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Monday, December 28, 2015

FORTUNE MAGAZINE TOP STORIES-- ( A BUNCH)

These 5 Trends Will Shape the Global Economy in 2016

Peer into our crystal ball

Every year brings its share of economic events that take us by surprise. Few people predicted the collapse in oil prices that started in the summer of 2014, or were able to time the sharp decline in economic growth in China that started a few months ago.
That said, many of the economic trends that shape our world can be spotted ahead of time by careful observers. For instance, many pundits argued that the Federal Reserve wouldn’t be able to raise rates this year, but a close examination of the data would have enabled you to predict the Fed’s December liftoff. In 2016, new economic trends will emerge or gain steam, and shape the world we live in for the better or worse. Here are the top five:
George Diebold—Getty Images/Blend Images

The Global Economy Will Continue to Be Powered by America

Walter Zerla—Getty Images
If you ask the average American, he would be surprised to find out that the U.S. economy's performance is best in class. But with the rest of the wealthy world growing even more slowly than America, and with the collapse in economic growth in China, that's exactly what it's become.
The Chinese government says that GDP growth there has slowed to 6.9% in 2015, and that it will grow by 6.8% next year after averaging more than 10% for the past decade. That sounds much faster than the 2.5% to 3% growth expected here at home, but many economists doubt the accuracy of Chinese government numbers, estimating that growth will be closer to 3% to 4% in the years to come.
But more important, the United States has by far the largest trade deficit in the world, which means that the other big economies like Germany, Japan, and China are dependent on U.S. demand for their economies to grow. While Chinese leaders recognize that it's imperative for their economy to shift from an investment and export model to one built around consumer spending, expect global economy to continue to lean on the U.S. consumer in 2016.

China Will Stay Stuck in Second Gear

jmiks Getty Images/iStockphoto
For years, the world has watched as China posted economic growth rates three times as fast as the United States, built on the back of government-directed capital investment and massive exports to the wealthy world. The Chinese economy blew past the global financial crisis without so much as flinching, again with the help of massive government stimulus that enabled further investment-led growth.
But much of this investment was enabled by growing debt, both government and corporate, rather than profits. China must do the hard work of shifting wealth from powerful government officials and managers of state-owned enterprises to Chinese households, with consumer spending carrying more of the economic burden. This will, however, be politically difficult and won't happen overnight. Expect this bumpy transition to continue in 2016 and beyond.

Commodities Will Be Cheap

Photograph by Rick Wilking — Reuters
The collapse in Chinese growth helped commodities class have its worst year since 2008, with the Bloomberg commodities index falling 26% in 2015. As China was the main source of demand for the basic building blocks of the global economy, analysts expect commodities to remain soft in 2016.

Europe will edge closer to crisis

Getty Images
While many Americans may think of the European debt crisis as something that occurred in the past, it's actually still ongoing. The unemployment rate for the euro area remains at 10.7%, with unemployment in Spain, the union's fifth-largest economy, over 21%. Though Europe is slowly growing and its unemployment rate slowly falling, the imbalances that created the crisis still remain.
The Euro binds together countries like Greece and Germany with vastly different productivity levels, giving Germany unfair advantages in export markets while keeping unemployment in less productive countries dangerously high. Until Europe deals with the fundamental cause of its troubles, expect the continent to muddle along, while government debt levels steadily rise.

India will become the new growth king

Kevin Frayer—Getty Images
The IMF expects the Indian economy to grow at 7.3% clip next year, faster than even the Chinese government's trumped-up numbers. 2016 will be a turning point, in which a much younger and less technologically advanced India surpasses its neighbor to the east to become the fastest growing large economy.
Though the Indian economy hasn't been spared from the headwinds that have slowed other emerging market economies, it does have demographics on its side. Over the next ten years, the Indian workforce will grow to be larger than the Chinese, even as China's overall population remains the world's biggest. Narendra Modi has his hands full guiding the world's largest democracy towards more business-friendly policies, but the signs point to an emergent India in the new year.

Tesla Starts Shipping "Signature Series" Model X Cars To Customers

A handful of Tesla customers got early holiday presents: their long awaited Model X cars.

