National / International News

US deals make it a big week in global trade

Marketplace - American Public Media - Thu, 2014-11-13 11:00

It’s been a big week for global trade after the U.S. cleared hurdles to push two big deals forward.

First up was the Information Technology Agreement, in which the U.S. and China agreed to cut tariffs on technology products like semiconductors and other high tech goods. The second cleared an impasse with India over food stockpiling that will, in turn, rejuvenate the Trade Facilitation Agreement, a trillion-dollar accord on international customs procedures.

“Ten years ago, this would have been business as usual,” says Derek Scissors, a resident scholar at the American Enterprise Institute. “Now, these are breakthroughs.”

That’s because there’s been a drought of new trade deals in recent years, so these agreements have given the World Trade Organization fresh momentum.

Scissors says they also restore American leadership in trade.

“We’re the ones breaking through the barriers,” he says. “We’re the ones making the deals and with other important countries like China and India, but nonetheless we’re the common thread. That’s important.”

U.S. companies stand to benefit when the Information Technology Agreement is finalized.

“You go through the companies that are big in this space and a lot of them, say two-thirds, have U.S. names,” says Gary Hufbauer, a senior fellow at the Peterson Institute for International Economics. “Apple, Cisco and you can go down the list.”

Hufbauer says the key here isn’t the number of jobs this agreement might create, but the type – steady, high skilled, with good pay.

To a lesser extent, American companies that do a large volume of global shipping like FedEx and UPS also benefit from the Trade Facilitation Agreement, which will ease the process of moving goods across borders and seek to decrease corruption at ports.

Zooming out, these deals speak to how globally integrated our businesses have become, says Emily Blanchard, a professor at Dartmouth’s Tuck School of Business.

“In this world with global supply chains, little pieces of product are being added all across borders to create a final product,” she says. “If you have even small transaction costs at every border, those really add up.”

Warren Buffett finds tax advantage in Duracell deal

Marketplace - American Public Media - Thu, 2014-11-13 11:00

When Warren Buffett's company Berkshire Hathaway buys the battery brand Duracell from Procter & Gamble, Berkshire will pay the $4.7 billion price tag in stock. Not Berkshire Hathaway stock, but Procter & Gamble stock, which Berkshire just happens to have.

Berkshire Hathaway did a very similar swap earlier this year, when it bought a TV station from Graham Holdings — formerly and better known as the Washington Post Co. Same thing when it bought a subsidiary of Phillips 66 last December. Why not just pay cash?

First, these trades line up with something Berkshire Hathaway has come to favor over time: Owning and managing whole companies. According to Larry Cunningham, a George Washington University law professor and the editor of “The Essays of Warren Buffett,” Berkshire was once happy to either own stock or a small stake in a business. He says as Berkshire grew, that outlook changed.

"Now, it prefers to own entire businesses rather than small positions," he says. "So, this is a neat way to achieve that objective."

Also, these swaps allow Berkshire Hathaway to save a boatload on taxes. Procter and Gamble’s stock is worth much more than when Berkshire bought it, so selling that stock would mean paying taxes on the profit — probably more than 33 percent.

Thomas Lys, a finance professor at Northwestern University’s Kellogg School of Management, has done the math. Berkshire originally bought its shares for $336 million, and the stock is now worth $4.7 billion.  

"So that's a profit of $4.4 billion," Lys says. "So a third of that is — hefty tax." 

But in this deal, Berkshire isn’t selling the stock. It’s trading one piece of Procter and Gamble — the stock — for another piece, Duracell. Going for big tax savings seems like it would sit uncomfortably with Buffett’s role as the rich guy who’s always calling on the government to change the tax code and raise his taxes. But Lys says there is an important distinction to be made because Buffett is the CEO of Berkshire.

"Warren Buffett has an obligation to his shareholder," Lys says. "And that obligation is to pay as little as the code allows."

Hollywood's next 'it' celebs – toys

Marketplace - American Public Media - Thu, 2014-11-13 11:00

The latest buzz on Wall Street is that toy maker Hasbro might acquire Dreamworks Animation, the company behind Shrek and Kung Fu Panda.

Neither company has commented on the rumor and, according to reports, talks could still fall apart. 

The possible acquisition reflects the modern big business of selling toys. Once upon a time, toys were, well, just toys. You built stuff with Legos and played make-believe with Transformers.

But that's changed, says Chris Byrne, a toy analyst at TTPM. Popular toys are now considered entertainment “properties.” For example, Hasbro's Transformers and even its Ouija board are now the stars of movies

Bryne says the question is now, "'How do we think about this property in all the ways in which kids encounter that entertainment?' So that could be toys, that could be TV, that could be movies, that could be video games." 

The shift reflects the way kids are buying toys, says  Sean McGowan, analyst at Needham and Co. Children's entertainment used to focus on toys and cartoons, but today, McGowan says, "the claims on kids' time and attention and money are growing. So you see them using their smart devices."

Featuring toys as movie stars has helped, but overall, toy sales have remained flat for more than a decade, McGowan says.

Paul Sweeney, an analyst at Bloomberg Intelligence, says the fact that movie studios have also grown bullish on featuring toys also drives the trend.

"What’s happening in Hollywood, [is] the studios are really looking for tried-and-true already proven franchises, if you will, either stories or characters," Sweeney says. 

Sweeney says this deal would make sense on some levels – but the list of companies that have lost fortunes trying to make it in Hollywood is a long one.

