Category Archives: Business

economy and business news

US Stocks Seesaw Wildly After Day of Record Losses

U.S. stock prices fluctuated wildly Tuesday after regaining ground following a sharply lower open on the heels of selloffs earlier in the day in Asia and Europe.

The volatility continued unabated one day after The Dow Jones Industrial Average shed the most points in one day in its more than 120-year history.

The Dow fell 530 points at the market open and the more broad-based Standard & Poors 500 Index (S&P 500) tumbled 1.3 percent. The technology heavy Nasdaq Composite Index dropped 1.1 percent.

Earlier Tuesday, Asia’s benchmark stock indexes collapsed, as Monday’s massive selloffs on Wall Street rolled across the globe.

Japan’s Nikkei 225 index lost as much seven percent of its value at one point during the trading session, before closing at 21,610 points, a loss of nearly five percent.  Hong Kong’s Hang Seng index followed suit, dropping just over five percent in its worst trading day since August 2015.

The benchmark indexes Australia and South Korea also suffered serious losses.

In early Europe trading London’s FTSE 100 was down 3.5 percent at 7,081 points.

Asian markets were caught in the ripple effect of Monday’s 1,175-point loss on the Dow, marking the biggest point decline in history.  The S&P 500 also had a bad day, losing just over four percent to finish at 2,648 points.  

The stock market has now lost about a trillion dollars in value since Friday, when the Dow lost 666 points.  That drop followed a solid jobs report that showed the U.S. economy adding 200 thousand jobs and wages rising at the fastest pace in a decade. The tighter labor market and rising wages prompted investor fears of higher inflation and the possibility that the U.S. Federal Reserve would raise interest rates faster and higher than they have in recent years.

Analysts who spoke with VOA had been expecting a stock market “correction,” a decline of at least 10-percent from the most recent record highs, as a result of the record run-up in stock prices this year.  


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Following Foreign Trash Ban, China Fights Its Own Waste War

China’s decision last month to ban the import of certain types of waste and crack down on “foreign garbage” has had a ripple effect worldwide, forcing countries to quickly rethink their waste strategies.

That includes China, where its own fight against recycled waste has only just begun, analysts say.

Prior to the ban, China was the final resting place for about half of the globe’s metal, plastic and paper recyclables.

But in an effort to protect the environment and public health, Chinese authorities have banned the import of 24 categories of solid waste, sending shock waves through the international waste processing industry.

In the wake of the ban, most developed countries including Britain, the United States and Australia are grappling with a growing mountain of unprocessed rubbish and trying to find alternative destinations in Asia to fill China’s enormous shoes.

But Greenpeace East Asia plastic campaigner Eric Liu warned of the danger in their efforts to shift their trash headache to yet another developing country.

“This isn’t really a feasible solution, very few places are equipped to handle the sheer volume of waste that was being processed in China. Ultimately, the foreign trash ban should act as a wake up call to the world. We seriously need to cut down on our production and consumption of plastic,” Liu wrote in an emailed reply.

Environmentalists like Liu are hoping the development will motivate countries to eliminate unnecessary waste such as single-use plastic products.

Waste was one key topic Theresa May discussed when she met with Chinese leader Xi Jinping last week.

Last month, the British prime minister pledged to eradicate all avoidable plastic waste in Britain by 2042 as part of a 25-year green strategy.

Positive for China

Observers also note the ban is a positive step for China, although it has resulted in a shortage of some raw materials for the country’s manufacturing sector.

Local environmentalists hope the ban will spur the country’s waste processing industry to modernize and become more efficient.

“The domestically-produced, consumed and disposed waste should be recycled locally,” said Mao Da, researcher of solid waste treatment at Beijing Normal University.

“Prior to the ban, part of those foreign recyclable rubbish was of better quality and in greater quantity. That led to the country’s earlier dependence on foreign recyclable waste,” he said, adding, “The potential of locally-disposed recyclables has long been overlooked.”

Making China environmentally-friendlier

The researcher urges the environmental regulator to quickly enforce policies that will make households’ recycling and sorting of solid waste mandatory.

But Jason Wang, general secretary of the China Scrap Plastics Association said the country’s waste has already been fully recycled. He said that the import ban is a natural move following China’s rising awareness toward the environment and stricter standards for waste processing.

