Wireless carriers Sprint and T-Mobile called off a potential merger, saying the companies couldn’t come to an agreement that would benefit customers and shareholders.

The two companies have been dancing around a possible merger for years, and were again in the news in recent weeks with talks of the two companies coming together after all. But in a joint statement Saturday, Sprint and T-Mobile said they are calling off merger negotiations for the foreseeable future.

“The prospect of combining with Sprint has been compelling for a variety of reasons, including the potential to create significant benefits for consumers and value for shareholders. However, we have been clear all along that a deal with anyone will have to result in superior long-term value for T-Mobile’s shareholders compared to our outstanding stand-alone performance and track record,” said John Legere, president and CEO of T-Mobile US, in a prepared statement.

T-Mobile and Sprint are the U.S.’ third- and fourth-largest wireless carriers, respectively, but they are significantly smaller than AT&T and Verizon, who effectively have a duopoly over U.S. wireless service. The two companies have said they hoped to find a way of merging to make the wireless market more competitive.

Sprint and its owner, the Japanese conglomerate SoftBank, have long been looking for a deal as the company has struggled to compete on its own. But Washington regulators have frowned on a possible merger. D.C. spiked AT&T’s offer to buy T-Mobile in 2011 and signaled in 2014 they would have been against Sprint doing the same thing. But with the new Trump administration, it was thought regulators might be more relaxed about a merger.

Sprint has a lot of debt and has posted a string of annual losses. The company has cut costs and made itself more attractive to customers, BTIG Research analyst Walter Piecyk says, but it hasn’t invested enough in its network and doesn’t have enough airwave rights for quality service in rural areas.

T-Mobile, meanwhile, has been on a yearslong streak adding customers. After the government nixed AT&T’s attempt to buy it in 2011, T-Mobile led the way in many consumer-friendly changes, such as ditching two-year contracts and bringing back unlimited data plans. Consumers are paying less for cellphone service, thanks to T-Mobile’s influence on the industry and the resultant price wars.

“T-Mobile does not need a merger with Sprint to succeed, but Sprint might need one to survive,” Piecyk wrote in an October research note.
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U.S. President Donald Trump urged Saudi Arabia Saturday to list its state-owned oil company on the New York Stock Exchange when the company goes public in what is expected to be the largest-ever initial public offering in which shares of a company are sold to investors.

“Would very much appreciate Saudi Arabia doing their IPO of Aramco with the New York Stock Exchange. Important to the United States!,” Trump tweeted from Hawaii, his first stop ahead of a 13-day trip to Asia.

Saudi officials have reportedly said the government intends to list 5 percent of  the company’s shares on local and global stock exchanges in 2018 but have yet to select an overseas venue. Saudi officials have estimated the IPO will be worth about $100 billion.

The NYSE has had discussions with the Saudis about the upcoming IPO as has the London Stock Exchange. Exchanges in Hong Kong, Singapore, Tokyo, Toronto and the U.S. are also soliciting portions of the public offering.

New York-based NASDAQ, which provides technology to Saudi Arabia’s exchange, has been leveraging that relationship in an attempt to win the listing.

Trump has developed a close relationship with Saudi Arabia. During his visit there last summer, he signed a $110 billion defense agreement with Saudi King Salman.

At a $2 trillion valuation Saudi officials have projected for Aramco, selling five-percent of the company’s shares would reap $100 billion.

The public offering of shares of Aramco, the world’s largest oil producer, is part of Saudi government plans to sell state assets as a recession slows Riyadh’s effort to eliminate a budget deficit caused by low oil prices.

 
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The recent flurry of social and economic reform coming out of Saudi Arabia has left some Saudis ecstatic, others more circumspect, and a few conservatives bewildered or even angry.

Saudi Crown Prince Mohammed Bin Salman told a crowd of investors at a conference in late October that he was merely attempting to “return Saudi Arabia to the moderate Islam that once prevailed” before the Iranian Revolution in 1979. He stressed that 70 percent of Saudis are younger than 30 and vowed “not to spend another 30 years of our lives living under extremist ideas.”

The young crown prince also proposed an ambitious plan for a new economic zone on the Red Sea near Jordan and Egypt. In April, he put forward an economic road map for the kingdom, called Vision 2030. Part of the plan calls for privatizing 5 percent of the country’s flagship petroleum company Aramco, in addition to attracting foreign investment capital.

