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Xiao Gang, China’s Top Securities Regulator, Ousted Over Market Tumult

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Xiao Gang, who was replaced as chairman of the China Securities Regulatory Commission, had been criticized for allowing a speculative bubble to form in the country’s stock market.

HONG KONG — China’s top securities regulator, Xiao Gang, has been replaced, the official Xinhua News Agency announced on Saturday, after facing stinging criticism for amplifying the country’s stock market turbulence.

Just days ago, Prime Minister Li Keqiang castigated the country’s financial regulators for their handling of a steep plunge in stocks since last June and an erosion in the value of China’s currency.

The China Securities Regulatory Commission, led by Mr. Xiao, 57, has taken a big dose of blame for the problems.

He attracted significant criticism for allowing a speculative bubble to form, in which share prices more than doubled in a year. When it burst last summer, those shares gave up all of their gains, hurting millions of families who had borrowed heavily to buy stocks.

As stocks sank, the regulator also intensified the market mayhem. Two measures, intended to stabilized stocks, have been widely blamed for producing a weeklong rout in China’s stock markets that unsettled investors around the world.

Why China Is Rattling the World

China’s economy is faltering, prompting concerns that are now shaking global stock markets.

Mr. Xiao defended himself in a long statement on his agency’s website in mid-January, analyzing the causes of his country’s recent financial sector difficulties. He said the turbulence in China’s markets, including another nose dive in share prices last summer, was partly caused by the inexperience of investors and the immaturity of the local market.

But he also conceded that recent troubles reflected an “imperfect trading system, flawed market mechanisms and inappropriate supervision systems,” together with an exodus of seasoned personnel from his agency.

Mr. Xiao will be succeeded by Liu Shiyu, 54, chairman of the Agricultural Bank of China and a former deputy governor of the People’s Bank of China, according to the news agency.

Mr. Liu was trained in engineering at Tsinghua University, but started a career in the state banking sector in the 1980s, according to the news agency.

His task will not be an easy one.

Anticorruption investigators have been scrutinizing the agency, trying to ascertain whether staff members tipped off friends about their decisions, particularly during the market’s fall last summer. New rules also make it hard for the spouses and children of regulators to live overseas, even though the regulatory agency has also been widely accused of lacking workers with international experience and connections.

But the biggest challenge for Mr. Xiao’s successor may be a lack of autonomy. The senior leadership in Beijing gave little latitude to Mr. Xiao, and it is likely to vet and second-guess his successor as well.

“Even changing him is not going to change the system,” said Hao Hong, the chief strategist at the Bank of Communications International, the overseas arm of one of China’s largest banks. “I don’t see how someone else will want to take his job; he has a very unenviable position.”

Mr. Xiao, who earned an undergraduate degree from Hunan University and a master’s degree in law from Renmin University, spent much of his career in finance.

He started at the People’s Bank of China in 1981. At the central bank, he held several posts, including director general of the fund planning department and the monetary policy department, working his way up to deputy governor.

In 2003, he moved to the state-owned Bank of China, where he served as chairman of the board and secretary of the party committee. While he was at the Bank of China, he described the rapid growth of country’s shadow-banking sector as “fundamentally a Ponzi scheme.”

Mr. Xiao took over at the securities regulator in March 2013, putting him at the helm during the rise and the fall of the Chinese stock markets.

When the markets started tumbling, Mr. Xiao’s agency rolled out a raft of measures to help stabilize the situation. He halted initial public offerings of stock and banned share sales by large stakeholders.

The regulator’s efforts worked for a while, but they started to backfire in January.

Mr. Xiao’s agency introduced so-called circuit breakers for its stock market on the first trading day of this year. The circuit breakers mandated that markets would close for 15 minutes if share prices fell 5 percent and would close for the day if they fell 7 percent.

It was intended to provide a cooling-off period. But in practice, it added to the anxiety in the markets.

As markets began sustained slides, investors rushed to sell as many shares as possible before the circuit breakers could shut down trading. The thresholds were hit in quick succession, twice during the first week of trading in January.

Further policy measures only added to investors’ confusion. The ban of share sales was supposed to expire, and the country’s central bank was pushing down the value of the currency.

As China’s stock markets and the value of the renminbi tumbled faster, the country’s leaders ended up scrapping all three policies in less than 24 hours. The circuit breakers were repealed, the ban on sales of shares by large stakeholders was extended, and the central bank intervened decisively in currency markets to halt any further drop in the renminbi.

“It was a correct strategy to take market-stabilizing measures against unusual movements in stocks and the currency last year.” Prime Minister Li said last Monday of the State Council, China’s cabinet, according to the government-controlled Beijing News. “Looking back, the major responsible departments took inadequate actions and had internal management issues.”

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Why Yellen, Fed may be heartened by CPI data

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Fed Chairwoman Janet Yellen

WASHINGTON (MarketWatch) — Federal Reserve Chairwoman Janet Yellen will be heartened by the surprise jump in the core consumer price index as it confirms what she told Congress last week that prices would rise over the medium term.

The data “validates the Fed’s view that inflation is alive and kicking” said Omair Sharif, economist at SG Americas Securities in New York.

Core prices are up 2.2% over the past 12 months, the biggest increase since the summer of 2012.

Although too much inflation is viewed as dangerous for the economy, Fed officials think that a 2% inflation rate is best for the economy to grow.

Inflation has been trending below that target for the past four years. Low inflation is a signal of weak demand in the economy and raises fears of actual decline in prices or deflation, which can damage an economy, especially one with high debt burdens like the United States.

The Fed’s 2% inflation target is based on a different inflation measure, the personal consumption expenditure index, which tends to run a bit more slowly than the CPI.

Over the last six months, that gap has been pronounced.


Core inflation as measured by the consumer price index is accelerating, but an alternative gauge favored by the Federal Reserve hasn't risen as much, at least so far.

But economists at Bank of America Merrill Lynch said the details of the CPI suggest a pickup in the core PCE to 1.6% year-on-year, which would be the highest level since September 2014.

Yellen told Congress last week that she still expects inflation to rise to the 2% target over the medium term despite the market turmoil and market measures of inflation that have steadily declined.

Jim Glassman, economist at J.P. Morgan Chase, said the CPI data will bolster Yellen’s preferred gradual path of rate hikes.

The Fed “doesn’t want to wake up and find out interest rates are not in the right zip code,” Glassman said.

“Most of us have ruled out the Fed until June. But that’s because the stock market is down 10%,” he said. “The market can shift on you.”

Financial markets had taken any Fed rate hike off the table this year.

Ian Shepherdson, chief U.S. economist at Pantheon, said that if inflation continues at the current rate of increase, core CPI inflation will be 2.8% a year from now.

“Needless to say, the market’s current fed funds projections are not remotely consistent with inflation at that pace, or anything like it,” he said.

But other economists thought the gain in the CPI was more one-off than sustained in nature.

Richard Moody, chief economist at Regions Financial Corp., said there is less inflation pressure in the economy than implied by the CPI report.

“Before the inflationistas – who have been warning about a surge in inflation since the very first day of the very first round of the Fed’s QE program – take a victory lap, and before anyone else starts to worry the U.S. is on the road to becoming Venezuela...we’d suggest holding off,” he said.

The Fed is expected to remain on hold at its next meeting in March given the turbulence in the financial markets since the start of the year.

At their policy meeting in January, Fed officials said this tightening was acting like interest rate increases on the economy, minutes show.

Even economists who think the Fed should hike in March don’t think they will raise interest rates.

“It feels like most of the members of the FOMC have already made up their minds that they want to delay” in March, said Stephen Stanley, chief economist at Amherst Pierpont Securities.

“I am convinced that when the dust clears, we will look back and say that the Fed made a mistake.”

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Inflation flat in January, but some price pressure on consumers is building

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[ad_1]Consumers don’t have to spend as much on necessities because of low inflation on things like gas and clothes.

WASHINGTON (MarketWatch) — Cheaper gasoline and moderating grocery prices kept inflation in check in January, but expenses for medical care and housing are rising.

The consumer price index was flat last month, the government said Friday. Economists polled by MarketWatch had expected a seasonally adjusted 0.1% decline.

Over the past 12 months the main CPI has risen by an unadjusted 1.4%, double the rate in December. That’s the fastest pace since late 2014.

Core prices are up 2.2% in the same span, the biggest increase since the summer of 2012.


Energy prices fell 2.8% in January, led by another drop in gasoline. Fueling up is cheaper than it has been in years, with gas costing less than $2 a gallon in many parts of the country.

Food prices were unchanged in January as the cost of most staples fell, the Labor Department said. The cost of groceries is rising at a much slower rate after spiking in late 2014 and early 2015.

