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  • Barcelona hits Airbnb with a hefty fine

    Posted 2016-11-25 15:03:43 by: Guest

    THE phoney war between home-sharing websites and Barcelona seems to have come to an end. After months of sparring between the parties, this week Barcelona levied fines of €600,000 ($636,000) each on Airbnb and HomeAway, which it says have been offering to rent properties that do not have a tourist licence to holidaymakers. The firms had already been fined a nominal amount last year. HomeAway says it will pay the fine; Airbnb is appealing.Airbnb says that it is “part of the solution” in Barcelona. That depends on which problem it thinks it is addressing. Barcelona is a cramped town. The number of visitors to the city has more than doubled since the start of the decade, from 3.1m in 2000 to 7.8m in 2014. That is close to five tourists for every inhabitant. Tourist accommodation is scarce. The average hotel occupancy rate in Barcelona is 78%, the highest of any of Spain’s main towns. Hotels’ revenue per room, too, is higher than in other cities. All of which suggests a strong demand for...Continue ...

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  • The future of the A380

    Posted 2016-11-24 15:49:20 by: Guest

    AT THE world’s major airports, plane-spotters often spend days waiting for the world’s largest passenger plane, the Airbus A380, to make an appearance. The nerds at Dubai International Airport are spoilt for choice. It is home to Emirates, an airline that owns 86 of the monster aircraft, almost half of the global A380 fleet. These planes have propelled Emirates from insignificance a decade ago to its position as the world’s biggest carrier (measured by international passenger mileage in 2015). Now the airline has hit a rough patch. That is bad news for Airbus, the European aerospace and defence giant which makes the A380, and for the plane itself.Demand once seemed insatiable for flights through Emirates’ hub in Dubai, which is known in the industry as a “super-connector” airport. Now its location helps explain the airline’s difficulties as well as its spectacular past growth, says its president, Sir Tim Clark. When he helped set up the airline in 1985, he says, Dubai was “an enchanting Arab village” that generated little air traffic. Instead of filling up the planes with locals, his strategy was to use its position halfway between...Continue ...

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  • The business of reselling returned shop items

    Posted 2016-11-24 15:49:20 by: Guest

    Can I send him back, too?IN STORES and warehouses across America, they wait: towers of toys, scarves piled on scarves, box upon box of shoes. The official start of holiday shopping in America begins on “Black Friday” on November 25th. Retailers hope to sell more than $650bn of goods this season, roughly the annual economic output of Switzerland. Ideally, companies’ supply of products would precisely match demand for them. In reality millions of items will stay on shelves or get sent back after purchase—in all of 2015 Americans returned goods worth $261bn, out of a total $3.3trn sold. What happens next?Some returned goods will be resold by the very same retailer, but many will not. By the time an item is returned it might be either damaged or stale, points out Steven Barr of PwC, an accounting firm and consultancy; shops might want to offer newer wares. And resale is not an option for the stacks of goods that are never sold at all.For retailers and manufacturers, this is a big headache. Dealing with unwanted goods can amount to a tenth of the cost of making and distributing them in the first place. But for...Continue ...

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  • India grapples with the effects of withdrawing 86% of cash in circulation

    Posted 2016-11-24 15:49:19 by: Guest

    A short, sharp liquidity shockA NEW strain of trickle-down economics has been spawned by the decision, on November 8th, to withdraw the bulk of India’s banknotes by the end of this year. As holders of now-useless 500-and 1,000-rupee ($15) notes rushed to deposit them or part-exchange them for new notes, an e-commerce site offered helpers, at 90 rupees an hour, to queue outside banks in order to save the well-off the bother.Elsewhere, a chronic shortage of banknotes in a cash-dominated economy has left most trades depressed. Seven out of ten kiranas (family-owned grocers) have suffered a decline in business, according to a survey by Nielsen, a consultancy. Supply chains, in which wholesalers and truckers deal mostly in cash, have fractured. Some 20-40% less farm produce reached markets in the days after the reform. City folk admit to hoarding the 100-rupee note, the largest of the old notes to remain legal tender. Taxi drivers refuse to break the new 2,000-rupee note. Road-tolls have been suspended until at least November 24th, to prevent queues. Beggars have disappeared from parts of Delhi; no one has...Continue ...

