German Exports Rebound, Post Six-Year-High Rise

Data show German exports experienced their highest rise in over six years in August, potentially cooling fears over a slowdown in the world’s third largest export economy.

Germany recorded a 5.4 percent increase in seasonally-adjusted exports in August, according to Federal Statistics Office data released on Monday. The rise exceeded figures forecast by analysts and was the highest monthly rise seen since May 2010.

Imports by the European economic powerhouse also recorded an increase of 3 percent, which reverses the decline recorded in the month before.

In a survey by Reuters, financial analysts had predicted a 2.2 percent rise in exports and 0.7 percent increase in imports.


The improvement in exports helped Germany’s seasonally-adjusted trade surplus to reach €22.2 billion in August. That is an improvement over the €19.4 billion trade surplus reported in July. The performance also exceeded analysts’ forecast of €20 billion.

German exports had weakened in recent months threatening their role as the main driver of the European country’s economic growth. Following the release of the unimpressive July exports data, there were fears that the economy would slow down in the third quarter.

However, the latest figures do not seem to point at any slowdown. Exports are now expected to drive an expansion in the third quarter. The improvement in exports is said to have come as a result of economic expansion in China.

Economic experts cautioned however that world trade still remains weak. A potential “hard” Brexit is considered among the greatest risks that still need to be dealt with.

“This is a welcome amendment. But world trade remains very weak. And there are new risks – for instance that of a hard Brexit,” HSBC Trinkaus’ Thomas Schilbe said, as reported by Business Insider. “The economy in China has stabilized. This is good for producers of capital goods.”

Germany’s total exports to the rest of the European Union in August stood at €54.3 billion, which was a 10 percent boost over the figure for the same month last year. Exports to non-EU countries jumped 9.6 percent from a year ago.

Recent volatility in German export figures has been attributed to the effect of the U.K. referendum. The British market accounts for about 7 percent of exports from Germany.

Data from the leading European market has been reflecting fluctuations since Britons decided in the June referendum that the U.K. should leave the EU. This significantly contributed to low industrial production figures in Germany in July. Industrial production in the country slumped to its lowest level in about two years during the month.

But industrial production rebounded strongly in August, posting its biggest rise since January.

“The light is green for the German economy to thrust into growth in the second half of the year,” Thomas Gitzel, chief economist at VP Bank, said. “The overall growth rate in 2016 could come in better than expected.”

Signs of improvement have made the German government to raise its 2016 growth forecast for the economy to 1.8 percent, up from an earlier 1.7 percent. If that were to be realized, it would be the highest expansion recorded in about five years.

Tim Kaine Supports CFPB’s Payday Loan Proposal

Tim Kaine is backing the Consumer Financial Protection Bureau (CFPB)’s attempt to rein in the payday loan industry with the very first federal regulatory framework for short-term, high-interest loans.

The Virginia Democratic Senator and Vice-Presidential candidate wrote in a letter to CFPB director Richard Cordray that he supports the proposal. He averred to the consumer federal watchdog agency that he thinks the new rules and regulations would better help consumers and protect the most vulnerable.

“The issue of predatory lending is not new nor will it improve without strong action from the CFPB. Too many consumers are stuck in high-cost debt traps. I applaud the CFPB for taking action to end these harmful business practices,” stated Kaine. “I remain encouraged by the CFPB’s focus on predatory payday lending and hope the final rule will be strong to protect consumers.”

Tim Kaine

Prior to the unveiling of the CFPB’s proposal, Kaine urged the CFPB to implement new payday loan rules. Kaine wanted the CFPB to prevent predatory lenders from taking advantage of the impecunious.

During his time as governor, Kaine had installed a payday loan alternative program in which several lenders catered to state employees. The initiative allowed Virginian workers to borrow low sums of cash at minuscule interest rates. This was lauded by state Democrats, while Republicans argued that it was unfair for non-public sector workers. The program is called the Virginia State Employee Loan Program, a unique partnership between the Virginia State Employee Assistance Fund and the Virginia Credit Union.

Kaine has also offered his support for updating the Military Lending Act (MLA). Hillary Clinton’s running mate endorsed the Department of Defense (DOD)’s plan to revise the MLA that would close loopholes that can shield military members and their families from so-called abusive financial practices. (

In December 2009, Kaine published an op-ed in the Wall Street Journal, encouraging the United States government to replicate the Mother of States’s actions on tackling the payday loan industry.

Here is what Kaine opined in the newspaper:

“One thing is clear: As lawmakers craft their proposals for reforming America’s financial system, payday lending should be part of the equation. In the meantime, the option remains open to employers both public and private to offer an alternative that guarantees a meaningful payoff for our families and communities.”

When President Barack Obama took office, one of his mandates was to restrict payday loans. Proponents have celebrated the U.S. president for this goal, referring to the concept that the impoverished are most affected by the industry because of high interest rates, excessive fees and other charges.

This past spring, the CFPB unveiled a payday loan proposal that would complement state initiatives. It received mixed reactions as some said it went too far while others said it didn’t go far enough. Those who crafted the 1,200-page rule noted that it could go into effect as early as next year. However, it has met some opposition from some members of Congress, who want it delayed by two years.

