US Economic Growth a Bit Faster Than First Thought, But Still Slow

The U.S. economy grew a little faster than first thought in January, February and March.

The Commerce Department said Thursday the world’s largest economy expanded at a 1.4 percent annual rate in the first quarter. This is two-tenths of a percent faster than first thought, a rate that many economists called disappointing. Economists routinely revise these figures as more complete data becomes available.

Analysts said consumer spending, which drives two-thirds of U.S. economic activity, was higher than first estimated. Exports and business spending on equipment also provided a bit of a boost.

Employment

A separate Labor Department report said 244,000 Americans signed up for unemployment benefits last week. That is a slight increase from the prior week, but still low enough to indicate healthy job market.

The unemployment rate, which comes from a different study and is reported monthly, stands at a 16-year low of 4.3 percent.


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Myanmar Mobile Project Helps Lift Young Workers Out of Poverty

It’s six o’clock in the evening, Saw Ku Do reviews his English lessons shortly after finishing an 11-hour shift serving food and sweeping the floor at the tea shop where he works.

“Dog, cat, pig,” he said while looking at his notebook.

Saw Ku Do, age 15, only has a second grade education. He dropped out of school to go to work to help support his family. He says his parents are day laborers and struggle to take care of their six children.

“It’s not that I didn’t want to stay in school but I felt sorry for my parents,” Saw Ku Do said. “When we are broke we have to borrow money and have to repay with interest so it’s very difficult.”

Saw Ku Do says he gets one day off every other week and makes the equivalent of about 60 U.S. dollars per month. He sends most of that money home to his parents who live in a village about eight hours away from Yangon, Myanmar’s commercial capital.

His story is a common one across Myanmar, also known as Burma, where more than a quarter of the population is impoverished. One out of five children ages 10 to 17 goes to work instead of school to help support their families. Many of them move away from small villages to work in tea shops in Myanmar’s cities. At night they often sleep on top of tables in their tea shops or on a piece of cardboard that’s spread out on the floor.

Child labor laws

Myanmar has laws prohibiting children under the age of 14 from working and until 16, they’re not allowed to work more than four-hours per day. However, enforcement is lax.

But while these kids often left the classroom years ago, there’s a program that’s bringing class to some of them.

It’s the Myanmar Mobile Education Project also known as myME. The program teaches subjects including math and English plus vocational training in fields such as hospitality and tailoring. Three nights a week, Saw Ku Do’s tea shop is converted into a makeshift classroom. “I hope to improve my education so I can have a better job,” he said.

The goal of myME is to help these tea shop workers get an education and skills so they’re not stuck in these low paying jobs for the rest of their lives. MyME trained Naw Aye Aye Naing, 20, to be a tailor. She now works at a boutique clothing store earning double what some tea shop workers make.

“MyME improved my life a lot,” she said.

The program’s executive director, Tim Aye-Hardy, is a Myanmar native who moved to the United States in 1989.

“When I came back to this country in 2012 and ‘13, I started to notice a bunch of young people who are on the streets at these tea shops, restaurants instead of in school. That’s what really triggered me,” Aye-Hardy said. “I started asking questions: Why are they not in school? Why are so many kids out there?”

Myanmar’s economy and education system were crippled during nearly 50 years of military rule. The country has been undergoing political and economic changes during the past several years.

Climbing out of poverty

MyME’s annual $200,000 budget comes from private donations. The program teaches about 500 workers at 35 tea shops across Myanmar. But that’s just a small fraction of the more than one-million child workers in this country.

“If we don’t help them they’ll never be able to climb out of this trap and then they might be so poor that their kids will also have to quit school to work just like they did,” Aye-Hardy said.

In Saw Ku Do’s English class, his teacher asks him what his favorite animal is. “It is a cat,” he replies.

Saw Ku Do dreams of owning his own business when he’s older. He says he and his coworkers feel lucky to be part of myME.

“If there’s no myME we will be stuck this way,” he said. “If we know more through myME we can get a new job.”


