Monday, October 24, 2016

Crude oil slides below $50 per barrel

Crude oil slides below $50 per barrel

iraq oilA worker walks at the Nahr Bin Umar field, north of Basra, southeast of Baghdad, November 16, 2014. REUTERS/Essam Al-Sudani
SINGAPORE (Reuters) - Oil prices fell on Monday as Iraq said it wanted to be exempt from any deal by producer cartel OPEC to cut production to prop up the market, and as U.S. drillers stepped up work.
At 12:33 p.m. ET, US West Texas Intermediate (WTI) crude was down $1.12, or 2.2%, at $49.73.
Brent, the international benchmark for crude, was down $1.16, or 2.3%, at $50.62 a barrel.
Traders said the price falls were a result of comments from Iraq, which said it wanted to be exempt from a production cut by the Organization of the Petroleum Exporting Countries (OPEC) that the group plans to decide at its Nov. 30 meeting.
OPEC plans to reduce production to a range of 32.50 million to 33.0 million barrels per day, down from 33.39 million bpd in September.
That would be harder to achieve if OPEC-member Iraq, which is the group's second-biggest producer after Saudi Arabia, didn't participate.
Iraq 's deputy oil minister Fayadh al-Nema said on Sunday that the country's oil production stood at 4.774 million bpd, with exports standing at 3.87 million bpd.
"We are not going back in any way, not by OPEC not by anybody else," said Falah al-Amri, the head of Iraq's State Oil Marketing Company.
"Comments by Iraq over the weekend that it may not join the OPEC agreement to cut production could see oil prices come under pressure in today’s session," ANZ bank said on Monday.
Also pressuring the market, oil services firm Baker Hughes reported that U.S. oil rigs rose by 11 this week, the first double-digit growth since August. [RIG/U]
On the demand side, Japan's crude imports fell 4.6 percent in September from the same month a year earlier, to 3.27 million bpd, the Ministry of Finance said on Monday.
Despite the doubts over OPEC's ability to cut output and weak consumption in the world's biggest importer, analysts said that oil markets, which have been dogged by two years of oversupply, might be rebalancing in terms of production and consumption.
"Statistical balances suggest that conditions have improved markedly. We suspect that the market is moving more quickly into balance than is generally recognized," Barclays bank said in a note to clients on Sunday.
"The market moved into a small deficit in Q3, will remain so in Q4 and then the deficit will expand significantly in 2017," it added.
(Reporting by Henning Gloystein; Editing by Joseph Radford)
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Read the original article on Reuters. Copyright 2016. Follow Reuters on Twitter.

Japan's trade balance swung back to the black in September

Japan's trade balance swung back to the black in September

Photo by Kevin Mazur/Getty Images
Japan’s trade balance swung back to surplus in September, thanks in part to better performance from exports.
According to Japan’s Ministry of Finance (MOF), a trade surplus of 498.3 billion yen was recorded, higher than the 341.8 billion figure expected and a sharp turnaround from the 18.7 billion yen deficit previously reported in August.
The larger-than-expected surplus was helped in part by an improvement in exports, although they still remained down on the levels of a year ago in yen-denominated terms.
From September 2015, the value of exports fell by 6.9%, smaller than the 9.6% drop seen in August and forecasts for a decline of 10.4%.
It was the smallest year-on-year fall since March.
Despite the improvement registered in September, it was still the 12th month in a row that an annual decline had been reported, something that has been impacted by the twin headwinds of tepid global demand and significant strengthening in the Japanese yen.
This year alone the yen has risen by close to 16% against the US dollar.
The MOF reports that the value of exports to the US fell by 8.7% over the year, mirroring a similar decline to Asia which slid by 8.4%.
The value of exports to China — Japan’s largest trade partner — fell by a larger 10.6%, while those to the European Union rose by 0.3%.
On the other side of the trade ledger, the value of imports tumbled by 16.3%, although this too was an improvement on the 17.3% drop seen in August. It also topped forecasts for a decline of 16.6%.
Still, like the export figure, the value of imports has now logged a year-on-year decline in each of the past 21 months, dating back to December 2014.
That’s something that’s expected to continue, according to Marcel Thieliant and Mark Williams, economists at Capital Economics.
Writing before the release of today’s data, the pair said that export and import growth rates should remain “deeply in the red as the stronger exchange rate has reduced the yen-value of shipments”, according to Bloomberg.
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Rockwell Collins is buying B/E Aerospace for $6.4 billion

