IMF chief on growth and Greece; FT editor on China

Christine Lagarde, the head of the International Monetary Fund, talks with the FT's World Trade editor, Shawn Donnan, about the global economic recovery, Greece and the new Chinese development bank.

"There has been a huge commitment by the international community, the European partners but also the IMF and the European Central Bank to actually support the Greek economy,” Lagarde said.

"What needs to happen now is that the political views need to actually deliver the measures, the tools, the reforms that could actually reach the objectives that have been set between the international community and Greece: restore stability, improve the economy [and] make sure that one of these days Greece re-accesses the financial markets on its own and without support.”

Technical negotiations in Athens between the Greek government and staff from the IMF and European institutions were “gradually picking up”, she said. “We really hope that is going to continue to fruition so that we can move on.”

　

China is attempting to assert its position globally, but economic growth is at its slowest for six years. Lionel Barber, FT editor, who recently interviewed the Chinese premier, talks to emerging markets editor James Kynge about the pressures facing Beijing.

On Sunday the People’s Bank of China announced a move to boost lending to business by cutting its so-called the reserve requirement ratio by 1 percentage point, days after data revealed the country’s economy expanded at its slowest pace for six years in the first quarter.

The FT reports that the PBoC has only once before reduced the reserve requirement ratio by as much and that was during the depths of the financial crisis in November 2008.

　

How not to be ignorant about the world

How much do you know about the world? Hans Rosling, professor of international health at Sweden's world renowned Karolinska Institute, who is also the world's most famous statistician, with his famous charts of global population, health and income data (and an extra-extra-long pointer), in 2014 demonstrated that you have a high statistical chance of being quite wrong about what you think you know.

Play along with his audience quiz in this video — then, from Hans’son Ola, learn 4 ways to quickly get less ignorant.

　

Hans Rosling in 2006: The best stats you've ever seen

　

Data journalism

In 2012 Nate Silver correctly predicted the presidential election results for 50 US states and since then his FiveThirtyEight digital news operation has been acquired by ESPN, the sports cable network owned by Walt Disney. Nate Silver meets Matthew Garrahan, the FT's global media editor, at Manhattan's 21 Club to talk about the UK elections, Hillary Clinton and the growth of data journalism.

　

Ireland's postwar welcome for Nazi war criminals

In 1959 Otto Skorzeny, Hitler's favourite Nazi commando, famous for rescuing Mussolini, the Italian fascist leader, from an Italian hilltop fortress, and known as "the most dangerous man in Europe," became an Irish farmer. 

Winner of the Globe Gold Award (Documentary section) at the Intermedia World Media Festival in Hamburg, this 2007 two-part series sees Royal Air Force (RAF) veteran Cathal O'Shannon (1928-2011) uncover the truth about the war criminals and collaborators who found refuge in Ireland, in particular officials and politicians, in the years after World War 2.

A week of Greek and European brinkmanship -Videos

Jan 30, 2015: Yanis Varoufakis, Greece's new finance minister, interviewed on BBC's Newsnight.

Feb 5, 2015: The FT's John Authers quizzes Citi's Jonathan Stubbs on the reasons to buy European stocks. Europe looks cheap, but arguably the answer boils down to two letters: QE.

Feb 05, 2015: Greek bank shares fell by up to 25% on Thursday after the European Central Bank's latest move on funding. Lex's Robert Armstrong and Oliver Ralph discuss the volatile pickle that Greek banks find themselves in.

Feb 05, 2015: The FT's Stefan Wagstyl reports on the meeting between Yanis Varoufakis, Greek finance minister and Wolfgang Schäuble, his German counterpart – the climax of a roadshow in which Greece’s leftwing government had sought to win support for its debt plans.

Feb 04, 2015: John Authers reports from New York on a nasty surprise for markets from the European Central Bank. The negotiations over Greek debt remain risky; and the oil price's sudden rally takes a reverse.

Financial Times in 2015 predominantly a digital publication

The Financial Times is the world's digital trailblazer among significant old world newspapers.