Yet excluding food and energy, so-called core consumer prices jumped 0.3% to mark the biggest gain since August 2011.

Higher medical care and housing expenses, the two largest costs for many Americans, were behind the increase.

The cost of medical care jumped 0.5% in January and it’s risen 3.3% in the past 12 months, the highest rate in three years.

The cost of shelter — owning a home or renting an apartment — has climbed 3.2% in the past year. And rental costs are rising at the fastest pace since 2007.

Although inflation is still quite low, pressure is beginning to build and that’s likely to continue as gasoline prices stabilize. A huge plunge in oil last year drove inflation to fresh post-recession lows.

Real or inflation-adjusted hourly wages, meanwhile, rose 0.4% in January. They have increased by a mediocre 1.1% in the past 12 months.

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Gucci sales rise helps owner Kering to higher earnings

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Luxury group Kering CEO Francois-Henri Pinault speaks to the media during the full year 2015 results presentation in Paris, Friday, Feb. 19, 2016. The French luxury group reported better than expected sales.

PARIS — The French luxury group Kering, owner of brands like Gucci and Yves Saint Laurent, saw its earnings rise last year as demand in Europe and Japan offset a decline in struggling developing economies in Asia and Latin America.
The Paris-based company said its net income rose to 696 million euros ($771 million) in 2015 from 528 million euros a year earlier. Revenue increased 15 percent to 11.58 billion euros.

Sales rose for Gucci, which had lagged in recent quarters, as well as for other major brands, including Puma streetwear.

CEO and Chairman Francois-Henri Pinault noted Friday that the improvements come despite “a more complex economic and geopolitical environment.”

He expects more growth in 2016, despite the financial turmoil in many high-growth markets, particularly China.

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A Gas Leak Is Capped, but Neighbors Are Wary

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The Porter Hill neighborhood of Los Angeles sits below the Aliso Canyon natural gas storage facility.

LOS ANGELES — With a mix of pride and great relief, state officials here announced on Thursday that the leaking natural gas well near the Porter Ranch neighborhood — which over the last four months had pumped thousands of tons of methane and other chemicals into the atmosphere, sickening residents and prompting more than 6,000 households to flee — had finally been capped permanently.

Testing showed that air quality had returned to normal, according to state officials. But for some angry residents of the wealthy planned community at the northern edge of Los Angeles’s San Fernando Valley, nothing short of the gas field’s closing will be enough.

Officials say they have capped the well releasing methane and other chemicals into the atmosphere around the site.

“We have two words in response to today’s announcement: Flint, Michigan,” said Matt Pakucko, one of the founders of the group Save Porter Ranch, which is planning a rally on Friday in support of closing the gas field. “Those people were told by these kinds of officials, ‘The water is fine. Drink it.’ People are still getting sick here.”

Families who relocated to hotels or other short-term housing to escape the noxious fumes will have eight days to return home, before the gas company stops reimbursing them.

Officials for the Southern California Gas Company estimated that it had already spent up to $300 million since the blowout, much of it on attempts to plug the leak and paying for residents’ housing. That figure does not include legal costs from the dozens of lawsuits that have been filed against the company or any penalties the government orders it to pay.

At a news conference on Thursday, state and local officials announced measures that would be taken to make sure that residents were safe.

All wells at the Aliso Canyon storage facility must pass state inspection before any more gas can be injected into the field, officials said. Air quality testing would continue in the area. And an investigation into how the blowout occurred would begin.

“Gas emissions are controlled and air quality has returned to normal levels,” said Jason Marshall, chief deputy director of the California Department of Conservation. “I understand the tremendous concern for the safety of this community.”

Common complaints from exposure to the gas have included headaches, nausea and nosebleeds, which health officials said are short-term effects caused by chemicals added to the gas, so that humans can smell a leak. Those effects should stop now that the leak was over, they said.

“All the levels that we’ve looked at are below health levels of concern, so we do not anticipate that there will be any long-term health effects in the community,” said Jeffrey Gunzenhauser, interim health officer for the Los Angeles County Health Department.

Many residents, however, were far from convinced. Sandi Naiman, 66, has been living in a hotel in nearby Woodland Hills, where she takes care of her 2-year-old grandson. A severe asthmatic, she had developed chronic sinus problems since the leak began, she said, and got sicker every time she went home. She felt she had little choice but to go back.

“Can I afford to stay in a hotel? No,” Ms. Naiman said. “I’m nervous. We don’t feel safe with the gas company there. We’d like them out of there.”

State lawmakers have promised new regulations for all oil and gas storage — including much stricter well inspections and requirements for subsurface safety valves — which they say will help prevent another leak like the one in Aliso Canyon. The leak — which engineers believe was caused by a rupture in a 7-inch injection 500 feet below the surface — was discovered on Oct. 23. The governor declared a state of emergency in January.

Representative Brad Sherman, a Democrat who lives in Porter Ranch and represents the area, said the Aliso Canyon gas field should be monitored 24 hours a day with infrared cameras, which would show on the Internet if any gas was leaking.

“There is a long way to go before this city and this community is going to want to see new gas put in Aliso Canyon,” Mr. Sherman said earlier this week.

Few officials have proposed entirely shutting down the gas field, which accounts for nearly a quarter of California’s natural gas storage capacity. Even with the facility operating far below capacity, energy officials said they were concerned about power failures in Los Angeles.

Dennis V. Arriola, the president of Southern California Gas, said the company would do what it could to reverse the environmental damage that was caused.

At its peak in late November, the leaking well was spewing more than 50 tons of methane into the atmosphere each hour. Southern California Gas, a division of Sempra Energy, has agreed to fund a program to mitigate the effects of the escaped methane, a potent greenhouse gas.

“All of that will be covered by the company, not by ratepayers,” Mr. Arriola said. “We will be using company resources.” (Mr. Arriola also noted the company’s $1 billion insurance policy, which may cover some of the costs.)

Originally, the company planned to give residents only two days to return home once the leak was stopped; that timeline was extended to eight days, under an agreement with the city attorney’s office.

Residents complained that this is still not enough time. Some have called for house-by-house indoor testing, to make sure that none of the chemicals from the well have seeped into furniture or carpets.

Darren Hallihan, 43, said he and his girlfriend planned to sell their home and move away from Porter Ranch. .

“It’s just hard to feel safe up there, knowing that this is going to continue to go on,” he said. “You don’t know if this stuff is seeping slowly into the area.”

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How Tim Cook Became a Bulwark for Digital Privacy

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Timothy D. Cook, Apple’s chief, testifying before Congress in 2013. “We feel we must speak up in the face of what we see as an overreach by the U.S. government,” he wrote in an open letter published this week.

SAN FRANCISCO — Letters from around the globe began pouring into the inbox of Timothy D. Cook not long after the publication of the first revelations from Edward J. Snowden about mass government surveillance.

Do you know how much privacy means to us? they asked Apple’s chief executive. Do you understand?

Mr. Cook did. He was proud that Apple sold physical products — phones, tablets and laptops — and did not traffic in the intimate, digital details of its customers’ lives.

That stance crystallized on Tuesday when Mr. Cook huddled for hours with lawyers and others at Apple’s headquarters to figure out how to respond to a federal court order requiring the company to let the United States government break into the iPhone of one of the gunmen in a San Bernardino, Calif., mass shooting. Late Tuesday, Mr. Cook took the fight public with a letter to customers that he personally signed.

“We feel we must speak up in the face of what we see as an overreach by the U.S. government,” wrote Mr. Cook, 55. “Ultimately, we fear that this demand would undermine the very freedoms and liberty our government is meant to protect.”

Mr. Cook’s standoff with law enforcement officials is indicative of his personal evolution from a behind-the-scenes operator at Apple to one of the world’s most outspoken corporate executives. During that time, he has moved a once secretive Silicon Valley company into the center of highly charged social and legal issues. While Mr. Cook’s predecessor, Apple co-founder Steven P. Jobs, was considered a business icon, he never took aggressive positions on such matters as Mr. Cook now has.

Being at loggerheads with the United States government is risky for Apple and may draw a torrent of public criticism of the world’s most valuable company at a time when its growth rate has significantly decelerated.

Yet people who know Mr. Cook said he did not believe he had a choice but to be vocal. Mr. Cook, who became Apple’s chief executive in 2011, has long said that businesses and their leaders should think of themselves as important members of civic society. In September, he emphasized that this responsibility “has grown markedly in the last couple of decades or so as government has found it more difficult to move forward.”