​Too much change too fast

Clarence Rodriguez, who spent 12 years as a French foreign correspondent in Riyadh and recently wrote a book called Saudi Arabia 3.0 on the aspirations of Saudi women and young people, tells VOA that she believes Saudi Arabia “is in crisis, due to the drop in the price of petroleum,” and that it has found itself under pressure to “diversify its economy, which necessitates societal reform involving women and young people, as well.”

Rodriguez points out that the late King Abdallah, who died in 2014, started the reform movement by allowing Saudi women to run for the country’s consultative “Shoura” council and to enter the work force, becoming lawyers, bankers and salespeople.

She worries, however, that some recent moves to change the status of women have angered parts of the kingdom’s mostly conservative population. Traditionalists, she says, are “not used to such quick change” and many “are afraid, because things are moving too fast for them.”

On a recent talk show on an Arabic-language news channel, a conservative Saudi caller told the show’s host that he thinks Saudi King Salman and Crown Prince Mohammed Bin Salman are “violating (Islamic) sharia law” with some of their recent reforms “and should go to jail.”

Saudi commentator Jamal Kashoggi tells VOA that he’s “not optimistic about the reforms,” but that he would “still like to be optimistic … since everyone will suffer if they fail.” Kashoggi worries that the reforms are “not engaging Saudi society, enough.” 

“We wish Mohammed Bin Salman well, and we need economic (and social) reform,” he said, “but, we also need to discuss (these issues). The change,” he said, “is being done in very narrow circles. (Ordinary) people are not feeling engaged.” 

Was Saudi society more moderate?

Hilal Khashan, who teaches political science at the American University of Beirut, is not convinced that Saudi society was more moderate before the Iranian Revolution in 1979. He thinks that parts of Saudi society have always had a conservative streak to them, pointing out that Wahabi conservatives killed many moderate Muslims, including the Shafa’i mufti of Mecca when they overran the city and the nearby resort city of Ta’ef in 1924.

A handful of prominent Saudi conservative clerics have been arrested since Mohammed Bin Salman replaced his cousin, Mohammed Bin Nayef, as crown prince, in June. 

“By weakening the clerical establishment and making clerics simple government workers,” Khashan said, “(Mohammed Bin Salman) will be able to give women more rights, as he is proposing.” Saudi women were allowed to drive, starting in September, and this week were given permission to attend sports matches with their families.

Khashan believes that economic considerations are a key factor in the decision to allow Saudi women to drive. 

“If 10 million women are given the right to drive in Saudi Arabia,” he said, “and if just a fraction of those women buy cars, take driving lessons or buy insurance, that would contribute to stimulating Saudi Arabia’s stagnant economy.” Allowing women to drive will also curtail the expensive practice of hiring foreign chauffeurs to drive women around.

Both Kashoggi and Khashan believe that the Saudi government will eventually prevail in its efforts to reform society. 

“Conservatives,” Kashoggi said, “have already lashed out. They’ve been lashing out since 2003. Al-Qaida, or ISIS, or the radical Wahabis … these are the extremists in Saudi Arabia … and they don’t want change. They have resisted, and will continue to resist. … The only thing stopping them is (government) security.”

Clashes with clerics

Khashan points out that in clashes with conservative clerics back in the 1960s, after King Faisal opened a school for girls in Riyadh, and when the king opened the first TV station in Riyadh in 1965, the government prevailed. 

“Whenever the state clashes with the (conservative) clerical establishment, the state emerges victorious,” he said, “and there’s no reason to believe that things will not be the same, this time.”

Jordanian analyst Shehab Makahleh is less certain about who will come out on top, however. 

“There is a kind of opposition among royal family members who are not happy (about the reforms),” he said, “and they have had a number of meetings to clarify where the country is heading in the coming five to 10 years.”

Makahleh believes that King Salman may soon abdicate in favor of Mohammed Bin Salman “in order to gain more support from the international community” for his ambitious reform program and to promote a more secular model of society.
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For Yu Kaiguang, harsh new United Nations sanctions on North Korea are a disaster.

