U.S. spy agency joins Facebook, Twitter

The lobby of the CIA Headquarters Building in McLean, Virginia, August 14, 2008

(Reuters) - The CIA, which has long trolled social media to try to uncover global trends and track evil-doers, officially joined Twitter and Facebook on Friday. The spy agency cast the move as an effort to better get out its message and engage directly with the public, but its first Twitter message, sent out shortly before 2 p.m. EDT (1800 GMT), did not indicate there would be major revelations. It said simply: "We can neither confirm nor deny that this is our first tweet." The lack of content did not dampen interest: in less than 90 minutes, the CIA account had nearly 84,000 followers, and that number was climbing fast. The Central Intelligence Agency has long had a public website, and maintains official accounts on YouTube and Flickr, the photo-sharing site. "By expanding to these platforms (Facebook and Twitter), CIA will be able to more directly engage with the public and provide information on CIA’s mission, history, and other developments," CIA Director John Brennan said in a statement. Among the items to be posted are artifacts from the CIA's (non-public) museum, and updates to its "World Factbook," a compendium of world leaders, maps and similar information. Critics say the Obama administration is more secretive than its predecessors. It has cracked down on once-normal interactions between reporters and intelligence officials. In recent directives, Director of National Intelligence James Clapper has banned intelligence officials from speaking to reporters without permission, even about unclassified information, and also from citing news articles based on unauthorized disclosures. The CIA's Facebook page is www.facebook.com/central.intelligence.agency. Its Twitter "handle" is @CIA. (Reporting by Warren Strobel. Editing by David Storey and Lisa Shumaker)

SoftBank to cut smartphone charges in Japan

A man holding an umbrella walks past the logo of Softbank Corp at its branch in Tokyo April 22, 2014.

(Reuters) - SoftBank Corp (9984.T), Japan's No.3 mobile carrier, will cut its smartphone charges in Japan with a flat rate for unlimited voice calling and cheaper data plans, in a sign that price competition may be starting to pick up in Japan's mobile market. The lower rates, to take effect next month, are similar to reductions this month by rival NTT DoCoMo Inc (9437.T), Japan's largest wireless provider. Regulators have grown increasingly critical of the three dominant carriers, blaming them for high smartphone fees and oligopolistic practices. The authorities' complaints came at an awkward time for SoftBank CEO Masayoshi Son, as he tries to convince U.S. regulators that a proposed acquisition by his Sprint Corp (S.N), the No.3 U.S. mobile carrier, of No.4 T-Mobile US Inc (TMUS.N) would boost competition in the U.S. market, by giving the top two carriers more of a run for their money. In addition to flat-fee unlimited voice calling, SoftBank will offer options allowing users to roll over unused data communications to the next month or to share them with family members. It also will launch special offers or discounts for family plans, long-term users and subscribers aged 25 and under. A voice-only smartphone service will be priced at 2,700 yen ($26.33) per month, while data plans will run from 3,500 yen per month for 2 gigabytes up to 22,500 yen for 30 GB. Japan's wireless carriers had typically offered only high-end smartphone plans with minimum charges of 5,700 yen per month for 7 GB of data communications. The communications ministry has charged that the uniformly high fees showed there was insufficient competition in the industry.KDDI Corp (9433.T), the second-largest carrier, is also considering offering flat-rate, unlimited calling, sources familiar with the matter have said. (Reporting by Yoshiyasu Shida and Teppei Kasai; Writing by Edmund Klamann; Editing by David Holmes)

Apple to make 3-5 million smartwatches monthly, sales begin October: report

The Apple logo is pictured at a retail store in the Marina neighborhood in San Francisco, California April 23, 2014.

