Off the Wires

U.S. services sector expands strongly as orders, employment rise

May 4th, 2016  |  Source: Reuters

The vast U.S. services sector expanded in April as new orders and employment accelerated, bolstering views that economic growth would rebound after almost stalling in the first quarter.

The growth outlook was, however, dimmed by other data on Wednesday showing private employers hired the fewest number of workers in three years in April.

The Institute for Supply Management said its nonmanufacturing index rose 1.2 percentage points to a reading of 55.7 in April.

A reading above 50 indicates expansion in the services sector, which accounts for more than two-thirds of the U.S. economy. Services industry activity was last month buoyed by a 3.2 percentage point surge in new orders.

A gauge of services sector employment rose to 53.0 last month from a reading of 50.3 in March.

That strong increase should offset concerns about the labor market, which had been stoked by the ADP National Employment Report showing private payrolls increased 156,000 last month, the smallest gain since April 2013, after rising 194,000 in March.

The ADP report, which is jointly developed with Moody's Analytics, was published ahead of the government's more comprehensive employment report for April due on Friday.

According to a Reuters survey of economists, nonfarm payrolls likely increased by 202,000 jobs in April after rising 215,000 in March. The unemployment rate is forecast holding steady at 5.0 percent.


Craig Wright revealed as Bitcoin creator Satoshi Nakamoto

May 2nd, 2016  |  Source: BBC

Australian entrepreneur Craig Wright has publicly identified himself as Bitcoin creator Satoshi Nakamoto.

His admission follows years of speculation about who came up with the original ideas underlying the digital cash system.

Mr Wright has provided technical proof to back up his claim using coins known to be owned by Bitcoin's creator.

Prominent members of the Bitcoin community and its core development team say they have confirmed his claims.

But many others in the Bitcoin world are asking for more proof.

Signed blocks

Mr Wright has revealed his identity to three media organisations - the BBC, the Economist and GQ.

At the meeting with the BBC, Mr Wright digitally signed messages using cryptographic keys created during the early days of Bitcoin's development. The keys are inextricably linked to blocks of bitcoins known to have been created or "mined" by Satoshi Nakamoto.

"These are the blocks used to send 10 bitcoins to Hal Finney in January [2009] as the first bitcoin transaction," said Mr Wright during his demonstration.

Renowned cryptographer Hal Finney was one of the engineers who helped turn Mr Wright's ideas into the Bitcoin protocol, he said.

"I was the main part of it, but other people helped me," he said.

Soon after Mr Wright went public, Gavin Andresen, chief scientist at the Bitcoin Foundation, published a blog backing his claim.

"I believe Craig Steven Wright is the person who invented Bitcoin," he wrote.

Jon Matonis, an economist and one of the founding directors of the Bitcoin Foundation, said he was convinced that Mr Wright was who he claimed to be.

"During the London proof sessions, I had the opportunity to review the relevant data along three distinct lines: cryptographic, social, and technical," he said.

"It is my firm belief that Craig Wright satisfies all three categories."

Mr Wright said he planned to release information that would allow others to cryptographically verify that he is Satoshi Nakamoto.

Not everyone has been convinced by Mr Wright's claims and the technical proof he put in his blog. Some cryptographers and developers who worked through the information provided said they had trouble getting verifiable information out of it.

Security expert Dan Kaminsky said the procedure was almost "maliciously resistant" to validation.

Many people have called on Mr Wright to go further in proving his identify.


Germany says Assad's forces probably behind attack on Aleppo hospital

April 29th, 2016  |  Source: Reuters

An air strike on a hospital in the city of Aleppo that killed dozens of people was probably the work of Syrian government forces, a spokesman for the German government said on Friday.

A U.S. official has also said the attack on Wednesday night appeared to be solely the work of the Syrian government. Syria's military has denied its warplanes targeted the hospital.

German government spokesman Steffen Seibert told a news conference the destruction was targeted and therefore constituted the "murder of a huge number of civilians".

"The available information suggests that this attack can, with some degree of probability, be traced back to the troops of (President Bashar al-Assad's) regime," Seibert said, adding that it was a "blatant violation of humanitarian law".

The German government warned that the escalation of fighting in Aleppo and elsewhere threatened to undermine peace talks in Geneva.