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US Farmers Plow Through Uncertain Trade Environment

Many Americans in rural parts of the United States voted to elect Donald Trump as president in 2016, despite his stance against trade agreements. In the wake of the President Trump’s announcement to withdraw from the Trans Pacific Partnership Agreement, or TPP, and now curbing trade with Cuba, VOA’s Kane Farabaugh reports on how farmers in the Midwest state of Illinois are reacting, and adjusting, to the uncertain road ahead.


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Uber, Others Change Vietnam’s Motorbike Culture

Nguyen Kim Lan used to make a decent living shuttling customers around town on his Honda motorbike. But his clientele has dwindled as young and tech-savvy Vietnamese increasingly use ride-hailing apps like Uber and Grab to summon cheaper, safer motorbike taxis.

 

The expansion of the ride-hailing services across Southeast Asia is shaking up traditional motorcycle taxi services that are a key source of informal work for people like Lan. In some cases, the Xe Om, or motorbike taxi, drivers are venting their anger in attacks on the new competitors.

 

Lan is just frustrated. He says his income has fallen to 20 percent to 30 percent of what it used to be. 

‘Picked up at the door’

 

“Nowadays, my frequent customers have all booked Grab and Uber, so they don’t come here anymore,” said Lan, 62, as he waited for customers at an intersection in downtown Hanoi. 

 

“Before, office workers would come here after work. Now they just sit in their offices and get picked up at the door,” he said. 

 

As elsewhere in the region, motorbikes are Vietnam’s main form of transportation, especially in the capital Hanoi and the southern commercial hub of Ho Chi Minh City. They can maneuver through crowded, narrow city streets more easily than cars and are less expensive to buy and run.

​First taxis, now motorbikes

Having invaded the conventional taxi market, ride hailing apps like Uber and Malaysia-based Grab are now elbowing aside the Xe Om with their UberMoto and GrabBike services.

 

Vietnam, a communist-ruled country of 93 million, has about 45 million motorbikes, the highest rate of motorcycle ownership per capita in Southeast Asia. About 3 million new motorbikes were sold last year. 

 

Practically everyone has mobile phones, and cheap Internet access has enabled most Vietnamese city dwellers to get online. 

 

Nguyen Tuan Anh, chairman of Grab Vietnam, said the number of GrabBike drivers has jumped from 100 when they first launched in late 2014 to more than 50,000, with hundreds joining every day.

 

The growth of passengers is “explosive,” he said. 

 

Many Vietnamese now prefer to use ride hailing apps, viewing their services as safer and cheaper, Tuan Anh said. “GrabBike brings transparency and that’s why customers love it. They know that they will not be cheated by the drivers.”

Hotspots of conflict

 

But Tuan Anh said he knows of more than 100 cases where GrabBike drivers were attacked in the past year, often by Xe Om drivers worried about losing business. 

 

Bus stations, hospitals and schools are hotspots for conflict. In one case, a GrabBike driver was stabbed in the lung. In another, police fired warning shots to disperse crowds of Xe Om and GrabBike drivers who were battling near a bus station in Ho Chi Minh City.

 

Similar problems have been reported in Thailand and Indonesia. 

 

Tuan Anh said GrabBike tells its drivers to be cautious and to seek help from police. 

 

Many Vietnamese seem keen to use such services despite the potential for conflict.

Cheaper, more convenient

 

Tran Thuc Anh, a 21-year-old video games designer, says she switched to using GrabBike to commute from bus stations to and from her office about six months ago.

 

It costs her half as much as using Xe Om did, she says. 

 

“I just need to be online to book a bike without going around to look for a traditional Xe Om, so it’s very convenient,” Thuc Anh said. 

 

Many GrabBike drivers originally worked as Xe Om, but not all are willing to sign up. Older motorbike taxi drivers say they don’t know how to use online apps or lack the cash to buy smart phones. Others are put off by the cheaper fares GrabBike charges. 

 

But Nguyen Quang Trung, a 30-year-old salesman who began moonlighting for GrabBike six months ago, said Xe Om drivers who try to overcharge their customers are finished.