Mr. Cook “says what he believes, especially in difficult situations,” said Don Logan, the former chairman of Time Warner Cable who has been friends with Mr. Cook since he became chief executive of Apple, bonding over their shared alma mater, Auburn University. Of Mr. Cook’s opposition to the court order, Mr. Logan said: “Tim is currently dealing with a very difficult situation and he knows the decision he has made has lots of ramifications, good or bad. But he wants to do the right thing.”

Apple declined to make Mr. Cook available for an interview. The company is preparing to file an opposition brief against the court order.

Mr. Cook’s ideas about civic duty were partly formed during his childhood in rural Alabama. In a speech at the United Nations in 2013, he recounted how Ku Klux Klansmen had once burned a cross on the lawn of a black family’s home and how he yelled for them to stop. “This image was permanently imprinted in my brain, and it would change my life forever,” he said.

At Apple, which he joined as a senior executive in 1998, Mr. Cook was a quiet figure for much of the period when he worked for Mr. Jobs, a showman who prized secrecy at the company. After Mr. Jobs stepped down because of ailing health, Mr. Cook began making Apple more open, publishing an annual report on suppliers and working conditions for more than a million factory workers.

In 2014, Mr. Cook revealed he was gay, a move widely seen as making a statement about gay rights. Last year, he wrote an editorial decrying religious freedom laws that had been proposed in more than two dozen states that would let people skirt anti-discrimination laws that conflicted with their religious beliefs.

His outspokenness has drawn criticism, with some investors questioning how nonbusiness initiatives — including some of Apple’s environmental moves — would contribute to the company’s bottom line. Mr. Cook responded at a shareholder meeting that it is important for Apple to do things “because they’re just and right.”

Privacy has long been a priority for Mr. Cook. At a tech conference in 2010, he said Apple “has always had a very different view of privacy than some of our colleagues in the Valley.” He cited the iPhone’s feature that shows where a phone — and presumably its user — is and said fears about abuse and stalking had compelled the company to let consumers decide whether or not their apps could use their location data.

Mr. Cook’s views on privacy hardened over time as customers globally began entrusting more personal data to Apple’s iPhones. At the same time, Apple was growing tired of requests from government officials worldwide asking the company to unlock smartphones.

Each unlocking request was carefully vetted by Apple’s lawyers. Of those deemed legitimate, Apple in recent years required that law enforcement officials physically travel with the gadget to the company’s headquarters, where a trusted Apple engineer would be called to unlock the device in a secure S.C.I.F., or secure compartmented information facility. Processing these requests was extremely tedious. More worrisome, the data stored on its customers iPhones was growing more personal, including photos, messages and bank, health and travel data.

And some government officials were not exactly instilling confidence in Apple’s engineers. In one case, law enforcement officials rushed a phone to Apple’s headquarters for unlocking, only for the engineers to discover their target had not enabled the device’s passcode feature.

So Mr. Cook and other Apple executives resolved not only to lock up customer data, but to do so in a way that would put the keys squarely in the hands of the customer, not the company. By the time Apple rolled out a new mobile operating system, iOS7, in September 2013, the company was encrypting all third-party data stored on customers’ phones by default.

“People have a basic right to privacy,” Mr. Cook has said.

By then, Mr. Snowden’s disclosures about how the National Security Agency had cozied up to some tech companies and hacked others to gain user data were reverberating worldwide. The disclosures included revelations of a comprehensive, decade-long Central Intelligence Agency program to compromise Apple’s products; C.I.A. analysts tampered with the products so the government could collect app makers’ data. In other cases, the agency was embedding spy tools in Apple’s hardware, and even modifying an Apple software update that allowed government analysts to record every keystroke.

Letters from alarmed Apple customers started flooding into Mr. Cook’s inbox, fortifying his stance on privacy. Apple’s eighth mobile operating system, iOS8, which rolled out in September 2014, made it basically impossible for the company’s engineers to extract any data from mobile phones and tablets.

For officials at the world’s law enforcement agencies, the new software was a clear signal that Apple was growing defiant. A month after iOS8’s release, James Comey, the director of the F.B.I., told an audience at the Brookings Institution that Apple had gone “too far” with the expanded encryption, arguing that the operating system effectively sealed off any chance of tracking kidnappers, terrorists and criminals.

Government agencies began to press Apple and other tech companies for so-called back doors that could bypass strong security measures. With tensions rising, some form of technical compromise — whether in the form of a chip, a back door or a key — was off the table by 2015.

At Apple, Mr. Cook and others continued to work with investigators to the extent the company could and complied with court orders. Last October, a federal judge in New York said the government was overstepping its boundaries by using a centuries-old law, the All Writs Act, as the basis for its request that Apple open an iPhone for a drug investigation. Apple’s lawyer sided with the judge in the case. The matter has not been resolved.

After December’s San Bernardino attack, Apple worked with the F.B.I. to gather data that had been backed up to the cloud from a work iPhone issued to one of the assailants, according to court filings. When investigators also wanted unspecified information on the phone that had not been backed up, the judge this week granted the order requiring Apple to create a special tool to help investigators more easily crack the phone’s passcode and get into the device.

Apple had asked the F.B.I. to issue its application for the tool under seal. But the government made it public, prompting Mr. Cook to go into bunker mode to draft a response, according to people privy to the discussions, who spoke on condition of anonymity. The result was the letter that Mr. Cook signed on Tuesday, where he argued that it set a “dangerous precedent” for a company to be forced to build tools for the government that weaken security.

“Compromising the security of our personal information can ultimately put our personal safety at risk,” he wrote. “That is why encryption has become so important to all of us.”

Far from backing down from the fight, Mr. Cook has told colleagues that he plans to accelerate plans to encrypt everything stored on Apple’s myriad devices, services and in the cloud, where the bulk of data is still stored unencrypted.

“If you place any value on civil liberties, you don’t do what law enforcement is asking,” Mr. Cook has said.

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Facebook and Twitter Announce Support for Apple in Backdoor Dispute With FBI

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Both Facebook and Twitter today joined the ranks of a growing number of tech companies announcing support for Apple's decision to oppose a government order that would require it to weaken the security of its iOS devices. The FBI is demanding Apple create a version of iOS that would let it crack the passcode on the iPhone 5c used by San Bernardino shooter Syed Farook, something Apple has called a "dangerous precedent."

iphone5c-header
In a tweet shared this afternoon, Twitter CEO Jack Dorsey thanked Tim Cook for his leadership and said the company stands with Apple. In the tweet, Dorsey also links to Cook's strongly worded open letter that calls the FBI's software request "too dangerous to create."Facebook announced its support through a statement shared with USA Today, which says the company will "fight aggressively" against government requirements to weaken security. Facebook says the FBI's demands "would create a chilling precedent."

"We condemn terrorism and have total solidarity with victims of terror. Those who seek to praise, promote, or plan terrorist acts have no place on our services. We also appreciate the difficult and essential work of law enforcement to keep people safe," the statement reads. "When we receive lawful requests from these authorities we comply. However, we will continue to fight aggressively against requirements for companies to weaken the security of their systems. These demands would create a chilling precedent and obstruct companies' efforts to secure their products."

The dispute between Apple and the FBI centers around the FBI's request for a new version of iOS that would disable certain passcode security features on the shooter's iPhone 5c. The FBI has made three demands of Apple, which are as follows:

1. Eliminate the auto-erase function that wipes an iPhone if the wrong passcode is entered 10 times.
2. Eliminate the delay that locks the FBI out of the iPhone if the wrong passcode is entered too many times in a row.
3. Implement a method that would allow the FBI to electronically enter a passcode using software.

While the government has suggested the software tool will be used to unlock only the device in question, Apple and other technology companies believe that it sets a precedent that could lead to similar unlocking requests in the future or a general demand to weaken overall encryption for electronic devices. Tim Cook has called the FBI's demands an "overreach" by the U.S. government that would "undermine the very freedoms and liberty our government is meant to protect."

The implications of the government's demands are chilling. If the government can use the All Writs Act to make it easier to unlock your iPhone, it would have the power to reach into anyone's device to capture their data. The government could extend this breach of privacy and demand that Apple build surveillance software to intercept your messages, access your health records or financial data, track your location, or even access your phone's microphone or camera without your knowledge.

Apple has gained a number of backers over the course of the last few days. Google CEO Sundar Pichai previously announced support for Apple, calling the FBI's request a "troubling precedent" in a statement released yesterday. Apple also has the support of WhatsApp CEO Jan Koum and several advocacy groups, including the Electronic Frontier Foundation, Fight for the Future, and the American Civil Liberties Union. Apple customers have created petitions and are attending rallies held in support of Apple's willingness to fight for privacy protections.