(Reuters) - Apple Inc is preparing to sell its first wearable device this October, aiming to produce 3 million to 5 million smartwatches a month in its initial run, the Nikkei reported on Friday, citing an unidentified parts supplier and sources familiar with the matter. Specifications are still being finalized, but the devices are likely to sport curved OLED (organic light-emitting diode) displays and sensors that collect health data from blood glucose and calorie consumption to sleep activity, the Japanese news service cited industry sources as saying. The industry has long expected Apple to unveil some sort of smartwatch, following the release of Samsung Electronics' Galaxy Gear watches. Wall Street is hoping to see a new Apple product this year to galvanize the former stock market darling's share price and end a years-long drought of ground-breaking devices. CEO Tim Cook has promised "new product categories" in 2014. Apple declined to comment. (Reporting by San Francisco newsroom. Editing by Andre Grenon)

Chinese party newspaper says Western democracy only brings chaos

(Reuters) - China's top newspaper on Monday warned against aping Western-style democracy just a week after the 25th anniversary of the Tiananmen crackdown, pointing to Thailand and Ukraine as examples of the kind of chaos the system can bring. President Xi Jinping's ascendancy in a once-in-a-decade generational leadership transition had given many Chinese hope for political reform, mainly due to his folksy style and the legacy of his father, Xi Zhongxun, a former reformist vice-premier. But the repeated message the party has given out since Xi became president last year is that there will be no political liberalization. China has been on high alert over the past few weeks in the run-up to the 25th anniversary of the bloody suppression of pro-democracy demonstrations around Beijing's Tiananmen Square, detaining dissidents and tightening internet controls. In a lengthy commentary, the ruling Communist Party's official People's Daily newspaper said the country needed to be on guard against falling into the "trap" of Western-style democracy. "Over the past few months, from Kiev to Bangkok, the politics of the street and public clashes have caused deep sorrow," the newspaper said. "Looking back at the 'color revolutions' which have occurred in recent years ... how can we not say with deep feeling: rejoice that we have resolutely upheld socialism with Chinese characteristics. Otherwise, would China have peace?" "From western Asia to North Africa, many countries have slipped into the confused madness of 'western democracy', which has neither brought happiness nor stability," the paper said. It also took aim at British democracy. "In Britain's parliament to this day there are still hereditary nobles. For Chinese people, this is unthinkable," the paper said, adding that China should continue going down its own path. During a visit to Belgium in April, Xi himself said that China had experimented in the past with various political systems, including multi-party democracy, but it did not work, warning that copying foreign political or development models could be catastrophic. [ID:nL4N0MU0Z9] China's constitution enshrines the Communist Party's long-term "leading" role in government, though it allows the existence of various other political parties under what is calls a "multi-party cooperation system". But all are subservient to the Communist Party. Activists who call for pluralism are regularly jailed and criticism of China's one-party, authoritarian system silenced. (Reporting by Ben Blanchard; Editing by Robert Birsel)

Hollywood's longtime power lunch hub to cook up final script

Director of operations Adam Lewis poses for a photo at Kate Mantilini restaurant in Beverly Hills, California June 4, 2014.

Reuters) - The din of voices haggling over movies and pitching TV series, as familiar as the trademark meatloaf and grilled salmon, will soon disappear from Kate Mantilini, the Beverly Hills restaurant whose booths have long been a mainstay of Hollywood's power lunch crowd. Situated on Wilshire Boulevard in the heart of Beverly Hills, Kate Mantilini - a favorite of comedian Mel Brooks and late director Billy Wilder - will close its doors and pack up its wood-backed booths on June 14 after 27 years. "Many, many deals were made in those booths," said Adam Lewis, the restaurant's chief executive who made the decision to close after a rent increase. An outpost in Woodland Hills in Los Angeles' San Fernando Valley will remain open. "There's a semblance of privacy in there, but you can hear everything everybody is saying," added Lewis, 59, whose older brother David is the executive chef. "I've listened to pitches go down; some were really good, some I can't believe they made it this far." The restaurant's popularity among the Hollywood set was down in part to its location, said Tim Gray, a senior vice president of trade publication Variety. It sits across from film studio The Weinstein Co and two blocks from the Academy of Motion Picture Arts and Sciences, the industry organization that hands out the Oscars. "It really was one of the staples for industry lunches," Gray said of the restaurant that is arranged like a postmodern diner with a large sculptural sundial, a key early work by Pritzker Prize-winning architect Thom Mayne's firm, Morphosis. Kate Mantilini ranks as a top 10 business lunch spot for entertainment industry insiders, according to a Hollywood Reporter poll. "Everybody who comes here is an agent or lawyer or a manager and everybody table-hops - and they rely on good food," Lewis said, sitting at a round table with his brother and 84-year-old mother, Marilyn, who started the restaurant with her late husband Harry Lewis, a former Warner Bros contract actor and founder of popular chain Hamburger Hamlet. The restaurant also served as a backdrop in Michael Mann's 1995 crime drama "Heat" starring Al Pacino and Robert De Niro. "It was a real industry hangout ... because it had this amazing, huge menu," Gray said. "They had everything in the world on it." Dishes include chicken pot pie and other comfort foods, and health-conscious staples such as brown rice with vegetables. Marilyn Lewis, a self-described born-marketer who ran her own couture clothing line Cardinali in the 1960s-70s, said she named the restaurant after her uncle's mistress, whose long red-polished fingernails enthralled her as a child. "I liked the sound of it, and it would take a lot of letters, a lot of signage," she said. "It is important for this fast traffic because when they stop at the light and they see that big sign, they've got to know that something's going on there. Something." (Editing by Piya Sinha-Roy and Mohammad Zargham)