 

“Uber and Grab are safe and their fares are reasonable and customers see this,” Trung said. “Only elder people or those who are in hurry use traditional Xe Om. Young people and people who are not short on time never use Xe Om.”


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Cuba Expects Tourism Growth Despite Trump’s Crackdown on US Travel

Cuba earned more than $3 billion from tourism in 2016 and expects to better that this year despite President Donald Trump’s tightening of restrictions on U.S. travel to the Caribbean island, a government official said on Wednesday.

“In 2016, revenue reached more than $3 billion in all activity linked to tourism in the country,” Jose Alonso, the Tourism Ministry’s business director, told state-run media.

“We think that, given the growth the country is seeing at the moment, we will beat that figure this year,” Alonso said.

Tourism revenue totaled $2.6 billion in 2015.

The number of foreign visitors to Cuba was up 22 percent in the first half of 2017 compared with the same period last year, according to Alonso, who said that put it on track to reach its target for a record 4.2 million visits this year.

Tourism has been one of the few bright spots recently in Cuba’s economy, as it struggles with a decline in exports and subsidized oil shipments from its key ally Venezuela.

A surge in American visitors has helped boost the sector since the 2014 U.S.-Cuban detente under the Obama administration and its easing of U.S. travel restrictions, even as a longtime ban on tourism remained in effect.

But Trump earlier this month ordered a renewed tightening of travel restrictions, saying he was canceling former President Barack Obama’s “terrible and misguided deal” with Havana.

Many details of the policy change are still unknown. But independent travel to Cuba from the United States, by solo travelers and families, will likely be much more restricted.

Alonso said he was confident “an important number of Americans” would still be able to visit the island. But an announcement by Southwest Airlines Co (LUV.N) on Wednesday that it was reducing its number of flights to Cuba cast shadow over his upbeat comments.

“There is not a clear path to sustainability serving these markets, particularly with the continuing prohibition in U.S. law on tourism to Cuba for American citizens,” Southwest said in a statement.

Southwest joined other U.S. airlines that have cut flights to Cuba over past months or pulled out of the market altogether.


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Taiwan Activist Urges Crackdown Against Floating Sweatshops

Three videos from a mobile phone that described the beatings of an Indonesian crewman aboard a Taiwan-flagged vessel led Allison Lee to find her role as an advocate for those afflicted: migrant fishermen.  

Lee, the co-founder of the Yilan Migrant Fishermen Union, was recognized by the United States for safeguarding the rights of foreign fishermen working in Taiwan.  

 

In accepting her award in Washington on Tuesday, she made one appeal: to end slavery on the open sea.

To know the path from ocean to consumers’ dinner plates is to know the story of floating sweatshops, Lee told VOA on Tuesday.  

“Migrant fishermen are vulnerable to exploitation,” she said.

State Department award

Flanked by President Donald Trump’s daughter Ivanka Trump and Secretary of State Rex Tillerson on Tuesday, Lee was one of the eight men and women to receive “Hero Acting to End Modern Slavery Award” at the State Department, where the 2017 Trafficking in Persons (TIP) Report was released.

Lee is the first Taiwan citizen to receive the honor.  

Migrant workers aboard Taiwan-flagged fishing vessels that operate in international waters are not covered by the so-called Labor Standards Act, the laws governing employer and employee rights. Therefore, they do not benefit from Taiwan’s minimum-wage regulations regarding overtime pay, Lee said.

In a tweet on Wednesday, Taiwan President Tsai Ing-wen reaffirmed her government’s pledge to battle against human trafficking.

“Taiwan is committed to working with all stakeholders to fight human trafficking,” Tsai tweeted.  

For eight consecutive years, Taiwan has been ranked in the “Tier 1” category, the best ranking in the human-trafficking report.

While acknowledging Taiwan’s “serious and sustained efforts,” Washington urged Taipei to increase efforts to prosecute and convict traffickers under the anti-trafficking law.

