A conference with aviation executives on Thursday at the White House saw an “extraordinarily positive” Trump when he proposed to privatize America’s air traffic control system and to improve the country’s “obsolete” airports and roads.
“Our airports used to be the best, now they’re at the bottom of the rung. We have an obsolete plane system, we have obsolete airports, we have obsolete trains, and we have bad roads. Addressing the multi-billion dollar aviation industry, the former founder-cum-owner of the Trump Airlines promised to “change all of that”.
The participating airport officials and airline staff members had a positive outlook toward the meeting. Following the example of Canada, the American airline organizations have long wished to break free from the Federal Aviation Administration’s control of the air traffic and have demanded that the rights to control the airspace be transferred to a new and modern non-profit organization.
Gary Kelly, the CEO of Southwest Airlines, raised the issue of “modernizing the air traffic control system” and to spending money on its improvement and advancement. “I think there is near-unanimous agreement that we need to modernize the air-traffic control system. We are still using World War II-era ground-based radar to guide the aircraft. We’re not utilizing GPS satellite-delivered navigational tools.” Kelly said. He estimated that the industry suffered a loss of 25 billion US dollars on account of flight delays, air congestions and unusual fuel costs.
Trump also promised to set forth a plan within three weeks to cut down taxes on businesses and reduce government regulations so as to assist the airlines in hiring more employees for the betterment of their services. He also asked the airlines and airports to hand over a list of regulations that, in their opinion, ought to be removed from the system when they come together for a meeting in the next two to three months.
Four years back, commercial aviation was decontrolled by the US government. Despite this, there are almost 13,000 other regulations covering 13 federal organizations. The airlines and their passengers also pay 17 aviation federal taxes, which have shown a growth from 3.7 billion dollars in 1990 to 23.1 billion dollars in 2016 as quoted by a trade group.
The FAA has lagged behind in modernization. The president of Airports Council International – North America, Kevin Burke, said that President Trump supported the demand to be up-to-date with the air traffic control system but seemed reluctant to accept the idea of privatization.
During the course of the meeting, the President distanced himself from the controversial topic of debarring the entry of citizens from seven Muslim-majority nations including refugees from the war-ravaged Syria. The order, which was disapproved by the majority of airline industry leaders, is currently being reviewed by a federal appeals court.
The meeting also had a brief discussion on the alleged subsidies being given to the three major Middle Eastern carriers, namely Emirates, Qatar Airways and Etihad Airlines. Trump replied to these by saying, “I know you’re under pressure from a lot of foreign elements and foreign carriers. I’ve been hearing that a little bit. At the same time, we want to make life good for them also. They come with big investments.
The President of the United States Donald Trump has been vocal about his displeasure in the NAFTA deal. In fact, one of his campaign promises is that he will cancel or modify the deal that is unfair to the Americans. Immediately after becoming the President, Trump has ordered building an expensive wall on the American-Mexican border and he has also started his plan to cancel NAFTA deal. Mexico’s economy thrived after the formation of NAFTA as the protectionist country opened its doors to the world. The huge exports made imports cheaper for the country. Now that NAFTA is proposed to be canceled, it will have serious effects on Mexico’s economy.
In 1992, the Mexican team which negotiated the NAFTA deal was applauded for its economic credentials. Mexico was a protectionist country with too much focus on making the products in Mexico which were not of high quality. The idea of competitiveness was introduced after the launch of NAFTA deal. The economy which was closed for so long flourished beautifully after it was open to foreign investments. It provided high paying factory jobs for Mexicans. While several farmers left their land to look for a good job in cities or move to the US, it helped the economy to grow considerably.
The economic experts who coined the NAFTA deal are extremely worried about Mexico’s reactions to the cancellation of NAFTA deal. The bigger border tax that Trump proposes will affect the Mexican economy more than the US economy. Peso is weakening in the forex market and even a 25% border tax won’t have a big impact for the USA. On the other hand, Mexico shouldn’t raise its tariffs because it would make the imports expensive. Mexico exported $18.5 billion worth of pickup trucks to the USA and imported $18 billion worth of agricultural products from the USA.
