Category Archives: Business

economy and business news

Dow Closes Above 26,000, Just 8 Sessions After Earlier Milestone

Wall Street roared upward Wednesday, with investor enthusiasm sending all three major stock indices to record finishes, and the Dow to its first close above 26,000 points.

The blue-chip Dow gained 1.3 percent to close at 26,115.65 — just eight trading sessions after breaking the 25,000 mark — with strong showings from Boeing, IBM and Intel. 

The broader S&P 500 added 0.9 percent to close at 2,802.56, while the tech-heavy Nasdaq gained a full percentage point to settle at 7,298.28.

With just 11 trading days so far in 2018, Wednesday’s session marked the seventh time this year all three major indices closed at all-time highs.

Maris Ogg of Tower Bridge Associates told AFP the sustained rally was boosted by a “confluence of good news,” including strong company earnings, slashed corporate tax rates, higher worker compensation and new investment.

“This is a boost for productivity” and gave market players greater confidence, she said.

IBM gained 2.9 percent after analysts upgraded their price target for the company’s stock, and chipmaker Intel rose a similar amount, while aviation giant Boeing jumped 4.7 percent after announcing a joint venture to make aircraft seats.

Buoyant markets were comforted in midafternoon as a Federal Reserve survey portrayed the national economy growing at a “modest to moderate” pace.

Persistent cold weather in the United States helped oil prices shrug off weakness early in the weak, helping oil stocks nudge markets higher.

Exxon Mobil rose 1.2 percent, and ConocoPhillips increased 1.7 percent, while Royal Dutch Shell and Chevron each rose 0.3 percent.

The jubilant performance came despite continued pain at General Electric, which sank 4.7 percent as investors worked to evaluate component businesses within the company ahead of a possible breakup.

Goldman Sachs fell 1.8 percent after reporting a steep quarterly drop in trading income.

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US Financial Crime Fighters Eye Overseas Virtual Currency Platforms

Financial crime fighters at the U.S. Treasury are “aggressively” pursuing virtual currency platforms that lack strong internal safeguards against money laundering, a top official told a Senate panel on Wednesday.

With more criminals using the emerging asset class to store and transmit their ill-gotten gains, Treasury’s Financial Crimes Enforcement Network (FinCEN) will pursue malfeasant virtual currency platforms even if they are located overseas, Sigal Mandelker, the U.S. Treasury Department’s undersecretary for terrorism and financial crimes, told the Senate Banking Committee.

U.S.-based platforms for bitcoin and other virtual currencies are required to comply with antimoney laundering (AML) rules including filing suspicious activity reports, with around 100 such platforms registered with FinCEN. But many other countries have no such requirements.

“The real vulnerability that we all have to address is that while we have regulatory authorities in place here in the United States and we do enforce those… we need other countries to do the same,” Mandelker told the committee’s hearing on U.S. antimoney laundering laws.

Mandelker said the U.S. government would also encourage other countries to introduce stricter regulation of virtual currencies, which law enforcement officials say are attractive to criminals making illegal transactions because they can be used anonymously.

In July, the Treasury moved to shut down the website of Russia’s BTC-e exchange, one of the world’s largest bitcoin platforms, and ordered it to pay a $110 million fine for allegedly facilitating transactions involving ransomware, computer hacking, and drug trafficking, among other crimes.

A U.S. jury also indicted a Russian man in July in connection with the alleged crimes perpetrated by the platform.

Regulators and governments around the world are still debating how to address risks posed by cryptocurrencies. In recent weeks, South Korea, Japan and China have all made noises about a regulatory crackdown while officials in France vowed to investigate the emerging asset class.

Senators on Wednesday expressed concerns over the risks posed by cryptocurrencies to the global financial system with Democratic Senator Mark Warner saying the U.S. had “a lot of work to do” to get a grip on the issue.

U.S. markets regulators said this month they plan to take more aggressive enforcement action against exchanges that may be defrauding investors or allowing market manipulation.

The price of bitcoin slumped to $10,000 on Wednesday, halving in value from its peak price of almost $20,000 hit just in December, with investors gripped by fears regulators could clamp down on the volatile currency.