‘Vigorously investigate’ infractions

The State Department also urged Taiwan to “vigorously investigate and, where appropriate, prosecute the owners of Taiwan-owned or -flagged fishing vessels that allegedly commit abuse and labor trafficking on board long-haul fishing vessels.”

The TIP Report is a symbol of the U.S. moral and legal obligation to combat tragic human rights abuses and as well as to advance human dignity around the world, said Susan Coppedge, the U.S. Ambassador-at-large to Monitor and Combat Trafficking in Persons.

“Tier 1 countries meet the minimum standards to combat trafficking, but that’s just the minimum. They don’t rest on their laurels, so to speak,” Coppedge told VOA on Tuesday.

“They need to continue their efforts to combat trafficking, and one of the areas where Taiwan can make additional progress is in labor trafficking,” she added.

On January 15, 2017, the Act for Distant Water Fisheries took effect in Taiwan amid growing pressure on Taiwan’s seafood industry to crack down on modern-day slavery and abuses for migrants working on the island’s fishing vessels.

Lee told reporters that being a Christian gave her strength to withstand the pressure from government officials and the industry.


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Fed Approves Dividend, Buyback Plans of All 34 Biggest Banks

The Federal Reserve has given the green light to all 34 of the biggest banks in the U.S. to raise their dividends and buy back shares, judging their financial foundations sturdy enough to withstand a major economic downturn.

It was the first time in seven years of annual “stress tests” that every bank assessed by the Fed won approval for its capital plans. All have at least $50 billion in assets.

The Fed on Wednesday announced the results of the second round of its annual stress tests. Those allowed to raise dividends or repurchase shares include the four biggest U.S. banks — JPMorgan Chase, Bank of America, Citigroup and Wells Fargo.

Capital One’s plan only got conditional approval and it has six months to revise it. But the bank was still allowed to return profits to shareholders.

After the results were made public, the banks quickly jumped in with announcements of dividend boosts and share buyback plans. They included a doubling of Citigroup’s dividend, a 60 percent dividend increase by Bank of America and a 12 percent hike for JPMorgan.

Capital One, because of its conditional status, opted to keep its dividend at its current level but is planning a share repurchase.

The second part of the seventh yearly checkup tested the banks to determine if their current plans for paying out capital to shareholders would still allow them to keep lending if hit by another financial crisis and severe recession.

Results show strength

With the 34 banks holding more than three-quarters of total assets of all U.S. financial companies, the results showed strength in an industry that nearly toppled the financial system — and has recovered handily nearly nine years on from the 2008-09 crisis. Banks large and small across the U.S. received hundreds of billions in taxpayer funds to prop them up during the financial meltdown.

Now the banks have a total of about $1.2 trillion in capital reserves as of the fourth quarter of last year, an increase of $750 billion over the beginning of 2009, in the depths of the crisis, according to the Fed. They are expected to pay out to shareholders nearly 100 percent of their net revenue over the next four quarters, compared with 65 percent in the same period last year.

“They can now more freely pay out dividends and buy back stock without worrying whether they are resilient in a financial crisis,” said David Wright, a managing director at Deloitte who formerly worked on bank supervision at the Fed.

The results may not be an explicit seal of approval for the banks by the Fed, but that’s the conclusion that can be drawn, Wright said.

“I don’t think they [the Fed] are quite ready to declare victory, though,” he added. “Some of the smaller firms still struggled to identify risks and there is more work to be done. But I think we are at, or close to, the summit.”

Fed Gov. Jerome Powell said in a statement the Fed’s assessment of banks’ capital plans in light of their reserves “has motivated all of the largest banks to achieve healthy capital levels, and most to substantially improve their capital planning processes.”

The financial industry has seized on the strong showing to buttress its assertion that regulations it sees as excessive should be rolled back. After the crisis that plunged the U.S. into the worst economic meltdown since the Great Depression of the 1930s, banking industry profits have been steadily rising and banks have been lending more freely. The Trump administration and Republicans in Congress have taken major steps this year toward easing the financial rules that came in under the Dodd-Frank law enacted by Democrats and President Barack Obama in response to the crisis.  

