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Gross domestic product data for second quarter

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A view of Marina Bay Sands at sunrise on Sept. 18, 2016 in Singapore.

Rustam Azmi |Getty Images

Singapore’s economy shrank in the second quarter from the previous three months on an annualized basis, widely missing economists’ forecasts, preliminary data showed on Friday.

Gross domestic product (GDP) fell 3.4% in the April-June period from the previous quarter on an annualized and seasonally adjusted basis, the Ministry of Trade and Industry said in a statement.

A Reuters poll had forecast growth of 0.1% on a quarter-on-quarter, seasonally adjusted and annualized basis. In 2019’s first quarter, GDP expanded 3.8% from October-December.

Compared with a year earlier, GDP grew 0.1% in the second quarter, less than the 1.1% expansion forecast in a Reuters poll.

In the first quarter, GDP grew a revised 1.1% from a year earlier.

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America is ignoring Iraq’s protests at its peril: security experts

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A demonstrator carries an Iraqi flag during ongoing anti-government protests in Baghdad, Iraq November 4, 2019.

Thaier Al-Sudani | Reuters

Iraq is descending into its most violent days since the battle against ISIS concluded in late 2017 — and the world is completely underestimating its significance, regional experts told CNBC at the Middle East’s premier oil and gas conference this week.

The second-largest OPEC producer has seen protests every summer for the last several years over economic grievances, met time and time again with empty government promises of reform that go unfulfilled. But this year’s demonstrations are different, spilling over into demands for a full-on political overhaul and attracting elements like Iranian-backed forces and other extremists that threaten to hijack the protest movement and potentially bring the U.S. into deeper involvement.

“From a security perspective, I would say that the Iraq story is the most under-covered story in the region right now,” Amos Hochstein, former special envoy for international energy affairs under the Obama administration, told CNBC on Wednesday.

“Because the forces that are outside, the external forces that have decades of interest (in Iraq) are not going to go away quietly. They will affect the economics of the region potentially, and they can affect the security beyond the region of Europe and eventually the United States.”

Some 300 people have been killed and more than 2,000 injured as protests rocking the country of 38 million draw a harsh response from state security forces and other unidentified entities. Authorities have taken extreme measures like shutting down the internet and using live ammunition against protesters in an attempt to crack down on the uprising.

Amnesty International has described the government response as “nothing short of a bloodbath.”

Protesters report plainclothes snipers shooting and killing civilian demonstrators, with many Iraqis pointing to Iranian-backed paramilitary fighters or “anonymous thugs” as some of the forces sowing further violence and confusion.

What we do know is that our adversaries, both groups like ISIS, al-Qaeda or Iran, thrive in chaos and a vacuum. What we’re seeing in Iraq today is vacuums being created and then occupied.

Amos Hochstein

fmr U.S. special envoy for international energy affairs

Iraqis across the country, particularly in Baghdad and cities of the country’s oil-rich south, are angry over grievances that lie at the heart of protests similarly taking place in Lebanon and Algeria: rampant state corruption, high unemployment, and a lack of basic services provision.

Iraqi cities regularly suffer power cuts, garbage is left uncollected and there is a broad consensus that the state serves the interests of the elites, not the people — and all this in a country that is a major crude oil producer, sitting on the world’s fifth-largest proven oil reserves and pumping nearly 5 million barrels per day. Its southern Basra province, afflicted with some of the worst poverty and lack of public services in the country, hosts international oil hegemons like Exxon, BP and Total.

Rocket attacks on US forces?

The comments come just days after 17 Katyusha rockets were fired at an Iraqi military base south of Mosul that houses U.S. troops. Some 5,000 American troops remain in the country, providing training and security assistance and supporting a U.S.-led coalition fighting what remains of ISIS.

Responsibility for the rocket attack has not been claimed and no casualties have been reported, but commodities expert and former CIA analyst Helima Croft sees this as a dangerous risk that could bring the U.S. into further confrontation with Iran. Hardline Iranian-backed Iraqi militias regularly threaten to attack Americans inside the country.

“If they hit that base and if you had dead U.S. servicemen, that would certainly be a red line where we could be hitting something in Iran, could we be bombing (Iranian port) Bandar Abbas? Potentially,” Croft said. “Iraq is where I think this whole thing comes to a head.”

The rocket attack, and protester anger at the corruption bred in a government system the Americans helped set up, is a sobering reminder that 16 years after its invasion, the U.S. remains tethered to the turbulent story of Iraq.

‘If you break it, you own it’

The protesters in Iraq are also fed up with foreign influence in their country’s affairs — many protest signs and chants say “No America, no Iran.” Observers say this presents a threat to Iran’s deeply held influence in the country, something that Tehran is not likely to take lightly.

“You have a battle for who is going to win the proxy war in the Middle East,” Croft said. “Think about Lebanon and Iraq, these two places where Iran has a strong foothold. The question is, are they going to want to surrender their foreign policy and strategic influence? I don’t think they will.”

For Hochstein, who opposed the 2003 U.S. invasion of Iraq, the U.S. has a serious responsibility — and the Donald Trump administration is ignoring it.

“There is a basic rule of if you break it, you own it,” Hochstein said. “It was us who broke it. And the consequences of that, we are living through today.”

Demonstrators run as Iraqi security forces use tear gas during a protest after lifting of the curfew, following four days of nationwide anti-government protests turned violent, in Baghdad, Iraq October 5, 2019.

Thaier Al-Sudani | Reuters

The solution, the former diplomat believes, is engagement — but that doesn’t need to be boots on the ground.

