IT'S OFFICIAL: EUROPE FILES ANTITRUST COMPLAINT AGAINST GOOGLE

• Rob Price
 
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• 3h
• 1,211
 
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Axel Schmidt/Getty ImagesEric Schmidt, chairman of Google parent company Alphabet.

Alphabet-C  $753.93

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Disclaimer

The European Commission has filed a formal antitrust complaint against Google over its mobile operating system Android.

The press release announcing the complaint isavailable here. Here's a fact sheet.

The Commission is accusing Google of abusing its dominant position to promote its mobile apps over those of its competitors.

"Google [has] pursued an overall strategy on mobile to protect and expand its dominant position," European competition chief Margarethe Vestager said in a press conference on Wednesday morning.

"Google has abused its dominant position." This has, Vestager alleges, "harmed consumers by stifling competition and harming innovation."

Via the press release, the Commission's three key complaints with Android are that Google is:

• "requiring manufacturers to pre-install Google Search and Google's Chrome browser and requiring them to set Google Search as default search service on their devices, as a condition to license certain Google proprietary apps;
• "preventing manufacturers from selling smart mobile devices running on competing operating systems based on the Android open source code;
• "giving financial incentives to manufacturers and mobile network operators on condition that they exclusively pre-install Google Search on their devices."

In an emailed statement, Google SVP and general counsel Kent Walker said: "Android has helped foster a remarkable -- and, importantly, sustainable -- ecosystem, based on open-source software and open innovation. We look forward to working with the European Commission to demonstrate that Android is good for competition and good for consumers."

In a blog post published Wednesday shortly after the Commission's complaint was made public, Walker wrote: "We also believe that our business model keeps manufacturers’ costs low and their flexibility high, while giving consumers unprecedented control of their mobile devices."

The European Commission launched its probe in April 2015. If found guilty, Google could be fined $7.4 billion (£5.2 billion, or €6.5 billion) or 10% of 2015 revenues, Reuters previously reported. 

Google has 12 weeks — three months — to formally respond.

European Commission

Vestager said on Monday the focus is on contracts that have smartphones with Google apps pre-installed: "Our concern is that by requiring phone makers and operators to pre-load a set of Google apps, rather than letting them decide for themselves which apps to load, Google might have cut off one of the main ways that new apps can reach customers."

The Commission has also previously charged Google over search results, which — the Commission alleges — favours Google's shopping service over its competitor. 

Google lets smartphone manufacturers use its Android operating system for free, and makes it money by monetising its apps (like YouTube, Google Maps, Gmail, Google Search, and so on) that come bundled with it, typically via adverts. If found guilty of anti-competitive practices, Google could be forced to change how its app distribution strategy — damaging its revenue streams.

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FINANCE

The Financial Threats That Machines Can See

8

APRIL 18, 2016 7:00 AM EST

By

Mark Buchanan

Humans have a terrible track record of predicting financial crises in time to fend them off. Some computer scientists think that algorithms might help.

Given the right information, some crises can be foreseen. In “The Big Short,” Michael Lewis told the story of the scattered few who saw the imbalance growing in the mortgage market and profited as a result. Over decades, academic research has shown that many banking crises come with early warning signals, such as rapidly increasing debt and leverage. Yet economists and policy makers routinely miss such danger signs, in part because the financial world is so complex.

So can computers see what humans cannot? In a new study, computer scientists Samuel Rönnqvist and Peter Sarlin explore what can be achieved with so-called Deep Learning algorithms -- similar to those that Google used to beat the world Go champion or to play 1980s Atari video games at expert human level. Such algorithms work by studying data and learning to recognize patterns. Unleashed on a database of 6.6 million financial news articles over the period 2007 to 2014, the researchers’ algorithm accurately identified episodes of banking distress, and also provided a text extract describing the financial reality that most likely led to each one. It even recognized distress at banks that fell outside the group it initially studied, suggesting that it really captured meaningful and perhaps extremely subtle patterns.

This isn’t quite prediction, because the algorithm was working with historical data. But Rönnqvist and Sarlin, based on further work, believe such algorithms will soon be able to measure market exuberance or overheating in real time by focusing on the emotional shades of the words and phrases in news stories or online discussions. That really could be predictive.

Sarlin and colleague Markus Holopainen, for example, have already examined how algorithms do at spotting the conditions that make crises more likely, as opposed to recognizing actual distress at banks. Using macroeconomic data for 15 European nations since the 1980s, the machine-learning methods predicted banking crises more accurately -- and, importantly, with fewer false warnings -- than did any of a wide range of more commonly used statistical methods.

