The Latest Trend in Superyachts Is Renting, Not Buying

A week on a superyacht can cost $115,500 to $190,000, on average.

Lounging in the Caribbean aboard a beautiful, 100-foot superyacht sounds pretty great, but it might be hard to relax when you've got a hefty engine repair bill to pay and crew payroll paperwork to review. The annual cost of operating a 180-foot vessel is $4.75 million, or about 10 percent of the yacht's original cost. With high maintenance costs in mind, ultra-high-net-worth individuals looking to explore the high seas are increasingly turning to charters. 

According to "The State of Wealth, Luxury and Yachting" report released this week by researcher Wealth-X and yacht management and sales firm Camper & Nicholsons, ultra-high-net-worth individuals, defined as those with a minimum net worth of $30 million, took 21 percent more charters in 2015 than in the year prior.

"Sales vs. charters is always a big discussion with clients," said Barbara Dawson, a senior charter broker with Camper & Nicholsons. “I think for some, the fact of being able to walk on and experience what that yacht has to offer for one week and go away, leave all the troubles behind, it’s a big plus. They don’t have to worry about the chef needing a month off, the captain needing to go into the yard, the engine has blown. They don’t want to have to manage.”

A week on a superyacht can cost $115,500 to $190,000, on average, the report found, while the average purchase price is a bit more than $10 million—268 superyachts sold in 2015, compared with 271 in 2014 and 242 in 2013. The average charter fee went up slightly, 1.3 percent, from 2014 to 2015.

Ultra-high-net-worth individuals who do opt for purchases end up chartering their yachts out to others to offset the steep maintenance fees, but these vessels are more money sucks than cash cows. For the $10 million superyacht, the annual maintenance comes in around $1 million, meaning the boat will have to spend between six and nine weeks being chartered to reach a break-even point, depending on what it can fetch on the rental market.

Aboard Skyfall, which can be chartered for $250,000 a week. Helicopter not included

“You will help offset maintenance, but that’s barring no mechanical breakdowns of major consequence, and it also depends on location and your crew,” Dawson said.

If a superyacht is kept in the Caribbean, Dawson estimated it will be chartered only three to five weeks a year. Superyachts in the Mediterranean end up rented eight to 12 weeks a year, she said. With agent fees and value-added taxes cutting into the profit, there’s no guarantee that putting a superyacht up for charter will recoup the owner’s maintenance costs, despite the growing popularity of chartering.

There are also some ultra-high-net-worth individuals chartering yachts to determine if they’re interested in making a purchase, and others who charter to travel to more adventurous destinations. A new wave of superyacht enthusiasts prefers traveling to remote locations. “It’s more convenient, in the sense that they can charter where they want to and not have to worry about moving the yacht,” Ben Kinnard, a research analyst with Wealth-X, said. “We’ve seen a trend [to] trying out new destinations. If you want to try out Asia one month and Antarctica the next, there’s a lot of hassle if you own the yacht.”

Natita, on the right, is in its own ultra-expensive echelon for charters: $476,000 a week

FBI paid professional hackers one-time fee to crack San Bernardino iPhone

The FBI has found a way into San Bernardino Syed Farook's iPhone, and is now dropping bids to force Apple to help them crack into the phone. See all the latest developments in the case, and why the case isn't over yet. 

The FBI cracked a San Bernardino terrorist’s phone with the help of professional hackers who discovered and brought to the bureau at least one previously unknown software flaw, according to people familiar with the matter.

The new information was then used to create a piece of hardware that helped the FBI to crack the iPhone’s four-digit personal identification number without triggering a security feature that would have erased all the data, the individuals said.

The researchers, who typically keep a low profile, specialize in hunting for vulnerabilities in software and then in some cases selling them to the U.S. government. They were paid a one-time flat fee for the solution.

[FBI has accessed San Bernardino shooter’s phone without Apple’s help]

Cracking the four-digit PIN, which the FBI had estimated would take 26 minutes, was not the hard part for the bureau. The challenge from the beginning was disabling a feature on the phone that wipes data stored on the device after 10 incorrect tries at guessing the code. A second feature also steadily increases the time allowed between attempts.

The bureau in this case did not need the services of the Israeli firm Cellebrite, as some earlier reports had suggested, people familiar with the matter said.

The U.S. government now has to weigh whether to disclose the flaws to Apple, a decision that probably will be made by a White House-led group.