“With or without the ban and before 2017, any waste in China that was recyclable and of economic values had been fully recycled,” Wang said.

“China has an enormous army of scavengers with much of its population still living around the poverty line. As a result of their contribution, the country’s waste has long been fully recycled. So, the import ban is irrelevant to the country’s recycling [efficiency] of local waste,” he added.

Feng Juan, research director of Incom Recycle Co., a Beijing-based recycler of used plastic bottles, disagreed.

The company’s earlier experience showed that many of the used plastic bottles in Beijing might have been left unrecycled as its affiliated factory used to have a hard time sourcing enough used bottles to fill its annual processing capacity of 50,000 tons. According to estimates, Beijing generates 150,000 tons in used plastic bottle waste each year, Feng said.

Feng said the way local collectors had processed used bottles without a proper wastewater management in place further prompted the company in 2012 to facilitate a smarter way to source used bottles by bypassing those middlemen.

The company has since installed 5,000 vending machines in Beijing that collected 55 million used bottles directly from consumers last year.

“Through our platform, we can trace every single bottle we have collected and guarantee its safe [processing] flow,” Feng said. “While in the past, no one could tell the exact flow of used bottles or where they’ve ended up,” she added.

To-be-tightened use of plastics

China is also taking aggressive steps to tackle its plastic waste problem.

According to Greenpeace’s Liu, an estimated 1.3- 3.35 million tons of the plastic waste that’s polluted the world’s oceans come from Chinese cities.

China’s National Development and Reform commission is reported to have been mulling a new policy, specifically targeting plastic waste generated by the country’s e-commerce, courier and food delivery sectors. Liu said that if that policy is enacted it would be another positive step for China to bring the country’s rampant use of plastics under control.

China has imposed decade-long restrictions on the use of plastics, but lack of teeth in its enforcement has meant little success for the country’s past fight against plastic waste.

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US Trade Gap Hits $566 Billion in 2017, Highest Since 2008

The U.S. trade deficit hit the highest level in nine years in 2017, defying President Donald Trump’s efforts to bring more balance to America’s trade relationships.


The Commerce Department said Tuesday that the trade gap in goods and services rose to $566 billion last year, the highest level since $708.7 billion in 2008. Imports set a record $2.9 trillion, swamping exports of $2.3 trillion.


The U.S. ran an $810 billion deficit in the trade of goods and a $244 billion surplus in services such as banking and education.


The goods deficit with China hit a record $375.2 billion in 2017, and the goods gap with Mexico rose to $71.1 billion. Trump has sought to reduce the deficits with China and Mexico. His administration is weighing whether to impose trade sanctions on China for the theft of U.S. intellectual property. It is also renegotiating the North American Free Trade Agreement with Mexico and Canada.


The overall December trade deficit in goods and services rose to $53.1 billion, up from $50.4 billion in November and highest since October 2008.


Countries run trade deficits when they buy more from other countries than they sell.


Trump sees trade deficits as a sign of economic weakness and largely as the result of unfair competition by America’s trading partners. Most economists see them largely as the result of bigger economic forces: Americans spend more than they produce, and imports fill the gap.


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Nigeria’s President Signs Order to Boost Local Production, Employment

Nigeria’s President Muhammadu Buhari on Monday signed an executive order aimed at boosting the local production of goods and create jobs in the west African country.

Buhari, a 75-year-old former military ruler, has frequently spoken about ending the OPEC member’s dependence on oil exports while also creating jobs by boosting local food production.

And in 2015, months after Buhari came to power in May of that year, the central bank restricted access to foreign currency to import certain goods in a bid to stimulate local manufacturing.

The president “ordered that all ‘procuring authorities shall give preference to Nigerian companies and firms in the award of contracts, in line with the Public Procurement Act 2007,'” said the presidency in a statement circulated on Monday.

“The executive order also prohibits the ministry of interior from giving visas to foreign workers whose skills are readily available in Nigeria,” added the statement.

Around four out of every 10 people in the country’s workforce were unemployed or underemployed by the end of September, according to data released by the statistics office in December.