"That must be avoided," said Seibert, adding that Russia had a duty to prevent the ceasefire and the political process from failing.

The Geneva talks aim to end a war that has created the world's worst refugee crisis, allowed the rise of Islamic State and drawn in regional and major powers, but a truce intended to allow negotiations to take place has collapsed.

German Foreign Minister Frank-Walter Steinmeier said in a statement on Friday: "The Syrian government must decide - does it want to take part in negotiations seriously or does it want to continue to reduce its own country to rubble?"


Islamic State: Up to $800m of funds 'destroyed by strikes'

April 27th, 2016  |  Source: BBC

Up to $800m (£550m) in cash held by so-called Islamic State (IS) has been destroyed in air strikes, a US military official says.

Maj Gen Peter Gersten, who is based in Baghdad, said the US had repeatedly targeted stores of the group's funds.

The blow to the group's financing has contributed to a 90% jump in defections and a drop in new arrivals, he said.

In 2014, the US Treasury called IS "the best-funded terrorist organisation" it had encountered.

In a briefing to reporters, Maj Gen Gersten, the deputy commander for operations and intelligence for the US-led operation against IS, said under 20 air strikes targeting the group's stores of money had been conducted.

He did not specify how the US knew how much money had been destroyed.

In one case, he said, an estimated $150m was destroyed at a house in Mosul, Iraq.

Forces fighting IS received intelligence indicating in which room of the house money was stored. The room was then bombed from the air, Maj Gen Gersten said.

While it was difficult to know precisely how much money had been destroyed in total, estimates put the figure at between $500m and $800m, he said.

Islamic State's exact wealth is not known, but, after seizing oil fields and setting taxes, it approved a budget of $2bn and predicted a $250m surplus last year.

Since then, however, the group has lost territory, and its oilfields have been targeted in air strikes by the US-led coalition.

'Posing as women'

US intelligence indicated the group's cash troubles had led it to start selling vehicles to make money, Gen Gersten said. In January, the UK-based Syrian Observatory for Human Rights reported that IS announced it was to cut fighters' salaries in half "because of the exceptional circumstances that the Islamic State is passing through".

"We're seeing a fracture in their morale, we're seeing their inability to pay, we're seeing the inability to fight, we're watching them try to leave Daesh in every single way," Gen Gersten added, using an Arabic term for IS.

Some defectors had been captured posing as women or as refugees in Iraq, he said.

The number of those arriving to fight for Islamic State in Iraq and Syria had fallen to about 200 a month, Gen Gersten said, down from a peak of between 1,500 and 2,000 per month a year ago.

In February, the White House said it believed there were some 25,000 people fighting for IS, down from close to 31,500 last year.

Turkey has come under repeated pressure by the United States to tighten its border with Syria and prevent people crossing into IS-held territory.

On Tuesday, the US confirmed it would place rocket launchers in Turkey close to the border of territory held by the group.

Turkey's Foreign Minister Mevlut Cavusoglu told Haberturk newspaper the system would be deployed near the Syrian town of Manbij, through where IS brings in new supplies and fighters.

 

 


France wins $39 bn bid to build Australia's new submarines

April 26th, 2016  |  Source: AFP

France on Tuesday beat off competition from Germany and Japan to win a Aus$50 billion (US$39 billion) contract to design and build Australia's next generation of submarines, a decision Tokyo called "deeply regrettable".

The announcement by Prime Minister Malcolm Turnbull culminates years of planning to replace Australia's ageing diesel and electric-powered Collins Class submarines, which are due to leave service from around 2026.

Turnbull said the 12 new subs to be delivered by French contractor DCNS under Australia's biggest-ever defence contract "will be the most sophisticated naval vessels being built in the world".

"This is a momentous national endeavour," he said at an Adelaide shipyard where the submarines will be constructed.

The deal came as tensions grow between China and Australia's allies Japan and the United States. Beijing is flexing its muscles in the region by developing airstrips and other facilities on reclaimed reefs in the contested South China Sea.

French President Francois Hollande hailed the decision as historic.

"It marks a decisive advance in the strategic partnership between the two countries who will cooperate over 50 years," his office said in a statement.

A Japanese government-backed consortium led by Mitsubishi Heavy Industries, and German group ThyssenKrupp Marine Systems, were also in the running. But Canberra said DCNS was considered "best to meet all of our unique capability requirements".