Rockwell Collins is buying B/E Aerospace for $6.4 billion

Rockwell CollinsEmployees of Rockwell Collins, Inc. gathered at an airport hangar before a rally in Cedar Rapids, Iowa. AP/ Ryan J. Foley
(Reuters) - After two years of looking to expand, aircraft component maker Rockwell Collins Inc has struck a deal to buy aircraft interior maker B/E Aerospace Inc for $62 a share in cash and stock, the companies said on Sunday.
The acquisition, valued at $6.4 billion plus the assumption of $1.9 billion in debt, expands the range of products Rockwell Collins supplies to major commercial and business aircraft and broadens its customer base internationally.
Rockwell on Sunday also reported a 14 percent increase in profit to $1.58 a share in its fiscal fourth quarter ended Sept. 30, on a 4 percent rise in sales.
The acquisition, which is expected to be completed next spring, allows both companies to sell to each other's customers and to deploy Rockwell's capability with onboard connectivity to make internet-enabled seats, galleys, lavatories and other cabin systems that B/E Aerospace provides.
"B/E is very strong in relationships with airlines," Rockwell Chief Executive Officer Kelly Ortberg said in an interview. "We're stronger with aircraft makers as well as business aviation operators and the military. We'll be able to sell our respective products into a much broader market base than either of us could do independently."
B/E Aerospace plans to use Rockwell's dealer network and relationships with business jet owners, for example, to know when jets are coming in for avionics upgrades.
"Having that information and time to market directly to the owners of the aircraft is a tremendous opportunity that we're looking to take advantage of," said Amin Khoury, B/E Aerospace founder and chairman. "It's not something we can do on our own."
The combination is expected to produce cost savings of about $160 million, with 90 percent captured in the first full year of the acquisition, and provide a double-digit percentage boost to per-share earnings in the first full year, the companies said. They also anticipate it generating more than $6 billion in free cash flow over five years.
The cost savings come from eliminating public company administration at B/E Aerospace, greater buying power with suppliers, consolidating information technology system and using low-cost factory labor across the combined company, Ortberg said.

 LITTLE PRODUCT OVERLAP

Rockwell agreed to pay $34.10 a share in cash and $27.90 in shares of Rockwell Collins stock, a 22.5 percent premium to B/E Aerospace's closing price on Friday.
The purchase will curb Rockwell's appetite for big deals for about three years, but the company will still be looking for smaller acquisitions while paying down debt, Ortberg said.
The companies have little product overlap. Rockwell is best known for avionics, flight control systems and cabin connectivity, while B/E Aerospace is a major provider of aircraft seats, galleys, lighting and other systems.
Rockwell, based in Cedar Rapids, Iowa, has market value of about $11 billion, more than twice the size of Wellington, Florida-based B/E Aerospace, which has a market value of $5.1 billion. The offer represents a 22.5 percent premium to B/E Aerospace's closing price on Friday.
B/E Aerospace brings more aftermarket and aircraft retrofit business to Rockwell, which is mainly focused on new equipment, and also adds exposure to twin-aisle aircraft, said Richard Aboulafia, an aerospace analyst at the Teal Group.
Combined sales will be about evenly split between the U.S. domestic market and international markets, Ortberg said.
Pricing pressures from Boeing Co and Airbus are one driver of such a deal. "But it's also a pretty clear indicator that the market has peaked in terms of deliveries and orders," Aboulafia said of new aircraft sales. "In this environment, consolidation is inevitable as a cost-control move."
Ortberg said that while cost was a factor, "It's really the transition to the digital airplane that's creating the perfect timing to bring these two entities together."
Rockwell's board set up a committee two years ago to examine whether to grow by expanding into new markets or partnering to use existing sales channels. "We thought that (latter strategy) was a much better approach," he said. (Reporting by Alwyn Scott in New York; Additional reporting by Jilian Mincer in New York and Mike Stone in Washington; Editing by Bill Trott and Peter Cooney)
Read the original article on Reuters. Copyright 2016. Follow Reuters on Twitter.