How is this going to change finance and economics? The first thing we’ll likely see is tools to cope with the overwhelming complexity of the financial world, by focusing human brains on the things that matter most. This could help traders to find profit opportunities and policy makers to spot systemic risks. Human understanding of how economies work, after all, isn’t too impressive: Economists today don’t even agree on whether low interest rates tend to make inflation go up or down. Machine learning methods might bypass dubious theory and learn straight from the data, finding ways to identify vulnerabilities that, with the right trigger, could lead to a crisis.

In the battle between Google’s AlphaGo and Go champion Lee Se-dol, the algorithm came up with moves that seemed beyond human understanding. Future algorithms might do the same with financial and economic data, pointing to warning signs that no human could recognize.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

To contact the author of this story:
Mark Buchanan at buchanan.mark@gmail.com

To contact the editor responsible for this story:
Mark Whitehouse at mwhitehouse1@bloomberg.net

Canada plans to experiment with giving people unconditional free money

• Chris Weller
 

• Mar. 4, 2016, 2:28 PM
• 413,832
 
• 93

Blair Gable/ReutersCanadian Prime Minister Justin Trudeau.

Finland and the Netherlandshave already shown their interest in giving people a regular monthly allowance regardless of working status, and now Ontario, Canada is onboard.

Ontario's government announcedin February that a pilot program will be coming to the Canadian province sometime later this year.

The premise: send people monthly checks to cover living expenses such as food, transportation, clothing, and utilities — no questions asked.

It's a radical idea, and one that has been around since the 1960s. It's called "basic income." In the decades since it was first proposed, various researchers and government officials have given basic income experiments a try, to mixed results.

Folks at the Basic Income Canada Network, the national organization promoting basic income, have high hopes.

"We need it rolled out across Canada, and Quebec, too, is in the game," said chair of BICN, Sheila Regehr, in a statement. "So there's no reason why people and governments in other parts of this country need sit on the sidelines – it's time for us all to get to work."

Ontario officials haven't decided when or where exactly it'll roll out the program, nor how much each person will receive. When it does, the money will come from a portion ofOntario's budget set aside for the experiment.

In Finland, a small social democratic country, people will receive an additional 800 euros per month, or just shy of $900. In various cities throughout the Netherlands, people will receive an extra $1,000.

Ontario at least doesn't seem to be spinning its wheels. Canada's federal minister of families, children, and social development, Jean-Yves Duclos, formally endorsed the experiment early last month, saying that basic income merits a genuine discussion.

"There are many different types of guaranteed minimum income," Duclos told The Globe and Mail. "I'm personally pleased that people are interested in the idea."

In theory, basic income should work.

While one kneejerk reaction is to argue that free money creates a lazy working class, research suggests the opposite is true. Supported by the financial safety net, people in one 2013 study actually worked 17% longer hours and received 38% higher earnings when basic income was given a shot.

In a country like Canada, where healthcare and retirement savings are already highly socialized, it isn't farfetched to think a steady income paid for by the taxpayers could roll out smoothly.

Correction: An earlier version of this post misattributed the pilot program to the Basic Income Canada Network, not the province of Ontario.

SEE ALSO: Finland is considering a radical plan to give everybody free money

Chinese developers want to build a city covered in trees and shrubs from the ground up

• Chris Weller
 

• Apr. 18, 2016, 10:40 AM
• 832

Bazuki Muhammad/Reuters

Creating a city from scratch is no easy task, but one Chinese company could be banking billions that a so-called "Forest City" — a new high-tech, eco-friendly city covered head to toe in trees and shrubs — is the wave of the future.

So far, the development firm Country Garden Holdings has sunk $534 million into Forest City, which will be built on a chain of four reclaimed islands between Singapore and Malaysia. The money has primarily gone toward anchoring the islands into the surrounding Indian Ocean so architects can build high-rises without worrying about collapse, the Wall Street Journal reports.

Forest City would potentially be home to more than 700,000 people living along nearly 20 miles of coastline. Each building's roof would be able to collect and divert stormwater for storage or purification — a feature found in many Singaporean buildings already.

If the project reaches completion (at a future date that's still undetermined) the total cost will likely exceed $40 billion.

Beneath towering skyscrapers whose facades are lined with rows of plants, Forest City will contain a dense network of underground tunnels to keep the ground-level sidewalks open for pedestrians.

