News

Leaders of the U.S. central bank raised interest rates slightly Wednesday and signaled that rates are likely to go higher as the economy continues to strengthen.

At the end of two days of deliberation in Washington, the Federal Reserve set the key interest rate a quarter of a percent higher, at a range between 1.75 and 2 percent. They say the labor market continues to improve, spending is rising, and inflation is rising closer to the modest 2 percent annual rate that experts say helps the economy grow predictably.

Fed officials work to maximize employment while maintaining stable prices. With that in mind, they slashed interest rates to nearly zero during the recession in 2008 to boost economic activity. Now, they judge that it is time to continue raising rates because holding rates too low for too long could spark inflation, and such rapidly rising prices could harm the economy.

“The economy is doing very well,” Fed Chairman Jerome Powell told journalists. “Most people who want to find jobs are finding them and unemployment and inflation are low.”

He said the Fed’s efforts to manage the economy work best when the public is told what is being done, what is being considered, and why certain decisions are made. Consequently, Powell said he will begin holding press conferences more often beginning next year. 
…

German authorities fined Volkswagen nearly $1.2 billion Wednesday for its role in a diesel emissions scandal that first surfaced in the United States in 2015.

Prosecutors found the German automaker failed to properly monitor its engine development department. The lack of oversight resulted in global sales of nearly 11 million diesel vehicles with illegal emissions-controlling software.

U.S. authorities previously imposed billions of dollars in penalties on the automaker, which said Wednesday it would accept the fine announced by prosecutors in the city of Braunschweig.

Volkswagen said paying the latest fine would hopefully have “positive effects on other official proceedings being conducted in Europe” against the company and its subsidiaries.
…

German authorities fined Volkswagen nearly $1.2 billion Wednesday for its role in a diesel emissions scandal that first surfaced in the United States in 2015.

Prosecutors found the German automaker failed to properly monitor its engine development department. The lack of oversight resulted in global sales of nearly 11 million diesel vehicles with illegal emissions-controlling software.

U.S. authorities previously imposed billions of dollars in penalties on the automaker, which said Wednesday it would accept the fine announced by prosecutors in the city of Braunschweig.

Volkswagen said paying the latest fine would hopefully have “positive effects on other official proceedings being conducted in Europe” against the company and its subsidiaries.
…

U.S. President Donald Trump says oil prices are too high and blames the Organization of the Petroleum Exporting Countries.

The 14 oil-producing nations in OPEC — Saudi Arabia, Iran, Iraq, Kuwait and Venezuela among them — produce about 40 percent of the world’s oil, but about 60 percent of the oil traded on international markets. OPEC’s actions, whether to cut or increase production, often heavily influence the price of oil, and by extension the prices consumers and businesses pay for fuel.

OPEC’s oil chiefs struck a deal in 2016 to cut production by 1.8 million barrels a day to reduce the global glut of oil and shore up prices. Since then, oil prices have risen from below $30 a barrel to more than $70.

But that rollback in production is set to expire at the end of the year. OPEC has yet to set new production levels beyond that, but the cartel’s oil ministers are meeting again next week in Vienna.

Saudi Energy Minister Khaled al-Faleh said in April that the global market can absorb higher oil prices, a remark that drew a swift rebuke from Trump.

“With record amounts of oil all over the place, including the fully loaded ships at sea, Oil prices are artificially Very High! No good and will not be accepted!” the U.S. leader tweeted on April 20, although he has no control over what OPEC decides to do.

Early in the year, with gas prices at service stations still relatively low, Trump suggested raising the country’s gasoline tax that customers pay at service stations by 25 cents a gallon to fund road and highway repairs.

But the president has not mentioned the tax increase idea in months as gas prices have steadily risen because of higher oil prices on the world market, eating into higher take-home pay that millions of American workers gained when Congress late last year passed tax-cut legislation supported by Trump.

The average gallon of gas in the United States now costs $2.92, far more than in such oil-producing countries as Nigeria, Saudi Arabia and Iran, and far less than in other countries around the world, including Europe.
…

U.S. President Donald Trump says oil prices are too high and blames the Organization of the Petroleum Exporting Countries.

The 14 oil-producing nations in OPEC — Saudi Arabia, Iran, Iraq, Kuwait and Venezuela among them — produce about 40 percent of the world’s oil, but about 60 percent of the oil traded on international markets. OPEC’s actions, whether to cut or increase production, often heavily influence the price of oil, and by extension the prices consumers and businesses pay for fuel.

OPEC’s oil chiefs struck a deal in 2016 to cut production by 1.8 million barrels a day to reduce the global glut of oil and shore up prices. Since then, oil prices have risen from below $30 a barrel to more than $70.

But that rollback in production is set to expire at the end of the year. OPEC has yet to set new production levels beyond that, but the cartel’s oil ministers are meeting again next week in Vienna.