Japan was the early favourite and last November Tokyo said handing it the contract would help bolster regional security. Some senior US officials, including former deputy secretary of state Richard Armitage, also backed a Japanese build.

For Australia, cooperating with Japan risked angering its biggest trading partner China. There were also reportedly concerns that Tokyo lacked experience in exporting such complex military hardware.


Large majority of U.S. Senate pushes Obama to boost Israel aid

April 25th, 2016  |  Source: Reuters

More than four-fifths of the U.S. Senate have signed a letter urging President Barack Obama to quickly reach an agreement on a new defense aid package for Israel worth more than the current $3 billion per year.

Eighty-three of the 100 senators signed the letter, led by Republican Lindsey Graham and Democrat Chris Coons. Senator Ted Cruz, a 2016 presidential candidate, was one of the 51 Republicans on board. The Senate's Democratic White House hopeful, Bernie Sanders, was not among the 32 Democrats.

"In light of Israel's dramatically rising defense challenges, we stand ready to support a substantially enhanced new long-term agreement to help provide Israel the resources it requires to defend itself and preserve its qualitative military edge," said the letter, which was seen by Reuters.

It did not provide a figure for the suggested aid. Israel wants $4 billion to $4.5 billion in aid in a new agreement to replace the current memorandum of understanding, or MOU, which expires in 2018. U.S. officials have given lower target figures of about $3.7 billion. They hope for a new agreement before Obama leaves office in January.

The funding is intended to boost Israel's military and allow it to maintain a technological advantage over its Arab neighbors.

The letter said the Senate also intends to consider increased U.S. funding for cooperative missile defense programs, similar to increases in the past several years.

Obama has asked for $150 million for such programs, but lawmakers are believed to be willing to send Israel hundreds of millions for programs like its Iron Dome air defense system and David's Sling medium- and long-range defense system.


FBI paid more than $1.3 million to break into San Bernardino iPhone

April 22nd, 2016  |  Source: Reuters

Federal Bureau of Investigation Director James Comey said on Thursday the agency paid more to get into the iPhone of one of the San Bernardino shooters than he will make in the remaining seven years and four months he has in his job.

According to figures from the FBI and the U.S. Office of Management and Budget, Comey's annual salary as of January 2015 was $183,300. Without a raise or bonus, Comey will make $1.34 million over the remainder of his job.

That suggests the FBI paid the largest ever publicized fee for a hacking job, easily surpassing the $1 million paid by U.S. information security company Zerodium to break into phones.

Speaking at the Aspen Security Forum in London, Comey was asked by a moderator how much the FBI paid for the software that eventually broke into the iPhone.

"A lot. More than I will make in the remainder of this job, which is seven years and four months for sure," Comey said. "But it was, in my view, worth it."

The Justice Department said in March it had unlocked the San Bernardino shooter's iPhone with the help of an unidentified third party and dropped its case against Apple Inc (AAPL.O), ending a high-stakes legal clash but leaving the broader fight over encryption unresolved.

Comey said the FBI will be able to use software used on the San Bernardino phone on other 5C iPhones running IOS 9 software.

There are about 16 million 5C iPhones in use in the United States, according to estimates from research firm IHS Technology. Eighty-four percent of iOS devices overall are running iOS 9 software, according to Apple.

The FBI gained access to the iPhone used by Rizwan Farook, one of the shooters who killed 14 people in San Bernardino, California on Dec. 2.

The case raised the debate over whether technology companies' encryption technologies protect privacy or endanger the public by blocking law enforcement access to information.


Investors pull $15bn from hedge funds

Hedge funds have suffered their worst quarter in seven years after more than $15bn was pulled out by investors starting to fight back against the high fees being charged across the industry.

The total amount invested in hedge funds fell to $2.86tn in the first three months of the year, marking the first time since 2009 that the sector has faced two consecutive quarters of net outflows, according to data from Hedge Fund Research.

Sharp market moves have wrongfooted many firms, leading to poor performances in the first quarter from funds such as Bill Ackman’s Pershing Square, and rankling investors already disgruntled over fee structures charging 2 per cent for management as well as 20 per cent of profits. A broad index of hedge fund performance fell 0.7 per cent in the first quarter, according to HFR.