Forest City would be the first city of its kind, both in its technology and premise, but not the first to introduce plant-lined buildings. It has several predecessors, in fact, including the dual tree-covered skyscrapers in Milan known as Bosco Verticale ("vertical forest").

That design won second place in the 2015 Emporis Skyscraper Awards.

Andrea Passoni/FlickrMilans' award-winning skyscrapers, Bosco Verticale.

There's also the Tower of the Cedars, in Switzerland, which will begin construction in 2017.

It'll feature 24,000 plants on all sides of the 384-foot tower, including 6,000 shrubs and 18,000 perennials, when completed.

Stefano BoeriThe Tower of the Cedars, located in Lausanne, Switzerland.

The closest relative Forest City has is the Green Heart in Singapore, an apartment complex whose floors and main atrium are an enormous ode to nature. Construction began in 2012.

There are reflecting pools, hanging gardens, walkways, and waterfalls.

Gustafson PorterSingapore's Green Heart is a vast forest tucked inside a soaring apartment complex.

Like these other green-minded buildings, Forest City would be focused on using sustainable energy sources like wind and solar power rather than coal and natural gas.

Cars would be parked underground to keep the main streets cleaner and quieter.

Whether a project as large as Forest City manages to get off the ground is up in the air, but its instincts seem to be pointed in the right direction.

The only way to manage a growing trend of urbanization and greenhouse gas emissions may be a radical rethinking of how society structures itself.

The Veneer of Justice in a Kingdom of Crime (Video)

The Veneer of Justice in a Kingdom of Crime

2016 

During the 1980s, in the aftermath of the costly savings and loan scandal, up to a thousand executives from Wall Street were prosecuted for the roles they played in perpetuating financial fraud on a massive scale. Many were convicted and sent to prison. Cut to the Wall Street of today, as America and much of the world continues to attempt a recovery from the largest financial crisis since the Great Depression, and we witness a very different narrative.

In the wake of a criminal act which cost the economy a conservative estimate of 13 trillion dollars, not a single instigator of this calamity has been brought before a court of law. The intriguingly titled documentary The Veneer of Justice in a Kingdom of Crime examines the reasons why.

The film provides a smart and concisely observed summary of the cause and effect behind the financial meltdown which occurred beginning in 2008, and targets the investment banking firm Goldman Sachs as its main orchestrator. The ethical obscenity represented by this global financial collapse is clear. Eager customers were knowingly sold toxic mortgages by the world's largest financial institutions, who then bet big against their clients' ability to pay. In short, these firms wagered against the economy and the middle class, and reaped major profits for themselves as a result.

In light of such gross manipulation - and the destruction that it's caused throughout the globe - the lack of meaningful punishment for the key players behind the crisis has been nothing short of infuriating. Does "too big to fail" mean "immune from the scrutiny of the law"? The filmmakers seem to think so.

With an impassioned activism, The Veneer of Justice in a Kingdom of Crime sets it glare not only on offenders like Goldman Sachs, but also on the impotence of the Department of Justice. Their failure to successfully investigate and prosecute these heinous crimes points to a major failing in America's legal system. Relying on reams of documents and incriminating testimonies, the film shows how these financial institutions operate by their own laws, avoid regulatory oversight, and remain shielded from criminal indictment.

Silver is going nuts

• Will Martin
 

• 2h
• 10,115
 
• 1

The price of silver has exploded on Tuesday and is trading at its highest level since May 2015

Just after 2:20 p.m. BST (9:20 a.m. ET) the metal synonymous with finishing second is the biggest gainer of all major commodities, up by more than 4.9% on the day. It is trading at roughly $17.02 per ounce. Silver gained 3% in early trading, but has continued to jump.

Here's how silver looked a few minutes ago:

Investing.com

The cause of silver's rally looks to be a correction in the trading ratio between gold and silver. Traditionally, silver prices track gold carefully, meaning that when gold rises, so does silver. However, this year, silver prices have lagged a little behind.

At the start of April, gold had gained more than 13% on the year, while silver was up just 8%. However in the past couple of weeks, silver has started to gain momentum, as investors look to close the appreciation gap between the metals.

As UBS analyst Joni Teves puts it, as quoted by the Financial Times: "It's a combination of silver getting a bit of attention over the past week with the big move in the gold/silver ratio and quite a few market participants looking at silver in and its relative performance to gold and thinking it might be time for a bit of catch up."