The people who helped the U.S. government come from the sometimes shadowy world of hackers and security researchers who profit from finding flaws in companies’ software or systems.

Some hackers, known as “white hats,” disclose the vulnerabilities to the firms responsible for the software or to the public so they can be fixed and are generally regarded as ethical. Others, called “black hats,” use the information to hack networks and steal people’s personal information.

At least one of the people who helped the FBI in the San Bernardino case falls into a third category, often considered ethically murky: researchers who sell flaws — for instance, to governments or to companies that make surveillance tools.

This last group, dubbed “gray hats,” can be controversial. Critics say they might be helping governments spy on their own citizens. Their tools, however, might also be used to track terrorists or hack an adversary spying on the United States. These researchers do not disclose the flaws to the companies responsible for the software, as the exploits’ value depends on the software remaining vulnerable.

In the case of the San Bernardino iPhone, the solution brought to the bureau has limited shelf life.

FBI Director James B. Comey has said that the solution works only on iPhone 5Cs running the iOS 9 operating system — what he calls a “narrow slice” of phones.

Apple said last week that it would not sue the government to gain access to the solution.

Still, many security and privacy experts have been calling on the government to disclose the vulnerability data to Apple so that the firm can patch it.

[As encryption spreads, U.S. grapples with clash between privacy, security]

If the government shares data on the flaws with Apple, “they’re going to fix it and then we’re back where we started from,” Comey said last week in a discussion at Ohio’s Kenyon College. Nonetheless, he said Monday in Miami, “we’re considering whether to make that disclosure or not.”

The White House has established a process in which federal officials weigh whether to disclose any security vulnerabilities they find. It could be weeks before the FBI’s case is reviewed, officials said. The policy calls for a flaw to be submitted to the process for consideration if it is “newly discovered and not publicly known.”

“When we discover these vulnerabilities, there’s a very strong bias towards disclosure,” White House cybersecurity coordinator Michael Daniel said in an October 2014 interview, speaking generally and not about the Apple case. “That’s for a good reason. If you had to pick the economy and the government that is most dependent on a digital infrastructure, that would be the United States.”

But, he added, “we do have an intelligence and national security mission that we have to carry out. That is a factor that we weigh in making our decisions.”

The decision-makers, which include senior officials from the Justice Department, FBI, National Security Agency, CIA, State Department and Department of Homeland Security, consider how widely used the software in question is. They also look at the utility of the flaw that has been discovered. Can it be used to track members of a terrorist group, to prevent a cyberattack, to identify a nuclear weapons proliferator? Is there another way to obtain the information?

I

n the case of the phone used by the San Bernardino terrorist, “you could make the justification on both national security and on law enforcement grounds because of the potential use by terrorists and other national security concerns,” said a senior administration official, speaking on the condition of anonymity because of the matter’s sensitivity.

A decision also can be made to disclose the flaw — just not right away. An agency might say it needs the vulnerability for only a few months.

“A decision to withhold a vulnerability is not a forever decision,” Daniel said in the earlier interview. “We require periodic reviews. So if the conditions change, if what was originally a true [undiscovered flaw] suddenly becomes identified, we can make the decision to disclose it at that point.”

Pekín censura las revistas 'Time' y 'The Economist' por criticar a Xi Jinping

 Pekín | 11 Abr 2016 

Las webs de la revista estadounidense Time y la británica The Economist han sido censuradas en China a raíz de sendos artículos en portada críticos con el presidente Xi Jinping, una medida que defendió este lunes la prensa oficial china por considerar que Pekín debe frenar la ideología occidental en la red, reporta EFE.

El diario Global Times, ligado al gobernante Partido Comunista de China, hizo esa defensa en un artículo de opinión que, con el título de "¿Por qué los medios occidentales odian tanto la Gran Muralla de internet China?" argumenta que el país debe mantener su estricto control de los contenidos en las redes.

"Internet heredó naturalmente elementos occidentales, como sus leyes y su orden, y la Gran Muralla de internet —término con el que se conoce a la censura china en la red— redujo los intentos de penetrar en China ideológicamente", señala el artículo del periódico, publicado por el grupo mediático del Diario del Pueblo.

La columna asegura que la censura china en internet, que también afecta a páginas como Google, YouTube, Facebook o Twitter, podría no ser necesaria en el futuro a medida que la influencia de China avance en el mundo e internet se desprenda de su sesgo occidental.