The Financial Times, a leading provider of business news, commentary, and analysis for almost 127 years, uses salesforce.com across the entire organization, including ad sales teams, journalists, and back office personnel. "The ability to consolidate onto one platform has had a big impact for us. It's more cost-effective to maintain and support, and users only have to log into one place," says Christina Scott, CIO.

Finfacts Dec 2014: Web & News: Big brand newspapers, magazines finding digital model that works

The Financial Times came into life 127 years ago on February 13th 1888. Journalists and editors, past and present, reflect on the values of the FT and how it has changed, especially in the last 25 years and the start of the digital revolution. The contributors are Nigel Lawson, former UK chancellor of the exchequer, Richard Lambert, former editor, John Lloyd, Lucy Kellaway and Lionel Barber, the current editor.

Empire of the pig: China’s insatiable appetite for pork

Of all the meat options, pork reigns king in China. To keep up with demand, China now rears (and eats) nearly 500 million pigs a year—more than half of all the swine in the whole world.

The Economist says that while most of the pigs China eats are home-grown, each kilogram of pork requires 6kg of feed, usually processed soy or corn. Given the scarcity of water and land in China, it cannot feed its pigs as well as its people. The upshot is that Chinese swine, which previously ate household scraps, increasingly rely on imported feed.

Mindi Schneider of the International Institute of Social Studies in The Hague has estimated that more than half of the world’s feed crops will soon be eaten by Chinese pigs. By 2010 China’s soy imports accounted for more than 50% of the total global soy market. From a low base, grain imports are rising fast as well: the US Grains Council, a trade body, predicts that by 2022 China will need to import 19m-32m tonnes of corn. That equates to between a fifth and a third of the world’s entire trade in corn today.

Land use is changing drastically on the other side of the world and in Brazil, more than 25m hectares of land—parts of which were once Amazon rainforest—are being used to cultivate soy (Chinese companies have not signed up to the “soy roundtable”, a voluntary association, the members of which agree not to buy soyabeans from newly deforested land).

The newspaper/ magazine says entire species of plants and trees are being sacrificed to fatten China’s pigs. Argentina has chopped down thousands of hectares of forest and shifted its traditional cattle-breeding to remote areas to make way for soyabeans. Since 1990 the Argentine acreage given over to that crop has quadrupled: the country exports almost all of its whole soyabeans—around 8m tonnes—to China. In some areas farmers harvest two or three crops a year, using herbicides that have been linked to birth defects and increased cancer rates.

However, the significance of pork goes deeper than culinary tastes. They have been at the centre of Chinese culture, cuisine and family life for thousands of years. So why are pigs so important to China?

Economist report

What now for the House of Saud?

Salman bin Abdulaziz al-Saud has succeeded King Abdullah of Saudi Arabia. Hugh Carnegy and Roula Khalaf assess the implications of King Abdullah’s death amid the sharp fall in oil prices and the rise of Islamist extremism in the Middle East.

UK retailers face food/non-food disparity

With falling oil prices consumers should have more to spend but they’re certainly not splashing out on food. The FT's Lex’s Alan Livsey and Robert Armstrong discuss the disparity between the fortunes of the UK’s food and non-food retailers.

The world of public debt

FT chief economics commentator Martin Wolf discusses global debt sustainability with Gavyn Davies, chairman of Fulcrum Asset Management. They point out the improving situation in the US and UK, but are concerned about the Eurozone periphery and China.

Despite the biggest restructuring in history in 2012, Greece’s debts are still at about 174% of GDP, a fact that has helped the radical left Syriza party ride high in the polls on a platform of “debt forgiveness” from the country’s lenders ahead of elections later this month.

Together with the IMF, the Financial Times says that it has designed an online, interactive tool based on the fund’s economic model that calculates a country’s debt trajectory and how it is affected by an array of factors such as economic growth, borrowing costs and public belt-tightening. Assumptions can be tweaked to see how debts can be tamed, or increased. But it cannot determine exactly when a country is bankrupt.

The Three Tenors Christmas Concert 1999

The Three Tenors - Spanish singers Plácido Domingo (b. 1941) and José Carreras (b. 1946) and the Italian singer Luciano Pavarotti (1935-2007) - perform for Christmas in Vienna in 1999.