The order states that consideration will only be given to a foreign professional, “where it is certified by the appropriate authority that such expertise is not available in Nigeria.”

The country, which has Africa’s largest population and biggest economy, in 2016 fell into its a recession largely caused by low oil prices and militant attacks on energy facilities in the Niger Delta region.

It emerged from recession in the second quarter of 2017, largely on higher on oil prices.

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Venezuela Announces 99.6 Percent Devaluation of Official Forex Rate

Venezuela’s central bank on Monday announced a devaluation of more than 99 percent of its official exchange rate with the launch of a new foreign exchange platform, a move critics quickly said would not create a functioning currency market.

The central bank said the first auction of its new DICOM system yielded an exchange rate of 30,987.5 bolivars per euro, equivalent to around 25,000 per dollar.

That is a devaluation of 86.6 percent with respect to the previous DICOM rate and 99.6 percent from the subsidized rate of 10 bolivars per dollar, which was eliminated last week.

Venezuela is undergoing a major crisis, with quadruple-digit inflation and shortages of food and medicine. Economists consistently describe the 15-year-old currency control system as the principal obstacle to functioning commerce and industry.

The new rate is still dwarfed by the black market rate for greenbacks, currently at 228,000 bolivars per dollar according to website DolarToday, which is used as a reference.

The existence of such disparate exchange rates has for years encouraged Venezuelans to buy dollars on the cheap and flip them on the black market for a profit. That has created shortages of hard currency, which in turn fuels shortages of imported products such as food and medicine.

The government has repeatedly created foreign exchange mechanisms similar to DICOM, but business leaders say they never provided a steady supply of hard currency.

The government would repeatedly end up shuttering the foreign exchange platforms in part because maintaining an exchange rate so divergent from the black market rate proved to be unsustainable.

“If the exchange rate is imposed arbitrarily, it will perpetuate the crisis,” wrote Alejandro Grisanti of local consultancy Ecoanalitica on Twitter.

(1 eur = 1.24 dollars)

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UN: US Tax Overhaul May Drain $2 Trillion From Foreign Projects

U.S. President Donald Trump’s tax reform could bring almost $2 trillion back to the United States as U.S. firms repatriate cash piles from foreign affiliates, a U.N. report said Monday.

Ending the incentive to hoard cash overseas could produce a stimulus effect in the United States, and Trump has credited the tax reform with spurring a $350 billion investment plan by Apple.

“Now is the perfect time to bring your business, your jobs, and your investments to the United States of America,” Trump told the World Economic Forum in Davos last month.

The reform ends a system whereby companies defer tax on foreign earnings until the funds are repatriated. Instead it treats those earnings as if they were being repatriated, with an 8 percent tax on non-cash assets and a 15.5 percent tax on cash.

“This measure is widely expected to have the most significant and immediate effect on global investment patterns,” said the report by the U.N. trade and development agency UNCTAD.

Big firms had long awaited such a tax break, having last received one in the 2005 U.S. Homeland Investment Act, which brought $300 billion back from abroad, the report said.

Since then, U.S. overseas retained earnings have grown to $3.2 trillion, half of U.S.-owned foreign direct investment, with about $2 trillion in cash. Unlike in 2005, companies are not required to actually repatriate the funds.

The biggest overseas cash hoarders are in the tech sector, with Apple, Microsoft, Cisco, Alphabet and Oracle holding $530 billion, a quarter of the total, the report said. Other major cash holders are in pharmaceuticals and engineering.

Almost 40 percent of the funds are located in the United Kingdom or its Caribbean offshore territories such as the British Virgin Islands, UNCTAD said, citing data from the Bureau of Economic Analysis.

Even if the money was not invested in tangible assets, its withdrawal could still have a macroeconomic impact, said Richard Bolwijn, UNCTAD’s head of investment research.

“It’s still a part of … the external sources of finance helping to make up for savings shortfalls in developing countries,” he said.

Much of the impact depends on how other countries react, and there is still uncertainty as the details of the tax bill are clarified. In addition, there are some concerns that the U.S. reforms could violate tax treaties and trade rules, the UNCTAD report said.

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Stock Sell-off Creates Market Jitters

Recent losses on global financial markets, including those in the U.S., have some investors concerned about expectations for their holdings and plans for the future.