Gold has been garnering most of the attention in markets in recent months, enjoying its most successful quarter in 30 years in Q1 of 2016.

The safe-haven metal appreciated hugely in the first quarter, driven by high market volatility and a weakening dollar, however on Tuesday, it is silver that is in focus, with gold pulled higher by silver's surge. It is up by roughly 1.75% on the day. Platinum, one of few metals to cost anywhere near as much as gold, has gained just less than 3.55%. Palladium, another rare metal, closely related to platinum, is up 2.7%.

Strong metals on the day are helping boost Europe's miners. On the FTSE 100, Anglo American, Fresnillo, and BHP Billiton are amongst the biggest gainers.

China wants to buy a big stake in Yum Brands

• Reuters

• 5h
• 840

REUTERS/Kim Kyung-HoonMen sits outside a KFC restaurant in Beijing July 17, 2014.

(Reuters) - China Investment Corp, China's state-owned sovereign wealth fund, is backing a group of investors who have expressed interest in buying a majority stake in Yum Brands Inc's China unit, Bloomberg reported, citing people with knowledge of the matter.

A deal could value Yum's China unit at $7 billion (5 billion pounds) to $8 billion, Bloomberg said, citing sources.

The investor group also includes KKR & Co LP and Baring Private Equity Asia, the report said.

Sources told Reuters in March that Yum Brands was in talks with private equity firms KKR & Co and Hopu Investments, among others, over the sale of a minority stake in its China unit as it prepares to spin off the once booming unit.

Yum plans to spin off its 6,900 restaurants in China, which account for about half of the company's total sales, by the end of 2016. Yum China would list on the New York Stock Exchange, and possibly in Hong Kong.

Yum Brands and CIC could not be immediately reached for comment.

(Reporting by Rama Venkat Raman in Bengaluru; Editing by Sunil Nair)

Read the original article on Reuters. Copyright 2016. Follow Reuters on Twitter.

Panama Papers: The Shady World of Offshore Companies (Video)

Panama Papers: The Shady World of Offshore Companies

2016 , 

The recent unveiling of over eleven thousand documents have members of the news media buzzing. The content of these documents incriminate many of the world's most powerful leaders and nefarious criminals. No one knows the identity of the whistleblower who leaked these materials, but their actions have set off a series of intense investigations that could have far-reaching implications.

They're the Panama Papers, and they reveal the offshore accounts of everyone from the, now Ex-Prime Minister of Iceland to the world's most notorious drug traffickers. Panama Papers: The Shady World of Offshore Companies sets out to investigate the questionable dealings of Mossack Fonseca, the firm which handles each of the more than 214,000 accounts detailed in the documents, as well as the potentially illegal activities of its clientele.

A great number of these offshore accounts were set up to establish a tax haven for the wealthy. In some cases, they're suspected of being used to hide more sinister enterprises such as money laundering and the funding of terrorist organizations.

Headed by Jurgen Mossack, who is described in the film as "a lawyer without a conscience", Mossack Fonseca is a firm based out of Panama, and they provide tax shelters to a wide variety of businesses and individuals throughout the globe. The film follows a team of over a hundred investigative journalists as they work in collaboration to unveil the depths of their operation. In the process, they uncover a series of shady practices. One example involves a company called Elite Industrial Holdings. After purchasing a piece of the popular Olympia typewriter business, Elite placed its holdings in an offshore account hosted by Mossack Fonseca. This account provided them great financial flexibility, and the ability to avoid paying out over five million dollars that they owed to the company's loyal retirees.

This is just the top of iceberg. Produced in Germany, where the story first originated, Panama Papers: The Shady World of Offshore Companies also exposes ties to Vladimir Putin and British Prime Minister David Cameron. The film shows us the ease with which anyone of means can open their own offshore account, and calls for enhanced accountability for those who have indulged in tax evasion under the cloak of anonymity for far too long.

Morgan Stanley beats, but profit dropped more than 50%

• Portia Crowe
 
•  

• 2h
• 4,371
 
• 2

GettyMorgan Stanley CEO James Gorman.

Morgan Stanley  $26.25

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See Also

Citi beats, but profit plummeted

Bank of America reports OK earnings 'despite volatile markets'

JPMorgan just set the bar for the rest of Wall Street

Morgan Stanley just reported first-quarter earnings that beat analyst expectations, despite a huge decline in profit.

The firm reported diluted earnings per share of $0.55 on revenue of $7.88 billion.