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Bitcoin Slumps to $10,000 After Losing Half its value

Bitcoin slid to $10,000 on Wednesday for the first time since Dec. 1, leaving the cryptocurrency down by close to half from its peak hit last month.

Bitcoin, the largest and most prominent cryptocurrency, fell more than 11 percent to hit $10,000 on the Luxembourg-based Bitstamp exchange, amid worries about a regulatory clampdown.

The cryptocurrency touched a peak of almost $20,000 in December — and indeed crossed over that threshold on some exchanges — but has since been roiled by several large sell-offs.

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Gourmet Chocolate Becomes Economic Lifeline in Venezuela

In a modest apartment near a Caracas slum, nutrition professor Nancy Silva and four aids spread rich, dark Venezuelan cocoa on a stone counter to make chocolate bars to be sold in local shops that cater to the crisis-hit country’s dwindling elite.

Like some 20 recently launched Venezuelan businesses, Silva uses the country’s aromatic cocoa to make gourmet bars of the kind that can fetch more than $10 each in upscale shops in Paris or Tokyo.

The oil-rich but recession-devastated nation’s Byzantine bureaucracy makes large-scale exports nearly impossible for small businesses.

As a result, most of her bars are sold locally for less than one U.S. dollar – well out of reach of millions of Venezuelans who earn less than that in a week, but reasonably priced for the well-heeled of an increasingly two-tiered economy.

But entrepreneurs who have launched new Venezuelan chocolatiers in recent years say producing gourmet bars allows them to make a living amid the collapse of a socialist economic system – and dream of exports as a golden opportunity down the road.

“Our real oil is cocoa,” said Silva, owner of the chocolatier Kirikire that in 2014 won an award from the prestigious Salon du Chocolat fair in Paris. “In Europe, they’re snatching up these bars.”

Silva faces constant operational challenges due to hyperinflation and Soviet-style product shortages. But these are offset by steady access to high-quality aromatic cocoa from a cocoa farm in eastern Venezuela owned by her family.

Her bars are sold in high-end Caracas grocery stores, delis and liquor stores, where everything from staple products to luxury goods are amply available to the well-heeled – in contrast to the long lines and bare shelves of most shops.

Silva is now focused on getting her chocolate to France, where she once sold a single kilo of her chocolate for the equivalent of 80 euros ($96), which is today the equivalent of five years of minimum wage salary in Venezuela.

Standing in her way are a range of permits such as customs authorizations and sanitary inspections that take months in Venezuela’s notoriously inefficient bureaucracy.

The Information Ministry did not respond to a request for comment.

Venezuela was the world’s leading cocoa producer at the end of the 18th century when it was still a Spanish colony, according to Jose Franceschi, who has written books about cocoa and whose great-grandfather founded the Venezuela’s gourmet Franceschi chocolate brand.

But the cocoa trade was overshadowed by the rise of the oil industry in the early 20th century. Critics say it was further weakened by state takeovers under late President Hugo Chavez, who boosted state involvement in the economy as part of promises to create a society of equals.

But since the crash of oil markets, Venezuela has become a sharply divided society where oil engineers and public hospital doctors rarely make as much as $50 a month while a small group citizens with access to even modest amounts of hard currency can afford fine dining and gourmet products.

Bean to Bar

Output of 16,000 tons per year is less than 1 percent of the global total, and less than 10 percent of the production of regional heavyweights Brazil and Ecuador.

Many gourmet bars made in the United States now prominently advertise the use of Venezuelan cocoa but generally mix in other less-desirable cocoas. Bars made in Venezuela, in contrast, are made with 100 percent local cocoa.

This gives the new Venezuelan chocolatiers a leg up as they tap into the global ‘bean-to-bar’ movement, in which chocolate makers oversee the entire process of turning cocoa fruit into sellable treats.

On the second floor of an old mansion in Caracas, economist and chef Giovanni Conversi has been making specialty chocolate for two years under the name Mantuano.

Sprinkled with sea salt or aromatic fruits from the Amazon, the chocolate bars are a hit in London, Miami and Panama City in specialty chocolate stores or shops that specialize in Latin American food.