The Dow Jones Industrial Average declined 2.5 percent Friday, its largest percentage drop since Britain’s decision in June 2016 to leave the European Union.

The Dow and the broader U.S. Standard & Poor’s 500 Index ended the week roughly 4-percent lower, their biggest weekly drops since early 2016, amid fears of inflation and disappointing quarterly corporate earnings results.

Key stock indexes in Europe also fell Friday. Germany’s DAX index dropped 1.7-percent, while France’s CAC 40 Index declined 1.6-percent.

In Asia, Japan’s Nikkei 225 Index slid nearly 1-percent and South Korea’s Kospi fell 1.7-percent.

Meanwhile, U.S. bond yields climbed and contributed to the sell-off after the U.S. government reported that wages grew last month at their fastest pace in eight years.

The wage data helped stoke investor concern that the Federal Reserve, the U.S. central bank, will respond to higher inflation by hiking its key interest rate more quickly than anticipated.

Darrell Cronk, head of the Wells Fargo Investment Institute, said an extended period of low interest rates has helped create the uncertainty.

“We’ve enjoyed low interest rates for so long, we’re having to deal with a little bit higher rates now, so the market is trying to figure out what that could mean for inflation.”

The yield on the benchmark 10-year U.S. Treasury notes rose to 2.852-percent, its highest level in more than four years. The rise in bond yields hinders stock performance in two ways: it makes corporate borrowing more expensive and it makes bonds more attractive to investors compared to riskier stocks.

Bond strategists were unwilling Friday to predict what lies ahead for interest rates this week after the markets’ unusual volatility in the past week.

Investors may get a hint of the direction of interest rates when trading resumes in Asia early Monday, and possibly more insight after the U.S. Treasury’s $66 billion in auctions of 3-, 10- and 30-year bonds from Tuesday to Thursday.

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Guest Workers Leave Behind Big Houses, Ghost Neighborhoods

Over the last decades, growing economic hardships forced people in cities and villages around the world to leave their hometowns to find work in other countries. Dreaming of returning one day and enjoying a better life where they grew up, many invested most of their savings buying houses back home. But often, these houses remain empty, making many communities look like ghost towns. Faiza Elmasry has the story. Faith Lapidus narrates.

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Tillerson Visits Argentina to Talk Conservation, Economics

U.S. Secretary of State Rex Tillerson’s Latin American tour took him Saturday to Argentina, where he talked with officials about conservation and diplomacy.

Traveling from Mexico City after meeting with the Mexican president and other senior officials on Friday, Tillerson arrived in Bariloche, a lakeside resort town in Argentina’s Nahuel Huapi National Park.

Local news reports said Tillerson met with park rangers to discuss progress made in joint U.S.-Argentine projects on science and conservation issues. He also met with a student selected for the U.S. Fulbright scholarship program.

Tillerson was scheduled to visit the Argentine capital, Buenos Aires, to meet with his counterpart, Jorge Faurie.

On Monday, Tillerson is set to meet with Argentina President Mauricio Macri to discuss regional issues, including upcoming elections and the political crisis in Venezuela.

Before his visit, Tillerson told reporters that he hoped other countries would follow Argentina’s lead on making economic reforms and generating growth.

On Friday in Mexico, Tillerson said that immigrants bring “enormous value” to the U.S., but added the U.S. government lacked “good discipline” in regulating who enters the country to live.

‘Out of normal order’

After meeting in Mexico City with Mexican Foreign Secretary Luis Videgaray and Canadian Foreign Minister Chrystia Freeland, Tillerson told reporters the U.S. had put “many mechanisms in place” over the years to control immigration, but had “never gone back to clean this up.”

“Let’s make sure we have systems in place where we understand who’s coming into the country,” Tillerson said. He said immigration in the U.S. had “gotten out of normal order,” which is why President Donald Trump is pushing Congress to “fix these defects that have risen over the years.”

The Mexican government has repeatedly expressed opposition to Trump’s proposals to curb illegal immigration and have Mexico pay for a reinforced border wall.