Germany is driving the European economy again

Germany is driving the European economy again

Merkel beerREUTERS/Michael Dalder
Germany is once again the driving force of the European economy, helping boost composite growth across the continent to a 10-month high, according to the latest PMI data released by Markit on Monday morning.
Markit's flash composite PMI figure for the eurozone — a first measure of growth in the continent-wide economy — came in at 53.7 in October.
That was substantially up from September's final reading of 52.6 in the composite index. Flash manufacturing and services data also came in well above September's figures.
The purchasing managers index (PMI) figures from Markit are given as a number between 0 and 100. Anything above 50 signals growth, while anything below means a contraction in activity — so the higher the better.
Here is the full scoreboard of PMIs:
  • Services PMI — 53.5 (52.2 in September)
  • Manufacturing PMI — 53.3 (52.6 in September)
  • Composite PMI —  53.7 (52.6 in September)
Markit also provided breakout readings for the eurozone's two biggest individual economies, Germany and France. Take a look at the numbers provided by Markit:
  • Germany composite — 55.1, well above September's 52.8 reading.
  • France composite — 52.2, down from September's final reading of 52.7.
Commenting on the results, Oliver Kolodseike, an economist at IHS Markit said:
"The German economy has entered the fast lane again at the start of the fourth quarter, with output growth accelerating from September’s recent low. The improvement in the PMI in October lifts hope that the weaker expansions we have seen in the past two months were just a temporary soft patch, rather than the beginning of a serious slowdown."
Adding to these comments, Chris Williamson, IHS Markit's chief business economist said (emphasis ours):
"The eurozone economy showed renewed signs of life at the start of the fourth quarter, enjoying its strongest expansion so far this year with the promise of more to come. With backlogs of work accumulating at the fastest rate for over five years, business activity growth and hiring look set to accelerate further as we head towards the end of the year.
"October’s PMI is consistent with a quarterly GDP growth rate of 0.4%, led by a 0.5% pace of expansion in Germany."
Here is the single currency area-wide chart:
October flash pmi europeIHS Markit

Sunday, October 23, 2016

The Steve Jobs guide to manipulating people and getting what you want

The Steve Jobs guide to manipulating people and getting what you want

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Steve Jobs Illustration Portrait Apple new black and whiteMike Nudelman/Business Insider
Steve Jobs died five years ago today, at the age of 56.
Jobs launched two of the most valuable and creative companies in modern times with Apple and Pixar — but he didn't reach those heights by following the rules all the time.
Jobs faced many obstacles to get Apple and Pixar off the ground. But he had a unique way of crafting his own reality, a “distortion field” he'd use to persuade people that his personal beliefs were actually facts, which is how he pushed his companies forward.
He also used a blend of manipulative tactics to ensure his victories, particularly in boardroom meetings with some of the most powerful company executives in the world.
Many consider Jobs a genius, and everyone can learn a thing or two from his tactics.
Here, we teach you how to get what you want — whether that’s in your career, or in your life in general — by using examples from Jobs’ life. Most of these stories were taken from Walter Isaacson's biography of Steve Jobs, which you can buy here.

View As: One Page Slides


Pitch with passion. People can be influenced by strong displays of emotion.

