Economist 1/7/16

  1. Facebook’s proposition is simple: not enough people are aware of the internet or the benefits it can bring, so the company offers them a limited experience free of charge on their smartphones, which is where most new internet users come online.Critics, some of whom have organised under the banner of “” say that the offers neither the entire internet, nor is it a charitable organisation, for which .org domain names are usually used. Facebook responded by changing the name of the service in 2015 to “Free Basics”. Moreover, the critics argue that if Indians and other poor-world internet internet users spend the vast majority of their time within Facebook’s walled garden, that would force other businesses to set up shop on Facebook rather than on their own websites or elsewhere on the internet.There is some evidence to show their fears are not unfounded: a survey last year found that millions of Facebook users in the poor world don’t realise they are actually using the internet.
  2. AFRICA is losing its vultures. Of its 11 species of the bird, 6 are at risk of extinction and 4 are critically endangered, according to a recent report by BirdLife International, a nature conservation partnership. The vulture population in much of the rest of the world is at risk, too.Since the 1990s, the population of South Asia’s vulture species has collapsed by more than 99%. In 2003 scientists identified diclofenac, an anti-inflammatory drug used to treat livestock, as the main cause for this decline. Vultures living on the carcasses of animals recently treated with the drug died from severe kidney failure within weeks of ingesting it.In 2006 the governments of India, Pakistan and Nepal introduced a ban on the manufacture of the drug that has since seen vulture numbers in the region stabilise, though they remain vulnerable.But diclofenac remains widely available across Africa, and loopholes in European law mean it is approved for commercial sale in five European countries, including Spain and Italy, where 90% of European vultures live. 
  3. Since 1986 The Economist has compared the prices of McDonald’s signature burgers in different countries as a guide to whether currencies are over- or undervalued. Assuming that in the long run exchange rates adjust so that $1 buys the same basket of goods everywhere, a cheap burger at market rates suggests a cheap currency too: a Big Mac costs 37% less in Japan than in America, implying the yen is undervalued. In fact, most currencies in our chart look cheap against the greenback.The rouble is among the hardest hit: it’s now 69% undervalued against the dollar (against 47% in July 2014).
  4. SAUDI ARABIA is thinking about listing shares in Saudi Aramco, the state-owned company that is the world’s biggest oil producer and almost certainly the world’s most valuable company.The potential listing comes as Saudi Arabia grapples with the damage wreaked on its economy by an oil-price collapse to below $35 a barrel, as well as mounting tensions with its arch-rival Iran, following the execution of Saudi cleric Nimr Baqr al-Nimr in early January. It is just one possible step in an ambitious plan to balance the budget and throw open the country’s closed economy.Officials say Saudi Aramco is worth “trillions of dollars”, but it is one of the world’s most secretive oil companies and reveals no information on revenues and offers only limited information on its hydrocarbon reserves.At 261 billion barrels, Saudi Aramco’s stated hydrocarbon reserves are more than ten times those of ExxonMobil, the largest private oil company. Saudi Aramco is also one of the world’s lowest-cost oil producers, thanks to the ease of pumping oil in Saudi Arabia.
  5. ONE of the many oddities of the topsy-turvy world of Chinese finance is that red is green and green is red. In most countries “going into the red” means losing money; stocks that are falling are often depicted in red on ticker boards. In China, however, red is auspicious and so is the colour for stocks that make gains; green is for the losers.The CSI 300, an index of the country’s biggest stocks, fell by 7%, the worst-ever start to a year for Chinese markets. Small-cap stocks fared even worse, many falling by the daily maximum of 10%. Monday was the first day of operation for new “circuit breakers”—automatic 15-minute pauses in trading whenever the CSI 300 swings up or down by 5%. These are intended to restore calm when the markets are in a frenzy. No such luck: less than ten minutes after trading resumed following the first such pause, the index fell by another two percentage points. That triggered another circuit breaker, prompting a suspension in trading for the remainder of the day.The new circuit breakers, far from calming investors, may have exacerbated the sense of panic.

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