"No hará falta cuando China y Occidente estén en pie de igualdad en términos de poder blando" señala el diario. Acusa de cierta hipocresía a gobiernos como el de Estados Unidos, que se quejan de la falta de acceso de sus grandes empresas de internet al territorio chino, pero a la vez vetan la entrada de firmas como Huawei.

La web de The Economist es inaccesible en China —salvo con servidores de red privada virtual VPN— desde el 2 de abril, poco después de que una imagen del presidente chino retratado como el Mao de la Revolución Cultural apareciera en su portada, bajo el título "Cuidado con el culto a Xi".

Su aplicación para móvil tampoco puede usarse desde entonces en China, y varias cuentas ligadas a la veterana revista en Wechat, popular red social para móviles, también están bloqueadas.

Time publicó en la misma semana una portada similar, en la que una imagen de Xi parece despegarse de una pared imaginaria mostrando a Mao detrás, y desde entonces al intentar acceder a la web de la revista estadounidense desde China solo aparecen mensajes de error. 

The World Is Getting Fatter and No One Knows How to Stop It (BW)

Global obesity is on the rise

Humanity is putting on weight. Across the globe, in wealthy countries and developing nations, among children and adults, an increasing number of people are overweight or obese. Today, nearly 40 percent of the world’s adults fall into one of those categories, according to new estimates by a global network of researchers called the NCD Risk Factor Collaboration.

Economic forces are conspiring to cause the great global weight gain. Countries grow wealthier and increase consumption. People move from rural areas to cities, where they have ready access to inexpensive, processed foods. Machines do work that humans once did, decreasing the amount of energy people use. And global trade means the reach of junk food has never been greater. Up against these trends, no country has figured out how to reverse the rise of obesity.

In 2014, there were 114 countries where more than half the adult population was considered overweight, including much of the Americas, Europe, and the Middle East, according to World Health Organization data. In small Pacific Island nations and Persian Gulf states, more than two-thirds of the population is considered overweight or obese, a higher prevalence than in the United States.

Researchers estimate that excess weight caused 3.4 million deaths worldwide in 2010. Being overweight or obese is a risk factor for chronic conditions like cardiovascular disease and diabetes. Those are rising worldwide, too. There were an estimated 422 million adults with diabetes in 2014, a rate of 8.5 percent, compared to 4.7 percent in 1980, according to new estimates published by the World Health Organization April 6.

Diabetes is rising fastest in low- and middle-income countries. It’s most common in the region that includes the Middle East and North Africa, where levels of physical inactivity are high.

The number of people who are overweight or obese is going up pretty much everywhere. The world has made progress against health threats from smoking and malnutrition to malaria and waterborne illnesses. No country has yet reversed the obesity epidemic. “Not only is obesity increasing, but no national success stories have been reported in the past 33 years,” researchers in the Lancet wrote in a 2014 report funded by the Bill & Melinda Gates Foundation.

A United Nations plan published in 2013 calls for halting the rise in diabetes and obesity by 2025. Though the pace of increase has slowed in some places, Lancet researchers recently called the chances of the world meeting that target “virtually zero.”

So what’s causing obesity?

The causes of the worldwide weight gain are complicated, and the story is different from country to country. There are some common trends: Rising incomes, global trade, changing food supplies, and declines in physical activity all contribute.

The world has a lot more food than it once did. For most of history, humans struggled to get enough to eat. Now, in many countries, the food supply is more than sufficient to provide the energy people need. It’s difficult to measure how much people actually eat, but estimates of the calories available for consumption show they’ve steadily climbed over the past half century.

That transformation has unquestionable benefits, with millions of people avoiding starvation and malnutrition. But the increase in obesity, diabetes, and other chronic diseases indicates that too much food —and less healthful food, especially— can have harmful effects on a population as well.

How we use the energy we get from food has also shifted. Humans were hunter-gatherers until the beginning of agriculture more than 10,000 years ago. Even in wealthy countries, most people are only a few generations removed from ancestors who worked in the fields.

Today, the majority of humanity lives in cities. Work, play, and transit involve less physical activity than they did in an era before computers, televisions, and cars. Globally, almost one-third of adults don’t get the recommended level of physical activity, according to research published in 2012.

There may be other factors that we don’t fully understand, such as genetics, changes to humans’ gut bacteria, or chemicals in the environment that influence our metabolism.

What can be done about obesity?