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In 2015, airline passenger complaints skyrocketed by 30 percent

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A Delta jet takes off in view of an Alaska Airlines plane that just landed at Seattle-Tacoma International Airport in Washington state.

More than 20,000 passengers were unhappy with their airline experience in 2015, an almost 30 percent increase in displeasure over the year before, the U.S. Department of Transportation reported Thursday.

The number of passengers who filed complaints rose from 15,539 received by DOT’s Aviation Consumer Protection Division in 2014. The final month of last year was a big one for passenger complaints, DOT said, after recording 1,565 dissatisfied customers. That was a 19.6 percent increase from November and a 46.9 percent bump from December 2014.

Complaints are filed with the DOT over all sorts of things connected with flying: flight problems, baggage, reservation and ticketing, refunds, consumer service, disability and discrimination.

Airlines reported an on-time arrival rate of 77.8 percent in December 2015, up from the 75.3 percent on-time rate in December 2014. But that was a decrease from November 2015, when 83.7 percent of flights were on time.

The most on-time airlines in December were Hawaiian Airlines (93 percent on time), Alaska Airlines (85 percent) and Delta Air Lines (83.6 percent). The airlines with the worst on-time performance were Spirit Airlines (68.7 percent), JetBlue Airways (70 percent) and Virgin America (71.1 percent).

For the full year in 2015, airlines recorded an on-time arrival rate of 79.9 percent, up from 76.2 percent in 2014.

In 2015, airlines told DOT they canceled 1.5 percent of their scheduled domestic flights, an improvement over the 2.2 percent cancellation rate in 2014. In 61 instances last year, domestic flights were delayed on the tarmac for more than three hours.

In December, airlines reported that 22.17 percent of their flights were delayed. They told DOT that 5.70 percent of their flights were late because of aviation system delays, compared with 4.84 percent in November; 7.64 percent of delays were caused by late-arriving aircraft, compared with 5.18 percent in November; 6.13 percent by factors, such as maintenance or crew problems, compared with 4.60 percent in November; 0.66 percent by extreme weather, compared with 0.42 percent in November; and 0.06 percent for security reasons, compared with 0.04 percent in November.

Lost baggage has become less of a problem with the advent of bar-coded baggage tags and computer networks that track luggage. But U.S. airlines said baggage was mishandled for four out of every 1,000 passengers in December. For all of 2015, the airlines posted a mishandled baggage rate of 3.24 per 1,000 passengers, down from 2014’s rate of 3.61.

In December, airlines said there were four incidents involving the death, injury or loss of animals while traveling by air, down from the six reports filed in November 2015. For all of 2015, carriers reported 35 animal deaths, injuries to 25 other animals, and three lost animals, for a total of 63 incidents, up from the 45 total incident reports filed for 2014.

Ashley Halsey reports on national and local transportation.

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Uber loses $1 billion a year competing in China

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Uber has had a rough time trying to make it in China.

The ride-hailing service is all-but dominant in the United States and popular in many other foreign markets, but it’s found Asia, especially mainland China, difficult to crack. The company faces formidable competition from Chinese-owned rival Didi Kuaidi.

On Thursday Uber CEO Travis Kalanick announced that the company’s Chinese operations are losing more than $1 billion on operational and other costs.

"We're profitable in the USA, but we're losing over $1 billion a year in China," Uber CEO Travis Kalanick told Canadian technology platform Betakit. "We have a fierce competitor that's unprofitable in every city they exist in, but they're buying up market share. I wish the world wasn't that way."

That’s not for lack of trying. Uber China, which focuses on the mainland Chinese market, is separate from Uber’s other operations and is run by Chinese managers. The subsidiary has pulled in $200 million in investments from Baidu, the Chinese search engine, and has some of the highest ride volume worldwide from its Chinese audience. In early February, Uber also partnered with Alipay, an app that lets Chinese users traveling internationally pay for their rides in renminbi (China's official currency) without having to switch currencies.

Uber is the world’s largest ride-hailing service by many accounts, valued at more than $50 billion. But despite the Baidu investment and its own sink of funds, Uber China is finding itself outpaced by Didi Kuaidi nearly every step of the way. Didi Kuaidi was formed when the two biggest ride-hailing apps in China, Didi Dache and Kuaidi Dache, merged, and it’s backed by e-retailer Alibaba and service portal firm Tencent, the two largest Internet companies in China.

At least in the Chinese market, Didi Kuaidi has far more capital than Uber does to spend on expansion in the mainland, having raised raised $2 billion in capital to the $1 billion Uber has set aside for its Chinese ventures. Didi Kuaidi also serves far more riders than Uber China does. One million people a day in Beijing alone use the service. A recent report by Analysys International found that Didi Kuadi dominates the ride-hailing market in China, leading with 83.2 percent of users to Uber’s 16.2 percent.

Didi Kuaidi has moved aggressively in its plans for expansion, and is looking to grow in Uber’s US backyard. In September 2015, it invested $100 million in Uber’s domestic rival Lyft. The two firms are working closely together to build a seamless user experience, where customers can use the same app to hail a car from Lyft when visiting the US or a car from Didi Kauidi when visiting China. Didi Kauidi has inked similar deals with GrabTaxi in Southeast Asia and the ride-hailing service Ola in India.

Uber and Didi Kuaidi have both invested heavily in subsidies for drivers that allow them to offer cheaper fares, and Uber believes that this pricing strategy may pay off in the long run for its Chinese operations. According to Kalanick, company hopes to offer Uber in more than 100 Chinese cities by the end of the year.

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One of the most powerful Internet companies is officially for sale

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Yahoo has admitted what everyone already knew — the company is up for sale.

And to make sure it's taken seriously, Yahoo is bringing in outsiders to drum up interest.

The company announced on Friday the formation of "a Strategic Review Committee of independent directors" to explore "strategic alternatives." Put more plainly, Yahoo has hired bankers and lawyers to field offers that can be presented to the company's board of directors.

The moves come after a particularly dark time for Yahoo, marked by layoffs that are cutting around 15% of its workforce and include the shuttering of many of its content verticals such as food, health and travel.

Yahoo and its CEO Marissa Mayer have faced increasing pressure from activist investors to sell what has been referred to as its "core assets" but really just means its actual business.

Despite remaining a major and powerful web destination, driven by the power of its curated, news-focused homepage, Yahoo's core web advertising business suffered along with the rest of the media industry and efforts to grow into newer areas such as mobile and video have been middling.

The formation of an independent board is a step that could force the company to act if a buyer is found.

Meanwhile, Yahoo has held a sizable stake in Chinese e-commerce company Alibaba, something that made its stock very appealing as a way for U.S. investors to invest by proxy into the company before it went public.

Now that Alibaba is a publicly traded company, Yahoo has been pushed to figure out a way to sell its stake in a way that returns money to shareholders while avoiding a major tax hit. One way to do that is to sell Yahoo's core business to another company.

Maynard Webb, chairman of the board of Yahoo, said that the company is looking at this strategy, nothing it could be the best thing for Yahoo shareholders. Investors tepidly agreed, sending Yahoo shares up 1.7%.

"We believe that pursuing these complementary paths is in the best interests of our shareholders and will maximize value," Webb said in a press release.

Yahoo had previously announced in its most recent quarterly earnings release that it would be considering "strategic alternatives," which is code for selling to the highest bidder.

In thia March 3, 1997 file photo, Yahoo! co-founders David Filo, left, and Jerry Yang hold up a fish prop in Filo's office in Santa Clara, Calif.

Friday's announcement comes after some doubt had been expressed over whether Yahoo's leaders had really been that interested in a sale.

SunTrust analyst Robert Peck on Thursday said in a note that some possible buyers had found little interest from Yahoo, "making them question the seriousness of the firm and management in seeking strategic alternatives."

That sluggishness has been attributed to Mayer, who has publicly and privately shown little interest in making a deal, according to Re/code.

In what could best be described as a bit of mixed messaging, Mayer said that the company would consider a sale but also continue to execute her plans

"As both shareholders and employees, all of us here at Yahoo want to return this iconic company to greatness," she said in the press release. "We can best achieve this by working with the committee to pursue various strategic alternatives while, in parallel, aggressively executing our strategic plan to strengthen our growth businesses and improve efficiency and profitability."

A sale of Yahoo would follow on the purchase of another big first-generation Internet company that had fallen from grace — AOL.

Helmed by CEO Tim Armstrong, who is friendly with Mayer, AOL had gone through something of a reinvention as a digital media company with a heavy emphasis on video.

Armstrong was able take a few acquisitions — most notably online video ad platform Adap.tv — and sell what had at one-time been a company on a steep decline for $4.4 billion to Verizon.

