest retailers, including Lidl, Morrisons, Sainsbury’s and Tesco, for their own-brand products.

Earlier this month, David Potts, CEO of Morrisons, the country’s fourth largest chain of supermarkets, said the retailer had seen an increasing demand for toilet paper over recent months. According to Potts, the high demand may be caused by rising uncertainties over the UK quitting the European Union by the end of March.

The UK, which is expected to withdraw the bloc on March 29, is currently trying to negotiate a deferral of the deadline to June 30.
Last week, the House of Commons voted to allow Prime Minister Theresa May to ask the EU for an extension. The European Commission said that the extension must be backed by all the members of the bloc.

In a situation where there is no negotiated plan to allow the EU and the UK to continue trading smoothly, British businesses may face delays to goods moving in and out of the country due to probable customs checks and changes to border rules.

The UK’s annual consumption of toilet paper totals some 1.3 million tons with 1.1 million of which are imported either in finished form or as components, according to the Confederation of Paper Industries.

For more stories on economy finance visit RT’s business section

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Tech Fix: I Deleted Facebook Last Year. Here’s What Changed (and What Didn’t).

The social network uses a variety of approaches to collect information about web users. One involves Facebook pixel, an invisible tracker that brands can embed into their websites. When you load a website for a brand, Facebook pixel sends information about the device and its browsing activities back to the company. The social network can then use that information to help brands target you.

When I deleted Facebook, I wanted all of that ad targeting to go away. So not only did I erase my Facebook account, I also installed tracker blockers on my computer browser and mobile devices to prevent advertisers from using web cookies and invisible tracking pixels like Facebook’s. (For instructions on how to shake ad targeting more thoroughly, see this previous column.)

The extra steps worked. The onslaught of targeted online ads stopped.

“If you have the tracker blocker and deleted your Facebook account, you’ve exited,” said Gabriel Weinberg, the chief executive of DuckDuckGo, which offers internet privacy tools including a web browser that blocks trackers.

Facebook says it does not build profiles on people who are not on the social network, nor does it serve targeted ads to them. “Sites and apps send us information about the people who visit them, regardless of whether that person has a Facebook profile,” the company said in a statement. “If you aren’t a Facebook user, we don’t know who you are and don’t build any kind of profile on you.”

Advertisers still have methods other than Facebook to chase me around, but there are economic reasons for them to give up. With Facebook’s tools, it was relatively affordable and effective for them to track and target me. Without those, it gets a lot more costly.

“You might be too expensive for them to chase,” said Michael Priem, the chief executive of Modern Impact, an advertising firm in Minneapolis.

Facebook has often defended targeted ads by saying that internet users are annoyed when they see irrelevant ads. I disagree. Yes, the ads I now see have nothing to do with me — but the benefit was watching my spending drop immensely.

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Volkswagen CEO Diess’ future in doubt over Nazi-era blunder

The CEO reportedly told the company’s managers that the high margins of VW Group’s Porsche brand gave it more freedom than its other marques, such as Audi. “Ebit macht frei,” Diess told his managers, which translates as “Profits will set you free.”

The phrase has echoes of “Arbeit macht frei” or “Work sets you free,” the slogan which hung on the gates of concentration camps during the Holocaust where millions perished.

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“I think he is going to be fired,” said one long-term US institutional investor as cited by the Irish Times. “I’m torn about it. On the one hand, he’s one of the few managers that could probably move the company in the right direction. On the other hand, it’s so offensive I don’t think it’s really excusable.”

Another Volkswagen investor in the US said that, “Any shareholder would know that whatever his utterances, Diess is the best thing to happen to the company in the last 50 years.”

Ulrich Hocker, a director at DSW, a group representing small shareholders in Germany, called Diess’s statement “ridiculous,” adding: “It’s not a sentence you can say in Germany.”

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Hocker said he planned to demand another apology at Volkswagen’s upcoming shareholders’ meeting, but was not sure it warranted the CEO’s removal.

“[Shareholders were] very upset and shocked by the comments. We had high hopes for him — for his ambitious strategy and focus on costs. But what changed last week is now there are big question marks over his judgment.”