He and four assistants produce 9,000 bars a month in Caracas. He has opened a factory in Argentina that buys cocoa from small-scale producers like Yoffre Echarri, who two decades ago inherited his grandfather’s plantation in the beach town of Caruao.

He opens the fruit to remove the beans and the accompanying sweet white pulp, which has a strong aroma of tropical fruit and then ferments the mixture in plastic bags buried underground.

That process retains more aroma than the traditional method of fermenting in wooden boxes.

He sells the beans to Venezuelan chocolatiers for less than $1 per kilo, about half the international price.

“Clients can’t get enough. Those who three months ago were asking for five kilos now call for 50,” said Echarri.

Many small chocolatiers only manage to get products to foreign markets by carrying them in suitcases on commercial flights, though well-established brands such as El Rey have formal export operations to the United States and Europe.

In Japan, El Rey is represented by the food division Japanese trading house Mitsubishi. Mitsubishi did not immediately respond to a request for comment.

Still, some 1,700 people have recently studied artisanal chocolate at the Simon Bolivar University.

“Everyone wants to give it a shot,” said Rosa Spinosa, the head of the program created two years ago.

($1 = 0.8363 euros)

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El Salvador Eyes Work Scheme with Qatar for Migrants Facing Exit from US

El Salvador is discussing a deal with Qatar under which Salvadoran migrants facing the loss of their right to stay in the United States could live and work temporarily in the Middle Eastern country, the government of the Central American nation said on Tuesday.

Last week, U.S. President Donald Trump’s administration said that as of September 2019, it would eliminate the temporary protected status, or TPS, that allows some 200,000 Salvadorans to live in the United States without fear of deportation.

Presidential communications chief Eugenio Chicas said El Salvador was in talks to see how Salvadorans could be employed in Qatar, a wealthy country of some 2.6 million people that is scheduled to host the soccer World Cup in 2022.

“The kingdom of Qatar … has held out the possibility of an agreement with El Salvador whereby Salvadoran workers could be brought across in phases (to Qatar),” Chicas told reporters.

After an unspecified period, the Salvadorans would return home, Chicas added, without saying how many workers the program could encompass.

El Salvador’s foreign minister, Hugo Martinez, is in Qatar until Friday and said in a statement that Salvadorans could work in engineering, aircraft maintenance, construction and agriculture.

Martinez also noted that Qatar had offered to provide health services to the Central American country, which is struggling with a weak economy and gang violence.

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Ethiopian Airlines to Re-launch Zambia’s National Carrier

Ethiopian Airlines says it has finalized an agreement with Zambia to re-launch the southern African country’s national carrier.

The partnership with Zambia comes as Ethiopian Airlines is opening new routes and hubs and is acquiring new aircraft.

In a statement Tuesday, the airline said it will have a 45 percent stake in the Zambian carrier and it aims to make the Zambian capital, Lusaka, its newest aviation hub. The remaining 55 percent will be acquired by the Zambian government which is aiming to revive the country’s aviation sector after Zambia Airways ceased operations on January 2009.

“The launching of Zambia Airways will enable the traveling public in Zambia and the Southern African region to enjoy greater connectivity options,” said Ethiopian Airlines CEO, Tewolde Gebremariam. “It is only through partnerships among African carriers that the aviation industry of the continent will be able to get its fair share of the African market, currently heavily skewed in favor of non-African airlines.”

Gebremariam told The Associated Press earlier this month his company is also exploring opportunities in other African countries including Mozambique, Djibouti and Congo.

Ethiopian Airlines currently operates from hubs in Lomé, Togo with ASKY Airlines and in Lilongwe, Malawi. Its main hub is in the Ethiopian capital, Addis Ababa.

Ethiopian Airlines currently flies to more than 100 destinations. Airline officials say that recent currency devaluations in some African countries and a subsequent rise in jet fuel prices could hamper its profits.

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Bitcoin, Rival Cryptocurrencies Plunge on Crackdown Fears

Bitcoin slid as much as 18 percent on Tuesday to a four-week low, as fears of a regulatory crackdown on the market spread after reports suggested it was still possible that South Korea could ban trading in cryptocurrencies.