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Walmart Profit Fell Almost 8% in 4th Quarter

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A Walmart store in Secaucus, N.J. The company said same-store sales in the United States rose 0.6 percent in the fourth quarter.

Walmart said profit fell about 8 percent last quarter, and it lowered its sales forecast for this year, citing a strong dollar and the costs of a plan to close more than 200 stores worldwide.

Sales during the recent holiday season slowed from the third quarter, Walmart said on Thursday, and it reported fourth-quarter profit of $4.57 billion, down 7.9 percent from the same period a year ago, on declining revenue and same-store sales.

For the current fiscal year, which began this month, sales are projected to be flat, whereas previous estimates called for growth of 3 to 4 percent.

Walmart is among the big retailers struggling to adapt to the popularity of online shopping. Last month, the company announced plans to close 269 stores, including 154 in the United States, a move that will affect 16,000 workers.

“This past year has been a year of investment, operational improvement and change, even while we delivered solid growth,” said Doug McMillon, Walmart’s president and chief executive. “We do see an underlying strength in our Walmart U.S. business that wasn’t there a year ago.”

Quarterly revenue, which reached $129.7 billion, fell 1.4 percent from the year-ago period, with currency adjustments shaving off $4.8 billion.

Earnings per share were $1.43, compared with $1.53 a year ago. Costs associated with the store closings cut 20 cents off earnings per share, which was partly offset by tax-related gains of 14 cents a share.

For the full fiscal year, profit was $4.57 a share, compared with $4.99 the year before, and revenue was $482.1 billion, compared with $485.7 billion in the year-ago period.

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HSBC executives rue missed chance in HQ choice

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The HSBC headquarters is seen in the Canary Wharf financial district in east London, Britain February 15, 2016. REUTERS/Hannah McKay The HSBC headquarters is seen in the Canary Wharf financial district in east LondonBy Lawrence White and Simon Jessop

LONDON (Reuters) - British Finance Minister George Osborne's relief at HSBC's choice of London over Hong Kong as its headquarters is not shared by several top executives who rue a missed opportunity for its China-centered growth strategy.

With its historical roots in China -- HSBC was founded in Hong Kong and Shanghai in 1865 -- Europe's biggest lender has stepped up efforts in recent months to become chief cheerleader for Beijing's 'one belt, one road' infrastructure plan.

"A move to Hong Kong would have sent very positive signals to the region in the longer term," one senior Hong Kong-based executive told Reuters, speaking on condition of anonymity due to the sensitivity of the issue within the bank.

HSBC had a taste of what China's outbound investment drive can offer earlier this month as sole international adviser to state-owned China National Chemical Corp on its $43 billion bid for seeds and fertilizer giant Syngenta, the biggest ever overseas takeover offer by a Chinese company.

China's plan for a new silk road and economic belt, which Beijing envisages spreading from Western China to Central Asia and onwards to Europe, has echoes of The Hongkong and Shanghai Banking Corporation's original 19th century vision, when Thomas Sutherland founded the bank to meet the demands of China's growing business communities and their need for more reliable and sophisticated banking.

Fast forward 150 years and some members of HSBC's management feel a move back to its original hometown of Hong Kong would have helped the bank win more advisory business, along with the financing for some of the huge infrastructure projects expected on China's new silk road.

HSBC's history tells how Sutherland weathered a financial storm in Hong Kong in 1866 by maintaining the bank's payment period for bills of exchange when others were cutting theirs, a move which kept him in business as other banks collapsed.

After Sunday's historic board meeting in London, HSBC said that Asia remained at the heart of the group's strategy, a line a spokeswoman for HSBC reiterated when asked about any divisions within the bank's senior echelons.

HSBC insiders told Reuters the bank had taken into account Chinese sensitivities in timing the announcement of its decision to remain in the UK, waiting until the end of the lunar new year holiday.

"There are senior executives in Asia who were very excited about the possible move...I expect the bank will now do a lot of PR to reinforce the 'we love you messages' to China, having turned them down," an external source familiar with the board and management team's thinking told Reuters.

In conversations both before and after the decision Reuters spoke with nearly a dozen Asia-based executives at the bank who said they would welcome the headquarters moving eastwards.

ASIA PIVOT

HSBC set out a strategy last year to shift up to $230 billion of assets saved by spending cuts elsewhere to Asia, so that it could invest more in the Pearl River Delta and Southeast Asia in particular.

That gave a long-term logic for a move to Hong Kong, despite near-term headwinds such as flagging Chinese economic growth and gyrations in the country's stock markets.

But a move by Britain's Osborne to scrap most of an onerous levy on banks' global balance sheets removed one of the biggest disadvantages of having a London base, appeasing many investors who had pushed for the HQ review.

The make-up of HSBC's board also likely played a part in the outcome, said Chris White, head of equities at Premier Asset Management, which holds shares in the bank.

"If you look at the composition of HSBC's board, it's mainly European, so it shouldn't necessarily be any surprise when they decide that they ought to stay in Europe," he said.

Most prominent among the few non-Europeans on HSBC's board is Hong Kong businesswoman Laura Cha who sits on Hong Kong's Financial Services Development Council advising on how it can improve its status as a financial center. Cha also chaired discussions at the Asian Financial Forum in January on the new silk road plans.

Cha did not respond to an emailed request for comment.

Reuters was not able to ascertain from sources familiar with the meeting whether any board members initially favored a move to Hong Kong. The bank said that the board's final decision on Sunday was unanimous, and most investors now back the choice.

"If they would have decided to move to Hong Kong, I would have had to rethink my position in HSBC," said Joost de Graaf, senior portfolio manager at Kempen Capital Management, which owns shares in HSBC.

While some executives at HSBC in Asia had privately hoped for the move, both they and investors thought that outcome unlikely given China's grimmer market outlook and tightening grip on Hong Kong in recent months.

"I thought it was kind of inevitable they would stay in UK given what is going on in China - currently a Hong Kong listing does not look very attractive for a corporate executive," said an investor at one of the bank's top 20 shareholders.

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Managers at HSBC won’t get a promised pay rise

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HSBC Chairman Douglas Flint, HSBC has struggled to strike the right tone on pay.

The bank u-turned on a global pay freeze last week after a protest from employees, saying it would find cost savings elsewhere.

And it’s now u-turned on the u-turn, refreezing salaries for thousands of UK-based managers, according to a report in the Financial Times.

Emma Dunkley reports that most managers in the bank’s UK retail and investment management operations were told they wouldn’t be getting a pay rise this year.

More junior staff will be getting a salary hike, funded from the bank’s bonus pool, according to the FT.

The bank, like most others, is seeking to cut costs and reduce the size of its capital-intensive investment banking operations. It’s aiming to cut around 50,000 jobs and save $5 billion (£3.1 billion) a year by 2017.

HSBC last week also finally chose to keep its headquarters in the UK after a long-running relocation review.  The bank, one of the world’s largest by assets, considered Hong Kong, the US, and Canada in its list of new homes.

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Asia markets set for a year of exceptions

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Currency symbols are illuminated at a currency exchange store at night in the Mong Kok district of Hong Kong, China, on Saturday, Oct. 24, 2015. The Hong Kong Monetary Authority bought the most U.S. dollars in six years in October to keep its currency within the permitted trading band amid inflows into its stock market and signs the city will be forced to raise interest rates. Photographer: Xaume Olleros/Bloomberg©Bloomberg

Willem Buiter offered a chilling prospect this week at a conference in Hong Kong.

“Its not impossible that even [China] some time next year may be looking at negative rates if the slowdown that I anticipate continues,” Citigroup’s chief economist told the bank’s invitees. “It’s not our central scenario but it is a risk.”

If regular investors shiver at the prospect of a China struggling to combat slowing growth to the extent it has to follow Europe and Japan in making people pay to save — and it should send a chill — then China’s indebted companies should be nearing outright panic.

Low growth and low, or no, inflation would rob them of both routes out from under debt burdens that for many groups are already at alarming levels.

Amid all the fears stalking global markets — be they related to China, oil or emerging markets in general — the problem for traders is to ensure they don’t eschew ultimately attractive investment opportunities along with the bad. For Asian markets, facing a Chinese slowdown, Japan’s battle to reflate, slowing global trade and fears over rising debts, this is even more key. Not all face anything like the same combination of the above.

There are high-level signs of investor differentiation already. Fund managers cut extreme negative emerging markets positions last month, according to Bank of America Merrill Lynch’s monthly survey, which nonetheless still put “short EM” the third most crowded trade behind going long the dollar and short oil.

Next comes the need to differentiate between industries. According to Fitch Ratings, 11 per cent of the 302 non-financial companies that it rates in Asia-Pacific carry a negative outlook, up from 8 per cent a year ago. As last year, about 4 per cent of groups could see an upgrade.