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  • British mutual-fund fees are too high

    Posted 2016-11-24 15:49:16 by: Guest

    BANKS tend to grab the headlines when it comes to financial scandals and systemic risk. But many people have a lot more money squirrelled away with the asset-management industry, in the form of pensions and lifetime savings, than they do in their bank accounts. A new report* from one of Britain’s regulators, the Financial Conduct Authority (FCA), suggests that the industry is not doing a great job at looking after investors’ interests.The British fund-management industry is huge, with some 1,840 firms managing around £6.9trn ($8.6trn) of assets. With the ten biggest fund managers representing only around 47% of the market, competition ought to be pretty intense. But the FCA report finds that fees in the actively managed sector (ie, funds that try to beat the market by picking the best stocks) have barely shifted in the past ten years. Operating margins across a sample of 16 fund-management firms have averaged 34-39% in recent years, one of the highest of any industry. Profits that heady smack more of an oligopoly than of a cut-throat battle for business.There is one part of the market where fees have come...Continue ...

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  • American bankers look forward to a bonfire of financial rules

    Posted 2016-11-24 15:49:16 by: Guest

    BEFORE the presidential election, Wall Street dreaded Donald Trump as a dangerous, unpredictable and disruptive, if improbable, president. Since his victory, fear has turned to hope. Stockmarkets are at record highs and shares in financial institutions have been among the best performers. Mr Trump, it turns out, looks to big finance like good news. Partly this reflects Mr Trump’s change of tack. He campaigned as the leader of a rustbelt revolt against the besuited, pampered elites. As president-elect, he seems less of an outsider. Among the rumoured names he has been mulling as his choice for treasury secretary are Jamie Dimon, boss of JPMorgan Chase, and Steven Mnuchin, a 17-year veteran of Goldman Sachs. Wall Street’s access to the corridors of power seems likely to be unimpaired.But the euphoria mostly reflects the finance industry’s excitement at one of the more achievable of Mr Trump’s campaign promises: to cut red tape. In a YouTube video this week outlining his priorities, he announced a new rule: for every new regulation, two old ones must be eliminated. No industry in America feels as browbeaten by regulators as does...Continue ...

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  • False news items are not the only problem besetting Facebook

    Posted 2016-11-24 15:49:16 by: Guest

    “MARK ZUCKERBERG, dead at 32, denies Facebook has problem with fake news.” The satirical headline, which made the rounds online this week, nicely encapsulates the most recent woes of the world’s largest social network: its algorithms, critics say, filled users’ newsfeeds with misinformation—and in the process influenced the American election result. But this is not the only problem the firm is grappling with. A volatile share price, privacy policies and advertising metrics have also kept Mr Zuckerberg (pictured) busy.“News” that the Pope had endorsed Donald Trump or that a pizzeria in Washington, DC, is the home base of a child-abuse ring led by Hillary Clinton, were not confined to Facebook (nor were fake stories only a right-wing phenomenon). They often originate elsewhere, for instance on fake-news websites in Macedonia, which make good money via online ads, and on Twitter. But Facebook’s algorithms give prominence to such misinformation. They are tuned to maximise “engagement”, meaning they present users with the type of content that has already piqued their interest, as outrageous headlines tend to do.Yet despite...Continue ...

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  • Aviation executives doubt a third runway at Heathrow will be built anytime soon

    Posted 2016-10-31 16:19:00 by: Guest

    LAST week, the British government gave London Heathrow airport the go-ahead to expand. The decision to allow it to build a third runway had been a long time coming. It is 70 years since the area around London last saw a new one built, and Heathrow, Europe’s busiest hub, is operating at 99% capacity. But already two aviation executives have expressed their cynicism about whether a runway will be built anytime soon. Or to cost.Willie Walsh (pictured), the boss of IAG, the parent company of British Airways (BA), by far Heathrow’s biggest tenant, kicked off proceedings. “Do I have confidence that the current team at Heathrow can do it?” he said in an interview on Friday. “No, I don’t.” Mr Walsh is not exactly a disinterested observer. The proposed £17.6bn ($21.4bn) expansion of Heathrow is to be financed privately; IAG fears that this will mean higher charges for BA. Even before the vote Mr Walsh, perhaps disingenuously, had come out against the building of a new runway for this reason. Last year, after the Airports Commission had...Continue ...

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  • Wall Street v Main Street

    Posted 2016-10-31 12:11:37 by: Guest

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  • Anatomy of a stupid rumour

    Posted 2016-10-30 10:12:54 by: Guest

    MARK Carney, the governor of the Bank of England, has upset many people in the Conservative party because of his warnings about the economic impact of Brexit. So some including former chancellor Lord Lawson and Daniel Hannan, a eurosceptic MEP, have called on him to resign. As we argue in a leader in the latest issue, this political pressure on an independent central bank governor is a great mistake. On the day after the referendum vote, the prime minister resigned and Brexit campaign leaders were nowhere to be seen; it was Mark Carney who stepped forward to calm the markets. He was the only grown-up in the room.Now the stories are circulating that Mr Carney might resign, with some even suggesting that ...

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