Worst-case scenario

Wednesday’s announcement on the second round of the tests followed last week’s initial results. There, the regulators determined that the 34 big banks are adequately fortified with capital buffers to withstand a severe U.S. and global recession and continue lending.

The Fed’s most extreme hypothetical scenario in this year’s tests envisions the U.S. economy falling into a deep recession causing the stock market to plunge about 40 percent. Under that scenario, unemployment — now at a 16-year low of 4.3 percent — climbs to at least 10 percent, while home prices drop 25 percent and commercial real estate prices tumble 30 percent.

The Fed said the 34 big banks would sustain $383 billion in loan losses under the most dire scenario. That’s down from $526 billion in losses for 33 banks last year. Even with $383 billion in losses, all the banks would still together hold a high-quality capital ratio of 9.2 percent, far above the 4.5 percent minimum and showing improvement from last year’s 8.4 percent. Capital ratios are an industry measure of how strong a cushion a bank holds against unexpected losses.

The dividend increases and share buyback plans are important to ordinary investors, and to banks. The banks know that their investors suffered big losses in the crisis, and they are eager to reward them. Some shareholders, especially retirees, rely on dividends for a portion of their income. For the banks, raising dividends can drive up their share prices and make their stock more valuable to investors.

But raising dividends is costly, and regulators don’t want banks to run down their capital reserves, making them vulnerable in another recession. Buybacks also are aimed at helping shareholders. By reducing the number of a company’s outstanding shares, earnings per share can increase.

CIT was added this year to the banks tested by the Fed. They are: Ally Financial, American Express, BancWest, Bank of America, Bank of New York Mellon, BB&T, BBVA Compass, BMO Financial, Capital One, Citigroup, Citizens Financial, Comerica, Deutsche Bank, Discover, Fifth Third, Goldman Sachs, HSBC, Huntington Bancshares, JPMorgan, KeyCorp, M&T, Morgan Stanley, MUFG Americas Holdings, Northern Trust, PNC, Regions Financial, Santander Holdings, State Street, SunTrust, TD Group, U.S. Bancorp, Wells Fargo and Zions Bancorp.


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America’s Cup Foiling Technology Set to Fly Beyond Racing Boats

From water taxis that “fly” on hydrofoils to aircraft wings and cutting-edge car steering wheels, the America’s Cup has produced technology with potential far beyond its “foiling” catamarans.

With their focus on carbon fiber and aerodynamics, the teams that fought for the America’s Cup attracted partners including planemaker Airbus and automotive groups BMW and Land Rover who were keen to learn from them.

One area where this is likely to have an impact is in harnessing “foiling” technology, where the America’s Cup boats “fly” above the water on foils, cutting water resistance.

“Foiling in small electric boats will most likely appear on rivers in major cities. We are just at the beginning of the foiling adventure,” Pierre Marie Belleau, head of Airbus Business Development, who managed its partnership with Larry Ellison’s Oracle Team USA, told Reuters.

The space-age catamarans used in the 35th America’s Cup, which ended in victory for Emirates Team New Zealand this week, can sail at maximum speeds of 50 knots (92.6 kilometers per hour) and have more in common with flying than sailing.

For Jaguar Land Rover, which sponsored British sailor Ben Ainslie’s attempt to win the cup, the relationship is a strategic one with a focus on technology and innovation.

“We don’t just get our logo onto a sail,” Mark Cameron, the company’s Experiential Marketing Director, said by telephone, adding that the carmaker would be providing more designers to help Land Rover BAR with technology for their next campaign.

Land Rover produced a special steering wheel for Ainslie to use in the America’s Cup, with in-built gear shift paddles that allowed him to adjust the catamaran’s “flight” levels.

The relationship is similar between BMW and Oracle Team USA, with the German automaker focused on areas including the electronics in the wheel used by skipper Jimmy Spithill, the development of carbon fiber used to make the boat and its components, and the aerodynamic testing.