Split by industries, the need to sift carefully is even more clear. The proportion of industry sectors with negative outlooks, according to Fitch, has jumped to 42 per cent from 18 per cent. The list can still challenge perceptions, however: Fitch is positive on Chinese housebuilders, whom it thinks will benefit from falling inventories and rising sales — when most people still fear the sector is a debt-ridden disaster.

Country perceptions are worth re-examining too. Indonesia, which as a commodity exporter does not enjoy the same boost from cheaper materials as China does, is in fact one of the best-performing stock markets in the world so far this year. Business confidence in the country has jumped sharply in the past six months, too.

“There’s this misconception that Indonesian companies borrow dollars left, right and centre and are completely irresponsible,” says Herald van der Linde, head of Asia equity strategy at HSBC, who has covered the country for more than 20 years. “That’s not the case. Since the Asian financial crisis, the better companies have mostly kept a check on leverage.”

Asia’s financial crisis largely passed China by — something analysts are noting as corporate debt piles up. Companies that bought assets overseas last year carried an average gross leverage ratio of 5.4, according to data from S&P Global Market Intelligence.

ChemChina, which this month offered $44bn for Syngenta, the Swiss agribusiness giant, carried total debt of almost twice that based on 2014 numbers. As a state-owned entity with the assumed guarantee that carries, ChemChina has access to lending facilities that private companies could not hope to tap.

For now, China’s buying — and borrowing — continues. On Wednesday, Zoomlion Heavy Industry confirmed that it had offered $3.3bn for Terex, a US crane maker — a cash-and debt financed bid that if successful, would increase Zoomlion’s already eye-popping leverage ratios.

The construction machinery maker already carries gross debt of more than 80 times earnings before interest, tax, depreciation and amortisation. Net out its cash on hand and the ratio is more than 40. As a rule of thumb, leverage above about four times would be considered risky.

Yet, also on Wednesday, there were more positive signs. Fosun International, one of China’s best-known serial acquirers with Club Med and Cirque du Soleil in its portfolio among others, cancelled the $462m purchase of Israel’s Phoenix Holdings — in part to keep its leverage down.

In Asia particularly, 2016 is setting up to be a year of exceptions rather than rules. And in markets so nervous and changeable, it will pay to follow individual stories, be they at country or company level, as closely as any trend.

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How to make sure you’re getting real Parmesan cheese

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On top of spaghetti, all covered with...wood? Bloomberg News recently reported that some packaged grated Parmesan cheeses contain too little cheese and too much wood-pulp, according to a test conducted by an independent laboratory.

How to make sure you're getting real Parmesan cheeseFoodio / Shutterstock / Foodio

The "wood-pulp" mentioned is actually a powdered plant fiber called cellulose that's completely legal in the US and is an FDA approved anti-clumping ingredient for pre-grated cheese. Cellulose is widely used throughout the food industry, helping to make foods like ice cream have a creamier mouthfeel and it's used in good quality grated cheeses, as well as not-so-great quality cheeses.

Since not all cheese is created equal, we turned to Liz Thorpe, cheese expert, consultant and author of The Cheese Chronicles, to get her tips for how to make sure you get real Parmesan every time:

Italian Parmigiano-Reggianopaulista / Shutterstock / paulista

1. Look for the words "Parmigiano-Reggiano" on the rind

"The first thing to know is that Italian Parmigiano-Reggiano and Amerian Parmesan cheese aren't the same thing," says Thorpe. "Parmigiano-Reggiano is a legally protected designation of origin that's used in Europe only for Italian cheese. It can never be sold pre-packaged in a grated form. The beauty of this cheese is that you can always know that you're getting the real thing because the name 'Parmigiano-Reggiano' is burned onto its rind in an unmistakable dotted pattern." This is the top of the line Italian cheese that you want to use in your cooking and and hope to see in restaurants.

2. Buy a wedge from a wheel of cheese rather than pre-grated cheese

Many of us buy grated cheese for its convenience, but "it's super easy to use a microplane and then you're guaranteed a pure product," says Thorpe. "Grate or crumble it yourself—it will taste so much better and you'll use less cheese because it's flavor is so much better."

3. If you're going to buy pre-grated Parmesan, look for American producers with good reputations

"Learn the names of reputable brands that offer pre-grated Parmesan like Sartori and BelGioioso which are both from Wisconsin and Arthur Schuman, Inc. from New Jersey which is the largest importer of hard Italian cheeses," says Thorpe. "Their products are widely available, their quality is really excellent and you can count on their cheeses."

4. In a supermarket, shop for Parmesan in the deli department first

"There are three different tiers of quality: the Parmesan in the deli area, the Parmesan in the dairy case and the Parmesan in the aisle are each different," says Thorpe. "Shop in the deli department first, followed by the dairy case and, as a last resort, the aisle. Cheese is a perishable product and you want your cheese to require refrigeration. If you're buying one that is not refrigerated, there's a reason. A grated product that's shelf stable—that's the lowest product that you could be buying." In other words, make the cheese in a green can your last resort.

5. Buy grated cheese at a specialty foods shop

"A small store buying whole wheels of cheese will grate it on site and there will not be any cellulose added because it doesn't need to have a four-, six- or eight-week shelf life," says Thorpe. Also, if you ask, a small retailer will likely be accommodating and grate the cheese for you.

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China’s HNA Group Entity to Buy Ingram Micro

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Technology distributor Ingram Micro Inc. agreed to be acquired for about $6 billion by a unit of Chinese conglomerate HNA Group.

The deal is the latest in a string of investments by Chinese companies in U.S. tech companies, including deals involving U.S. makers of computer chips that have attracted scrutiny on national-security grounds.

Ingram, founded in 1979, is one of the largest distributors of personal computers and other technology products including printers, scanners, TVs, videogame consoles, video monitors and software. The Irvine, Calif., company recently branched into a range of higher-margin professional services.

HNA Group, which claims more than 180,000 employees, evolved from marine shipping into operations that include transportation, logistics, tourism, banking and insurance. Its logistics group includes companies such as Jinhai Heavy Industry Co.

Alain Monié , Ingram Micro's chief executive, said the deal would allow his company to accelerate investments in technology while becoming part of a larger organization with "complementary logistics capabilities and a strong presence in China."

Chinese companies have become more aggressive lately in pursuing deals amid concerns about China's weakening economic growth, investment bankers say.

In January, Zoomlion Heavy Industry Science & Technology Co. offered to buy U.S. crane-maker Terex Corp. for about $ 3.3 billion, an attempt to override an existing deal between Terex and Finland'sKonecranes Oyj.

In December, a group including China Resources Microelectronics Ltd. and Hua Capital Management Co. made an unsolicited bid for Fairchild Semiconductor International Inc., which already had a deal with U.S. chip maker ON Semiconductor Corp.

Fairchild on Tuesday rejected the Chinese proposal, stating a preference for the ON transaction. Fairchild cited, among other factors, risks that the deal would be rejected by U.S. authorities on national-security grounds.

Royal Philips NV in January terminated the planned $2.8 billion sale of most of its lighting components and automotive-lighting unit to a Chinese investor, after the U.S. Committee on Foreign Investment blocked the deal on national-security grounds.

Many technology companies use Ingram to run their supply chains. Ingram, a longtime wholesaler of computer components and peripherals, launched a third-party logistics unit in 2000.

The U.S. company has completed many acquisitions over the years, like a deal for e-commerce fulfillment company Shipwire. It launched a cloud-computing-services portfolio in 2007.

For the nine months ended Oct. 3, Ingram posted sales of $31.7 billion. In late October, it projected fourth-quarter sales of $12 billion to $12.6 billion.

Along with the deal, Ingram Micro is suspending its quarterly dividend payment and its share-repurchase program.  Ingram's management team will stay in place, including Mr. Monié , and the company will remain in Irvine, Calif.

The boards of both companies have approved the transaction, which is expected to close in the second half of the year.

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Company Update (NASDAQ:NVDA): NVIDIA Corporation Reports Financial Results for the Fourth Quarter and Fiscal …

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NVDANVIDIA Corporation (NASDAQ:NVDA) reported record revenue for the fourth quarter ended January 31, 2016, of $1.40 billion, up 12 percent from $1.25 billion a year earlier, and up 7 percent from $1.30 billion in the previous quarter.

Revenue for fiscal 2016 was a record $5.01 billion, up 7 percent from $4.68 billion a year earlier.