Saudi Energy Minister Khaled al-Faleh said in April that the global market can absorb higher oil prices, a remark that drew a swift rebuke from Trump.

“With record amounts of oil all over the place, including the fully loaded ships at sea, Oil prices are artificially Very High! No good and will not be accepted!” the U.S. leader tweeted on April 20, although he has no control over what OPEC decides to do.

Early in the year, with gas prices at service stations still relatively low, Trump suggested raising the country’s gasoline tax that customers pay at service stations by 25 cents a gallon to fund road and highway repairs.

But the president has not mentioned the tax increase idea in months as gas prices have steadily risen because of higher oil prices on the world market, eating into higher take-home pay that millions of American workers gained when Congress late last year passed tax-cut legislation supported by Trump.

The average gallon of gas in the United States now costs $2.92, far more than in such oil-producing countries as Nigeria, Saudi Arabia and Iran, and far less than in other countries around the world, including Europe.
…

For many years, Ivory Coast has been the world’s largest producer of cocoa. Most of it leaves the country in bulk and ends up in Europe, where it gets turned into fine and expensive chocolate, fetching up to 50 times the price of the raw cocoa.

Chocolate is the world’s favorite comfort food. Two-thirds of all that sweet stuff comes out of factories in the United States and Western Europe. It is where most people consume it, too. Almost completely left out of this feast for the palate are the countries that produce the raw material for chocolate: cocoa.

A few years ago, a Dutch-Ivorian television crew went to one of Ivory Coast’s many cocoa farms and recorded the surprise on the planters’ faces when tasting chocolate for the first time: so THIS is what they do with our cocoa beans?

Very little chocolate is consumed in Africa, but this Ivorian entrepreneur is planning to change that. 

Axel Emmanuel Gbaou says he worked at a commercial bank until 2010 before he decided to go into the business of making chocolate. The taste for the sweet bars came from his mother, who had been living among Swiss missionaries, great chocolate lovers. His conviction came from doing some basic arithmetic.

Eighty percent of next year’s cocoa beans, he explains, have already been bought up by the big multinational companies that transport them raw to the chocolate factories in other parts of the world. One kilo of chocolate fetches up to 50 times more than one kilo of unprocessed cocoa beans. Axel wants some of that money to stay in Ivory Coast.

In this nondescript building close to the market in Abidjan’s Cocody district, you will find the production unit, the packaging center and sales office. Axel’s company sells its products to an ever expanding circle of customers, including the global airline Air France.

Back in the cocoa producing fields, the situation is dire. World market prices have been falling for two years. In response, the government of Ivory Coast has lowered the standard price per kilo. 

Agronomist N’dourou M’beo is quality control manager at Axel’s company. He says current cocoa prices stand at around $1.40 per kilo. That is the raw harvest that gets shipped out of the country. But after some basic treatment — roasting and winnowing — those beans fetch three times as much and they can be stored for months. This is one model the company has adopted. As a result, more work and money stay on the farm and the company has a reliable supply of quality beans.

The world is the market, but Axel’s biggest challenge lies right here in Africa. 

In the next two years, he says he wants to sell 100 million bars of chocolate on the African continent. 

That sounds like a lot, but in fact with well more than one billion inhabitants and a fast growing middle class that can afford buying a few bars at $3 each, he thinks it is perfectly doable.

 
…

Fueled by a surging stock market and huge gifts from billionaires, charitable giving in the United States in 2017 topped the $400 billion mark for the first time, according to the latest comprehensive report on Americans’ giving patterns.

The Giving USA report, released Tuesday, said giving from individuals, estates, foundations and corporations reached an estimated $410 billion in 2017 — more than the gross domestic product of countries such as Israel and Ireland. The total was up 5.2 percent in current dollars (3 percent adjusted for inflation) from the estimate of $389.64 billion for 2016.

“Americans’ record-breaking charitable giving in 2017 demonstrates that even in divisive times our commitment to philanthropy is solid,” said Aggie Sweeney, chair of Giving USA Foundation, which publishes the annual report. It is researched and written by the Indiana University Lilly Family School of Philanthropy.

Giving increased to eight of the nine charitable sectors identified by Giving USA. The only decline was for areas related to international affairs.

The biggest increase was in giving to foundations — up 15.5 percent. That surge was driven by large gifts from major philanthropists to their own foundations — including $1 billion from Dell Technologies CEO Michael Dell and his wife, Susan, and $2 billion from Facebook CEO Mark Zuckerberg and his wife, Priscilla Chan.

Other sectors with increases of more than 6 percent included education, health, arts and culture, environment and animal welfare, and public-society benefit organizations — groups which work on such issues as voter education, civil rights, civil liberties and consumer rights.