Pitch with passion. People can be influenced by strong displays of emotion.
Justin Sullivan/Getty Images
Pitching was a key part of Jobs’ repertoire, and it should be part of yours, too. The process of selling — yourself, or a product — is the key to getting others to buy into your ideas.
Before Apple launched iTunes in 2001, Jobs met with dozens of musicians in the hopes of corralling record labels into going along with the iTunes plan. One of the people Jobs pitched to was prominent trumpet player Wynton Marsalis.
Marsalis said Jobs talked for two hours straight. 
“He was a man possessed,” he said. “After awhile, I started looking at him and not the computer, because I was so fascinated with his passion.”
He also pitched ideas to his ad team with a similar passion to “ensure that almost every ad they produced was infused with his emotion.” The resulting commercials, like the "1984" ad and theiPod silhouette ads, helped Apple become much more than just a computer company.

Being brutally honest will help you build a strong following.

Being brutally honest will help you build a strong following.
Justin Sullivan / Getty
When Steve Jobs returned to Apple for his second stint in 1997, he immediately got to work trying to invigorate the company he started, which was suffering from too many products and too little direction. Jobs summoned Apple’s top employees to the auditorium, and, wearing shorts and sneakers, got up on stage and asked everyone to tell him “what’s wrong with this place.”
After some murmurings and bland responses, Jobs cut everyone off. “It’s the products! So what’s wrong with the products?” Again, more murmurs. Jobs shouted, “The products suck! There’s no sex in them anymore!”
People would buy into Jobs' ideas because he was always earnest about what he said. As he later told his biographer (emphasis ours): “I don’t think I run roughshod over people, but if something sucks, I tell people to their face. It’s my job to be honest. I know what I’m talking about, and I usually turn out to be right. That’s the culture I tried to create. We are brutally honest with each other, and anyone can tell me they think I am full of s--t and I can tell them the same... That’s the ante for being in the room: You’ve got to be able to be super honest."

Work hard, and others will respect you. Respect is a crucial first step to getting what you want.

Work hard, and others will respect you. Respect is a crucial first step to getting what you want.
AP Images
Steve Jobs had an incredible work ethic. Jobs told his biographer that when he returned to Apple in 1996, he worked from 7 a.m. to 9 p.m. every day, since he was still also leading Pixar's operations. He worked tirelessly, and suffered from kidney stones. But he insisted on motivating both companies by consistently showing up and pushing people to make the best products possible, and they respected him for it.

Disarm people with seduction and flattery.

Whether they’re working for you, or you’re working for them, people continually seek approval for their actions — so they respond very well to affection.
And if you keep giving it to them, they’ll eventually crave it from you. From Isaacson’s biography (emphasis ours):
“Jobs could seduce and charm people at will, and he liked to do so. People such as (former Apple CEOs) Amelio and Sculley allowed themselves to believe that because Jobs was charming them, it meant that he liked and respected them. It was an impression that he sometimes fostered by dishing out insincere flattery to those hungry for it. But Jobs could be charming to people he hated just as easily as he could be insulting to people he liked.

Claim all the good ideas are yours — and if you’re reversing your position, get behind the new idea with full force. Memories of the past can be easily manipulated.

Steve Jobs wasn’t right all the time, but he was a master at convincing people he was. So how did he do it? He stood firmly in one position, and if your position was actually better than his, he wouldn’t just acknowledge it: He’d adopt your position as his own, which would throw you off balance.
Bud Tribble, a former Mac engineer, had this to say in Jobs’ biography (emphasis ours):
“Just because he tells you something that is awful or great, it doesn’t necessarily mean he’ll feel that way tomorrow. If you tell him a new idea, he’ll usually tell you that he thinks it’s stupid. But then, if he actually likes it, exactly one week later, he’ll come back to you and propose your idea to you, as if he thought of it.
An example: When Apple decided to open retail stores for its products, Jobs’ retail SVP Ron Johnson came up with the idea of a “Genius Bar,” which would be staffed “with the smartest Mac people.” At first, Jobs called the idea crazy. “You can’t call them geniuses. They’re geeks,” he said. “They don’t have the people skills to deliver on something called the genius bar.” The next day, Apple’s general counsel was told to trademark the name “Genius Bar.”

Make decisions quickly and definitively. You can (usually) always change things later.