Increased food availability, growing global wealth, and urbanization are likely to continue. In the United States, obesity plateaued in the first decade of the 21st century, and among the youngest children it may be decreasing. To turn the trend around, Mexico began taxing sugary beverages in 2014, with early indicators showing soda sales declining.

With obesity trends intertwined with economic forces, some advocates say that health considerations need to be written into trade and economic policies, like the Trans-Pacific Partnership. The trade deal, currently being considered by 12 nations, including Japan, Australia, Mexico, Canada, and the United States, would lower tariffs on food products like meat, dairy, and sugar, potentially increasing the availability of cheap food.

The trade agreement could also empower corporations to challenge governments’ attempts to fight obesity through food labeling laws or subsidies for more nutritious goods.

The course of the obesity epidemic won’t rest on the TPP alone. But it might depend on how well countries can balance the health of their people with the global forces shaping their economies.

Wind and Solar Are Crushing Fossil Fuels (BW)

Record clean energy investment outpaces gas and coal 

2 to 1.

Wind and solar have grown seemingly unstoppable.

While two years of crashing prices for oil, natural gas, and coal triggered dramatic downsizing in those industries, renewables have been thriving. Clean energy investment broke new records in 2015 and is now seeing twice as much global funding as fossil fuels.

One reason is that renewable energy is becoming ever cheaper to produce. Recent solar and wind auctions in Mexico and Morocco ended with winning bids from companies that promised to produce electricity at the cheapest rate, from any source, anywhere in the world, said Michael Liebreich, chairman of the advisory board for Bloomberg New Energy Finance (BNEF). 

"We're in a low-cost-of-oil environment for the foreseeable future," Liebreich said during his keynote address at the BNEF Summit in New York on Tuesday. "Did that stop renewable energy investment? Not at all."

Here's what's shaping power markets, in six charts from BNEF:

Renewables are beating fossil fuels 2 to 1

Government subsidies have helped wind and solar get a foothold in global power markets, but economies of scale are the true driver of falling prices: The cost of solar power has fallen to 1/150th of its level in the 1970s, while the total amount of installed solar has soared 115,000-fold. 

As solar prices fall, installations boom 

The reason solar-power generation will increasingly dominate: It’s a technology, not a fuel. 

As such, efficiency increases and prices fall as time goes on. What's more, the price of batteries to store solar power when the sun isn't shining is falling in a similarly stunning arc. 

Just since 2000, the amount of global electricity produced by solar power has doubled seven times over. Even wind power, which was already established, doubled four times over the same period. For the first time, the two forms of renewable energy are beginning to compete head-to-head on price and annual investment.  

An industry that keeps doubling in size

Meanwhile, fossil fuels have been getting killed by falling prices and, more recently, declining investment. It started with coal—it used to be that lower prices increased demand for fossil fuels, but coal prices apparently can't fall fast enough. Richer OECD (Organisation for Economic Co-operation and Development) countries have been reducing demand for almost a decade. In China, coal power has also flattened. Only developing countries with rapidly expanding energy demands are still adding coal, though at a slowing rate. 

Coal phases out in wealthier countries first

What does that look like on a country-level basis? The world's first coal superpower, the U.K., now produces less power from coal than it has since at least 1850. 

Canary in the coal mine: U.K.

More recently it's the oil and gas industry that's been under attack. Prices have tumbled and investments have started drying up. The number of oil rigs active in the U.S. fell last month to the lowest since records began in the 1940s. Producers—from tiny frontier drillers to massive petrol-producing nation-states—are creeping ever closer to insolvency.  

"What we're talking about is miscalculation of risk," said BNEF's Liebreich. "We're talking about a business model that is predicated on never-ending growth, a business model that is predicated on being able to find unlimited supplies of capital."

The chart below shows independent oil producers and their ability to pay their debt.1 The pink quadrant at the bottom right represents the greatest threat to a company's solvency. By 2015, that quadrant starts to fill up, and Liebreich warned, "It's going to get uglier."

U.S. oil patch heads to the insolvency zone 

Oil and gas woes are driven less by renewables than by a mismatch of too much supply and too little demand. But with renewable energy expanding at record rates and with more efficient cars—including all-electric vehicles—siphoning off oil profits at the margins, the fossil-fuel insolvency zone is only going to get more crowded, according to BNEF. Natural gas will still be needed for when the sun isn't shining and the wind isn't blowing, but even that will change as utility-scale batteries grow cheaper.  