“We have come to this dichotomy now, we’ve come to this extreme where it’s either we have to be involved, meaning troops, or the alternative is nothing. And that is not the case here. What we’re seeing now is that during the Trump administration, we’re seeing no troops and no diplomacy.”

Hochstein stressed the need for American engagement to “at least put the path of dialogue on the table so that you can see a horizon for solutions, versus a total absence from the scene that allows the protests and the violence to take on a life of its own.”

“And then you don’t know where it ends. And what we do know is that our adversaries, both groups like ISIS, al-Qaeda or Iran, thrive in chaos and a vacuum. What we’re seeing in Iraq today is vacuums being created and then occupied. And the more we retreat, both militarily and diplomatically, the more vacuums we’re creating to be occupied by our opponents.”

‘All of them out’

Former Secretary of State Condoleezza Rice, speaking at the Abu Dhabi International Petroleum Exhibition & Conference (ADIPEC) this week, told CNBC, “We certainly have a responsibility in Iraq.”

“The Iraqi situation is one I have great sadness for because I think the Iraqis have a chance to govern wisely. Unfortunately they’ve not really delivered the services the people expect, the jobs people expect,” she said.

Rice was a leading proponent of the 2003 Iraq invasion, and remains a controversial figure from the Bush administration. Critics of the Iraq War say the former diplomat remains responsible for the chaos and violence that engulfed the country as a result.

Iraqi Prime Minister Adel Abdul Mahdi, who came to power only a year ago, has promised more public sector jobs and limited economic reforms, but the pledges have failed to satisfy popular anger. The U.S. embassy in Baghdad on Sunday called for new elections, but Iraqis protesting say that will only result in the same faces reappearing in power. The leaderless movement has seen demands ranging from a new generation of leaders to a return to military dictatorship.

“It reminds me of what we saw in Lebanon — protester demands have morphed into ‘all of them out’,” Croft said, referring to the mass protests sweeping neighboring Lebanon where citizens are calling for the removal of the entire political class. She noted the same happening in Algeria, where popular protests have endured since last spring.

“‘All of them out’ seems to be a movement sweeping across the region. And I think this is an under-reported story,” Croft said. “A movement sweeping across the Middle East.”

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Airbnb CEO Brian Chesky on the most bizarre customer complaint

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Since launching Airbnb in 2008, CEO Brian Chesky has pretty much heard and seen it all when it comes to customer complaints.

But one stands out as the most bizarre.

“One day, a customer calls us and says they want a full refund. We say, ‘why do you want a full refund?’ They said because the house is haunted and there’s a ghost,” Chesky said at The New York Times DealBook event on Nov. 6.

As with any other complaint, Chesky’s team called the hosts to relay the message and find out what happened. Chesky said he expected the hosts to say there was no ghost and that would be the end of it. But that’s not what happened.

“The host confirms the ghost [but] says that it’s a friendly ghost named Stanley and that the ghost is in its listing description,” Chesky said.

Sure enough after reading the listing, Stanley “the ghost” was mentioned, Chesky said.

“So we go back to the guests and the guest says, ‘Yes, we knew about Stanley. That’s why we booked it, but Stanley has been harassing us all night,'” Chesky told the crowd at DealBook. They were upset he wasn’t a friendly ghost. “How do you adjudicate that?” Chesky said. (He didn’t say whether the guests received a refund.)

For Chesky, the story is not just funny, it also illustrates that in today’s sharing economy, where businesses are built on trust — Airbnb only works if people are willing to trust their homes to complete strangers — companies need to be flexible and open to a wide range of issues.

“There is no playbook for this stuff,” he said.

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Customers cautious due to trade war, Brexit

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Cisco Systems Chairman and CEO Chuck Robbins told CNBC on Thursday the company’s larger customers are pausing their spending plans due to global economic uncertainties.

“They’re just expressing caution that they’re concerned about what’s going on in the macro environment,” Robbins said on “Squawk on the Street.”

Dow stock Cisco tumbled after the technology conglomerate late Wednesday reported fiscal second-quarter earnings that came in below estimates and lowered forward guidance. Cisco blamed the disappointing results on reticence in the face of a slowing global growth — partly based on fears of that Britain’s exit from the European Union and the U.S.-China trade war won’t get solved.

“We don’t see anything in the short term that will definitively resolve the issues we’re seeing around the world,” Robbins said. Though he did says that progress on a “phase one” trade deal between the world’s two largest economies “would help” with customer confidence.

Shares of Cisco were down more than 7% on Thursday morning and on pace for their worst day since mid-August. Cisco is up almost 5% year-to-date compared to the S&P 500‘s nearly 24% advance in 2019.

Robbins cited similar global pressures when speaking to analysts on Wednesday’s post-earnings conference call. Cisco saw “a bit of a pause” in the quarter and that some large deals were made but “got done smaller,” he said.

Beijing and Washington are working to cement a “phase one” trade deal, which was announced in principle last month. However, negotiations have hit a snag over a number of issues.

The U.S. is trying to secure stronger commitments from China on intellectual property protections, amounts of agriculture purchases, and an end to what it sees as forced technology transfers. China wants a rollback of tariffs, while reportedly balking on putting a specific number on farm good buys. Washington has placed tariffs on more than $500 billion in Chinese goods. Beijing has put duties on about $110 billion in American products.

In August, Robbins told CNBC that Cisco saw an impact on its business in China due to the ongoing trade war.

“We certainly saw an impact on our business in China this quarter. A lot of state-owned enterprises, I think where they have options, they’re choosing local manufacturers,” Robbins said at the time. “We don’t know if that’s a short-term thing or a long-term thing.”

— CNBC’s Jordan Novet contributed to this report.

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