When it came to making new products, Apple rarely considered studies, surveys, and research. It was also rare for a major decision to take several months; Jobs tended to get bored easily and was quick to go with his gut. 
In the case of the first iMacs, Jobs immediately decided Apple would release the new computers in a rainbow of candy colors.
Jony Ive, Apple’s chief of design, said “in most places that decision would have taken months. Steve did it in a half hour.
On the same computer, iMac engineer Jon Rubinstein tried to argue that the iMac should come with a CD tray; but Jobs detested CD trays and he really wanted a high-end slot drive. On that particular decision, Jobs was wrong — burning music could only be accomplished on CD trays, and as that trend took off, the first round of iMacs were left behind. But since Jobs was able to make quick decisions, the first iMacs shipped on time, and the second-generation desktops included the CD drive that could rip and burn music, which was the necessary peg Apple needed to launch iTunes and the iPod.

Don’t wait to fix problems. Fix them now.

Don’t wait to fix problems. Fix them now.
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When Jobs was working with Pixar on “Toy Story,” which would be the first feature-length film created entirely with 3D animation, the first iteration of Woody the cowboy had gradually turned into a jerk, mainly through script edits handed down by Disney. But Jobs refused to let Disney, one of the biggest companies in the world, ruin Pixar’s original story.
“If something isn’t right, you can’t just ignore it and say you’ll fix it later,” Jobs said. “That’s what other companies do.”
Jobs insisted that Disney give the reins back to Pixar, and in the end, Woody became a very likeable and thee-dimensional character (no pun intended) in "Toy Story," which went on to be a monumental success.
Another example: When Jobs was designing the first Apple Store, his retail VP Ron Johnson woke up in the middle of a night before a big meeting with an excruciating thought: They had organized the stores completely wrong. Apple had previously organized the stores by the types of products being sold, but Johnson realized Apple needed to organize the store based around what people might want to do with those products. 
Johnson told Jobs his epiphany the next morning, and after a brief eruption from Jobs, the Apple CEO told all who attended that day’s meeting that Johson was absolutely right, and they needed to redo the entire layout, which delayed the planned rollout by 3-4 months. “We’ve only got one chance to get it right,” Jobs said.

There are two ways to deal with problematic people: Either address them head on…

There are two ways to deal with problematic people: Either address them head on…
REUTERS/Robert Galbraith
Jobs often saw the world through binary terms: “A person was either a hero or a bozo, a product was either amazing or s--t.” He wanted Apple to be a company of “A players,” which meant regularly cutting B and C players, or pushing them with great fervor — bullying them, to some extent — to become A players.
Before Apple launched the Macintosh, one of the engineers charged with building a mouse that could easily move the cursor in every direction — not just up/down and left/right — told Bill Atkinson, one of the early Apple employees who developed graphics for the Mac, that there was “no way to build such a mouse commercially.” After Jobs heard about the complaint over dinner, Atkinson arrived at work the next day only to discover Jobs had fired the engineer. The first words said by the engineer’s replacement were, “I can build the mouse.” 

...Or "follow the line of least involvement" and ignore them entirely.

Jobs did not like overly complex issues, especially if they required him to make accommodations. So on occasion, he would become totally aloof. As Jobs’ biographer Walter Isaacson said, “Jobs would go silent and ignore situations that made him uncomfortable.”
Jobs used this tactic, which was extremely effective, on several occasions: When Apple’s then-CEO Gil Amelio asked what role he wanted to play in the company after he rejoined via the NeXT acquisition — Jobs couldn’t say “I want your job,” after all — and when he wasn’t sure how to deal with his estranged daughter Lisa.
Chrisann Brennan, the mother of Jobs’ daughter Lisa, described this tactic to Jobs biographer (again, emphasis ours):
“There was a community of people who wanted to preserve his Woodside house due to its historical value, but Steve wanted to tear it down and build a home with an orchard. Steve let that house fall into so much disrepair and decay over a number of years that there was no way to save it. The strategy he used to get what he wanted was to simply follow the line of least involvement and resistance. So by his doing nothing on the house, and maybe even leaving the windows open for years, the house fell apart. Brilliant, no?"