Diess has issued an apology for what he described as “definitely an unfortunate choice of words.”

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He denied referencing the Nazi phrase and explained that he was referring to the freedom afforded to VW brands in strong financial health. “At no time was it my intention for this statement to be placed in a false context. At the time, I simply did not think of this possibility,” he said.

Experts say Diess who took the reins of the world’s largest carmaker has been making progress. He is the second CEO to run VW since the ouster of Martin Winterkorn in 2015 over the diesel scandal at the automaker. The company reported profit of €12 billion for 2018 despite paying out heavy settlements related to the Dieselgate emissions scandal.

Founding member of Germany’s corporate governance commission Christian Strenger said removing Diess after his full apology “would be quite a mistake” given the progress he has made getting the Porsche-Piëch families on board with reforms. “He’s been pretty successful in getting them moving.”

For more stories on economy finance visit RT’s business section

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Building bridges: Last steel beam linking Russia-China railway bridge connected

The 2,209-meter-long (1.4 miles) structure links Russia’s Far East with China’s northernmost Heilongjiang province. The full completion of the cross-border bridge (railway and highway parts) is scheduled for July.

“On the morning of March 20, the last steel beam was built in, with Russia completing construction works from its part. This means the first railway bridge between the two countries is generally successfully connected,” Heilongjiang province’s administration said in a statement.

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The completion of the bridge will end the history when the Chinese and Russian borders did not have a cross-river railway bridge, said Li Huachao, a chief engineer of China Railway Major Bridge Engineering Group.

According to him, the project aims to develop an international corridor connecting China’s northeastern railway networks with Russia’s Siberian railway networks.

“The shipping capacities between the two sides will be greatly enhanced as they will no longer be affected by seasonal weather conditions, which often have an impact on river shipping,” said Li, as cited by

According to Song Kui, a researcher of the Heilongjiang Provincial Academy of Social Sciences, the bridge will play a significant part in promoting trade globally and in northeast Asia.

Song said that in 2018 trade between Heilongjiang province and Russia amounted to 122 billion yuan ($18.2 billion). The figure represents 69.8 percent of the province’s total export and import value and 17.3 percent of China’s exports and imports to Russia.

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Construction of the cross-border bridge officially started in 2016, following 28 years of negotiations between the two countries. Russia plans to export iron ore, coal, mineral fertilizers, lumber, and other goods via the link to China.

The highway section of the bridge will be ready for traffic this year. Traffic capacity is expected to exceed three million tons of cargo and be used by 1.48 million people a year by 2020. It will greatly facilitate trade between the two countries, since the route will be roughly 3,500km (2,175 miles) shorter.

For more stories on economy finance visit RT’s business section

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US ‘oil weapon’ could change geopolitics forever

In a dynamic that shows just how far US oil production has come in recent years, the US Energy Information Administration (EIA) said on Monday that in the last two months of 2018, the US Gulf Coast exported more crude oil than it imported.

Read more on US on the hunt for Iranian ‘ghost tankers’

Monthly net trade of crude oil in the Gulf Coast region (the difference between gross exports and gross imports) fell from a high in early 2007 of 6.6 million barrels per day (bpd) of net imports to 0.4 million bpd of net exports in December 2018. As gross exports of crude oil from the Gulf Coast hit a record 2.3 million bpd, gross imports of crude oil to the Gulf Coast in December—at slightly less than 2.0 million bpd—were the lowest level since March 1986.

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US oil production hit a staggering 12.1 million bpd in February, while that amount has been projected to stay around that production mark in the mid-term then increase in the coming years. The US is the new global oil production leader, followed by Russia and Saudi Arabia, while Saudi Arabia is still the world’s largest oil exporter – a factor that still gives Riyadh considerable leverage, particularly as it works with Russia, and other partners as part of the so-called OPEC+ group of producers. However, Saudi Arabia’s decades-long role of market swing producers has now been replaced by this coalition of producers, reducing Riyadh’s power both geopolitically and in global oil markets. In short, what Saudi Arabia could once do on its own, it has to do with several partners.