Differences over the issue did not preclude Videgaray from praising the U.S. He said the Mexican government’s relationship with the Trump administration was “closer” than it was under former President Barack Obama’s administration. Videgaray acknowledged the two countries “do have some differences” but said “we are working closely and we are about results.”

Tillerson later held a closed-door meeting with Mexican President Enrique Pena Nieto during a time when relations have also been strained by U.S. threats to pull out of the North American Free Trade Agreement (NAFTA).

NAFTA, which Trump alleges costs American jobs, was discussed at the trilateral meeting, along with energy development and drug interdiction.

Tillerson’s travels through Latin America will also take him to Peru and Colombia, with a final stop in Jamaica on February 7.

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Former Utah Monument Lands Open to Claims, but No Land Rush in Sight

The window opened Friday for oil, gas, uranium and coal companies to make requests or stake claims to lands that were cut from two sprawling Utah national monuments by President Trump in December, but there doesn’t appear to be a rush to seize the opportunities.

For anyone interested in the uranium on the lands stripped from the Bears Ears National Monument, all they need to do is stake a few corner posts in the ground, pay a $212 initial fee and send paperwork to the federal government under a law first created in 1872 that harkens back to the days of the Wild West.

They can then keep rights to the hard minerals, including gold and silver, as long as they pay an annual fee of $155.

It was unclear if anyone was doing that Friday.

​Inquiries, but no claims yet

The Bureau of Land Management declined repeated requests for information about how they’re handling the lands and how many requests and claims came in.

The agency says it must comply with a complex web of other laws and management plans.

Steve Bloch, legal director of the Southern Utah Wilderness Alliance, said he was told by the BLM Friday afternoon that inquiries were made but no claims sent in.

He said other conservation groups that have sued to block the downsized monument boundaries are watching closely to ensure no lands are disturbed in the short-term, hoping a judge will side with them and return the monuments to the original boundaries.

Two of the largest uranium companies in the U.S., Ur-Energy Inc. and Energy Fuels Resources Inc., said they have no plans to mine there. The price of uranium, which has fallen to about $22 per pound, down from more than $100 in the mid-2000s, would “discourage any investment in new claims,” said Luke Popovich, a spokesman for the National Mining Association.

Colorado-based Energy Fuels asked for a reduction of Bears Ears last year in a public comment, but spokesman Curtis Moore said in a statement that the company has higher priorities elsewhere. He noted the lands were open to claims for 150 years before President Barack Obama creating the national monument in 2016.

“There probably isn’t any land available for staking that would be of much interest to anyone,” Moore said.

Coal in Grand Staircase-Escalante

In Grand Staircase-Escalante National Monument, part of a major coal reserve that a company was preparing to mine before President Bill Clinton protected the lands in 1996, has been made available again but it appears unlikely any company will immediately jump at the chance this time.

Out-of-state demand for Utah’s coal had led to a drop in coal production to about 14 million tons in 2017, down from about 27 million tons in the mid-2000s, said Michael Vanden Berg, energy and mineral program manager at the Utah Geological Survey.

“If a new mine were to open, it would be competing with existing mines in Utah for limited demand,” Vanden Berg said.

Popovich called it “doubtful given market conditions and other factors” that companies interested in coal would put in a lease request.

Vanden Berg noted that a potential coal port in Oakland, California, could open up an Asian market and that technology could be developed to change market forces.

Oil and gas potential

There’s some potential for oil and gas at Grand Staircase, Vanden Berg said. But Kathleen Sgamma, president of an oil and gas industry group called Western Energy Alliance, said heavy oil shale in the area would require an intensive mining operation that doesn’t make sense in today’s market.

“There’s no fracking trucks at the border waiting to rush in,” Sgamma said.

President Trump downsized the Bears Ears National Monument by about 85 percent and Grand Staircase-Escalante National Monument by nearly half. It earned him cheers from Republican leaders in Utah who lobbied him to undo protections by Democratic presidents that they considered overly broad.

Bears Ears, created nearly a year ago, will be reduced to 315 square miles (815.85 square kilometers). Grand Staircase-Escalante will be reduced from nearly 3,000 square miles (7,770 square kilometers) to 1,569 square miles (4,063.71 square kilometers).

Conservation groups called it the largest elimination of protected land in American history.

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