Analysts were expecting adjusted earnings per share of $0.47 on revenue of $7.76 billion, according to Bloomberg.

The results are down significantly from the same quarter last year, when Morgan Stanley reported diluted earnings per share earnings of $1.18 on revenue of$9.91 billion. 

Net income of $1.1 billion was down 54% from $2.4 billion last year.

"The first quarter was characterized by challenging market conditions and muted client activity," said CEO James Gorman in a statement. "Against that backdrop, our businesses delivered stable results."

He continued:

While we see some signs of market recovery, global uncertainties continue to weigh on investor activity. We remain focused on executing against our priorities, helping clients navigate difficult markets while controlling our expenses and managing risk prudently.

Morgan Stanley beat expectations on investment-banking and sales-trading revenues, but results were lower than the same period last year:

• Trading revenues were $2.69 billion for the quarter (versus $2.65 billion expected), down from $4.08 billion in the year-ago quarter.
• Fixed-income sales and trading revenues came in at $873 million (versus $791 million expected), down from $1.9 billion a year ago.
• Equity sales and trading revenues were $2.1 billion ($1.86 billion expected), down from $2.3 billion in the same quarter last year.
• Investment banking revenue came in at $990 million for the quarter (versus $982 million expected). That's down from $1.17 billion in the year-ago period.

Revenues in wealth management, typically Morgan Stanley's strongest division, were $3.67 billion, down 4% from $3.83 billion in the year-ago quarter.

Last quarter, Morgan Stanley beat expectations, reporting diluted earnings per share of $0.43 on revenue of $7.86 billion, excluding accounting adjustments.

The first quarter is typically the strongest for investment banks, but has been unusually weak on Wall Street so far this year. Choppy trading conditions in early 2016, fears over China's growth, and a collapsed oil price created a "perfect storm" for banks. More on that here.

JPMorgan, Bank of America, Wells Fargo, and Citi have already reported first-quarter earnings, each beating or matching analyst expectations despite significant declines in profit.

Goldman Sachs will report Q1 earnings on Tuesday.

SEE ALSO: Goldman Sachs is cutting costs big time

NOW WATCH: James Altucher makes an argument for not paying back your credit card debt

More: Wall Street James Gorman Morgan Stanley Q1 

Saudis threaten to sell $750 billion US assets if Congress passes bill that would let 9/11 victims sue Saudi Arabia

• Elena Holodny
 
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• Apr. 16, 2016, 1:30 PM
• 100,271
 
• 89

APSaudi King Salman bin Abdul-Aziz Al Saud

Saudi Arabia threatened to sell up to $750 billion worth of US assets held by the Kingdom if Congress passes a bill that would allow the Saudi government to be sued over 9/11, reports The New York Times' Mark Mazzetti.

Saudi Foreign Minister, Adel al-Jubeir, personally passed on the message last month during a trip to Washington, according to The Times.

The foreign minister was referring to the Justice Against Sponsors of Terrorism Act, (JASTA) which would let victims of 9/11 and other terrorist acts sue foreign sponsors of terrorism.

As Vice News noted when it was reintroduced in September, the Senate bill would pave the way for a lawsuit to proceed over Saudi Arabia's alleged role in the 9/11 terror attacks.

Saudi Arabia has been arguing that it's immune from liability over 9/11 under a 1976 law that makes it difficult to sue foreign countries in US courts. However, the JASTA legislation would allow victims of terrorism on US soil to sue foreign sponsors of terrorism.

The Obama administration has been lobbying Congress to block the bill's passage, administration officials and congressional aides from both parties told The Times. The administration argues that the legislation would put Americans at legal risk overseas.

Meanwhile, "the Saudi threats have been the subject of intense discussions in recent weeks between lawmakers and officials from the State Department and the Pentagon," writes Mazzetti. "The officials have warned senators of diplomatic and economic fallout from the legislation."

The Saudi government has routinely denied any involved in 9/11. Additionally, the 9/11 Commission found “no evidence that the Saudi government as an institution or senior Saudi officials individually funded the organization." 

However, Mazzetti writes that suspicions about Saudi involvement have lingered because a 2002 inquiry from Congress cited evidence that Saudi officials living in the US were part of the 9/11 terror plot.

Notably, the Saudis' statement comes at time when US-Saudi relations are not as great as they once were following attempts to (kind of) patch things up with Iran, the Saudis' regional rival, and ongoing questions about the roles both countries should play in the Middle East.

Check out the full story at the New York Times.