20/04/2017 BBC Business Live


20/04/2017

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Hello, you with business live. Campaigning in the UK in action gets

:00:12.:00:17.

under way today. Antonio to Johnny will meet with

:00:18.:00:44.

Theresa May at 10 Downing Street this morning. The European

:00:45.:00:49.

Parliament made it clear what its so-called red lines are in the

:00:50.:00:52.

negotiation process. And we will talk you through what is at stake.

:00:53.:00:57.

Also in the programme, Emirates reduces its flights to the US. And

:00:58.:01:07.

looking at the European markets, they are treading water and

:01:08.:01:14.

relatively mixed. Of course, that first round in the election on

:01:15.:01:18.

France is on Sunday. Traders are gearing up for that. We will take

:01:19.:01:22.

you through the markets a little bit later. Now, it might taste good, but

:01:23.:01:27.

could it also do good? We will meet the woman behind the chocolate brand

:01:28.:01:32.

which is co-owner and by farmers in Ghana. Also, as Facebook begins work

:01:33.:01:38.

on mind control technology, we want to know, is mind control and social

:01:39.:01:43.

media a risky combination? Just think of the havoc it could cause.

:01:44.:01:57.

Let us know what you think. A very warm welcome to the programme. So,

:01:58.:02:01.

once again we start with our focus on what's going on in Downing

:02:02.:02:06.

Street. In less than an hour, the head of the European Parliament is

:02:07.:02:09.

due to meet with British Prime Minister Theresa May. That's Antonio

:02:10.:02:16.

Tajani, who is visiting as the UK prepares for an election which will

:02:17.:02:20.

be dominated by Britain's exit from the European Union. The European

:02:21.:02:23.

Parliament has a vote on the final Brexit deal, but is not involved in

:02:24.:02:30.

the process. However it has set out a series of what it describes as red

:02:31.:02:35.

lines, that it will not compromise on, something Antonio Tajani will no

:02:36.:02:39.

doubt discuss with the reason may later. Let's tell you what we know

:02:40.:02:44.

about those. So, the European Parliament wants the final agreement

:02:45.:02:48.

to make sure the UK continues to comply with a range of EU policies

:02:49.:02:52.

on various issues, such as the environment, tax evasion and

:02:53.:02:53.

competition. It also stresses the United Kingdom

:02:54.:02:59.

must honour all its legal and financial obligations to the EU

:03:00.:03:05.

- including its agreement to pay That could mean a hefty exit bill -

:03:06.:03:08.

a figure put by the European And one that's bitterly

:03:09.:03:16.

disputed by some in the UK. Notably by the so-called Brexit

:03:17.:03:28.

secretary David Davis. And it insists two major EU

:03:29.:03:33.

regulators currently based in London - the European Banking Authority

:03:34.:03:36.

and European Medicines Agency - will also have to move

:03:37.:03:39.

to the continent. Some in financial markets are now

:03:40.:03:42.

betting that getting the election out of the way in June will allow

:03:43.:03:45.

the UK to be much more flexible in agreeing to these demands -

:03:46.:03:49.

and avoid a so-called "hard We can now get the view of a

:03:50.:04:08.

political analyst from King's College London. In one sense it

:04:09.:04:11.

makes her life easier because she will have to pass a lot of

:04:12.:04:15.

legislation to make Brexit happen. With a bigger majority, which

:04:16.:04:17.

pollsters expect, that will be easier. I don't think it will affect

:04:18.:04:21.

the European Union lose position, though. They will not care one way

:04:22.:04:24.

or the other what size her majority is in parliament. I think they will

:04:25.:04:29.

fair negotiating position, and that fair negotiating position, and that

:04:30.:04:34.

won't change. How important is today's meeting? The European

:04:35.:04:36.

Parliament is not involved in the negotiations, but it does have to

:04:37.:04:39.

sign it off at the end of the two years? Yes, it is curious, we are

:04:40.:04:44.

not negotiating with the European Parliament but we need to keep them

:04:45.:04:48.

on site. The worst of all worlds is that the European Parliament says,

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we don't like this, we going to vote it down, which they can do. So

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keeping them on side is important. They have described some of these

:04:56.:04:59.

things as red lines which can't be crossed. The divorce bill of 60

:05:00.:05:04.

billion euros, already, David Davis says it is nothing like that. Yeah,

:05:05.:05:09.

that figure has been bandied around by the European Commission as a

:05:10.:05:13.

possibility. I think the first stage of negotiations will be to figure

:05:14.:05:16.

out what we should be including in our bill and what we shouldn't. I

:05:17.:05:20.

don't think that figure is set in stone, but I think the EU is making

:05:21.:05:24.

it clear that whatever figure they arrive at, we have to pay, we cannot

:05:25.:05:26.

get around it. Emirates will reduce flights to five

:05:27.:05:30.