The trader in the Chinese border city of Dandong has seen business all but dry up, and he spends his days scrambling to obtain payment from the suddenly broke North Korean state companies to whom he sold on credit.

“They have no money to pay us in cash, and the worst is that because of sanctions they can’t settle the bill with goods such as coal, as they did in the past,” said Yu, reached by telephone at the offices of his Dandong Gaoli Trading Company.

Yu said he’s owed about $1 million in all for deliveries of toothpaste, instant noodles and other household items. He’s trying to avoid laying off staff by continuing to export foodstuffs such as pine nuts and red beans. “If they become unemployed, it would be bad for both the state and society.”

​Common problem for traders

Yu’s plight appears increasingly commonplace across Dandong, where the bulk of the cross-border trade is handled. Interviews with four trading companies and recent media reports indicate Chinese companies are hurting in a city where North Korean trucks used to rumble across the Yalu River bridge several times a week delivering metal scrap and returning with everything from televisions to toilet bowls.

The owner of another firm, Dandong Baoquan Commerce and Trade Co., which used to import iron ore and coal and export basic consumer goods, said he was owed around $200,000 by his North Korea clients.

“I had to lay off about 10 staffers, but I had no other choice because it was the government policy,” Han Lixin said, referring to the sanctions. “I’m still in business hoping to trade with other countries, but it takes a lot of time and efforts to develop customers.”

Large-scale trade involving North Korean resources such as iron ore and coal has been banned entirely under the sanctions, dealing a big blow to Dandong’s port, whose operator defaulted on a $150 million corporate bond this week in part because of cratering revenues.

Both economies hurting

“The sanctions have a broad effect, and both the economies of North Korea and China are suffering a lot,” said Jin Qiangyi, professor at the Institute of Northeast Asia Studies at Yanbian University in Northeast China. “Chinese companies doing business with North Korea may see quite a lot of losses, and the companies that have already invested in North Korea will suffer more.”

Dealing with North Korean companies was never easy. Wang Chengpeng, former manager of Dandong Hongwei Trading Company, quit doing business with the North entirely because of hassles, restrictions and low-profit margins, even before the latest sanctions began to bite.

Despite that, China has long been the North’s biggest economic partner. Beijing accounted for more than 90 percent of its neighbor’s foreign trade of about $6.5 billion in 2016, according to the South Korean-owned Korea Trade Investment Promotion Agency. China continues to be a key source of food and fuel aid to help keep North Korea’s weak economy from collapsing, and Chinese officials say they won’t agree to measures that could cut off basic life necessities and possibly cause Kim Jong Un’s dictatorship to topple.

Sanctions holding

China’s patience with Kim has grown increasingly thin, however, and Beijing has lent its support to increasingly tough resolutions unanimously approved by the Security Council this year that target North Korea’s economy in response to its ballistic missile launches and latest nuclear test.

China has said it sees sanctions purely as a means of inducing North Korea to return to nuclear disarmament talks and has rejected unilateral measures not approved by the Security Council, of which it is one of the five veto-wielding permanent members.

Still, despite some allegations of cheating, China appears to be seeking to enforce the sanctions that also ban exports of lead, textiles and seafood, prohibit joint ventures, and bar any country from authorizing new permits for North Korean workers, all sources of hard currency for Pyongyang.

The sanctions have also blacklisted a number of firms in the extraction and financial industries, imposed travel bans and frozen the assets of some government officials, banned the import of natural gas liquids and condensates, and capped the country’s crude oil imports.

It’s hard to gauge the exact impact of sanctions on the North Korean economy because the crucial food and energy sectors are less likely to be hurt by external conditions, said Lee Seok-ki, a senior researcher at the South Korean government-run Korea Institute for Industrial Economics and Trade.

However, while the North’s economy has been expanding, by 3.9 percent in 2016, according to an estimate by the Bank of Korea in South Korea, that rate almost certainly can’t be sustained if sanctions continue, Lee said.

China for its part is watching North Korea to see how its ally will respond to the new measures, eager for signs of a shift in tactics by Kim and an improvement in relations between Beijing and Pyongyang that have “sunk into a standstill,” as Jin puts it.
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A solid rebound for the job market in October as the U.S. economy added 261,000 jobs. Job gains were strong across the board, and the unemployment rate fell to 4.1 percent, its lowest level in 17 years. But, as Mil Arcega reports, American workers are not seeing any real growth in their wages.
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The aggregate value of all cryptocurrencies hit a record high of over $200 billion this week, according to industry website Coinmarketcap, putting their reported market value at more than that of U.S. banking giant Citigroup.