Electric car company Tesla Motors has quietly hit a milestone in delivering its long-awaited crossover SUV, the Model X.
Over the past couple of weeks, a handful of customers who had put down a $40,000 deposit for a “Signature Series” of the Model X, have received their cars, according to customers’ reports on forums, social media and blog posts. The “Signature Series” of the Model X is a limited-edition version for early reservation holders that comes “fully loaded” with all of the cars bells and whistles. The cost: $132,000 to $144,000.
The Model X, first revealed in 2012, is Tesla’s third electric car. It was designed with swooping gull-wing doors and seats for seven adults along with an optional tow hitch.
A Tesla  TSLA -0.70%  spokesperson confirmed that the company has started delivering the Signature Series versions of the Model X cars. On Saturday, the company tweeted a picture of one of those deliveries.
WATCH: Tesla’s Model X video
During a splashy event at its Fremont, Calif. factory in late September, Tesla publicly delivered the first six “Founders Series” Model Xs for some V.I.P.s. Those early customers included Tesla investors and, reportedly, Google  GOOG 1.89%  co-founder Sergey Brin.
But beyond those select few, it’s been unclear how quickly Tesla would be able to ship the cars to the rest of its customers, many whom have been waiting years for their orders to arrive. How quickly Tesla can grow and automate production of its Model X cars—at the same time that the company is also making the Model S— is important for Tesla’s near term future and its earnings in early 2016.
Tesla spokesperson Khobi Brooklyn told Fortune that Tesla has now delivered “hundreds” of Model Xs, and says the company plans to soon start shipping “general production” versions of the Model X cars. These general production Model X cars, which cost at least $70,000, make up the bulk of Model X reservations.
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As of this summer, Tesla had over 20,000 reservations for the Model X (most of which required a $5,000 deposit). In Tesla’s latest earnings call, CEO Elon Musk said that he was “very confident” of being able to grow production of the Model X to “several hundred vehicles per week by the end of the year.”
Musk said production growth depended on how quickly the company could solve small technical issues, like correct placement of the door seals. Deliveries of the Model X cars around the holidays could also be a “logistical challenge,” said Musk.
The Tesla Motors Model X sport utility vehiclePhotograph by David Paul Morris — Bloomberg via Getty Images

Why It's Getting Harder to Return Gifts at Sears and Costco

The new restrictions are aimed at combating fraud.

Return policies have become a flashpoint for retailers. Some stores are making it harder while others are making it easier for customers to return purchased items.
While most retailers’ return policies have remained unchanged from last year, a few major chains have added restrictions or offered benefits to shoppers, according to a new study by Consumer World.
Sears  SHLD -0.38% , for one, has dropped its 30/60/90 day return policy, and issued a blanket 30-day return window for items. Costco  COST -0.36%  has now refused returns of tires, batteries, and custom orders, reported Consumer World.
Meanwhile, other retailers are implementing “slice and dice” return policies, with complicated rules for different categories of items, subjecting products like electronics to more stringent return policies than clothing, for example. Consumer World found that computers, game consoles, and opened goods are often subject to limited return rights, restocking fees, or shorter return periods.

The more stringent requirements are partly on account of new efforts to combat retail fraud, a concern among retailers. Out of the total annual returns this year — which is expected to reach $260.5 billion — 3.5% are expected to be fraudulent, according to the National Retail Federation.
On the other end of the return policy spectrum, 49% of online stores surveyed now offer “free returns,” in which the retailer covers the cost of return shipping for unwanted items. Major retailers like Macy’s  M 0.06% , Target  TGT -0.41% , and Gap  GPS -1.03%  have jumped on the free return bandwagon for online purchases.
Some policies favor loyal shoppers. Target REDcard members get 30 extra return days, and Best Buy Elite members  BBY 0.10%  also get a longer return period than non-member customers. “Since the rules vary so much from store to store, you really have to read the fine print,” Edgar Dworsky, founder of Consumer World, wrote on his publication’s site.
Photograph by Justin Sullivan — Getty Images

Fujitsu to Spin Out PC, Smartphone Divisions


Like IBM and Hewlett Packard, the Japanese technology pioneer is distancing itself from the cutthroat personal computer business.