Despite the record-setting total, Americans’ level of generosity is no higher than it was decades ago. For 2017, giving by individuals represented 2 percent of total disposable income — down from 2.4 percent in 2000 and the same as the rate in 1978. Similarly, total charitable donations have hovered around 2 percent of the gross domestic product for many years; for 2017, that figure was 2.1 percent.

Una Osili, a dean and economics professor at the Lilly Family School of Philanthropy, says the school’s research shows that the percentage of U.S. households making charitable donations has declined steadily in recent years, from about 67 percent in 2000 to 56.6 percent in 2015 — the latest year for which data is available.

She said giving rates for lower- and middle-class families had dropped significantly since the 2008 recession, while the giving rate for the wealthiest 20 percent of households was relatively steady.

Stacy Palmer, editor of the Chronicle of Philanthropy, said many fundraisers in the U.S. — while pleased with the recent increase in gifts — are unsure what lies ahead.

If trade wars break out, she said, that could weaken the economy to the point at which it deters some donors. She said fundraisers also worry that some middle-class donors may cut back on giving if changes in the new tax law no longer give them a deduction for their charitable donations.

Alluding to the surge of mega-gifts by the wealthy, Palmer added, “Some people feel they don’t need to give any more.”
…

Fueled by a surging stock market and huge gifts from billionaires, charitable giving in the United States in 2017 topped the $400 billion mark for the first time, according to the latest comprehensive report on Americans’ giving patterns.

The Giving USA report, released Tuesday, said giving from individuals, estates, foundations and corporations reached an estimated $410 billion in 2017 — more than the gross domestic product of countries such as Israel and Ireland. The total was up 5.2 percent in current dollars (3 percent adjusted for inflation) from the estimate of $389.64 billion for 2016.

“Americans’ record-breaking charitable giving in 2017 demonstrates that even in divisive times our commitment to philanthropy is solid,” said Aggie Sweeney, chair of Giving USA Foundation, which publishes the annual report. It is researched and written by the Indiana University Lilly Family School of Philanthropy.

Giving increased to eight of the nine charitable sectors identified by Giving USA. The only decline was for areas related to international affairs.

The biggest increase was in giving to foundations — up 15.5 percent. That surge was driven by large gifts from major philanthropists to their own foundations — including $1 billion from Dell Technologies CEO Michael Dell and his wife, Susan, and $2 billion from Facebook CEO Mark Zuckerberg and his wife, Priscilla Chan.

Other sectors with increases of more than 6 percent included education, health, arts and culture, environment and animal welfare, and public-society benefit organizations — groups which work on such issues as voter education, civil rights, civil liberties and consumer rights.

Despite the record-setting total, Americans’ level of generosity is no higher than it was decades ago. For 2017, giving by individuals represented 2 percent of total disposable income — down from 2.4 percent in 2000 and the same as the rate in 1978. Similarly, total charitable donations have hovered around 2 percent of the gross domestic product for many years; for 2017, that figure was 2.1 percent.

Una Osili, a dean and economics professor at the Lilly Family School of Philanthropy, says the school’s research shows that the percentage of U.S. households making charitable donations has declined steadily in recent years, from about 67 percent in 2000 to 56.6 percent in 2015 — the latest year for which data is available.

She said giving rates for lower- and middle-class families had dropped significantly since the 2008 recession, while the giving rate for the wealthiest 20 percent of households was relatively steady.

Stacy Palmer, editor of the Chronicle of Philanthropy, said many fundraisers in the U.S. — while pleased with the recent increase in gifts — are unsure what lies ahead.

If trade wars break out, she said, that could weaken the economy to the point at which it deters some donors. She said fundraisers also worry that some middle-class donors may cut back on giving if changes in the new tax law no longer give them a deduction for their charitable donations.

Alluding to the surge of mega-gifts by the wealthy, Palmer added, “Some people feel they don’t need to give any more.”
…

AT&T won approval from a U.S. court on Tuesday to buy Time Warner for $85 billion, without conditions, allowing AT&T to compete with internet companies that dominate digital advertising and providing new sources of revenue.

The planned deal is seen as a turning point for a media industry that has been upended by companies like Netflix and Google which produce content and sell it online directly to consumers, without requiring a pricey cable subscription. Distributors including cable, satellite and wireless carriers all see buying content companies as a way to add revenue.

The ruling could also prompt a cascade of pay TV companies buying television and movie makers, with Comcast’s bid for some Twenty-First Century Fox assets potentially the first out of the gate.

The merger, including debt, would be the fourth largest deal ever attempted in the global telecom, media and entertainment space, according to Thomson Reuters data. It would also be the 12th largest deal in any sector, the data showed.

“I conclude that the government has failed to meet its burden of proof,” District Court Judge Richard Leon told the court. He called one of the government’s arguments against the deal “gossamer thin.”