The best minds in energy keep underestimating what solar and wind can do. Since 2000, the International Energy Agency has raised its long-term solar forecast 14 times and its wind forecast five times. Every time global wind power doubles, there's a 19 percent drop in cost, according to BNEF, and every time solar power doubles, costs fall 24 percent.

And while BNEF says the shift to renewable energy isn't happening fast enough to avoid the catastrophic legacy of fossil-fuel dependence—climate change—it's definitely happening. 

Watch Next: Southern Company CEO is Bullish on Solar, Wind 

World Leaders Hid Wealth Via Shell Companies, Report Alleges (BW)

• Leaked files show web of hidden wealth, ICIJ alleges
• Files said to be from Panama law firm creating shell companies

Leaked files from a Panama law firm that creates shell companies show that politicians, criminals and celebrities worldwide have used banks and shadow companies to hide their finances, according to a series of reports by the International Consortium of Investigative Journalists.

Within hours of publication, the divulgences prompted a parliamentary vote of confidence in Iceland, a curt denial from Argentina and ridicule from a close confidant of Russian President Vladimir Putin.

The consortium said it had obtained a cache of 11.5 million records outlining the creation of more than 200,000 offshore shell companies. The trove includes offshore companies linked to 12 current and former world leaders, as well as hidden financial dealings by 128 more politicians, public officials and entertainment celebrities, according to the ICIJ.

While offshore holdings can be legal, they can also be used to hide wealth. Since the financial crisis, Western governments have sought to shed greater light on offshore banking centers, accusing them of being used for activities ranging from tax avoidance to hiding illicit funds to enabling reckless trading. Many Western countries have increasingly linked foreign aid to anti-corruption crackdowns in recipient countries. The ICIJ cited documents that it alleged showed that some banks and law firms failed to follow requirements to check that their clients weren’t involved in crimes.

“The Panama Papers investigation unmasks the dark side of the global financial system where banks, lawyers and financial professionals enable secret companies to hide illicit corrupt money,” José Ugaz, the chair of Transparency International, an advocacy group, said in a statement. “This must stop. World leaders must come together and ban the secret companies that fuel grand corruption and allow the corrupt to benefit from ill-gotten wealth.”

‘All But Untraceable’

At least $2 billion in transactions involved people and companies the ICIJ alleged had ties to Putin, according to the report. It outlined, for example, the creation, within 24 hours, of a chain of four shell companies in three countries, involving two banks, a process that made the money behind it “all but untraceable.” 

The original company in the chain, according to the consortium’s report, was the St. Petersburg-based Bank Rossiya “whose majority owner and chairman has been called one of Putin’s ‘cashiers.”’ Some of this money was used to gain “indirect influence” over shareholders in Russian companies.

“Mr. Putin was never involved. It’s bulls**t,” Andrey Kostin, chief executive officer of VTB Group, Russia’s second-largest lender, said in an interview with Bloomberg Television on Monday. He also rejected allegations that the lender made unsecured loans through a Cyprus-based subsidiary, Russian Commercial Bank (RCB), to a close friend of the president, saying it was near impossible given that RCB is subject to European Central Bank regulations.

Iceland Reverberations

The Western country most affected by the allegations is Iceland, which went through a major banking crisis last decade and where Prime Minister Sigmundur D. Gunnlaugsson now faces a confidence vote in parliament Monday after he and his wife appeared in documents as having an investment account in the British Virgin Islands to handle an inheritance.

The ICIJ’s report said account holders also include current and former leaders from Argentina, Georgia, Iraq, Jordan, Qatar, Saudi Arabia, Sudan, United Arab Emirates, and Ukraine.

The office of Argentinian President Mauricio Macri said in a statement that he had been “occasionally designated as a director” of an off-shore company mentioned in the report, but never held shares.

Disclosure Required

The documents span from 1977 to 2015 and came from Panama-based law firm Mossack Fonseca, a top creator of shell companies that has branches in Hong Kong, Miami, Zurich and more than 35 other places around the globe, the ICIJ said.

What makes an offshore account legal or not is often simply a question of whether it’s declared to tax authorities, said Professor Peter Hahn at London’s Institute of Financial Services.

“Rather than blame the banks for such transactions, international attention should focus on requiring disclosure of the end of the chain owners of shell companies, eliminating the ability of the unscrupulous to misuse the banking system and create vast compliance costs for legitimate businesses,” Hahn said in response to e-mailed questions.