Irish Income Tax 2015: Numbers by income range

Data issued by the Department of Finance in December in response to a parliamentary question:

All income earners for Income Tax Year 2015 (provisional)

Range of Gross Income - €	Number of Income Earners
0 to 9,000	368,585
9,001 to 12,000	107,297
12,001 to 15,000	116,836
15,001 to 20,000	213,112
20,001 to 25,000	216,626
25,001 to 30,000	201,085
30,001 to 40,000	324,506
40,001 to 50,000	229,709
50,001 to 60,000	157,805
60,001 to 70,000	107,045
70,001 to 80,000	77,378
80,001 to 100,000	91,301
100,001 to 120,000	47,956
120,001 to 150,000	34,809
150,001 to 200,000	22,512
Over  200,001	24,642
Total	2,341,203

Fall of Berlin Wall - 25 years later

In the Interview - Former German Foreign Minister Hans-Dietrich Genscher looks back on the road to German unity. Who threw up barriers? And who helped things along? Germany's former foreign minister recalls the days when Berlin was making world history and assesses what has been achieved since for Germany and Europe.

November 9th 2014 marks the 25th anniversary of the fall of the Berlin Wall - a happy date in German history. But many of the country’s neighbors were against the idea of a reunited Germany back then, worried that it would once again seek to dominate Europe. What role should and can Germany now play in both Europe and the rest of the world?

Berlin has changed considerably since the fall of the Wall. But traces of the 160-kilometer-long border that once divided East and West Berlin can be found at the Brandenburg Gate and the East Side Gallery - and elsewhere, too!

Steven Pinker on bad and good writing

The psychologist and word-usage expert has produced a new style guide with cognitive sensibilities called "The Sense of Style."

Steven Pinker, a Harvard University professor, in the book 'The Sense of Style: The Thinking Person’s Guide to Writing in the 21st Century' according to The Economist steers:

writers towards a “classic style”, in which the writer clearly points out things that may have escaped the reader’s notice, but which anyone can understand with patient guidance. Classic style uses concrete words in straightforward sentences easily parsed by man’s limited brain. Bad writing, exemplified by academese, bureaucratese and bewildering gadget manuals, does the opposite. Sentences are long, filled with abstract words, and make sense only to those who already know most of the information. (Mr Pinker admits that he struggles daily with papers in his own academic field.)

Why, psychologically, is bad writing bad? Working memory, which holds syntactic constructions in mind until they are complete, is easily overwhelmed. Mr Pinker uses memorable (and often funny) examples to show exactly what kind of sentences tax the mind. For example, violating expectations, such as upsetting chronological order, makes the reader do extra work. (When financial journalists say that an equity fell to $76 from $110, they invite confusion.) And the much-derided passive voice can make a passage flow more smoothly by preserving the ideal order of old information, then new.

Chris Soghoian's wake-up call on internet privacy

Digital Editor of The Economist Tom Standage interviews Christopher Soghoian, Principal Technologist and Senior Policy Analyst, Speech, Privacy and Technology Project, American Civil Liberties Union (ACLU).

China's territorial claims in Asia

The Economist says one reason China’s spectacular rise sometimes alarms its neighbours is that it is not a status quo power. From its inland, western borders to its eastern and southern seaboard, it claims territory it does not control.

In the west, China’s border dispute with India is more than a minor cartographic tiff. China claims an area of India that is three times the size of Switzerland, the state of Arunachal Pradesh.

Further west, China occupies Indian claimed territory next to Ladakh in Kashmir, an area called the Aksai Chin. China humiliated India in a brief, bloody war over the dispute in 1962. Since 1988, the two countries have put the dispute on the backburner and got on with developing commercial ties, despite occasional flare-ups.

More immediately dangerous is the stand-off between China and Japan over disputed islands in the East China Sea, known as the Senkakus in Japan and Diaoyu in Chinese.

Why London is the most expensive city to build in

Oddly-shaped buildings and unexploded bombs are two reasons it costs more to build in London than any other city.