In the current economic situation, Mexico must maintain its near-zero level tariffs with the USA. This will only keep the imports affordable. Politically, this is difficult because everyone in the nation expects Mexico to retaliate Donald Trump. The nationalistic impulse of the people are kindled by the actions of Trump and the president is also forced to take some action. Recently, twitter tag #NoCompresUSA (Don’t buy USA) trended among Mexicans and the movement has gained 3 million followers.
The governments after the NAFTA deal failed to promote domestic investment as they concentrated more on increasing the exports to improve the economy. In an attempt to hold on to the free trade principles of the country, Mexico is hoping to expand its trade deal with the European Union. It is also trying to reduce trade barriers with Argentina to import grains. Mexico is also planning to conduct free trade talks with other countries like New Zealand, Australia, Singapore, and Malaysia. These countries are affected by the cancellation of Trans-Pacific partnership with the USA. Mexico has plans to sign trade pacts with Asian nations like Colombia, Peru, and Chile to survive the trade war with its northern neighbor.
IBM has been in the news for the launch of the Internet of Things headquarters in Munich. It was a $200 million project. To take the project to a new level, IBM has partnered and collaborated with several companies such as Visa, Indiegogo, French railway SNCF, Bosch and several others.
IBM is a legendary company that was popular for the servers and associated technology. With the introduction of latest technologies, the importance of IBM has gone down in recent years. To boost the value of IBM and to be a pioneer in the industry, IBM has invested in Internet of Things (IoT) to work on newer technologies. The primary focus of IoT is the Watson artificial intelligence business and IBM has plans to invest $3 billion in this project over the course of four years.
In an attempt to push the IoT project, IBM continues to make deals with numerous companies. Weather Company was acquired by IBM in 2016. The existing IBM cloud services were moved to the new platform. The Watson artificial intelligence technology was integrated into the Cisco edge routers to take one step forward in the data analytics arena. The revenues from IoT have been rewarding for IBM.
IBM has not openly disclosed the revenues generated through the IoT project. The global head of the IoT project commented that the revenues from the project contributed to about 40% of the overall revenue for IBM. The headquarters of IBM is in the US, but the IoT center was built in Munich. This was completed before the presidency of Donald Trump who pushes all the companies to invest in the USA and move out of other countries.
IBM has proclaimed itself as a supporter of Trump. The support has impacted several employees as they wanted to leave the company. Trump has promised numerous business tax cuts that could benefit IBM. In an attempt to motivate the employees, IBM has sent an internal memo claiming that the company’s association with Donald Trump will help the company to exert influence on policy making. The company alleged that exposure to insider information will help IBM to stay away from dangerous executive orders.
Visa is responsible for 60% of the financial transactions all over the world and IBM brings its Watson IoT platform to Visa through its collaboration. It is one of the biggest steps taken by IBM to monetize IoT project. IBM hopes to provide cloud services at free of cost along with tools and support for startup hardware and electronic projects on Indiegogo and Arrow. IBM has always associated itself with huge corporations in the past. Now, the new deal makes IBM technology accessible for small businesses and startups.
IBM also wants to expand the reach of its Watson IoT platform by working with giants such as Tech Mahindra, Cap Gemini, BNP Paribas Avnet, Bosch, and EEBUs. French railway SNCF is also partnering with IBM to use the Waston IoT platform to improve railway performance.
The Asian markets experience a tough time ever since President Trump was elected. The executive orders issued by Trump continues to increase political and economic risks. The central banks in the Asia-Pacific region are extremely concerned about the economic and trade policies of Donald Trump. Economic experts argue that the protectionist policies of Trump will affect the economy of the US as well.
The chief of New Zealand Central bank commented that imposing higher tariffs on Chinese and Mexican imports will increase the cost in the USA. This will result in inflation shock within the country. As a result, the Federal Reserve has to take action to enforce a tighter policy which has the potential to limit economic growth. The rising inflation will become a challenge for the Federal Reserve and only stricter policies will be introduced thereafter.