The Alibaba culture: kung fu commerce with a dash of theater

A woman stands next to a door inside the headquarters of Alibaba in Hangzhou, Zhejiang province, April 23, 2014.

When Jack Ma and his colleagues sat down in 2001 to lay out Alibaba's defining values, they named them after a martial arts technique drawn from Ma's love of kung fu novels and their heroic themes. But the corporate culture of China's biggest e-commerce company also draws heavily from Western values in a mix of East and West that Ma dubbed 'Hupan culture' after the apartment block in Hangzhou where he set up his business. These core values, now named the 'Six Vein Spirit Sword' - customer first, teamwork, embrace change, integrity, passion and commitment - shaped Alibaba Group Holding, which began as an online bulletin board for companies in Ma's Hupan Huayuan apartment complex in eastern China. Alibaba's aspirations helped it grow from just 18 employees to more than 20,000 today. Along the way, it knocked eBay Inc out of China and is now preparing for a U.S. stock listing that could be the biggest tech IPO to date. But its romanticism - and even cultishness - has sometimes sidelined the business reality, almost bankrupting Alibaba in its early years and more recently denying Ma his preferred Hong Kong stock listing. "Alibaba is not like a Chinese company, it's a blend of the good parts of East and West," said Andrew Teoh, a former Alibaba executive and founder and managing partner at Ameba Capital. "It's grown huge, but they maintain a start-up culture. Alibaba is a flat structure, bureaucracy is a pet hate there." Crucial to this was Savio Kwan, a former General Electric executive, who lifted from the U.S. conglomerate's playbook to introduce a reward system that was new to China at the time. Half an employee's annual appraisal was to be based on their performance. The other half depended on how well they embodied Alibaba's core 'kung fu' values. "We wanted to make sure that even in a company of 10,000 people it had this Hupan culture, a start-up culture," said Porter Erisman, a former vice president at Alibaba and director of "Crocodile in the Yangtze", a documentary on Alibaba's first decade. "We didn't want to lose the sense of innovation and teamwork, so those were the systems Savio helped introduce." Kwan, who joined Alibaba as chief operating officer in 2001 and left the company in 2012, did not respond to e-mail and phone requests for comment. REBELS AND RELIGION From day one, Alibaba lacked nothing in ambition. "Our core mission was, and is still, to make it easy to do business anywhere," Joe Tsai, Alibaba's executive vice chair, told Reuters in March. "The mission ... is our religion." Armed with that quasi-religious fervor, Alibaba grew from a simple business-to-business website hooking up overseas companies with their Chinese suppliers. "Savio came and said he would change us from a rough bunch of rebels into a regular army," recalls Li Zhiguo, a former Alibaba employee and now CEO of accounting site Wacai.com. By 2003, Alibaba began work on its first major departure from business-to-business e-commerce. Ma summoned a small group of employees, giving them the option to carry on with their normal work or sign a document and begin a secret project, said Shou Yuan, a former employee who took that second option. The group gathered in the original Alibaba apartment to create Taobao, the consumer-to-consumer e-commerce site that was launched in 2003 and faced off against eBay, which that year bought rival Chinese site EachNet for $180 million. At 4 p.m. every day, the Taobao project group would break from work to swim, do handstands