Bitcoin’s slide triggered a selloff across the broader cryptocurrency market, with biggest rival Ethereum down 23 percent on the day at one point, according to trade website Coinmarketcap, and the next-biggest, Ripple, plunging by as much as a third.

Bitcoin traded as low as $11,191.59 on the Luxembourg-based Bitstamp exchange. By 1400 GMT it has edged up to $11,650, but that was still down more than 14 percent, leaving it on track for its biggest one-day fall since September.

Jamie Burke, chief executive of Outlier Ventures, a venture capital firm that is one of the biggest holders of top-10 cryptocurrency IOTA, said the belief the market was overdue a correction was making traders jittery and that was exacerbating the scale of the moves.

“Anybody that understands the technology knows there’s going to be a correction – it’s going to be a big correction and it’s going to be indiscriminate, because there are no established fundamentals for anybody to distinguish between where there is and isn’t value,” Burke said.

“There’s no way you can rationalize that there’s any value in the market at the moment; everything is significantly overpriced,” he added. Burke holds a number of top-20 cryptocurrencies in a personal capacity.

South Korean news website Yonhap reported that Finance Minister Kim Dong-yeon had told a local radio station that the government would be coming up with a set of measures to clamp down on the “irrational” cryptocurrency investment craze.

South Korea said on Monday that its plans to ban virtual coin exchanges had not yet been finalized, as government agencies were still in talks to decide how to regulate the market.

Further China Crackdown

That came amid news that a senior Chinese central banker had said authorities should ban centralized trading of virtual currencies and prohibit individuals and businesses from providing related services.

China shut down exchanges operating on the mainland last year – a move that also sparked a selloff, though the market later recovered.

“It’s mainly been regulatory issues which are haunting (bitcoin), with news around South Korea’s further crackdown on trading the driver today,” said Think Markets chief strategist Naeem Aslam, who holds what he described as “substantial” amounts of bitcoin, Ethereum and Ripple.

“But we maintain our stance. We do not think that the complete banning of cryptocurrencies is possible,” he said.

Cryptocurrencies enjoyed a bumper year in 2017 as mainstream investors entered the market and as an explosion in so-called initial coin offerings (ICOs) – digital token-based fundraising rounds – drove demand for bitcoin and Ethereum.

The latest tumble leaves bitcoin down around 40 percent from a record high near $20,000 hit in mid-December, wiping about $130 billion off its total market value – the unit price multiplied by the number of bitcoins that have been released into the market.

A director at Germany’s central bank said on Monday that any attempt to regulate cryptocurrencies must be on a global scale as national or regional rules would be hard to enforce on a virtual, borderless community.

The latest plunge in the market came as wealth management firm deVere Group, which has $12 billion under advisement, said it was launching a cryptocurrency app that would allow users to store, transfer and exchange five of the biggest digital coins, citing “soaring global demand”.

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Brazilian Miner Vale Ordered to Repair Environmental Damage

A Brazilian court on Monday ordered the world’s largest iron ore miner Vale SA to repair environmental damages its operations caused in land belonging to a community of descendants of escaped slaves in northern Brazil.

Federal prosecutors announced the ruling in a statement that said the electricity transmission lines and a bauxite pipeline damaged soil and silted up rivers in the Moju “quilombola” territory in the northeast of  Pará state.

The court also ordered Vale to set up a project to generate income for the 788 families affected by the company’s operations and compensate them with cash until it was implemented.

No value was given for the cost of the reparations Vale must pay. The Rio de Janeiro-based company did not immediately respond to a request for comment.

In a separate case, federal prosecutors recommended the suspension of Vale’s dredging operations in the Sepetiba Bay in Rio de Janeiro state after a virus killed 200 gray porpoises.

Vale said it had not been officially informed about the recommendation. It said in a statement that all its operations in the bay where it has a terminal are duly licensed and monitored by the authorities.

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America Last? EU Says Trump Losing on Trade

The European Union’s trade tsar has no idea what Donald Trump will tell his audience at the World Economic Forum in Davos next week, but she is clear what the EU’s message to the U.S. president will be.