Hollywood's next it celebs: Toys

Marketplace - American Public Media - Thu, 2014-11-13 11:00

The latest buzz on Wall Street is that toy maker Hasbro might acquire Dreamworks Animation, the company behind Shrek and Kung Fu Panda.

Neither company has commented on the rumor, and according to reports, talks could still fall apart. 

The possible acquisition reflects the modern big business of selling toys. Once upon a time, toys, were, well, just toys. You built stuff with Legos and played make-believe with Transformers.

But that's changed, says Chris Byrne, a toy analyst at TTPM. Popular toys are now considered entertainment “properties.” For example, Hasbro's Transformers and even its Ouija board are now the stars of movies

Bryne says the question is now, 'How do we think about this property in all the ways in which kids encounter that entertainment? So, that could be toys, that could be TV, that could be movies, that could be video games." 

The shift reflects the way kids are buying toys, says  Sean McGowan, analyst at Needham and Co. Children's entertainment used to focus on toys and cartoons, but today, McGowan says, "the claims on kids time and attention and money are growing. So, you see them using their smart devices."

McGowan says featuring toys as movie stars has helped, but overall, toy sales have remained flat for more than a decade. 

Paul Sweeney, an analyst at Bloomberg Intelligence, says the fact that movie studios have also grown bullish on featuring toys also drives the trend. "What’s happening in Hollywood, [is] the studios are really looking for tried-and-true already proven franchises, if you will, either stories or characters," Sweeney says. 

Sweeney says this deal would make sense on some levels, but he says the list of companies that have lost fortunes trying to make it in Hollywood is a long one.

Why the Reddit CEO stepped down

Marketplace - American Public Media - Thu, 2014-11-13 11:00

Reddit CEO Yishan Wong stepped down Thursday. In a blog post, investor Sam Altman said the departure was over a fight with the board about a new office.

That's right: Wong didn't get the office he wanted so he quit.

"To be clear, though, we didn't ask or suggest that he resign — he decided to when we didn't approve the new office plan," Altman explained.

Whether this is actually what happened or just corporate nonsense is up for the debate.

 

Liberians Meet Death With Flowers, Trumpets and Cameras

NPR News - Thu, 2014-11-13 10:52

To understand why Liberians have had a hard time changing their funeral practices in the age of Ebola, first you must understand their tender and celebratory traditions.

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Is Wayne Rooney an England great?

BBC - Thu, 2014-11-13 10:39
With Wayne Rooney one cap away from being an England centurion, Phil McNulty looks at the striker's international career.

Liberia leader lifts Ebola emergency

BBC - Thu, 2014-11-13 10:18
Liberian President Ellen Johnson Sirleaf lifts the state of emergency imposed to control a deadly Ebola outbreak that has ravaged the country.

Lightning strikes 'more as world warms'

BBC - Thu, 2014-11-13 10:16
Global warming will significantly increase the frequency of lightning strikes, according to US research.

Reports: Obama Will Approve Immigrant Work Permits For Millions

NPR News - Thu, 2014-11-13 10:03

Following on a pledge to use his office's discretionary powers to address immigration, President Obama will remove the threat of deportation for up to 5 million people, says The New York Times.

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Ennis-Hill enters football rape row

BBC - Thu, 2014-11-13 09:56
Jessica Ennis-Hill wants her name removed from a stand at Bramall Lane if Sheffield United offer rapist Ched Evans a contract.

Car park death leads police to body

BBC - Thu, 2014-11-13 09:51
The body of a woman is discovered at a house in a Suffolk village after a man was found dead at the bottom of a multi-storey car park.

Ferran Adria And Fellow Star Chefs Talk Biodiversity In Brazil

NPR News - Thu, 2014-11-13 09:51

A group of chefs gathered this month in Sao Paolo to talk about how they can help preserve biodiversity. Among their warnings: If we lose food products, we will lose flavors and traditions.

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First Elvis recording to be sold

BBC - Thu, 2014-11-13 09:47
A demo acetate recording made by Elvis Presley when he was an unknown 18 year old is to be sold at auction at his former Graceland home.

Drones 'patrol US-Mexico border'

BBC - Thu, 2014-11-13 09:44
The US government is using drones to patrol half of its border with Mexico to detect illegal immigrants and smugglers, a report by the Associated Press says.

Wales suffering 'obesity epidemic'

BBC - Thu, 2014-11-13 09:36
Health Minister Mark Drakeford says the level of sugar in food should be regulated.

Poor Contact Lens Care Leads To A Whole Lot of Eye Infections

NPR News - Thu, 2014-11-13 09:31

Almost 1 million people a year end up with painful eye infections, and improper contact lens care is a big reason why, according to a new study from the CDC.

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VIDEO: Hunt for needle in haystack 'is art'

BBC - Thu, 2014-11-13 09:30
Palais de Tokyo director Jean de Loisy explains why Italian performance artist Sven Sachsalber is trying to find a needle in a pile of hay in a contemporary art gallery in Paris.

Is comet landing mission worth the cost?

BBC - Thu, 2014-11-13 09:29
At a price of 1.4bn euros, is Europe's Rosetta mission to a comet really worth the cost?

VIDEO: Medomsley centre staff interviewed

BBC - Thu, 2014-11-13 09:17
Former wardens at a youth detention centre have been interviewed by police investigating claims a paedophile ring operated there.

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