Verizon Reportedly Wants a Price Cut on Yahoo Deal

Verizon had been widely reported to be interested in acquiring Yahoo, but it appears that a possible deal now hangs on an agreement of a discounted price with the popular Internet company.

People familiar with the matter told the New York Post that the leading telecommunications company now wants a slash of about $1 billion off the price agreed for the proposed Yahoo acquisition. This follows recent reports of hacking and privacy breaches by the popular email service provider.

The acquisition deal was originally valued at $4.83 billion.

Two weeks ago, Yahoo revealed for the first time a hacking incident that had occurred in 2014. Names and passwords associated to at least 500 million accounts were estimated to have been stolen in that incident. The breach, which also possibly gave hackers access to users’ telephone numbers and even security questions and answers among others, is considered one of the largest-scale ever.

yahoo headquarters

The company was again in the spotlight few days ago when reports emerged that it had built a program to scan through all of its customers’ incoming emails for U.S. intelligence agencies. It did so in compliance with an order by a secret Foreign Intelligence Surveillance Court to detect signatures used by terrorists.

Verizon has plans to combine its subsidiary AOL with Yahoo to enable it compete more favorably against heavyweights, such as Google and Facebook, who get the bulk of digital advertising dollars. But it now feels that the value of Yahoo has reduced as a result of the recent scandals and, as such, desires a discount, sources say.

AOL CEO Tim Armstrong is believed to be displeased about lack of disclosure on the hack. He also appears to be ready for a Verizon pullout from the acquisition deal.

“In the last day, we’ve heard that Tim is getting cold feet,” a source told the New York Post. “He’s pretty upset about the lack of disclosure and he’s saying can we get out of this or can we reduce the price?”

One of the sources revealed that Armstrong flew to the West Coast few days ago to pitch a case for a price reduction to Yahoo executives. But the Internet company is said to be against any move to reduce the $4.83 billion agreed in July, saying a legal deal was agreed by the parties and the terms cannot now be changed.

Discussions on a possible price cut are ongoing. The requested discount is very likely to be discussed at the next board meeting of Yahoo holding in about two weeks’ time.

Speaking to the CNBC on Wednesday, Yahoo’s former interim Chief Executive Ross Levinsohn seemed to support the request by Verizon for a discounted price. He said it made sense from a business standpoint.

The combined Yahoo-AOL user base will stand at about one billion in the event of a deal being concluded in the first quarter, the NY Post reports. Verizon’s target is for this to increase to two billion by 2020.

Full integration of AOL into Verizon has yet to be completed several months after its acquisition by the telecom giant.

Walmart Increases Stake in Chinese Online Retailer

A securities filing by American retail giant Walmart indicates it has almost doubled its stake in the Chinese e-retailer as part of its drive to penetrate the market in the Asian country.

Walmart revealed in a filing with the Securities and Exchange Commission on Wednesday that it had increased its stake in JD to around 10.8 percent. This represents a significant increase on the stake it already controlled in the second-largest Chinese online retailer.

In June, the U.S. retailer had acquired about 5.9 percent stake in JD after selling its Chinese e-commerce marketplace, Yihaodian, to the company.


Sources familiar with the deal told the Wall Street Journal that it could confer observer status on Walmart at JD’s board meetings. The only strategic partner of the leading Asian retailer that maintains a seat on its board at the moment is Tencent Holdings Ltd, a very popular social networking company in China which owns the WeChat messaging platform.

Foreign retailers such as Walmart have not had it easy cracking into China, a country whose e-commerce market has grown to become the largest in the world with domestic companies like Alibaba and JD dominating. The U.S. retailer would hope the linkup with one of the largest online retailers in the highly populous Asian country can help with its long-term strategy there.

“This stepped-up investment in JD has been part of our plan, as we continue to be a passive investor,” Walmart spokesperson Jo Warner said in an email statement. “We believe this strategic alliance will help us grow e-commerce even faster in China.”

Online retail spending in China hit $589 billion in 2015, according to Cambridge, Massachusetts-based market research firm Forrester Research. That amount was significantly larger than the $334 billion recorded in the U.S.

JD is second only to Alibaba in the Chinese e-commerce space in terms of gross merchandise volume. The company’s stock price gained more than five percent in after-hours trading following news that Walmart had increased its stake in it. The price stood at more than $29.50 around 6:30 p.m. in New York on Wednesday. It has been on a rise since the Yihaodian online grocery marketplace was acquired by the Chinese retailer in June.

The stake obtained by Walmart in the earlier deal with JD was valued at around $1.5 billion. The value of its stake in the company has now risen above $7.8 billion, according to Forbes.

It was reported at the end of September that Walmart was in talks to invest in India’s largest e-commerce company, Flipkart Online Services Pvt. The largest American retailer was supposedly considering an investment of between $750 million and $1 billion in the ecommerce business which started in 2007.

However, no concrete deal has come out of the reported Flipkart talks so far.

The second half of this year has been a somewhat busy one for Walmart. It bought the online retail startup for $3.3 billion in August.

Walmart shares have gained about 17 percent in 2016. Price dropped to $71.67 per share on Wednesday, but later added eight cents in after-hours trading, according to the WSJ.