GAAP earnings per diluted share for the quarter were $0.35, inclusive of a restructuring charge of $0.04 per diluted share. Non-GAAP earnings per diluted share were $0.52, up 21 percent from $0.43 a year earlier and up 13 percent from $0.46 in the previous quarter.

GAAP earnings per diluted share for the full year were $1.08, inclusive of restructuring charges of $0.15 per diluted share. Non-GAAP earnings per diluted share were $1.67, up 18 percent from $1.42 a year earlier.

“We had another record quarter, capping a record year,” said Jen-Hsun Huang, co-founder and chief executive officer, NVIDIA. “Our strategy is to create specialized accelerated computing platforms for large growth markets that demand the 10x boost in performance we offer. Each platform leverages our focused investment in building the world’s most advanced GPU technology.

“NVIDIA is at the center of four exciting growth opportunities — PC gaming, VR, deep learning, and self-driving cars. We are especially excited about deep learning, a breakthrough in artificial intelligence algorithms that takes advantage of our GPU’s ability to process data simultaneously.

“Deep learning is a new computing model that teaches computers to find patterns and make predictions, extracting powerful insights from massive quantities of data. We are working with thousands of companies that are applying the power of deep learning in fields ranging from life sciences and financial services to the Internet of Things,” he said.

Capital Return
During the fourth quarter, NVIDIA paid $62 million in cash dividends and received 4.3 million shares in connection with an accelerated share repurchase agreement that it had entered into in the quarter. During fiscal 2016, the company returned to shareholders $800 million in quarterly cash dividends and share repurchases.

For fiscal 2017, NVIDIA intends to return approximately $1.0 billion to shareholders through ongoing quarterly cash dividends and share repurchases.

NVIDIA will pay its next quarterly cash dividend of $0.115 per share on March 23, 2016, to all shareholders of record on March 2, 2016.

Q4 FY2016 Summary

FY2016 Summary 

NVIDIA’s outlook for the first quarter of fiscal 2017 is as follows:

  • Revenue is expected to be $1.26 billion, plus or minus two percent.
  • GAAP and non-GAAP gross margins are expected to be 57.2 percent and 57.5 percent, respectively, plus or minus 50 basis points.
  • GAAP operating expenses are expected to be approximately $500 million. Non-GAAP operating expenses are expected to be approximately $445 million.
  • GAAP and non-GAAP tax rates for the first quarter of fiscal 2017 are both expected to be 19 percent, plus or minus one percent.
  • Capital expenditures are expected to be approximately $35 million to $45 million.

Fourth Quarter Fiscal 2016 Highlights
During the fourth quarter, NVIDIA achieved progress in each of its platforms.

Gaming:

  • Announced the GeForce® GTX VR Ready program — in conjunction with PC companies, notebook makers and add-in card providers – to help users discover systems that will provide great virtual reality experiences.
  • Released NVIDIA GameWorks™ VR, a software development kit for developers of VR software and headsets for gaming.

Professional Visualization:

Datacenter:

  • Introduced an end-to-end hyperscale datacenter deep learning platform — consisting of two accelerators, the NVIDIA Tesla® M40 and NVIDIA Tesla M4 — that lets web-services companies accelerate deep learning workloads.
  • Revealed new breakthroughs from leading web-services groups using NVIDIA GPUs:
    • Facebook is using the NVIDIA Tesla accelerated computing platform to power Big Sur, its next-generation computing system for machine learning applications.
    • Alibaba’s AliCloud cloud computing business is working with NVIDIA to promote China’s first GPU-accelerated, cloud-based, high performance computing platform.
    • IBM is adding support for NVIDIA GPU accelerators to its Watson cognitive computing platform.
    • Google is open-sourcing its TensorFlow deep-learning framework, which can be accelerated on GPUs.
    • Microsoft’s Computational Network Toolkit was integrated with Azure GPU Lab, enabling neural nets for speech recognition that are up to 10x faster than their predecessors.

Auto:

  • Launched NVIDIA DRIVE™ PX 2, a powerful engine for in-vehicle artificial intelligence.
  • Announced that Volvo will use DRIVE PX 2 to power a fleet of 100 Volvo XC90 SUVs that will appear on the road next year in the car manufacturer’s Drive Me autonomous-car pilot program. (Original Source)

Shares of Nvidia jumped nearly 8% in after-hours trading. NVDA has a 1-year high of $33.94 and a 1-year low of $19.09. The stock’s 50-day moving average is $28.60 and its 200-day moving average is $27.34.

On the ratings front, Nvidia has been the subject of a number of recent research reports. In a report released yesterday, Jefferies Co. analyst Mark Lipacis maintained a Buy rating on NVDA, with a price target of $38, which represents a potential upside of 37.4% from where the stock is currently trading. Separately, on January 20, JMP’s Alex Gauna reiterated a Buy rating on the stock and has a price target of $38.

According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Mark Lipacis and Alex Gauna have a total average return of 9.7% and -2.2% respectively. Lipacis has a success rate of 62.1% and is ranked #132 out of 3610 analysts, while Gauna has a success rate of 45.2% and is ranked #2657.

Overall, one research analyst has rated the stock with a Sell rating, one research analyst has assigned a Hold rating and 4 research analysts have given a Buy rating to the stock. When considering if perhaps the stock is under or overvalued, the average price target is $33.00 which is 19.3% above where the stock closed yesterday.

NVIDIA Corp is a visual computing company, connecting people through the powerful medium of computer graphics. The Company’s reporting segments include GPU and Tegra Processor.

 

 

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David Pogue’s Yahoo Web home gutted in cost-cutting purge

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Yahoo's once-iconic San Francisco billboard, pictured here in 2011.

In January of 2014, Yahoo CEO Marissa Mayer's keynote at CES in Las Vegas featured the recently launched Yahoo Tech, the company's technology news "digital magazine." She had hired former New York Times technology columnist David Pogue in October of 2013 as the site's architect and shining star and brought in a stable of other editorial talent to create digital magazines for other "verticals" (food, cars, music, and health among them) as part of her big turnaround strategy for the company. But the turnaround never materialized, and now the sites are being shut down or scaled down.

Dan Tynan, editor-in-chief at Yahoo Tech, revealed his departure in an e-mail to staff published by Politico today. "Well, that was not entirely unexpected," Tynan wrote in the memo. "Eight Hundred and Four days after taking the purple, my career as a Yahoo is over." Politico reported that Yahoo intended to shut down Yahoo Tech along with a flight of other sites.

However, a Yahoo spokesperson told Ars that Yahoo Tech was not being shut down—but several other brands are. And Tynan's departure is part of a broader layoff being announced today. "In early February Yahoo shared a plan for the future, with this new plan came some very difficult decisions and changes to our business," the spokesperson said. "As a result of these changes some jobs have been eliminated and those employees will be notified today. We thank those employees for their outstanding service to Yahoo and will treat these employees with the respect and fairness they deserve."

The purge is part of Mayer's effort to cut costs at Yahoo as the company attempts to develop a strategy to deal with what is both the company's biggest asset and something of a strategic curse—its massive windfall from an investment in the Chinese e-commerce website Alibaba. The company’s board and major investors are keen to cut away the Alibaba holdings from the rest of the company, which has, as Ars reported recently, failed to make money on its own.

After the US government indicated it would not approve a tax-free spinoff of the Alibaba holdings as a separate company, there was talk of spinning off or selling Yahoo's Internet holdings instead. But Mayer advocated for cost-cutting measures to preserve the Internet company. In an earnings call earlier this month, Yahoo executives announced that they were moving to "simplify" Yahoo's information business to focus on the parts of the company that have been most successful: Yahoo News, Yahoo Sports (the platform for Yahoo's growing fantasy sports business), Yahoo Finance, and Yahoo Lifestyle.

The shape of that simplification became apparent today. In a Tumblr post today (Tumblr being another one of Mayer's acquisitions to revive Yahoo), Yahoo global editor in chief Martha Nelson wrote, "To that end, today we will begin phasing out the following Digital Magazines: Yahoo Food, Yahoo Health, Yahoo Parenting, Yahoo Makers, Yahoo Travel, Yahoo Autos and Yahoo Real Estate."

"As we make these changes, we acknowledge the talent and dedication of an extraordinary group of journalists who brought new and newsworthy content to Yahoo," she continued. "While these Digital Magazines will no longer be published, you will continue to find the topics they covered, as well as style, celebrity, entertainment, politics, tech and much more across our network."

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Yahoo Is Shuttering Several Digital Magazines

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Yahoo today said it is shutting down a huge swath of its digital magazines as it rethinks its digital content strategy. A Yahoo spokesperson said Yahoo Tech was not affected by the changes.