and play video games. "We were just a group of country bumpkins, and our competitor was eBay," Shou recalled. By 2006, eBay effectively conceded defeat, shutting down its EachNet site. Today, Alibaba dwarfs its U.S. rival, with the Chinese group's estimated value of around $150 billion more than double that of eBay, and the goods traded over its sites are worth more than eBay's and Amazon.com Inc's combined. Driven by Ma's force of personality, Alibaba was able to tilt at windmills, said Duncan Clark, managing director of Beijing-based tech advisory BDA and a former consultant for Alibaba. "He likes to win. They're the company that humbled eBay in China." PUTTING THE CULT IN CULTURE Alibaba goes a long way to embracing its employees. Days after the company filed for its U.S. IPO last month, Ma presided over the company's ninth corporate mass wedding, blessing 102 couples who performed "wedding rituals of ancient times" clad in traditional scarlet and black robes from a 2,000 year-old Chinese dynasty, state media reported. The company's annual 'Alifest' is now a stadium-sized event, packed with tens of thousands of employees, families and friends, where workers sing, dance and perform skits. In one act, Ma sported a red and black leather punk rock costume with a long bleached white wig and oversized mohawk to serenade Joe Tsai, Alibaba's financial mastermind. Workers sometimes become known by their stage names. One employee was called 'cunzhang', or 'village chief', after he performed sketches as the bumbling head of a rural village. All of which has prompted some, including those close to the company, to say it's 'cultish'. "I really loved Alibaba, but others weren't able to make sense of it, they didn't know if I was mad," said Shou, one of the Taobao creators. CLOSE TO THE EDGE Yet Alibaba's romanticized notion of itself and its aspirations have sometimes worked against it. From 2000 to 2001, Alibaba's confidence had seen it expand too rapidly. Having almost burned through its money just after the dotcom bubble burst, the company was close to bankruptcy. Senior managers targeted potential investors, pitching a vision of a global network of small- and medium-sized enterprises doing business - with Alibaba as the middle-man. "More than a handful of Silicon Valley venture capital firms turned down Alibaba for investment," said David Chao, co-founder and general partner of venture capital firm DCM. "The whole industry went through a nuclear winter after the Internet bubble popped. It was a period where people were just not betting on models that weren't making money or companies that didn't have a clear business model." Alibaba was forced to strip down its business, getting rid of international staff and focusing on building a core market in China - a strategy it dubbed 'Back 2 China' or 'B2C'. More recently, Alibaba's emphasis on its values has trumped more practical goals. The company was denied entry on to the Hong Kong Stock Exchange after Ma refused to budge on Alibaba's controversial partnership structure that would see an unelected group of 28 people nominate board members. Hong Kong authorities insisted this violated its one-share-one-vote policy, and kept its doors closed to an IPO. Alibaba's weighty U.S. listing prospectus mentioned the company's culture and values more than 30 times. "If we are not able to maintain our culture, or if our culture fails to deliver the long-term results we expect to achieve, our business, financial condition, results of operations and prospects could be materially and adversely affected," it said. (Additional reporting by Beijing Newsroom; Editing by Ian Geoghegan)