The judge in a scathing opinion urged the U.S. government not to seek a stay of his ruling, saying it would be “manifestly unjust” to do so and not likely to succeed.

Shares of AT&T were about flat in after-hours trade following the decision, while Time Warner rose more than 5 percent.

The Justice Department filed a lawsuit to stop the deal in November 2017, saying that AT&T’s ownership of both DirecTV and Time Warner would give AT&T unfair leverage against rival cable providers that relied on Time Warner’s content, such as CNN and HBO’s “Game of Thrones.”

AT&T in a six-week trial argued that the purchase of Time Warner would allow it to gain information about viewers needed to target digital advertising, much like Facebook and Alphabet’s Google already do.

AT&T and other wireless carriers need to find new sources of revenue as the mobile phone market stagnates and more customers abandon pricey cable and satellite packages for streaming services they can watch on their phones or televisions.

The government estimated costs to industry rivals, such as Charter Communications, would increase by $580 million a year if AT&T owned Time Warner.

To assuage the Trump administration’s criticisms, AT&T offered to submit pricing disagreements with other pay TV companies over Turner’s channels to third-party arbitration. The companies further offered not to black out programming during arbitration for seven years.

Announced in October 2016, the deal was quickly denounced by Donald Trump, who as a candidate and later as president has been critical of Time Warner’s CNN and its coverage.

Before the trial started, AT&T lawyers said the Time Warner deal may have been singled out for government enforcement but Judge Leon of the U.S. District Court for the District of Columbia rejected their bid to force the disclosure of White House communications that might have shed light on the matter.

The deal cost AT&T’s top lobbyist, Bob Quinn, his job in May after it became public that AT&T had paid Trump’s personal lawyer Michael Cohen $600,000 for advice on winning approval.

The ruling could also have implications for CBS’s potential tie-up with Viacom, which is already uncertain because of a lawsuit between CBS’s controlling shareholder, Shari Redstone, and its board.
…

AT&T won approval from a U.S. court on Tuesday to buy Time Warner for $85 billion, without conditions, allowing AT&T to compete with internet companies that dominate digital advertising and providing new sources of revenue.

The planned deal is seen as a turning point for a media industry that has been upended by companies like Netflix and Google which produce content and sell it online directly to consumers, without requiring a pricey cable subscription. Distributors including cable, satellite and wireless carriers all see buying content companies as a way to add revenue.

The ruling could also prompt a cascade of pay TV companies buying television and movie makers, with Comcast’s bid for some Twenty-First Century Fox assets potentially the first out of the gate.

The merger, including debt, would be the fourth largest deal ever attempted in the global telecom, media and entertainment space, according to Thomson Reuters data. It would also be the 12th largest deal in any sector, the data showed.

“I conclude that the government has failed to meet its burden of proof,” District Court Judge Richard Leon told the court. He called one of the government’s arguments against the deal “gossamer thin.”

The judge in a scathing opinion urged the U.S. government not to seek a stay of his ruling, saying it would be “manifestly unjust” to do so and not likely to succeed.

Shares of AT&T were about flat in after-hours trade following the decision, while Time Warner rose more than 5 percent.

The Justice Department filed a lawsuit to stop the deal in November 2017, saying that AT&T’s ownership of both DirecTV and Time Warner would give AT&T unfair leverage against rival cable providers that relied on Time Warner’s content, such as CNN and HBO’s “Game of Thrones.”

AT&T in a six-week trial argued that the purchase of Time Warner would allow it to gain information about viewers needed to target digital advertising, much like Facebook and Alphabet’s Google already do.

AT&T and other wireless carriers need to find new sources of revenue as the mobile phone market stagnates and more customers abandon pricey cable and satellite packages for streaming services they can watch on their phones or televisions.

The government estimated costs to industry rivals, such as Charter Communications, would increase by $580 million a year if AT&T owned Time Warner.

To assuage the Trump administration’s criticisms, AT&T offered to submit pricing disagreements with other pay TV companies over Turner’s channels to third-party arbitration. The companies further offered not to black out programming during arbitration for seven years.

Announced in October 2016, the deal was quickly denounced by Donald Trump, who as a candidate and later as president has been critical of Time Warner’s CNN and its coverage.

Before the trial started, AT&T lawyers said the Time Warner deal may have been singled out for government enforcement but Judge Leon of the U.S. District Court for the District of Columbia rejected their bid to force the disclosure of White House communications that might have shed light on the matter.

The deal cost AT&T’s top lobbyist, Bob Quinn, his job in May after it became public that AT&T had paid Trump’s personal lawyer Michael Cohen $600,000 for advice on winning approval.

The ruling could also have implications for CBS’s potential tie-up with Viacom, which is already uncertain because of a lawsuit between CBS’s controlling shareholder, Shari Redstone, and its board.
…