Putin, Ukraine and the airliner crash

FT leader writer James Blitz and East Europe editor Neil Buckley discuss what Russian president Vladimir Putin and western leaders will do next after a Malaysian civilian airliner was shot down in eastern Ukraine with the loss of 298 lives.

Google's self-drive car

Google says: "Fully autonomous driving has always been the goal of our project, because we think this could improve road safety and help lots of people who can't drive.

We're now developing prototypes of vehicles that have been designed from the ground up to drive themselves—just push a button and they'll take you where you want to go! We'll use these vehicles to test our software and learn what it will really take to bring this technology into the world."

 Google hopes that by this time next year, 100 of its driverless two-seaters will be on public roads, following extensive testing. The cars would not be for sale and instead would be provided to select operators for further tweaking and have limitations such as a 40-kilometre-per-hour top speed.

United States prison rate has quadrupled since 1960s

Source: The Brookings Institution’s Hamilton Project.

*Rates are from 2013 for all countries with the exception of Greece, Israel, the Netherlands, Sweden, Switzerland and the United States, which are from 2012; and Canada, which is from 2011–12. The rate for Britain is a weighted average of England and Wales, Northern Ireland and Scotland.

The New York Times says that despite a recent dip, the incarceration rate in the United States has almost quadrupled since the 1960s. The US now has far more people in prison as a share of its population than any other developed country and partly reflects the failed 'War on Drugs' which has criminalised a generation of young men.

California student gunman left chilling video before rampage

Before he set out on a rampage through the California seaside college town of Isla Vista on May 23, that ended with seven dead and 13 injured, suspected gunman Elliot Rodger (22) calmly laid out his plans online and said he was a virgin as girls had rejected him.

The video was posted on Youtube but was later removed.

The Wall Street Journal reports that investigators said Rodger was found dead in his vehicle with three handguns—two Sig Sauer 226 and a Glock 34, all purchased legally in California and registered to the suspect.

The Journal said Elliot Rodger, a Rodger family spokesman said Saturday, had a difficult time making friends. He had been diagnosed as a "high functioning Asperger's child" earlier in life, and was being treated by many mental health professionals, said Alan Shifman, a lawyer for Peter Rodger, the father of Elliot Rodger. Peter Rodger is a Hollywood director who worked as an assistant director on "The Hunger Games."

A Deutsche Bank chief warns traders on being ‘boastful, indiscreet and vulgar’

Colin Fan, co-head of Deutsche Bank’s investment bank, has warned traders in an internal video that being ‘boastful, indiscreet and vulgar’ will have ‘serious consequences’. Andrew Hill, FT management editor, tells Daniel Garrahan why he’s a fan of Mr Fan.

Anglo Irish Bank, accounting fraud, and targeting domestic firms

Days after Ireland shocked Europe on September 30, 2008, with a blanket guarantee of Ireland's bank deposits and debts, Patrick Neary, the financial regulator, was interviewed on Irish television but he may as well have been regulator of banking in Freedonia:

The trial of former executives of Anglo Irish Bank on the issue of the bank supporting the share price through an illegal scheme, wouldn't have occurred but for the collapse of the Irish banking system.

In contrast with a case like Guinness plc in the UK in the 1980s, where company funds were used to boost the share price during a takeover battle, here we had the Central Bank of Ireland in the information loop on the efforts to prevent a rerun of the Northern Rock bank collapse situation when it became known in September 2007 that Seán Quinn, a then billionaire, had built up in the period 2006/07 a secret CFD (contracts for difference) holding of more than a quarter of the shares in Anglo Irish Bank.

When Seán FitzPatrick and David Drumm, Anglo’s chairman and chief executive, discovered in September 2007, that Quinn had then a 24% stake in Anglo through contracts for difference (CFDs), they told the bank's board and Drumm was instructed to inform Patrick Neary, the financial regulator.

Neary told the trial that at a meeting that month, he didn't ask Drumm what was Quinn's stake nor did Drumm tell him. In early 2008 when Seán Quinn visited Neary's office at the Central Bank, Neary told the trial that he didn’t think it would be “fair or appropriate” to have asked about the stake that Quinn had in the bank.