Fed up with paying “exorbitant fees” for poor returns, the New York City Employees’ Retirement System has cut its $1.5bn programme, pulling money from managers including Perry Capital and Brevan Howard. The shift comes about 18 months after California’s pension scheme also scrapped hedge funds from its portfolio.

At the same time, sovereign wealth funds have been withdrawing billions from asset managers globally as they turn their attention to supporting their own faltering oil-dependent economies.

Letitia James, public advocate for the New York pension scheme, attacked managers who “balk at negotiations for investor-favourable terms” believing they “could do no wrong, even as they are losing money”.

“If they were truly fiduciaries and cared about our members, they would never charge large fees for failing to deliver on their promises,” she said. “Let them sell their summer homes and jets, and return those fees to their investors.”

Read on here: ($) : http://www.ft.com/intl/cms/s/0/72b5a244-06fd-11e6-9b51-0fb5e65703ce.html#axzz46C3LzQix


Google’s Antitrust Woes in Europe Are Likely to Grow

April 20th, 2016  |  Source: NYT.com

Google’s antitrust problems in Europe are about to get a whole lot bigger.

The company is expected to be charged with breaking the European Union’s competition rules by unfairly favoring Google services, like its search engine and Google Maps, on its Android smartphone operating system over those of rivals, according to three people. The three, who work in either government or the private sector, spoke on the condition of anonymity.

The charges, known formally as a statement of objections, may be announced in Brussels as soon as Wednesday, though the announcement could still be postponed until later this month, according to one of the people.

The expected charges against Google are the latest in a raft of regulatory problems that American tech giants have faced as the European Union has cracked down on these companies’ perceived dominance over how people in the 28-member bloc get access to digital services.

That ranges from privacy complaints over how Facebook uses people’s online information to questions about Apple’s tax affairs from its headquarters in low-tax Ireland. These cases come after previous antitrust investigations into how the likes of Microsoft and Intel operated across regions.

Read on here: http://www.nytimes.com/2016/04/20/technology/google-android-eu-antitrust.html?_r=0


Goldman Sachs revenue slumps to lowest in more than four years

April 19th, 2016  |  Source: Reuters

Goldman Sachs Group Inc's (GS.N) quarterly profit fell by more than half and revenue slumped to its lowest in more than four years as market volatility hit the Wall Street bank's bond trading and investment banking businesses.

Goldman, wrapping up a dismal quarter for big U.S. banks, reported a 40 percent drop in net revenue, reflecting declines in all of its main businesses.

As with other banks, Goldman's trading revenue was hit by sliding commodity and oil prices, worries about the Chinese economy and uncertainty about U.S. interest rates.

Highlighting the challenges facing the bank, Goldman's return on average common equity - a measure of how well the bank uses shareholder money - was 6.4 percent in the quarter, down from 14.7 percent a year earlier. (bit.ly/22KtaAI)

Many investors think ROE should be at least 10 percent to cover the cost of capital.

Goldman, whose shares were down 1 percent in early trading on Tuesday, said its revenue from trading bonds, currencies and commodities (FICC) fell about 47 percent. Equities trading revenue, normally a strength, slid 23 percent.

FICC accounted for 26.2 percent of total revenue in the quarter - a far cry from the 40 percent the business regularly contributed before the financial crisis.

"The market was braced for a weak quarter, but we think the breadth of weakness on the top line will be a disappointment as people try to grapple with the timing of the recovery," Evercore ISI analyst Glenn Schorr wrote in a client note.

Goldman's traditional rival, Morgan Stanley (MS.N), reported a 54 percent drop in adjusted revenue from fixed income and commodities trading and a similar drop in net profit. Its equities trading revenue fell 9.3 percent.

Goldman reported a 56.3 percent fall in net income applicable to common shareholders to $1.2 billion, or $2.68 per share, for the three months ended March 31. That compared with $2.75 billion, or $5.94 per share, a year earlier, when the bank recorded its best quarterly profit in five years.

Analysts on average had expected earnings of $2.45 per share, according to Thomson Reuters I/B/E/S.

Net revenue fell to $6.34 billion from $10.62 billion.

Read on here: http://www.reuters.com/article/us-goldmansachs-results-idUSKCN0XG1EV




About Value News Network

Value is the only commonality in an increasingly complex, challenging and interdependent world.
Laurance Allen: Editor + Publisher

Connect with Us