Strike when the iron’s hot, and strike hard.

Success usually tricks people into thinking they can stop working; Jobs had a much different point of view. When his big bet on Pixar paid off, and the company’s first movie “Toy Story” was a huge success with critics and the box office, Jobs decided to take the company public. 
Investment bankers said it couldn’t happen, especially after Pixar had hemorrhaged money for five years prior. Even John Lasseter, Pixar’s creative head, told Jobs he should wait until after Pixar’s second film. But Jobs insisted.
“Steve overruled me and said we needed the cash so we could put up half the money for our films and renegotiate the Disney deal,” Lasseter told Jobs’ biographer.
And that’s exactly what happened. Pixar held its IPO one week after “Toy Story” opened in theaters, and it was a wild success: It exceeded Netscape as the biggest IPO of 1995, and more importantly, it meant Pixar no longer needed to be dependent on Disney to finance its movies. Suddenly, Disney, with its flailing animation department, needed Pixar, instead of the other way around. The Mickey Mouse company would later realize this fact, and pay $7.4 billion to acquire Pixar — effectively making Jobs the biggest shareholder of Disney, keeping Pixar independent, and also saving Disney's once-great animation department in the process.

When you have leverage, USE IT.

It was huge news when Steve Jobs returned to Apple, the company he helped start but had since lost its “magic.” Jobs insisted he was only an “advisor” to Apple at the time, but those in and around Apple knew he was really in control. Apple's then-CEO Gil Amelio depended on Jobs for the company’s vision moving forward.
So, on his first Thursday back at Apple, Jobs used this newfound leverage to his advantage: He called a board meeting and demanded Apple reprice its stock options by lowering the exercise price to make them valuable again. It was legal at the time, but not considered good business, at least ethically. But even after the board of directors balked at the idea, saying a study would take at least two months, Jobs fired back.
“You brought me here to fix this thing, and people are the key… Guys, if you don’t want to do this, I’m not coming back on Monday. Because I’ve got thousands of key decisions to make that are far more difficult than this, and if you can’t throw your support behind this kind of decision, I will fail. So if you can’t do this, I'm out of here, and you can blame it on me, you can say, ‘Steve wasn’t up for the job.’”
The board gave Jobs what he wanted. But Jobs didn’t stop there: The next day, he demanded all the board members resign, “or else I’m going to resign and not come back on Monday.” He said all the board members had to go, except for Ed Woolard, and that’s exactly what happened. By being able to choose his own board members — and act independently from them — he had the power to control Apple's next projects, which made it possible for gadgets like the iPod to exist.

Demand perfection, and don’t settle for anything less.

Demand perfection, and don’t settle for anything less.
Alessia Pierdomenico / Reuters
Jobs detested anyone who was ready to make compromises to get a product out on time and on budget. He found adequacy to be “morally appalling.” Jobs' goal for Apple was never to simply beat competitors, or even to make money: it was to make the greatest product possible, “or even a little greater.”
He was demanding about everything:
• When the Macintosh booted up too slowly, he badgered the engineer responsible, equating the situation to a matter of life or death.
• He worked with countless artists and advertising agencies to make sure Apple's ads had the right feel, and that the imagery and the audio synced up perfectly.
• Of the iPod engineers, he demanded the ability to access any function on the music player with three button presses, and no more.
• He insisted the production process for all Apple computers be shaved down from four months to two. 
Each one of these individual decisions could be considered nitpicks, but when put all together, Apple created a cult-like following unlike any other. Unlike other tech companies that had come and gone, customers and loyal fans felt like Apple put their interests first, and they were, as a result, willing to pay high prices for those products.
“Steve created the only lifestyle brand in the tech industry,” Oracle cofounder Larry Ellison told Jobs’ biographer. “There are cars people are proud to have — Porsche, Ferrari, Prius — because what I drive says something about me. People feel the same way about an Apple product.”

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