In written comments to the consortium, Mossack Fonseca said it “does not foster or promote illegal acts” and that the group’s allegations that it provides shareholders with structures “supposedly designed to hide the identity of the real owners are completely unsupported and false.”

The government of Panama said it will cooperate with any legal probe resulting from the data leak, Agence France-Presse reported.

The ICIJ, founded in 1997, is a global network of investigative journalists who collaborate on in-depth investigations on issues including cross-border crime, corruption and the accountability of power, according to its website.

Johnson & Johnson Has a Baby Powder Problem

Jacqueline Fox worked in restaurant kitchens and school cafeterias, cleaned people’s houses, watched their kids, raised a son, and took in two foster children. She was careful about her appearance and liked to tend the garden in front of her home in Birmingham, Alabama. She had been treated for high blood pressure, arthritis, and diabetes, but, at 59, she was feeling pretty good. In the spring of 2013, her poodle, Dexter, began acting strangely. He’d jump on her, he’d cry, he’d stay close by all day. Fox happened to watch a television program about a dog that sensed its owner was unwell. When she let Dexter sniff her, he whined even more.

A week later, Fox was diagnosed with advanced ovarian cancer. She had chemotherapy to shrink the tumors and surgery to remove her uterus, ovaries, fallopian tubes, and part of her spleen and colon. In December of that year, she saw a commercial from an Alabama law firm, Beasley Allen, suggesting a connection between long-term use of Johnson & Johnson’s Baby Powder and ovarian cancer. Fox had been sprinkling Baby Powder made from talc on her underwear every day since she was a teen. “I was raised up on it,” she later said in a deposition. “They was to help you stay fresh and clean. … We ladies have to take care of ourselves.” It was as normal as using toothpaste or deodorant. “We both were a bit skeptical at first,” says her son, Marvin Salter, a mortgage banker in Jacksonville, Fla. “It has to be safe. It’s put on babies. It’s been around forever. Why haven’t we heard about any ill effects?”

Fox died from the cancer in October 2015. Four months later, a jury in St. Louis concluded that talcum powder contributed to the development of the disease and that Johnson & Johnson was liable for negligence, conspiracy, and failure to warn women of the potential risk of using Baby Powder in the genital area. The verdict, decided by a 10-2 vote, included $10 million in compensatory damages and $62 million in punitive damages, more than Fox’s lawyers had recommended. Salter bowed his head and wept.

“People were using something they thought was perfectly safe,” he says. “And it isn’t. At least give people the choice. J&J didn’t give people a choice.” Among the most painful revelations, he says, was that in the 1990s, even as the company acknowledged concerns in the health community, it considered increasing its marketing efforts to black and Hispanic women, who were already buying the product in high numbers. Fox was black. The jury foreman, Krista Smith, says internal documents provided the most incriminating evidence: “It was really clear they were hiding something.” She wanted to award the Fox family even more. Imerys Talc America, the biggest talc supplier in the country and the sole source of the powder for J&J, was also named as a defendant. The company wasn’t found liable.

“Jury verdicts should not be confused with regulatory rulings or rigorous scientific findings,” Carol Goodrich, a spokeswoman for Johnson & Johnson Consumer, said in an e-mail. “The overwhelming body of scientific research and clinical evidence supports the safety of cosmetic talc.” The company says it will appeal the verdict. In a statement, Imerys said it’s “confident that its products are safe for use by its customers. Our confidence is supported by the consensus view of qualified scientific experts and regulatory agencies.”

Johnson & Johnson has spent more than $5 billion to resolve legal claims over its drugs and medical devices since 2013. That year, it agreed to pay $2.2 billion to settle criminal and civil probes into claims that it illegally marketed Risperdal, an antipsychotic drug, to children and the elderly; two other medicines were included in the settlement. It was one of the largest health fraud penalties in U.S. history. The company has also agreed to pay some $2.8 billion to resolve lawsuits about its artificial hips and $120 million for faulty vaginal-mesh inserts. In its 2015 annual report, J&J stated that more than 75,000 people had filed product liability claims, and that didn’t include the talc powder cases.

More than 1,000 women and their families are suing J&J and Imerys, claiming the companies have known of the association with ovarian cancer for years and failed to warn them. The next trial is scheduled to begin on April 11 in a St. Louis circuit court. “Whether or not the science indicates that Baby Powder is a cause of ovarian cancer, Johnson & Johnson has a very significant breach of trust,” says Julie Hennessy, a marketing professor at Northwestern’s Kellogg School of Management. “In trying to protect this one business, they’ve put the whole J&J brand at risk.”