Now may not be the time to buy bonds

Why are interest rates so low? And how long will they stay that way? Now that the European Central Bank has passed another historic milestone by imposing negative interest rates on a major part of the world economy, there is one explanation of the unprecedented collapse of interest that everyone can agree on. Central banks can set money market interest rates as low or as high as they please just by giving commercial banks whatever amount of excess credit is needed to keep these rates at the chosen level. Since early 2009, central bankers all over the world have decided, rightly or wrongly, that interest rates should be lower than ever before in history. Moreover, these policymakers made it clear that they will continue to squeeze interest rates down to near-zero, or even negative, levels until next year and perhaps beyond. But this obvious answer to the interest rate conundrum only begs a more interesting question: What accounts for the rock-bottom levels not only of the overnight interest rates that central banks set directly, but also the long-term rates that depend on the willingness of pension funds, insurers and private investors to tie up their savings for 10 years or more in government bonds? If investors were absolutely confident that short-term rates set by the central banks would remain near zero for many years ahead, then the seemingly paltry returns — varying from 2.6 percent down to 0.6 percent — on 10-year bonds issued by the U.S., European and Japanese governments would seem generous. Rational investors would be happy to lock up their money for a decade at these rates. But why are investors as confident about the persistence of near-zero interest rates as today’s low bond yields seem to imply? anatole -- ecb headThere are two possible answers, reflecting diametrically opposite economic views. The pessimistic view is that the world economy since the 2008 financial crisis has settled into a “new normal” of weak growth and negligible inflation or even falling prices. Whatever causes they attribute for this economic ice age — financial fragility, demographics, stagnating productivity or the unintended consequences of the post-2008 monetary experiments — proponents of the new normal agree that central banks will keep interest rates near zero for most of the next decade. So today’s historically low bond yields will offer investors much higher incomes than they will be able to secure in future years. Yet much of the recent evidence from the world economy and financial markets has contradicted this grim view. Economic statistics now mostly point to accelerating growth in the United States, Germany and Britain and at least a stabilization of the economic slowdowns in Europe, China and Japan. Inflation is also picking up in the United States, Japan and Britain. Meanwhile, in financial markets, equities are hitting all-time records and industrial commodities are rising. In short, the equity and commodity markets contradict the economic messages from the bond market. They cannot both be right — which brings us to the alternative explanation for rock-bottom bond yields: bond markets may simply be disconnected from economic reality. This could be happening for four technical reasons: 1. Very aggressive central bank policies in Japan and Europe, where deflation and stagnation are still real dangers, have artificially depressed bond yields in the United States and Britain — despite the economic acceleration evident in these countries. For Japanese and German investors, whose governments only pay 0.6 percent and 1.4 percent respectively on 10-year bonds, a U.S. yield of 2.6 percent looks generous. Especially when the currency risks can be hedged at almost zero cost — as they can be today. 2. Low bond yields everywhere have been exaggerated by regulatory distortions. Pension and insurance funds have been forced to guarantee their long-term obligations by buying “risk-free” government bonds — despite the very low prospective returns on these investments. Banks have been encouraged to “de-risk” by regulations that favor loans to governments rather than private companies and households. 3. We must ask why prudential regulators would want to force-feed financial institutions with bonds whose “risk-free returns” are now so meagre that these investments now amount to a “return-free risk.” A plausible answer is suggested by the history of postwar governments relieving themselves of wartime debts with regulations that forced savings into low-yielding long-term bonds — whose value was then whittled away by inflation. Governments must surely be tempted to repeat this process if bond market conditions allow. Which brings us to the final bond-market distortion. 4. Since late 1981, when short-term U.S. interest rates peaked above 20 percent, government bond yields have fallen continuously — if with occasional counter-trend interruptions — as memories of the 1970s’ great inflation faded. During these 30 years, investors who believed government promises of ever-lower inflation and structurally declining interest rates consistently made money. Meanwhile, the “bond market vigilantes,” who dominated investment thinking in the 1980s by continually warning against politicians who try to renege on their debts through inflation, have gradually lost their jobs. The upshot is that many of the survivors who now dominate bond investment tend to assume that the bull market they have enjoyed since 1981 will keep going — and every time bond prices fall (with yields correspondingly rising), this represents an opportunity to “buy on dips.” What these instinctive bond bulls have failed to notice is that the 30-year trend of rising bond prices — and the corresponding decline in long-term interest rates — probably ended in 2012. Since July 2012, the peaks and troughs in U.S. long-term interest rates have been gradually rising, not falling. Prospects for inflation and growth suggest that this trend of rising long-term rates will probably continue for many years. If so, then investors who buy bonds at today’s low yields will be big losers, while governments that issue, and then inflate away, these low-return obligations will rejoice.