Mark Zuckerberg is trending across Chinese social media today. Yesterday, the Facebook founder delivered a 30 minute speech in Mandarin at Tsinghua University, known as the MIT of China. Zuckerberg himself told his Chinese audience that his Chinese was terrible — a display of culturally appropriate false modesty to be sure — but his Chinese language skills appeared strained at times.
But this appearance wasn't about Zuckerberg's Chinese language ability. Facebook has had its eye on China for years. Since 2009, the site has been blocked inside of China, inaccessible without a VPN that helps you get over the country’s so-called "Great Firewall." And for a man who wants to connect the world, not having access to a fifth of humanity is a problem. Like every other internet company, Zuckerberg is doing whatever he can to appeal to the Chinese government in the hopes of getting access to the China market.
Does he stand a chance in China?
"At this point, probably not," says Marketplace's Rob Schmitz. "Facebook’s biggest draw is that it puts you in touch with a user base of millions of people with whom you can share any sort of content. China’s government has shown that it’s scared of sites like this because it wants to control the information its citizens have access to, not cede that power to a foreign company that doesn’t self-censor."
Schmitz says if Facebook wanted access to China, it would have to offer some sort of localized censored version that would be cut-off from the rest of the world.
But Zuckerberg deserves a lot of credit for laying his pride on the line. In the world of business, if you’re going to stand any chance with the Chinese, you have to show that you’re willing to invest in Chinese culture and Chinese language. And according to Schmitz, no matter how messy his speech was, Zuckerberg is certainly doing that, and the Chinese are giving him big points for that effort.
Southwest Airlines long ago outgrew its role as a regional discount carrier. But the company continues to grow — this fall, it’s running its first non-stop flights from its Dallas home base to cities like New York, Chicago and Los Angeles — and it has seen some growing pains. Once the leader in on-time performance, Southwest slipped to the bottom last year, and the airline is still working its way back.
Here's what happened: In August 2013, Southwest tried to make some extra money by adding flights without adding new planes. The tighter schedule didn’t work. Lots of delays.
But putting in a new schedule took months because of the airline’s antiquated reservation system.
"They would have had to go in and manually re-book every person," says Brett Snyder, who runs the site The Cranky Flier. "So they said, 'Well, this isn’t really feasible.'"
Because lots of plane tickets get booked months in advance, Southwest had to delay the start of a new, less-aggressive schedule until August of this year. Meanwhile, flights kept running late.
Southwest is still learning how to be a major airline, says Vinay Bhaskara, senior business analyst for Airways News. "They haven’t been this kind of airline for a very long time," he says. "It’s only been about seven years. United, Delta, and American have been that kind of airline for 30, 40 years."
However, Bhaskara thinks Southwest has strengths that will let it keep customers while it sorts things out, like non-stop flights to mid-size cities that don’t get much love from other big airlines, and — for now — no fees for the first two checked bags.
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The mayor of Iguala and his wife, accused of being connected to the disappearance of 43 students, are now fugitives. Thousands of protesters marched in Mexico City Wednesday demanding justice.
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It’s Halloween, so we’re all busy planning what to wear for the annual scary holiday party.
I’m going as the VIX. Why? Because nothing scares the Street like the Fear Index.
Sure, James Carville may insist that the bond market is way more intimidating, but if it’s a short, sharp shock you want, I say you can’t beat the VIX. Just like the Headless Horseman, it gallops in and scares the bejeezus out of everyone with great results: witness the global markets last week. Traders and investors were reduced to a bunch of terrified, shivering jellies when they were told the VIX had soared to a two-year high of 30.
So what is the VIX?
The VIX is the volatility index. Volatility is when something goes up and down. Like my mood. If I’m all happy one day and in a raging fury the next, you might say I have a volatile temper. Not necessarily a bad temper – more mercurial. It’s the same with stocks and the indices that track them. The more up and down they go – the wilder the swings in the market – the more volatile they are, and some smart boffins have worked out how to measure that volatility on an index: the VIX.
So how does the VIX measure volatility?
It does it by taking traders’ temperature. Not literally – that would really be something – rather, it tracks their expectations by watching how they make bets on what they think the S&P 500 index will do over the next 30 days. Using the wonder of math, those bets are crunched in various ways, and then displayed on a graph. If the traders think the market will only be a little bit bumpy, the VIX number will be low. If they fear there will be crazy wild swings, with stocks bouncing up and down like a roller coaster, the VIX number will be high. Hence the Fear Index.
So a high VIX number is bad?
Not necessarily. Think of the markets as the ocean and the VIX as a surf forecast. If the report says we’re going to have double overhead waves, driving rain and five mile-an-hour rip currents, a lot of surfers (like me) are going to stay in bed. Or maybe we’ll go down to the beach, stand on the shore and watch as the more adventurous and professional surfers (nutters) paddle out. Some of those daredevils will rue the day. They’ll come back with broken boards, splintered limbs and shattered dreams. But the really good – or lucky – ones will have an amazing time. Traders are like surfers. When the market is plunging one day and soaring the next, many step out of the market, which is why volume often falls when volatility is high. Most of those who have the nerve to hang in there will be shredded. But a lucky few will make pots of money, buying on the dips and selling on the highs. Like Goldman Sachs, which reported in its latest earnings release that a big chunk of its profits came from trading on the volatility in the markets.
What’s behind this latest bout of volatility?
You can pick your villain. On the downside, you’ve got Ebola, continued conflict in the Middle East, protests in Hong Kong, poor earnings from some select blue chips in the U.S. (GE, IBM), fears of a global slowdown, and worries about the draw-down in government stimulus. On the upside, here in the U.S. you’ve got falling unemployment, rising consumer sentiment, falling oil prices, some great earnings from banks and tech companies, the upcoming holiday season and, of course, the fact that stock prices have fallen recently, creating a buying opportunity.
Sounds dangerous. Should we worried that the end is nigh?
It’s true that the VIX is still at a two-year high, but don’t panic. Breathe in and out of a paper bag and keep saying to yourself, “this too shall pass.” If you’re an individual investor, that means you should leave your stock where it is. Remember that these days you’re not just up against some sleazy dude in a fancy Italian suit and loud suspenders, you’re up against the machines, too. So do the smart thing, and hang out on the beach sipping coffee while you watch the show. Remember, the VIX is just like the Headless Horseman: it gallops through the market, scares the wits out of everyone, and creates a hell of a mess. But the fear never lasts for long, and besides, it usually makes for some great stories.
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