The Bank of Japan governor has also warned against the new policies of the Trump White House. He has urged the bank to seek powerful monetary easing, considering the global economic situation. The low inflation rate in Japan coupled with the US action against the economy can cause a major setback to the Japanese economy. The central bank of India is also worried about the uncertainty while it kept the interest rates steady.
When Donald Trump was elected as the next President of the United States, the stocks and dollar value enjoyed a high ride. Tax reforms, economic deregulation and fiscal stimulus enthralled the investors and it resulted in a boom in the stock prices. However, in just a few weeks after assuming the office, Trump has issued controversial executive orders threatening various trade policies. This has piqued investors and the optimism is already fading. Further, experts argue that the economic reforms promised by Trump will take a long time to become realistic.
Trump has already pulled USA out of the 12 nation Asia-Pacific trade. He has also proclaimed that new trade deals will be formed with other countries while imposing heavy tariffs on imports from certain countries. The protectionist policy has threatened the integrity of the Asian economies. Particularly, countries such as Malaysia, Thailand, Taiwan and Korea depend on trade and their economies could have a major setback.
While the Federal Reserve has not increased the interest rates in 2017, it is expected to do so as the unemployment rates fall down in America. Eurozone inflation has also approached the 2% mark. The US policies can increase inflation risks in various countries. Trump has also commented that Japan and Germany devalue currencies, posing a risk to the US economy. Federal Reserve has already announced that it has plans to increase interest rates three times in this year. This means that protectionist policies will slow down growth all over the world.
There is so much uncertainty in the US economic policies and the experts are concerned. However, the long-term effect of the US interest rates will become clear as the fiscal stimulus policies of the Trump White House becomes clear.
Tesla Motors Inc. has revealed plans to team up with Japanese electronics company Panasonic Corp. for production of solar energy parts for SolarCity Corp. as the electric car maker’s CEO push closer to acquisition of the solar power company.
In a statement posted on its corporate blog late on Sunday, Tesla said it has signed a non-binding letter with Panasonic to commence manufacturing of solar energy components at a SolarCity facility in the United States.
Production of photovoltaic cells and modules is scheduled to commence at the facility in Buffalo, New York from 2017. These components will be used for SolarCity’s solar energy systems.
The proposed deal appears to bring Tesla Chief Executive Elon Musk’s desire of merging both the electric automaker and the solar panel company nearer to fruition. He intends creating a single company that will provide both electric vehicles and electricity needed to power such to consumers.
“We are excited to expand our partnership with Panasonic as we move toward a combined Tesla and SolarCity,” Tesla Chief Technical Officer JB Straubel said in the release. “By working together on solar, we will be able to accelerate production of high-efficiency, extremely reliable solar cells and modules at the best cost.”
The proposed SolarCity acquisition has been plagued by corporate governance issues, given the boards of both the company and the electric car maker are significantly interwoven. Musk is a chief financier of the San Mateo, California-based solar panel company and CEO Lyndon Rive is his first cousin. Majority of Tesla board directors (six out of seven) have connection to SolarCity.
The solar-energy parts deal depends on approval of Tesla’s acquisition of SolarCity by the boards of the two companies. The respective shareholders are due to vote on this matter on Nov. 17.
Musk’s plan to combine Tesla and SolarCity has been questioned by some, considering the issues facing the latter company. The major American solar panel installer has been battling to avoid defaulting on its debt. It disclosed in its latest quarterly reports that it was almost in breach of bonds covenants. SolarCity is forecast to record losses for at least two additional years.
But Tesla’s CEO has been quick to suggest how close the two companies are for a merger not to be faulted. He maintained that it “is largely an accident of history” for the companies to have existed as separate entities at all.
The latest solar-panel deal will not be the first between Tesla and Panasonic. They already have a partnership, which includes the building of a lithium-ion gigafactory in Nevada at a cost of $5 billion. The plant will produce batteries for Tesla’s electric vehicles, especially the Model 3, as well as energy storage products for utilities and homes.