Neary had also told the trial that after meeting with Drumm, a colleague had given him a document explaining CFDs.

This could evoke the Marx Brothers' 'Duck Soup' (1933) but the 'Nightmare on Dame Street' drama was set in a Trappist monastery.

One of the most striking illustrations of the dysfunctional nature of the office of the financial regulator, was that for most of 2008 Patrick Neary was unaware of the discovery by his staff, that Irish Nationwide Building Society had provided loans of up to €122 million to Anglo Irish Bank's Seán Fitzpatrick, over an eight-year period, enabling him to move his director loans at Anglo Irish, off the bank’s books at each September 30th year end, to avoid disclosing them publicly. What amount would have triggered some office gossip or a whisper in a pub?

Ruadhán Mac Cormaic of The Irish Times has reported that in two days in the witness box, Neary said “I don’t recall” 30 times, “I don’t know” 23 times, “I can’t recall” 12 times, “I can’t/don’t/cannot remember” 12 times, “That’s a complete blank to me” once, and “I’ve absolutely no recollection” four times.

Neary had also told the trial that Con Horan, his prudential director, had not informed him of a first attempt to unwind Quinn's CFDs in March 2008.

Besides the three defendants, how many others were involved in devising the support scheme even though they were working on the basis of legal advice that the Maple 10 arrangement was in compliance with the Companies Act 1963?

Finfacts: Last rites read for Anglo Irish Bank - - the damned builders' bank

1. So while Seán FitzPatrick should have been expected to know more than his other non-executive colleagues on the board about the risks of this transaction, at least two of them were chiefs of listed companies while another was the former chief of a Big 4 accounting firm.

The jury made the right call in acquitting FitzPatrick.

2. Willie McAteer and Pat Whelan, were found guilty of implementing the illegal scheme by a Dublin court on Friday.

The scheme was devised by many more and apart from the financial regulator, the senior management of the Central Bank and some officials in the Department of Finance were likely aware of it.

Anglo had also been advised by one of Dublin's biggest law firms that the arrangement was compliant with the Companies Act - while that does not make what's illegal legal, coupled with the tacit or overt imprimatur of the Central Bank, in the ordinary course of business, all that is usually sufficient for business executives who are  not legal specialists.

I used to have a copy of the Companies Act 1963 and while there are for example clear cases where companies engage in fraudulent trading when a company is close to collapse, there are others in hindsight where the directors should have called in a receiver earlier but last ditch attempts to rescue the firm that drained the more funds, were fruitless.

I have worked in a company of several hundred people that had some good contracts but it had cash flow problems and was awaiting an outside investment to stave off collapse.

Staff soon realise that there are serious problems and people with fear in their eyes anxiously search for some reassurance when there maybe none.

It must have been a similar atmosphere for non-executive staff within the bank.

Making a judgement on the share support scheme and the overall management of the bank during the property bubble, are different issues.

3. It's well to remember that there is no new dawn as compliance with company and tax laws will continue to be a much bigger risk area for Irish-owned firms and directors than for foreign-owned multinationals.

The Big 4 accounting firms are active in selling tax avoidance/ evasion shelters not only in the corporate tax area but in also cutting VAT for example [pdf].

Usually when abuse schemes are discovered by revenue authorities, a deal can be agreed.

In the past decade, there was a rare case in the US where a criminal prosecution was launched and KPMG LLP admitted to "criminal wrongdoing" and individual staff were targeted.

The US Department of Justice said in a statement: “In the largest criminal tax case ever filed, KPMG has admitted that it engaged in a fraud that generated at least $11 billion dollars in phony tax losses … cost the United States at least $2.5 billion dollars in evaded taxes.… KPMG also admitted that its personnel took specific deliberate steps to conceal the existence of the shelters from the IRS."

SEE also: OECD BEPS Project: Ireland should embrace corporate tax reform

Cost of breakfast rising due to drought, disease and rising demand

The Financial Times reports that drought, disease and rising demand have led to prices of eight key breakfast commodities rising on average almost 25% this year, fuelling consumer fears of food inflation.