America is shooting itself in the foot by withdrawing from global leadership on trade, Cecilia Malmstrom, the 49-year-old Swede who has served as Europe’s trade commissioner for the past three years, told Reuters.

Under Malmstrom’s direction, the EU has juggled a dizzying array of trade talks over the past year. In July it clinched a preliminary deal with Japan. And early this year it hopes to seal agreements with Mexico and the Latin American Mercosur bloc.

The retreat of the United States under Trump has played a big role in this push, Malmstrom says. Countries around the world are desperate for new trading partners, and the EU, confident again after years of economic crisis and Britain’s vote in 2016 to leave the bloc, has eagerly filled the gap.

“We have shown that we have overcome that acute crisis, so many countries are turning to Europe for leadership and for partnership,” said Malmstrom, who will also be in Davos.

“With other countries we are now setting the standards and that is also why it is bad for the U.S. to withdraw because there are standards set now and they will be global.”

Since coming into office one year ago on a promise to put America first, Trump has pulled Washington out of the Trans-Pacific Partnership (TPP), threatened to scrap the 90s-era North American Free Trade Agreement (NAFTA) and to introduce steel tariffs that could hit European allies as well as China.

But Malmstrom singled out Washington’s confrontational stance towards the World Trade Organization (WTO) as particularly worrying.

The Trump administration has blocked the appointment of judges to a WTO body that rules on trade disputes. If the United States does not shift its stance, that body could cease to function altogether, Malmstrom said.

She described a WTO ministerial meeting in December as a “disgrace.” The meeting in Buenos Aires failed to reach any agreements, such as on ending fishing subsidies, and descended into acrimony, in the face of stinging criticism from the United States.

“We want American leadership in the world. They shouldn’t disengage,” Malmstrom said.

Trump will be the headliner in Davos one year after Chinese President Xi Jinping traveled to the ski resort in the Swiss Alps and signalled a readiness to assume a leadership role in free trade created by an inward-looking Washington.

Malmstrom described the Xi speech as “brilliant” in terms of content and timing – just three days before Trump’s inauguration.

But she said there had been no change in China’s behavior towards Europe since then. If anything, the hurdles to European investment in China have grown.

The EU seemed to have gained a free trade ally in the world’s second largest economy, but Malmstrom said Beijing had not backed up Xi’s speech with action.

“Maybe he really believes in these things, but we haven’t seen it yet in China,” she said. “We want to work in China and we want China to invest here, but the level playing field is not there. We haven’t seen anything concrete in our trade relationship.”

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UN: Indigenous Women Are ‘Seed Guardians’ in Latin America Hunger Fight

Indigenous women in Latin America must be at the center of efforts to adapt agriculture to deal with the threat of climate change and help tackle hunger and poverty, said a top U.N. food official.

Jose Graziano da Silva, head of the Food and Agriculture Organization (FAO), said women were too often left out of development schemes, despite expert knowledge of the environment passed down through generations.

“They have fundamental roles in the spiritual, social and family arenas and are seed guardians — critical carriers of specialized knowledge,” Graziano da Silva told a Mexico City forum.

“Their social and economic empowerment is … a necessary condition to eradicate hunger and malnutrition in their communities,” he said, according to a statement.

Poor health care, malnutrition and illiteracy are other issues faced by indigenous women who generally have little access to the political arena, he said.

In Latin America and the Caribbean, indigenous people comprise 15 percent of those affected by hunger and extreme poverty, despite making up just 8 percent of the population in the region where 45 million identify as indigenous.

Women suffer the most. Wage levels for indigenous women in the region are often four times less than those for men, said the United Nations’ food agency.

Indigenous women can play a key role in adapting agriculture and diet to cope with climate change, said the FAO, with traditional indigenous land comprising 22 percent the world’s territory and 80 percent of its biodiversity.

The organization said it would ramp up projects to boost indigenous women’s leadership in countries including Bolivia, Paraguay, India and the Philippines this year.

In Mexico, traditional healer and Nahua speaker Maria de Jesus Patricio Martinez is a candidate in July’s election, the first indigenous woman to run for the country’s presidency.

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