The record, set Wednesday, came as the biggest and best-known cryptocurrency, bitcoin, hit a record high of $7,500 on the Luxembourg-based Bitstamp exchange, after a more than tenfold increase in value over the past 12 months.

That took its own market capitalization — its price multiplied by the number of coins that have been released into circulation — to a record high of more than $120 billion.

The second-biggest cryptocurrency, ether — sometimes known as Ethereum, after the project behind it — has a market cap of just below $30 billion, with another 1,000 or so rival digital currencies making up the rest of the $200 billion.

If the cryptocurrency market were a company, its valuation would put it in the top 25 firms on the S&P 500 stock index.

The latest surge in bitcoin was driven by news this week that CME Group, the world’s largest derivative exchange operator, would launch bitcoin futures in the fourth quarter of the year, as well as speculation that Amazon could be set to accept the digital currency.

Many are concerned that the market represents a bubble, with the latest warning coming from the head of Credit Suisse on Thursday.
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Economic growth in sub-Saharan Africa is expected to rebound this year from 20-year lows in 2016, according to the International Monetary Fund’s biannual report. The Washington-based organization warns that, despite the modest recovery, public debt is continuing to rise and could soon become unsustainable in some African countries. Henry Ridgwell has more.
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Japan is deepening its influence in the Philippines to vie with regional rival China, a welcome boost for an infrastructure overhaul program in the relatively poor Southeast Asian country and for Japanese geopolitical ambitions.

Philippine President Rodrigo Duterte met Japanese Prime Minister Shinzo Abe earlier this week to discuss “concrete, time-bound and specific ways to further intensify bilateral cooperation,” the presidential website in Manila said.

Duterte is playing Japan off China, which last year out-pledged other countries with an offer of $24 billion in aid and investment, analysts say. China and Japan, which have a legacy of two-way political disputes, are vying for economic inroads as well as military cooperation in much of Southeast Asia.

“He’s playing one side off the other, and so he’s come to ‘why not?’” said Jeff Kingston, author and history instructor at Temple University Japan. “Japan is trying to draw on its old ties and ‘we’re a more reliable and trustworthy neighbor.’”

Duterte’s second trip to Tokyo

Duterte, in office since June 2016, made his second official Tokyo visit Oct. 30-31. His meeting with Abe included discussions of economic issues. Abe pledged 1 trillion yen ($8.8 billion) in economic support, according to media reports from Tokyo this week, doubling the amount that Japan offered in January.

The aid is expected to help the Philippines build rapid transit, bridges and improvements to a container port in the country’s third largest city, Cebu, said Jonathan Ravelas, chief market strategist with Banco de Oro UniBank, Metro Manila.

“On top of our agenda is vital support for the centerpiece projects,” Duterte said via the presidential office website, referring to a $167 billion, five-year program to overhaul public facilities as a way of fostering stronger economic growth.

Testing Chinese aid

The Philippines began accepting Chinese aid for infrastructure last year after the two sides agreed to set aside a maritime sovereignty dispute that had landed them in a world arbitration court under Duterte’s predecessor.

Beijing hopes its economic help around Southeast Asia will ease opposition to its dominance in that dispute, which covers most of the South China Sea and involves six governments. Some Filipinos worry that acceptance of Chinese aid will lead to compromising Philippine maritime sovereignty claims.

For the past four years, China has separately advanced a “One Belt, One Road” policy that extends infrastructure aid across Asia to advance Sino-foreign trade relations.

What’s in it for Japan

Japan is widely seen as competing with China for clout in the Philippines as well as other developing Asian countries.

Direct aid worldwide increased 12.7 percent last year over 2015 to $10.37 billion. The development aid also has a widening mandate, including “human security” and “sustainable development” based on individual country needs, the Japanese foreign ministry says on its website.

Japanese support for the Philippines tends to unfurl slowly compared to Chinese support, and often comes through private investment deals such as aquaculture in remote, undeveloped regions. Both countries offer concessionary loans.