Talc is the softest mineral on earth, able to absorb odors and moisture. It’s composed of magnesium, silicon, and oxygen and is mined, usually from deposits above ground, in more than a dozen countries. It’s used in eye shadow and blush and chewing gum, but mostly it’s used in ceramics, paint, paper, plastic, and rubber. China is the biggest source; Johnson & Johnson’s supply comes from the southern province of Guangxi.

Johnson & Johnson began selling Baby Powder more than 100 years ago, soon after the company was founded in New Brunswick, N.J. Among its first products were adhesives infused with pain relievers such as mustard seed, capsicum, quinine, and opium. When customers complained that removing the plasters left them with skin irritation, J&J’s scientific director sent them small containers of talc to help soothe any rashes. A few reported that the talc also seemed to ease diaper rash. In 1894 the company introduced Baby Powder, made of 99.8 percent talc and sold in a metal tin labeled “for toilet and nursery.”

The other 0.2 percent is a mix of fragrant oils. Smell is evocative, and this particular scent is mingled with powerful memories—a marketer’s dream. “It’s calming, nurturing. … It doesn’t grab your senses. It wafts,” Fred Tewell, a J&J executive, told the Associated Press in 2008. 

The company has said that in blind tests, the scent of Baby Powder is recognized more often than that of chocolate, coconut, or mothballs. From the early 1900s, J&J tried to persuade women to use the powder on themselves, too. Ads in 1913 included the tag line, “Best for Baby, Best for You.” By 1965, when Fox was 12 years old, ads featured a sultry woman sprinkling talc on her bare shoulder. No baby is in sight. “Want to feel cool, smooth and dry? It’s as easy as taking powder from a baby.” Two decades later, the company told the New York Times Magazine that 70 percent of its Baby Powder was used by adults. 

Sales of J&J’s talcum powder products came to about $374 million in 2014, according to Euromonitor. That’s not essential to a $70 billion company that makes most of its money selling medical devices and drugs. But without Baby Powder, J&J may not have developed Baby Oil or Baby Shampoo nor have a baby division worth some $2 billion. Baby Powder’s value to the company extends well beyond sales.

Forty-five years ago, British researchers analyzed 13 ovarian tumors and found talc particles “deeply embedded” in 10. The study, published in 1971, was the first to raise the possibility that talcum powder could pose a risk. In 1982 a study in the journal Cancer by Daniel Cramer, an epidemiologist at Brigham & Women’s Hospital in Boston, showed the first statistical link between genital talc use and ovarian cancer. Soon after, Cramer received a call from Bruce Semple, an executive at J&J. The two met in Boston. “Dr. Semple spent his time trying to convince me that talc use was a harmless habit, while I spent my time trying to persuade him to consider the possibility that my study could be correct and that women should be advised of this potential risk of talc,” Cramer, a paid expert and witness for the plaintiffs, said in a 2011 court filing. “I don’t think this was a question of money,” he says now. “I think it was pride of ownership. Baby Powder is a signature product for J&J.”

Baby Powder is considered a cosmetic, which doesn’t need to be approved by the Food and Drug Administration under the 1938 Food, Drug, and Cosmetic Act. The law is laid out in a 345-page document; only two pages are devoted to the safety of cosmetics. Congress is considering updating the law to give the FDA more authority to regulate products. “It shouldn’t be up to consumer groups or jurors to try to make decisions about toxic products,” says Stacy Malkan, co-founder of the Campaign for Safe Cosmetics. J&J and many other big companies support the changes.

J&J does have a warning on Baby Powder, cautioning against inhalation. And the label notes that the powder is for external use only. Under pressure from consumers, activists, and impending California safety regulations, J&J has removed triclosan, formaldehyde, and other so-called chemicals of concern from its baby products in the past few years. In 2013, Samantha Lucas, a company spokeswoman, explained the shift to Scientific American: “We’ve been replying with evidence of the science that ensures safety. Now we have to go beyond science and be responsive to our consumers, because it’s really about their peace of mind.” If J&J applies this same thinking to Baby Powder, it has an alternative: It already sells Baby Powder made from cornstarch for about the same price. No study shows that cornstarch poses any potential risks; the American Cancer Society has been suggesting since 1999 that women consider it if they want to use genital powder. Some of J&J’s competitors, including Gold Bond, California Baby, and Burt’s Bees, sell baby powder made of cornstarch only.