Tesla says it intends having a long-term purchase commitment with Panasonic for the production of the photovoltaic cells.
Panasonic shares were trading higher by up to 2.5 percent in Tokyo on Monday, according to Bloomberg.
The Japanese company is better known as a consumer electronics manufacturer, but it also provides products and services to businesses. It is increasingly shifting its attention to housing, car batteries and information systems.
When you do not have access to a bank account or a traditional financial institution, you have to turn to the likes of check cashing facilities, prepaid cards and payday loans. All of these cost a great deal of money, and can reduce the amount of funds you earn every single month because of costly fees.
A new study has found unbanked Hispanics are the most affected by this trend.
Using data from the Federal Deposit Insurance Corporation (FDIC), NerdWallet discovered that Hispanic households without bank accounts can pay hundreds or perhaps even thousands of dollars in fees every single year, which impacts the most vulnerable that are already having a hard time getting by today.
It is estimated that 16 percent of Hispanic households don’t have bank accounts. When they decide to use prepaid cards, they can fork over $489 a year. This skyrockets when the fees from payday loans and money orders are added into the mix. The former can range between $10 and $30 for each $100 borrowed in addition to the exuberant interest rates. The latter can eat up 10 percent of the check.
This a lot higher than the $15 a month you’d pay the financial institution for a checking account, and the $34 you’d pay for an overdraft. Simply put: unbanked Hispanics are needlessly wasting money.
“They are discouraged very soon when they start to pay fees or struggle to maintain a minimum balance,” Antonio Alba Meraz, an educator with the Latino Financial Literacy Program at the University of Minnesota told the Palm Beach Post.
Ultimately, the report concluded, Hispanic consumers can enter into high-interest debt traps. Moreover, they can miss out on opportunities to establish credit, which can help them get banking products.
Reportedly, Spanish-speaking households are five times more likely to not have a bank account. Some of the reasons include high fees, identification problems, credit history issues and distrust of banks. Other common issues consist of low income, education, language barriers and legal status – we all know legal status has suddenly become quite the big deal in the United States today.
But if Hispanics want to avoid wasting their hard earned money on fees then it’s time to turn to banks.
Alternative financial products have been given a poor reputation as of late. This is especially true for payday loans, which is a $40 billion industry. Critics often accuse payday loan businesses like Landmark Cash of taking advantage of the impecunious, particularly minorities. They allege that payday loan lenders charge exorbitant fees, which send a lot of the customers into endless debt cycles.
Proponents counter this argument by referring to the fact that a lot of those who utilize payday loan companies do not have access to conventional forms of credit and bank accounts. Oftentimes, a payday loan, no matter the cost, can help a Hispanic households keep the lights on, pay the rent or repair a broken down vehicle.
Whatever the case, now is the time for unbanked Hispanics to become banked.
Salesforce.com which appeared to be in pole position to acquire Twitter following withdrawals of other leading suitors might now be forced to back out as a result of pressure from its investors.
Search giant Google, Apple and Disney were among the leading companies thought to be interested in buying Twitter, but all of them have now indicated that they would not make any offer for the social media site.
The withdrawals of these other lead suitors had put Salesforce in the lead as the potential buyer. Its chief executive Marc Benioff is believed to be particularly interested in acquiring Twitter, but his optimism appears not to be shared by investors in the cloud computing company.
Shareholders are lost on what value a troubled company that is being ditched by some of its investors could add to Salesforce. The New York Times reports that these investors have made it clear to Benioff that they are not in support of a Twitter acquisition.
Those calling for the plug to be pulled on the deal are led by Fidelity Investment, the company’s largest shareholder with around 14 percent stake. People familiar with the matter told the NY Times that some of the investors have threatened to sell their stock.
It now appears that Benioff has started to have second thoughts about the Twitter deal, based on his remarks at an investor meeting in San Francisco on Wednesday. He stated that he had read all notes and emails from the shareholders of Salesforce.
“And as I digest all of that information, this is actually the No. 1 thing that has been on my mind,” Benioff said. “In some cases, we have been unusually surprised and we have had to do a reset.”