“We like to think of ourselves more as a partner than a sponsor. We have a very strong carbon fiber relationship,” Ian Robertson, who is the BMW management board member responsible for sales and brand, told Reuters between races.

“This is a dynamic sport that is developing fast. … It’s moving quickly just like the car industry is moving quickly. It’s all changing,” Robertson said.

Plane sailing?

The America’s Cup catamarans use similar aerodynamics and load calculations to power their wings as commercial aircraft, which has led some skippers such as Spithill to become pilots.

Airbus is now considering applying the design and method of Oracle’s foils to the tips of aircraft, Belleau said, adding that this would need a two- to four-year certification process and require it to change its production method.

Airbus has also created a new generation of Micro Electro Mechanical Systems (MEMS) microchips that were originally developed for the wings of its test aircraft and then adapted on board the Oracle boat to measure the wind speed and direction at all points on its almost 25-meter-high wing sail.

The sensors make it easier to tell if the wing sails are set efficiently, as wind speed and direction can vary from the top to bottom of the 25-meter wing of the America’s Cup boats — technology that could become standard in the marine leisure industry to replace less reliable wind instruments.

“I would be very surprised if this MEMS technology does not become standard in order to replace the classic anemometer,” Belleau said.

The Airbus A350-1000, one of Airbus’ twin-aisle, wide-body jetliners, is also flying every day using new instrumentation developed through the partnership.

Oracle used Airbus’ 3D printing and manufacturing process to produce stronger and lighter parts that Airbus has started to use on aircraft to replace titanium and aluminum.

“In 10 years from now … this technology will spread and will be on all the sailing boats in the market,” Belleau said. “In addition to the sporting competition, there is still this technological competition. … The story is not finished.”


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Red-hot Iceland Keeps Some Investors Out in the Cold

Iceland spent nearly a decade trying to keep foreign money in the country after a financial collapse, now it is trying to keep some of it out.

The economy is booming again and hedge funds and other foreign investors want exposure to a surging tourism sector, banks, property, infrastructure and the soaring krona currency.

Most capital controls from the 2008 banking crisis were lifted in March, allowing money to flow in and out of the country more freely.

But with over 20 financial crises since 1875 and warnings from economists about the risk of overheating again, the government is being cautious.

It has left in place restrictions making it prohibitively expensive to buy government bonds which offer returns of 4.5 percent, the highest of any developed economy.

On Monday, the central bank took another step to try and break the cycle of boom and bust on the isolated North Atlantic island, clamping down on derivatives and other avenues it was worried were being used to bet on the krona.

“There are a bunch of people I know who would love to put money into Iceland but they simply can’t because of restrictions on the inflows,” said Mark Dowding, who runs a hedge fund at BlueBay Asset Management and bought into the Icelandic government bond market in 2015, before the central bank rules were introduced.

The government is preparing other steps to make Iceland less attractive — a contrast to other economies recovering from crisis which have welcomed inflows of money.

The government is preparing to raise taxes for the tourism industry which has been growing at 20 to 25 percent a year as foreigners flock to its volcanoes, glaciers and geysers. It is also considering a currency peg for the krona.

Opportunities

Iceland offers other exciting investment opportunities.

Growth of more than 6 percent is forecast this year and the krona is up 20 percent versus both the dollar and euro over the last 12 months.

The central bank has cut interest rates four times in the last year and analysts say it would need to cut further if it wants to slow the rise of the currency. That could further stimulate the economy.

“Once every decade or two, I come across a market overseas which is most attractive and is worth considering,” said Gervais Williams, a portfolio manager at London-based Miton Group. “That last happened in 1995 in Ireland, and Iceland is the market I now like.”

Cumulative net capital inflows have gone from almost nothing to 150 billion crown ($1.45 billion) in two years.

New cars sales are at the highest in 10 years, Marriott will open Iceland’s first five-star hotel next year. Data center firms are also moving in as the climate and cheap geothermal energy cut the costs of cooling huge server stacks.