Tesla's Model 3 Lives Up to the Hype (BW)

Fast, spacious, and with an endless view of the sky—the new electric car already has more than 250,000 reservations.

In the history of the automobile, this is definitely something we haven't seen before. 

Tesla has lifted the veil on its most important undertaking: the Model 3, a $35,000 car designed to bring electric vehicles and autonomous driving to the masses. By the looks of it, and the interest it's attracting, it just might succeed. 

On Thursday, Tesla raked in 134,000 reservations, each with a $1,000 deposit. And that was before most people saw the car—on Saturday morning, Chairman Elon Musk announced a total of 253,000 and counting. A little perspective on those numbers: There are now more than twice as many reservations for the Model 3 as total sales of all previous Tesla cars combined. In the unlikely event that all the refundable deposits turn into deliveries, this would represent an $11 billion launch. 

Here are some of the features Tesla disclosed at its big event in California:

• The base Model 3 goes from zero to 60 miles per hour in less than 6 seconds. That's faster than the entry BMW 3 Series and the Mercedes-Benz C Class, the leading cars in the compact luxury space. 
• The car will be able to drive a minimum of 215 miles on a single charge, with options to upgrade to a bigger battery. Musk said the company will push for an even longer range on the base model between now and the car's first deliveries.  
• The roof is an almost continuous sheet of glass that stretches from the front of the car to the rear to give riders a sense of openness. The layered glass is designed to block UV rays and manage heat.
• All cars will come equipped with the hardware for Tesla's Autopilot features and high-speed Supercharging.
• The Model 3 will have two trunks and more cargo space than any car of its size. A seven-foot surf board will fit inside the car, Musk said. 
• The body is made of a mix of lightweight aluminum and cheaper steel, primarily the latter.
• Tesla's signature touch-screen control panel will be flipped on its side and shrunk from 17 inches to 15 inches. It handles everything from navigation to speed.
• The traditional instrument panel under the dash is gone entirely.  
• The car is designed to fit five adults comfortably, in part by pushing the front passengers forward to provide more legroom in the back seat. 
• Rear-wheel drive is standard, with an option for dual-motor all-wheel drive. 
• The number of Palo Alto, California-based Tesla's high-speed charging stations will double by the end of next year to 7,200, Musk said. Slower destination chargers will jump from 3,689 to 15,000.
• Also by the end of 2017, the number of Tesla locations where people can buy or service cars will more than double to 441 worldwide.

At the unveiling, Musk focused on the features that come with the base $35,000 price of the car and said more options and upgrades will be revealed before the car goes into production next year. "You will not be able to buy a better car at $35,000."  

The way things are going, he may be right.

Foxconn agrees to buy Sharp for $3.5B

The Taiwanese company that assembles Apple’s iPhones agreed Wednesday to buy control of financially struggling Sharp Corp. for $3.5 billion in the first takeover of a major Japanese electronics producer by a foreign company. USA TODAY

TAIPEI, Taiwan - The Taiwanese company that assembles Apple’s iPhones agreed Wednesday to buy control of financially struggling Sharp Corp. for $3.5 billion in the first takeover of a major Japanese electronics producer by a foreign company.

The agreement by Foxconn followed weeks of uncertainty over what Sharp had said was a deal at a higher price.

Foxconn, also known as Hon Hai Precision Industry Co., said it would buy 66 percent of Osaka-based Sharp.

The price of 389 billion yen was a reduction of 100 billion yen, or about 20 percent, from the 489 billion yen ($4.4 billion) which Sharp said on Feb. 25 that Foxconn had agreed to pay. The Taiwanese company said at the time it wasn’t ready to sign a deal.

The companies gave no reason for the change but news reports suggested Foxconn was concerned about taking on additional liabilities it learned about late in the negotiations.

We are glad both sides could reach such a decision to forge an alliance to boost innovation,” Tai Jeng-wu, a member of Foxconn’s board of directors, said during a brief appearance before reporters at the Taipei stock exchange.

Asked what Foxconn’s strategy would be to help Sharp recover from losses, Tai said Foxconn’s plans called for the Japanese company to “upgrade its technology,” but he gave no details.

Foxconn said a final agreement is due to be signed Saturday.