Japan’s Fujitsu Ltd. intends to spin its personal computer and smartphone businesses into two separate companies by Feb. 1.
The move, approved in a board meeting Dec. 24, makes Fujitsu the latest tech giant to separate its technology services, computer server, and networking equipment division from those selling relatively low-margin commodity products. Most recently, the Hewlett Packard Enterprise and HP Inc. split became official Nov. 1, and IBM started the spinoff trend a decade ago, when it sold its PC division to Lenovo in 2005.
Fujitsu’s decision isn’t a surprise, given that the PC shipments are forecast to slip more than 10% this year. “With the ongoing commoditization of ubiquitous products, mainly of PCs and smart phones, it has become increasingly difficult to achieve differentiation, and competition with emerging global vendors has intensified,” the Fujitsu board said in a statement.
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In early December, several new reports suggested that the company was considering a three-way venture with Toshiba and Vaio, a company created when Sony Electronics spun out its PC business last year. That entity would have created Japan’s largest PC maker, but it would have ranked only seventh worldwide in terms of unit shipments.
Toshiba, which has been rocked by an enormous accounting scandal, confirmed its intention to divest its PC division on Dec. 21, but the details of its “revitalization plan” are still in flux.
Meanwhile, Fujitsu’s plan calls for it to transfer the research, design, manufacturing, sales, and support activities associated with its notebook and desktop computers into a wholly owned subsidiary called Fujitsu Client Computing. It will take a similar approach for its mobile phones, moving related assets to a new company called Fujitsu Connected Technologies.
Fujitsu holds more than 97,000 patents. It was a pioneer in using biometrics such as palm recognition for security authentication and helped establish ruggedized tablet computers in the healthcare sector.
The divestiture will allow Fujitsu to double down on innovation related to its core businesses in technology services, where it ranked among the top five suppliers last year; as well as in computer servers, where it has been losing share to aggressive companies such as China’s Huawei and Inspur.

Game of Thrones Was 2015's Most Pirated TV Show

Illegal downloads of the epic fantasy show raged on, despite the launch of HBO Now.

The wildly popular HBO series Game of Thrones has another award to its name.
Downloaded 14.4 million times in 2015, according to TorrentFreakGame of Thrones was the most pirated television show in the U.S. The series handily topped The Walking Dead, which was pirated 6.9 million times, and The Big Bang Theory, with 4.4 million downloads, for the second straight year.
While the top three shows are notable, the bigger story is that the data shows a shockingly big leap for piracy. In 2014, Game of Thrones downloads stood at 8.1 million, according to TorrentFreak’s data. The Walking Dead and The Big Bang Theory were in the second and third slots with 4.8 million and 3.9 million pirated downloads, respectively.
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TorrentFreak analyzes BitTorrent services that allow users to download television shows, movies, and other content from the Internet. But the website notes its data may only be the tip of the iceberg. Its numbers are estimated based on several, but not all, download sources. And what’s more, TorrentFreak says that “online streaming and downloads for file-hosting services” are not included in its data. This suggests the actual piracy numbers are much higher.
BitTorrent is a decidedly divisive topic. Its supporters say the download service provides an opportunity for Internet users to find content they enjoy and watch it free of charge. They also argue that it may increase paid viewership if those who download (or pirate) content ultimately like what they find and decide to watch it through traditional means.
Detractors—which include the recording, television, and film industries—say that the BitTorrent robs copyright holders of revenue they could generate off their creations. These groups have railed against peer-to-peer downloading platforms, saying that the technology provides an easy gateway for users to watch their paid programming for free.
WATCHFor more on Game of Thrones, check out the following Fortune video:
Meanwhile, content creators have drummed up new ways to offer their programming in a bid to sidestep piracy, but to no avail. This past year, for example, HBO launched a $15-a-month service called HBO Now, that lets users stream all of its programming. But based on these findings HBO’s video streaming service has done nothing to actually stem piracy’s tide.
Regardless of the numbers, the series has been a breakout success for HBO. Based the fantasy book series A Song of Ice and Fire by George R.R. Martin, Game of Thrones follows the fight for power among several families in a fictional, castle-filled land. The show’s fourth season won a record 12 Emmys, including Outstanding Drama Series, and its fifth season is expected to be similarly successful in the upcoming award season. Last month, HBO released a teaser for its highly anticipated sixth season.
MORE: For more on the next season of Game of Thrones, click here.
Yet 2015 was the fourth consecutive year Game of Throneshas topped TorrentFreak’s list of most-pirated television shows. That means yet another feather in the award-winning show’s cap — albeit this time, a dubious one.