Salesforce knows it has to be careful with how it deals with its investors, especially in the light of its profitability challenges. It relies significantly on stock to pay its employees and process acquisitions. The customer management software company reportedly paid its employees $593.6 million in stock-based compensation during its fiscal year that ended January 31.
The company has some big names among its shareholders, including T. Rowe Price, BlackRock and Sands Capital Management, so it knows it has to be careful with a Twitter deal. A source said the investors have effectively put an end to any potential acquisition. It is unclear if the company’s CEO would continue in his pursuit, but that now looks unlikely.
News broke on September 23 that Salesforce was in talks with Twitter over an acquisition deal. This led to some investors selling off their shares, driving down price by about 8 percent over the following 10 days.
The cloud computing company previously tried to acquire the professional social network LinkedIn, but it lost that to Microsoft in June. The loss to the tech giant came despite Salesforce offering a better deal. But it relied on stock in that deal while Microsoft offered $26.2 billion in cash.
Analysts say Benioff knows that any action that makes shareholders to sell off their stock would certainly drive down value. This would harm the company’s ability to pull off successful deals.
Founded in 1999, Salesforce has grown to become a public company with a value of about $49 billion. Share price has shot up from an IPO value of $11 to over $70.
Global pharmaceuticals company Mylan has agreed to pay $465 million to settle EpiPen Medicaid claims against it over allegations that it overpriced its emergency allergy products.
The settlement with the Department of Justice was announced by the drug maker on Friday. It comes after American lawmakers and federal health officials complained that Mylan had classified its EpiPen as a generic product when in fact it is not.
The drug company had reportedly classified its emergency allergy injection as a generic product since 1997 under the Medicaid program for the poor. This enabled it pay lower amount in rebates on sales of the products. But the U.S. government says EpiPen was wrongly classified, stating that it is a brand product which should have paid higher rebates.
EpiPen is a pen-like device used to inject epinephrine in order to deal with emergency, severe allergic reactions.
The law requires pharmaceuticals companies to pay rebates on sales of their products to Medicaid-insured patients. Under the government’s pricing rules, generics attract payment of 13 percent in Medicaid rebates, while brand-name medications have rebates set at a minimum of 23 percent.
Recently, officials of the Centers for Medicare & Medicaid were questioned by the Congress on what was being done about the lower rebate being paid by Mylan. Some senators last week requested the Department of Justice to investigate the EpiPen classification. It is believed the interest shown in the matter by the law makers contributed to the settlement finally announced by the drug company late Friday.
“I am glad the Department of Justice pursued this so quickly, since the misclassification was an outrage,” Sen. Amy Klobuchar (D-Minn) said in a statement.
Public outcry about the EpiPen misclassification was fueled by anger over outrageous inflation in the price of the anti-allergy injection. Mylan, which acquired rights to the product in 2007, has raised price per pair from $94 in that year to $608 in 2016. The price hike has come without there being significant improvement to the product since the acquisition.
Perhaps, more infuriating to some people is the claim it does not cost up to $10 to produce a unit of EpiPen.
Members of the Congress have also shown interest in knowing why such a high price is being charged for EpiPen. Mylan Chief Executive Heather Bresch was invited to a hearing of the House Oversight and Government Reform Committee on September 21 to explain the outrageous hike.
It was later found out that the company earned considerably higher profit on each pair of EpiPen than the $100 claimed by Bresch.
Government health programs, such as Medicaid, are principal EpiPen buyers. The amount spent on the product by Medicare and Medicaid surged some 463 percent from $86.5 million in 2011 to $486.8 million last year, according to Fox News.
Settlements such as this one usually result after several years of negotiations. The fast pace with which this one was reached indicated Mylan wanted to quickly move on from the controversy, even though it claimed the deal did not involve admission of wrongdoing.
On Thursday, CMS revealed that Mylan has also not been paying Medicaid another rebate required when the price rise of a brand drug is higher than inflation. Average percentage increase in EpiPen price has been more than 10 times higher each year since 2007.