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Meanwhile, US crude oil production, particularly in the Gulf Coast region, is still increasing. In November 2018, US Gulf Coast crude oil production set a new record of 7.7 million bpd, the IEA report added. However, since most of the oil produced in the US is light sweet crude, the US still has to rely on heavier crude blends from Saudi Arabia, Venezuela and others since most American refineries are configured to process heavy crude. On the other hand, a surplus of light sweet crude allows the US to export more oil thus giving the country growing energy geopolitical power once enjoyed almost exclusively by Saudi Arabia and Russia. The increasing amount of US crude being exporter, along with the increasing amount of US LNG being imported (with exports of both fuels projected to increase) is changing energy geopolitics.

US oil weapon possibilities

Evidence of growing American energy clout was evident last week when Secretary of State Mike Pompeo urged the oil industry  to work with the Trump administration to promote US foreign policy interests, especially in Asia and in Europe, and to punish what he called “bad actors” on the world stage. Pompeo made his remarks at IHS Markit’s CERAWeek conference in Houston, where US oil and gas executives, energy players and OPEC officials usually gather annually to discuss global energy development. Pompeo’s added that America’s new-found shale oil and natural gas abundance would “strengthen our hand in foreign policy.” He added that the US oil-and-gas export boom had given the US the ability to meet energy demand once satisfied by its geopolitical rivals.

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This is the first time, in at least recent history, that American officials have considered using oil production and exports for geopolitical advantage. One of the last times the country had such oil production clout dates back to the years just before World War II when the US held back oil exports to Japan. Consequently, this was one of the mitigating factors that provoked Japan to attack Pearl Harbor in 1941. Moreover, Pompeo’s comments can be viewed as a reversal from the so-called oil weapon that Arab producers have used on the US and its western allies for decades, including both the unsuccessful 1967 Arab oil embargo and the 1973 Arab oil embargo that brought the US and its allies to their knees, driving up the price of oil four-fold and contributing to severe economic headwinds for the West and a geopolitical and economic shift that still persists to the current.

This article was originally published on

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Fed, Dimming Its Economic Outlook, Predicts No Rate Increases This Year

“The Fed underscored patience and a strong desire to allow inflation to run above target,” researchers at Bank of America Merrill Lynch said in a research note. “As Powell said in his opening remarks, the Fed’s overarching goal is to sustain the economic expansion. This unprecedented dovish turn clearly shows such commitment.”

Yields on the 10-year Treasury note — a bellwether for a range of consumer borrowing rates — dropped sharply after the Fed statement was released as investors digested the potential that the Fed could be done raising rates for some time. The yield on the 10-year Treasury fell to 2.52 percent — its lowest level since January 2018. Stocks, which had been negative for most of the day, rallied and briefly regained positive territory after the announcement. However, they lost steam in the last hour of trading, and the SP 500 closed down 0.3 percent.

Analysts had been expecting the Fed to shift its forecasts at the meeting, but not by this much.

Eleven committee members said they do not expect any rate increases this year. Four said they expected one. None expected a rate cut. In 2020, a majority of members expected at least one rate increase, although some expected none.

Fed officials also announced that they would end an effort to slim the central bank’s massive holdings of government-backed securities in September, after slowing it down in May. The Fed accumulated $4.5 trillion worth of Treasury and mortgage-backed securities in an effort to stimulate the economy after the Great Recession. It has been slowly winnowing those holdings as the economy has recovered.

Many analysts had expected officials to announce the September end of the balance sheet wind-down, which Mr. Powell had foreshadowed in a recent speech at Stanford University. By October, the Fed said on Wednesday, officials will be shifting the composition of the balance sheet, moving out of agency debt and mortgage-backed securities and into primarily Treasury bonds.

Officials appeared to hasten to end the balance sheet reduction under pressure from financial markets. Many analysts blamed stock market volatility in December and January on the Fed’s wind-down process.

In announcing the end of the reduction, Fed officials acknowledged that they were stopping short of what many analysts had expected when the reduction began. They said the total holdings on the balance sheet once the wind-down ends “will likely still be somewhat above the level of reserves necessary to efficiently and effectively implement monetary policy.”

Carrying a larger-than-expected balance sheet — and operating with interest rates at what remain historically low levels — could hinder the Fed in battling an economic downturn in the near future.

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