UNITED STATES
US deficit plunges
The US budget deficit fell sharply in the just-ended fiscal year to US$1.1 trillion, the Treasury said on Friday, as the Obama administration claimed success in cutting spending and raising fresh revenue. However, the deficit, topping $1 trillion for the fourth year in a row, remained excessively high and a lightning rod for the president as he fights to retain his job in next month’s election. The fiscal shortfall for the year that ended Sept. 30 was down 16 percent, or US$207 billion, from last year’s deficit, helped by a US$75 billion surplus for last month. Overall, the deficit remains at a level economists consider unsustainably high over the long run: it was equivalent to 7 percent of gross domestic product, though that was down from 8.7 percent in the last fiscal year.
INVESTMENT
Banks post record profits
JPMorgan Chase & Co posted a record quarterly profit on Friday as falling interest rates and a recovering housing market brought big increases in mortgage lending. The mortgage market, long a drag on bank results, is starting to lift lenders’ earnings again, and JPMorgan Chief Executive Jamie Dimon said he was hopeful about the outlook for US residential real estate. “We believe the housing market has turned the corner,” Dimon said in a statement. JPMorgan suffered only modest losses in the latest quarter from the “London whale” trades that brought it US$5.8 billion of losses in the first half of the year, signaling that it is moving on after the scandal. In fact, a US$993 million increase in total mortgage fees neatly offset an US$831 million decrease in net interest income.
INDUSTRY
Strike impacts revenues
The world’s top platinum producer Anglo American on Friday announced US$126 million in lost revenue due to a month-long illegal strike, as ratings agency S&P downgraded South Africa over the mining unrest. Anglo American also declared a force majeure in its chrome deliveries as a result of the wildcat strike by thousands of its workers. The strike “will adversely affect the company’s delivery obligations regarding the supply of chrome ore and as a result force majeure notices have been issued to its chrome customers,” the company said in a statement. Its ability to deliver other metals including platinum and paladium “remains unaffected at this stage.” The group has over the past four weeks lost 67,000 ounces in production of platinum, the equivalent of about 1.1 billion rand (US$126 million, 97 million euros) in revenues. Meanwhile, Standard and Poor’s slashed South Africa’s sovereign debt rating on Friday by one notch from BBB+ to BBB, citing the strikes affecting Anglo American and other mining companies.
BANKING
Santander dismisses deal
Spain’s Santander dramatically pulled out of its £1.65 billion (US$2.65 billion) deal to buy 316 UK branches from Royal Bank of Scotland late on Friday, dealing a sharp blow to the state-backed British bank. More than two years after the deal was struck, it collapsed because the process of carving out the business proved more complex and difficult than had been expected. Santander said it was unwilling to again extend the deadline when it became clear that it would not be completed this year.
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”
Sales in the retail, and food and beverage sectors last month continued to rise, increasing 0.7 percent and 13.6 percent respectively from a year earlier, setting record highs for the month of March, the Ministry of Economic Affairs said yesterday. Sales in the wholesale sector also grew last month by 4.6 annually, mainly due to the business opportunities for emerging applications related to artificial intelligence (AI) and high-performance computing technologies, the ministry said in a report. The ministry forecast that retail, and food and beverage sales this month would retain their growth momentum as the former would benefit from Tomb Sweeping Day
Thousands of parents in Singapore are furious after a Cordlife Group Ltd (康盛人生集團), a major operator of cord blood banks in Asia, irreparably damaged their children’s samples through improper handling, with some now pursuing legal action. The ongoing case, one of the worst to hit the largely untested industry, has renewed concerns over companies marketing themselves to anxious parents with mostly unproven assurances. This has implications across the region, given Cordlife’s operations in Hong Kong, Macau, Indonesia, the Philippines and India. The parents paid for years to have their infants’ cord blood stored, with the understanding that the stem cells they contained