“Foreign direct investment in the Philippines coming from Japan has been growing in the past six years, so I think closer cooperation between these countries is beneficial,” Ravelas said.

China and Japan still face unresolved issues from World War II as well as a dispute over islets in the East China Sea.

The East China Sea issue, plus wariness about Beijing’s grip on the South China Sea — a separate dispute not involving Japan — have prompted Tokyo to factor in freedom of navigation, rule of law and security when making aid calculations, University of Adelaide Asian studies professor Purnendra Jain wrote in a 2016 online commentary.

Japan, a staunch ally of Washington, also advocates a multicountry approach to development assistance. 

“Duterte was in town at [the] Japanese invitation and I think they wanted to convince him,” Kingston said.

​Japanese help for destroyed Philippine city

As part of Japan’s emphasis on human security, Abe offered $2 million to help the Philippines rebuild Marawi, Philippine media reported this week. Marawi is a southern city that was demolished during five months of fighting this year between Philippine troops and Muslim rebels.

“In the past the focus has mostly been on infrastructure and grants, but now there’s an effort to try to address human security issues like the roots of conflict, and terrorism,” said Maria Ela Atienza, political science professor at University of the Philippines Diliman.
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The iPhone X’s lush screen, facial-recognition skills and $1,000 price tag are breaking new ground in Apple’s marquee product line.

Now, the much-anticipated device is testing the patience of consumers and investors as demand outstrips suppliers’ capacity.

Apple said Thursday that iPhone sales rose 3 percent in the July-September quarter, a period that saw the iPhone 8 and 8 Plus come out in the final weeks. Sales could have been higher if many customers hadn’t been waiting for the iPhone X, which comes out Friday.

Apple shipped 46.7 million iPhones during the period, according to its fiscal fourth-quarter report released Thursday. That’s up from 45.5 million at the same time last year after the iPhone 7 came out, but represents a step back from the same time in 2015, when Apple shipped 48 million iPhones during the quarter.

As with recent quarters, one of the main sources of Apple’s growth is coming from its services, which are anchored by an app store that feeds the iPhone and other devices.

Revenue in that division surged 34 percent to $8.5 billion during the July-September period. All told, Apple earned $10.7 billion on revenue of $52.6 billion, compared with a $9 billion profit on revenue of $46.9 billion a year earlier.

Apple shares are up 3 percent in after-hours trading.

Nonetheless, the just-ended quarter largely became an afterthought once Apple decided to release the iPhone X six weeks after the iPhone 8.

“The Super Bowl for Apple is the iPhone X,” GBH analyst Daniel Ives said. “That is the potential game changer.”

But it also brings a potential stumbling block. While conspiracy theorists might suspect that Apple is artificially reducing supply to generate buzz, analysts say the real reason is that Apple’s suppliers so far haven’t been to manufacture the iPhone X quickly enough.

Making the iPhone X is proving to be a challenge because it boasts a color-popping OLED screen, which isn’t as readily available as standard LCD displays in other iPhone models. The new iPhone also requires more sophisticated components to power the facial-recognition technology for unlocking the device.

Even with the iPhone X’s delayed release, Apple is still struggling to catch up. Apple is now giving delivery times of five to six weeks for those ordering in advance online (limited supplies will be available in Apple stores for the formal release Friday). Most analysts are predicting Apple won’t be able to catch up with demand until early next year.

On Thursday, Apple predicted revenue for this quarter from $84 billion to $87 billion. Analysts, who have already factored in the supply challenges, expected $85.2 billion, according to FactSet.

Analysts are expecting Apple to ship 80 million iPhones during the current quarter, which includes the crucial holiday shopping season, according to FactSet. That would be slightly better than the same time last year.

Apple is counting on the iPhone X to drive even higher-than-usual sales during the first nine months of next year — a scenario that might not play out if production problems persist and impatient consumers turn instead to phones from Google or Samsung.

“What Apple needs to do is manage consumer expectations so they don’t get frustrated having to wait for so long for a new phone,” Ives said.

Analysts believe Apple can pull off the juggling act. They are expecting the company to sell 242 million iPhones in the fiscal year ending in September 2018 — the most in the product’s history. The previous record was set in 2015 when Apple shipped 231 million iPhones, thanks to larger models introduced just before the fiscal year began. By comparison, Apple shipped nearly 217 million iPhones in its just-completed fiscal 2017.