A potential float of Arion Bank, the domestic arm that emerged from the collapsed Kaupthing bank, meanwhile is expected to lead to a surge of new foreign money into the stock market which currently lists just 17 firms.

Several hedge funds — Och-Ziff Capital Management Group, Taconic Capital Advisors and Attestor Capital — bought stakes in Arion privately, after the bulk of capital controls were lifted earlier in the year.

On the back of the shifts, London and Iceland-based fund firm GAMMA Capital Management launched its first two funds — including one hedge fund — for foreign investors in November last year after requests from abroad.

“We have been getting a lot of interest … but investing in Iceland brings a lot of hurdles, so we created a simple conduit,” said Hafsteinn Hauksson, economist at GAMMA. Both funds have more than doubled in size this year, he said.

Red hot

Nevertheless, there are concerns that Iceland could overheat again.

The International Monetary Fund said in a report last week that there was a need for “vigilance with regards to credit growth and the real estate sector, labour market tightening and wage increases.”

It called for capital inflows to be managed carefully.

Iceland has a history of spectacular booms and bust.

The head of Iceland’s central bank regularly describes its 2007-2008 banking bust — when the top-three banks, Kaupthing, Glitnir and Landsbanki collapsed under heavy debts — as “the third-biggest bankruptcy in the history of mankind.”

A 2015 report by Bank of Iceland economists noted that this was not Iceland’s first financial crisis.

“In fact, over a period spanning almost one and a half century [1875-2013], we identify over twenty instances of financial crises of different types,” it said. “Recognizing that crises tend to come in clusters, we identify six serious multiple financial crisis episodes occurring every fifteen years on average.”

The report said the crises typically involved a sudden collapse in the currency and capital inflows.

Glacier bonds

Wary of its history and nervous that the end of capital controls would bring a wave of foreign money, the central bank brought in a rule in May 2016 forcing buyers of its bonds to park additional money in a low interest account.

That costly “special reserve ratio” arrangement has meant foreign investment in Icelandic debt has dropped close to zero.

Along with repeated interest rate cuts, it has taken some of the steam out of the crown over the last month.

“In the current domestic and global circumstances, the risk of excessive and volatile carry-trade type capital inflows was becoming significant,” a central bank spokesman said of why the measure was brought in.

Monday’s decision to scale back some exemptions aimed to make it harder for foreign investors to bet on the krona.

Those exemptions had made it possible to conduct carry trades by issuing krona-denominated bonds — nicknamed Glacier bonds — and entering derivatives contracts with domestic banks.

“Experience has shown that capital inflows in connection with foreign issuance of krona-denominated bonds [Glacier bonds] could weaken monetary policy,” the central bank said.

Iceland also still has controls in place that prevent proceeds from the sale of pre-crisis bonds leaving the country unless the investor signs up to the terms of the central bank’s buyback arrangement, which offer a punitive exchange rate.


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A Decade Ago, Apple’s iPhone Transformed the World

In the two years leading up to June 29, 2007, when Apple’s iPhone went on sale, company co-founder Steve Jobs and a select team were hard at work secretly designing what would become a global game changer. 

The initiative even had a code name, “Project Purple.” By all accounts, the project was pained. 

Inside a secure room, a collection of super smart techies, ate, slept, worked way beyond the typical eight hour day, fought and, at times overthought, the design of this new slick mobile device.

​Before that day, flip phones, Blackberries and even the occasional pager were commonplace.

Pay phones were rarer still.

Photo gallery: America’s love affair with the ever-evolving phone

Ten years later, Jobs is no longer with us, having passed away in 2011.

But most of the public is hunched over a hand-held device, iPhone or not, accessing the internet, watching videos on demand, and conducting mobile banking. 

Time magazine published the final public video appearance of Jobs before he died after a 10-year battle with pancreatic cancer.

Apple, of course, is still redesigning, and hopefully improving upon, that first, innovative cell phone.

Later this year, the iPhone 8 will be released amid much speculation and apparent premature leaks. 


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