Coffee has soared more than 70% because of unseasonably dry weather in Brazil, while US pigs have been hit by a virus epidemic, leading to a more than 40% rally in Chicago pork prices.

The Wall Street Journal says that in the U.S., much of the rise in the food cost comes from higher meat and dairy prices, due in part to tight cattle supplies after years of drought in states such as Texas and California and rising milk demand from fast-growing Asian countries. But prices also are higher for fruits, vegetables, sugar and beverages, according to government data. In futures markets, coffee prices have soared so far this year more than 70%, hogs are up 42% on disease concerns and cocoa has climbed 12% on rising demand, particularly from emerging markets.

Drought in Brazil, the world's largest producer of coffee, sugar and oranges, has increased coffee prices, while dry weather in Southeast Asia has boosted prices for cooking oils such as palm oil.

Ireland's Kenny could become Europe's Mr Charmer

In the space of a few weeks, Stephen Collins, political editor of The Irish Times, in an economic commentary, swings from 'Bailout myth is a cocktail of half-truths and downright evasions - Wide acceptance of an unreliable narrative about what happened means we may never get to grips with the actual facts' to 'Kenny’s track record could land him a key EU position.'

It is however interesting that Enda Kenny (taoiseach/ prime minister since 2011) would be a suitable candidate for the largely ceremonial role of European Council president rather than the presidency of the Commission which has a key role in EU policy making - - one that could be well filled by Christine Lagarde of the IMF.

Kenny's optimism has been a positive thing, in particular when compared with his immediate predecessor but it's nonsense to claim he has had a big impact on investment inflows -- most of which come from the existing investment base (do not be misled by American Chamber of Commerce in Ireland spin on the issue.)

Besides, the charm did not get far when it was claimed that there had been an agreement at the June 2012 EU summit that Ireland would get a refund of the State's €64bn spending on rescuing Irish banks - - the curious thing about the claim is that it's still unknown which leader if any had made such a promise.  

It's easy to forget that Bertie Ahern (taoiseach/ prime minister 1997-2008) lauded by journalists for his 'common touch' once radiated optimism, but what he shared with Kenny was a lack of interest in the boring but crucial issue of reforming failed systems of governance.

At the MacGill Summer School in July 2009, Enda Kenny, then leader of the Opposition, asked why do we have a budgetary system in place that is unfit to run a corner-shop, let alone a nation of 4m people?

In July 2013, the IMF said on Irish government accounting, that there is no uniform set of accounting rules and procedures applying to government departments, extra-budgetary funds, semi-state bodies, local governments, and public corporations. "This makes consolidating government-wide financial information and promoting system-wide improvements in financial reporting practices very costly and time consuming."

The bailout terms were met but in terms of preparing for a world of different economic challenges, has there been change remotely comparable with what was done in Sweden and Finland in the aftermath of their crises in the early 1990s?

Wouldn't it be a shock if we had a society where workers have equal rights whether in the public or private sectors, including similar pension entitlements (the majority of private sector workers do not even have an occupational pension)?

Leo Tolstoy wrote in 'War and Peace' of the Battle of Borodino in 1812:

"it was not Napoleon who directed the course of the battle, for none of his orders were executed and during the battle he did not know what was going on before him... Napoleon fulfilled his office as representative of authority as well as, and even better than, at other battles. He did nothing harmful to the progress of the battle; he inclined to the most reasonable opinions, he made no confusion, did not contradict himself, did not get frightened or run away from the field of battle, but with his great tact and military experience carried out his role of appearing to command, calmly and with dignity."

However, a weakened Russian Army was allowed to escape and regroup.

Rather than Kenny's charm offensive, the vacuous 'Medium-Term Economic Strategy 2014-2020' that was published last December is a better pointer to the ultimate judgement on his leadership.

Finfacts: Irish Corporate Tax 2014: How official spin and distortion works - in short-term

Finfacts: Reality Check: Merkel did not agree to refund Ireland €64bn bank rescue cost