If Apple falters, investors are likely to dump its stock after driving the shares up by 45 percent so far this year on the expectation that the iPhone X will be the company’s biggest hit yet.
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As a choice to lead the Federal Reserve, Jerome Powell defies any recent mold.

He isn’t a trained economist. He’s produced no trail of research. He built a fortune as an investment manager.

Yet by the reckoning of Fed analysts — those who know him and those who don’t — Powell is equipped to lead the world’s most influential central bank, presiding over a U.S. economy on solid ground but hardly without risks.

What Powell brings to the position most of all, they say, are a formidable intelligence, an appreciation of intellectual diversity and a gift for forging agreement. And in five years on the Fed’s board of governors, he has schooled himself in monetary policy while becoming a specialist in areas from banking regulation to the U.S. payments system.

As a moderate who is expected to follow the cautious approach to interest rates of the current Fed chair, Janet Yellen, Powell could serve as a steadying force for the U.S. economy as well as a unifying figure among the central bank’s policymakers.

Looking for insights

“A consensus builder” is how Shai Akabas, who worked with Powell at the Bipartisan Policy Center, a public policy think tank, describes him. Powell was for two years a visiting scholar at the center — where, among other things, he focused on helping avert a crisis over raising the government’s debt ceiling — until he joined the Fed’s board in 2012. While at the think tank, it was Powell’s task to help convince congressional Republicans — successfully, in the end — that a default on the debt would be a catastrophe.

Akabas said Powell “was always trying to glean insights from those around him, and use that to form opinions.”

Educated at Princeton University with a law degree from Georgetown University, Powell, 64, known as Jay, spent many years in investment management — at Dillon Read and then at the Carlyle Group. His work there made him one of the wealthiest figures to serve on the Fed board: His most recent financial disclosure form places his wealth at between $19.7 million and $55 million. And based on how government disclosures are drafted, his wealth may actually be closer to $100 million.

Yet those who know him describe a man of unshowy modesty and collegiality, with little discernible pretension. Earlier this year at Reagan National Airport, Matthew McCormick, a government economist who was traveling with him, said he watched Powell carry a car seat and luggage for a family he saw was struggling to make a connecting flight.

At the Bipartisan Policy Center, Jason Grumet, who founded the center, recalls that the organization didn’t know what to expect from Powell, who had just finished several lucrative years at the Carlyle Group and had earlier held a high-level Treasury Department post. Yet Powell was content to take an unassuming office near the photocopier with a view of an alley.

“Jay dug in with the intensity of a young analyst,” Grumet said. “He was like a junior staffer.”

Focus on service

A Washington native, Powell has long shown an impulse toward federal policy and service. Early in his career at Dillon Read, he followed Dillon’s former chairman, Nicholas Brady, to President George H.W. Bush’s Treasury Department. Brady had become Treasury secretary, and Powell became undersecretary for finance.

His work at the Bipartisan Policy Center followed later in his career, and it led to his nomination by President Barack Obama to the Fed’s board.

In contrast to Powell, his predecessors Ben Bernanke and Yellen were nationally distinguished economists before their Fed chairmanships, with decades of research, papers and books attached to their names. In theory at least, they came to the Fed job prepared to lead the central bank’s response to unforeseen economic crises. No one knew, after all, that Bernanke would have to endure the stomach-churning threat to the financial system that forced him to preside over a raft of emergency actions to save the largest banks and, by extension, the economy.

What colleagues do know about Powell is that he won’t likely hesitate to rely on colleagues or advisers with deeper expertise. He is described as someone who believes deeply that differing opinions and backgrounds can help build common ground in public policymaking.

In a speech last year, took note of the value of having 12 Fed branches spread across the country. He suggested that the regional differences provide an array of views to help produce superior monetary policy.

“My strong view is that this institutionalized diversity of thinking is a strength of our system,” Powell said. “In my experience, the best outcomes are reached when opposing viewpoints are clearly and strongly presented before decisions are made.”

Powell, who projects a serious demeanor, is known for a lighter side as well. Friends say he strums rock and blues numbers on the guitar. He has been an avid golfer despite back pain.
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