According to a memo acquired by Capital New York, Yahoo Tech editor in chief Dan Tynan is leaving the company. Capital New York also reported that Yahoo is shuttering its tech vertical and moving some of its staff to Yahoo’s news vertical. It appears that some of Yahoo’s content verticals — launched at a high-profile CES event in 2014 — were not successful enough to sustain their presence within the greater Yahoo company.

“On our recent earnings call, Yahoo outlined out a plan to simplify our business and focus our effort on our four most successful content areas  – News, Sports, Finance and Lifestyle,” the company wrote in a blog post. “To that end, today we will begin phasing out the following Digital Magazines:  Yahoo Food, Yahoo Health, Yahoo Parenting, Yahoo Makers, Yahoo Travel, Yahoo Autos and Yahoo Real Estate.”

“In early February Yahoo shared a plan for the future, with this new plan came some very difficult decisions and changes to our business,” a Yahoo spokesperson told TechCrunch. “As a result of these changes some jobs have been eliminated and those employees will be notified today. We thank those employees for their outstanding service to Yahoo and will treat these employees with the respect and fairness they deserve.

Taken together, this isn’t really surprising. Yahoo’s core business has been floundering for the past several years — so much so that the company has signaled that it is potentially for sale. Throughout this time, Yahoo’s stock has plummeted as the company has shown no clear signal to shareholders that it is returning to being a growth company.

Marissa Mayer, a former Googler, took over Yahoo in 2012 — when there was a lot of hope that she could turn the company around as it transitioned to a primarily mobile-driven company centered around a portfolio of brands. The final goal was to return Yahoo, a powerhouse brand in the early days of the Internet, to being a household name.

And, according to everything that’s happened in the past few weeks — including reports of a potential sale — all this is a signal that the strategy in place has not worked. Mayer and Yahoo are in the hot seat, with the company being somewhat buoyed by its big stake in Chinese commerce giant Alibaba, a company worth $163 billion.

This could be part of a larger swath of layoffs happening within the company. During the company’s last earnings report, Yahoo confirmed that it would lay off about 15% of its staff as part of a greater restructuring. Yahoo’s core business has been struggling to the point that the company has also had to downsize in operations internationally. Yahoo also shut down Yahoo Screen, its home for original content like the show “Community,” in January this year.

Update: A Yahoo representative says it is not shutting down Yahoo Tech, but the company listed a slew of magazines that will be shut down. The story, which previously said that the company’s tech vertical would be shuttered, has been updated to reflect Yahoo’s comments.

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Flint mayor opposes governor’s plan on replacing pipes – Detroit Free Press

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“We’re going to get this done -- and done quickly -- by any and every means necessary,” Weaver said

Simmering tensions between city and state officials over how quickly to replace lead pipes in Flint flared Wednesday after officials announced different approaches to solving the city's drinking water crisis.

Flint Mayor Karen Weaver said she appreciates support from Michigan Gov. Rick Snyder to move quickly to replace Flint’s lead pipes and his recent budget proposal to partially fund the project. But the mayor said she would not agree to allow the governor’s engineering firm and contractors to do the work.

The governor announced his plan in a news release Tuesday night and is expected today to offer additional details.

Weaver said she welcomed the governor’s interest in working with the city to coordinate removal of the first 30 lead service lines, but noted that much more needs to be done by Snyder and others to secure full funding for her plan.

Weaver's administration intends to begin replacing lead pipes in Flint starting next week. She called Snyder to pressure the state Legislature to move immediately to approve funding for the first phase of her $55 million Fast Start lead pipe replacement plan.

“We’re going to get this done — and done quickly — by any and every means necessary,” Weaver said in a statement.  “The people of my city have simply run out of patience, and I have a moral obligation to act.”

Weaver said in a news release that she is working with water infrastructure experts from the Lansing Board of Water and Light to train local Flint workers on lead pipe removal at a vacant property in Flint owned by the Genesee County Land Bank. The training exercise is set to begin next week, she said. House-by-house lead service line removal and replacement operations targeting high-risk households across the city will begin afterward.

On Tuesday, Snyder said the state had signed an agreement with Flint-based engineering firm Rowe to update a study of the water system to identify and assess the city's water lines made from lead. The work would also instruct the firm to help test 400 sentinel sites for lead in drinking water, as well as begin to remove lead lines at 30 sites as a pilot program, according to Dave Murray, the governor's spokesman.

Flint Water Crisis

But the mayor appears to be charting her own course. Late last week, she ousted her police chief, fire chief and city administrator.

Elected last year and recently granted additional powers by a financial control board set up by the state, Weaver said Wednesday that she is pleased that her Fast Start plan has been endorsed by Virginia Tech water expert Dr. Marc Edwards, who is hailed for his role in uncovering the lead levels in Flint’s water supply and has testified before Congress on lead contamination in municipal water systems.

“I will not accept anything less than full removal of all lead pipes from our water system,” Weaver said in a statement. “I continue to hear from Lansing that the people of Flint should wait to see if pipes can be ‘coated.’ I call on Gov. Snyder to end that discussion, and to commit fully to getting the lead out of Flint.”

During the training exercise next week, the Lansing public works department will demonstrate its technology for removing and replacing lead pipes with new copper pipes in half the time and at half the cost of traditional methods, according to the mayor. The Lansing public water and electric utility has refined its technique by removing more than 13,500 lead pipes in Michigan’s capital city over the last 12 years, according to city officials.

Weaver said she is also working closely with the White House and Flint’s representatives in the Michigan Legislature and U.S. Congress to secure full funding for her lead pipe removal project, as well as long-term funding to fully repair the city’s devastated water-distribution system. She called on state and federal lawmakers to move quickly to approve emergency funding for her project while long-term repairs to Flint’s water-distribution system are evaluated.

“Lansing and Washington need to understand that the first and most critical priority is an emergency public health intervention to start getting rid of these pipes immediately,” Weaver said. “Then we can figure out exactly what it will cost over the long term to fix our broken water-distribution system. If we have to replace major components or even the whole system, it will cost an enormous amount of money. Everyone needs to be prepared for that possibility. Let’s start a serious conversation about where that money is going to come from while we get to work removing the pipes.”

If funding to ramp up her Fast Start project is not secured quickly from the state or federal government, Weaver said she may have to take her case directly to the national and international audience.

“If the state and federal governments won’t pay to restore safe drinking water and dignity to the people of my city, I may have to go on national TV and crowdsource the funding on the Internet,” Weaver said.

Flint's switch to using the Flint River as its water supply in April 2014 was followed almost immediately by complaints from residents about discolored, pungent water that had caused a number of ailments. Local and state officials insisted for months the water was safe to drink but reversed course after independent testing discovered unsafe lead levels throughout the system believed to be caused by leaching from lead piping.

Flint is now under a state of emergency because of elevated lead levels that continue to be found in drinking water supplied to city residents. Officials in the Snyder Administration have said that they hope to restore drinking water to the city in stages, with a full assessment of the system completed by mid-April.

Of the city's 56,000 land parcels, about 5,200 have lead service lines, officials have said. But roughly 25,000 parcels have piping of an unknown origin. Determining how much of that piping is lead is a crucial step for any remediation.

The governor's team has advocated a more deliberate approach to assess the condition of the entire water system in Flint first, in order to make sure any pipe removal does not increase the chances of additional lead leaching into the drinking water.

Snyder sent a supplemental budget request to the Legislature, including $25 million to be used for water infrastructure, like pipe replacement in Flint. The governor said Tuesday that other resources could be tapped for additional funds to replace pipes.

A key member of that team is retired National Guard Brig. Gen. Michael McDaniel, who has said he thinks replacing all of the city's lead pipes could be done within a year by 32 crews. McDaniel — who is assisting in coordinating activities between the city, the Lansing Board of Water and Light, state and federal agencies, and other stakeholders — said the project could begin within the next month. But McDaniel reiterated the plan is still in its early phases and much of it is based on "assumptions."

“Flint Mayor Karen Weaver wants this work to be completed as quickly as possible to protect Flint residents,” McDaniel said in a statement Tuesday. “We’ve been working in partnership to identify the areas that need to be addressed immediately and remove lead pipes, bringing peace of mind to Flint families and make sure this never happens again.”

The Flint firm hired by the state is no stranger to the city's water system.

In July 2011, the engineering firm Rowe completed a report titled "Analysis of the Flint River as a Permanent Water Supply for the City of Flint," for then-Mayor Dayne Walling. The report noted that treating river water on a daily basis was going to be challenging and more expensive than treating lake water, but concluded it could be done if improvements to Flint's water treatment plant were made.

Contact Matthew Dolan: 313-223-4743, msdolan@freepress.com or on Twitter @matthewsdolan

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