Whole Foods to Pay $500,000 to Resolve NYC Overcharging Probe

The settlement also requires the company to adhere to standards aimed at preventing overcharging.

By Nate Raymond
NEW YORK, Dec 28 (Reuters) – Whole Foods Market Inc has agreed to pay $500,000 to resolve an investigation into whether the supermarket chain charged too much for some prepackaged foods at its New York City stores, a city agency announced on Monday.
The New York City Department of Consumer Affairs said the settlement also requires the company to adhere to standards aimed at preventing overcharging.
The department’s commissioner, Julie Menin, said the agreement “will help to ensure New Yorkers are better protected from overcharging.”
Whole Foods, which operates nine stores in the city – in Manhattan and Brooklyn – said the settlement was below the $1.5 million the agency demanded and would “put this issue behind us so that we can continue to focus our attention on providing our New York City customers with the highest level of quality and service.”
The Department of Consumer Affairs in June had announced an investigation of Whole Foods after finding its New York City stores routinely overstated the weight of prepackaged meat, dairy and other goods.
The overcharges ranged from 80 cents for a package of pecan panko to $14.84 for a package of coconut shrimp, according to the agency, which tested 80 types of food and found that all of them had mislabeled weight.
The co-chief executives of Whole Foods, Walter Robb and John Mackey, subsequently apologized in a YouTube video, saying they “made some mistakes.” The publicity that followed the probe hurt sales at the Austin, Texas-based chain.
As part of the settlement, the Department of Consumer Affairs said Whole Foods must conduct quarterly in-store audits at all its New York City stores.
If agency inspectors identify mislabled pre-packaged foods at a store, that store must immediately remove all mislabled products and Whole Foods must check the accuracy of pricing of that and 20 other products from the same department at all city stores, the department said.
Whole Foods must also implement and enforce policies preventing employees from estimating a package’s weight and conduct training for employees involved in that process, the department said.
Whole Foods said in a statement that the Department of Consumer Affairs, in announcing the deal, had “misrepresented this agreement,” saying the company had pre-existing programs that went “above and beyond” the agency’s requirements.
Whole Foods said the settlement states that “there was no evidence of systematic or intentional misconduct by anyone in the Northeast region or the rest of the company.”
(Reporting by Nate Raymond in New York; Editing by Meredith Mazzilli and Leslie Adler)
Courtesy of Whole Foods

Here's How You Can Exchange That Unwanted Gift Card

Don’t be stuck with a dud.

The holiday rush is winding down, and there’s a good chance that you have a new gift card or two. While store-specific cash may seem like a safe gift-giving bet, your aunt may not have realized that J.C. Penney just isn’t your style.
Don’t worry, you don’t have to be stuck with a useless gift card this year. Target is offering shoppers an easy way to exchange it, reported the Star Tribune.
The retail chain started a new trade-in program last month that allows customers to exchange various store gift cards for a Target gift card, usually at a de-valued rate. For example, if a customer wanted to trade a $100 Walmart gift card, he or she could get a $85 Target card in exchange. The deal is available at hundreds of Target locations, and each non-Target gift card commands a different exchange rate.
The process works much like existing gift card exchange websites, including CardPool.com and CardCash.com. In fact, a shopper could get an even better deal for that $100 Walmart gift card on CardPool.com, which is a partner with Target. Based on what Fortune found on December 28, the store credit would amount to $93, delivered via check from CardPool.
However, Target’s program is all about convenience. The trade is instantaneous, and a customer can walk away immediately with their Target card in-hand. Target  TGT -0.41%  hasn’t confirmed how much it nets from the exchange but said it will run the program year round at about 1,500 of its 1,800 stores.
Other retailers have tried similar programs, including Walmart  WMT -0.13% , which partnered with CardCash.com to exchange gift cards online last year. The program ran for a few weeks, and the retailer hasn’t said if it would do it again this year.
Trade your gift card for a store you actually shop at.Photograph by Robyn Beck — AFP/Getty Images