US cities from next month, after new security rules targeted

:05:31.:05:37.

travellers from the Middle East. According to the Dubai-based

:05:38.:05:45.

airline, "recent government relating to the issuance

:05:46.:05:47.

of entry visas, heightened security vetting and restrictions

:05:48.:05:50.

on electronic devices in aircraft cabins have had a direct impact

:05:51.:05:52.

on consumer interest and demand Consumer goods maker Unilever

:05:53.:05:55.

reported better than expected first-quarter sales on Thursday,

:05:56.:06:05.

helped by pricing growth. Underlying sales rose by 2.9%,

:06:06.:06:11.

beating analysts' estimates of 2%. The results could boost investor

:06:12.:06:14.

enthusiasm for Unilever, whose shares have remained higher

:06:15.:06:20.

since February, when it received, and then quickly rejected,

:06:21.:06:25.

a $143 billion takeover offer Premier League football clubs

:06:26.:06:28.

posted record revenues of ?3.6 billion in 2015-16 -

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according to research by Deloitte. Manchester United topped

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the earnings table for the first time since the 2003/4 season -

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with revenue of ?515 million. Still, the top 20 English clubs made

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an overall pre-tax loss after two seasons of profit -

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hit by higher player wages, operating costs

:07:01.:07:03.

and other one-off charges. Japanese exports saw

:07:04.:07:08.

their biggest gain in more than two years in March -

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a sign of optimism for the world's third-largest economy,

:07:15.:07:19.

which also boosted Asian markets. Let's go to Sharanjit Leyl, who's in

:07:20.:07:25.

our Asia Business Hub in Singapore. A real boost for exports? That's

:07:26.:07:36.

right. Exports in Japan growing 12% in March led essentially by a strong

:07:37.:07:40.

demand for auto parts, optical instruments such as mobile phone

:07:41.:07:44.

parts and tools to make semiconductors. While imports were

:07:45.:07:48.

also up nearly 16%, which is mainly to buy all the coal, oil and energy

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needs to fuel the economy. We also heard from the International

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Monetary front, they have just rooted Japan's economic forecast,

:07:58.:08:02.

projecting a 1.2% annual expansion this year. And there was a key bank

:08:03.:08:09.

of Japan business confidence survey, which pointed to rising optimism

:08:10.:08:12.

among big manufacturers. All in all, really good for Japan, although I

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should say, the Newquay ended fairly flat, with worries about the French

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elections and north Korea. We have also seen the Japanese Prime

:08:23.:08:28.

Minister who has been trying to achieve this economic growth for

:08:29.:08:33.

years and end what has been a long period of on and off deflation

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through a policy blitz of easy money stimulus as well as reform. So,

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despite that great news about exports, as we heard, the Nikkei

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ended pretty flat. The Dow Jones was down. Quite a lot of earnings

:08:55.:09:00.

stories out of the US also which did not impress. IBM and eBay among

:09:01.:09:03.

them. In Europe, all eyes on France, as we

:09:04.:09:17.

head into the weekend, with voters deciding who they want to be the

:09:18.:09:19.

front runners in the presidential race in France. That's how things

:09:20.:09:25.

are going in Europe right now. We'll talk some more about trade in a

:09:26.:09:29.

moment. But first, let's look ahead to the day in the United States.

:09:30.:09:31.

And Michelle Fleury has the details about what's ahead

:09:32.:09:33.

The SNP 500's losing streak stretched into a fifth day. Doubts

:09:34.:09:46.

about Donald Trump's ability to fulfil his progress promises are

:09:47.:09:51.

behind that. Investors are hoping that first-quarter earnings will be

:09:52.:09:54.

strong enough to justify those lofty valuations. Of the more than 50

:09:55.:10:01.

companies in the SNP 500 that have turned in their report cards so far,

:10:02.:10:07.

75% have done better than it did, according to data from Thomson

:10:08.:10:11.

trend continue? Among those trend continue? Among those

:10:12.:10:17.

reporting quarterly profits come visa, cigarette maker Philip Morris

:10:18.:10:25.

and toymaker to picky. The number one US wireless carrier is expected

:10:26.:10:30.

to decline for a fourth straight quarter. Investors want to know how

:10:31.:10:39.

it will respond to rival AT's move into TV and content.

:10:40.:10:42.

Joining us is Alix Stewart, Fixed Income Fund Manager, Schroders.

:10:43.:10:47.

Good morning. We have been talking all week, and tomorrow is a big one,

:10:48.:10:56.

with a lot of the manufacturing news come can you explain the

:10:57.:11:03.

significance of these manufacturing PMIs? Well, obviously we have seen

:11:04.:11:07.

strong economic both through a lot of the world. And on the other side

:11:08.:11:14.

of the political stuff that has been dominating everything, we will be

:11:15.:11:17.

focusing back on what is actually happening in the economy is. We get

:11:18.:11:21.

that focus back, as you say, during the week, when the IMF upped its

:11:22.:11:28.

growth forecast for the UK, for Japan, for many economies, actually.

:11:29.:11:33.

And so it is quite interesting how the news coming through about

:11:34.:11:36.

various economies in the world seems to be getting better, even the

:11:37.:11:40.

inflation figures in the Eurozone yesterday were not as robust as

:11:41.:11:43.

people had feared, with worries about petrol going up etc? Yeah, we

:11:44.:11:49.

seem to be in quite a nice phase at the moment many we're getting a

:11:50.:11:52.

cyclical upswing globally perhaps for the first time since the

:11:53.:11:55.

financial crisis. And inflation is not a worry at the moment. Speaking

:11:56.:11:59.

of prices going up, let's talk retail sales. We will get the

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figures tomorrow. We have had results from Debenhams this morning.

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That is a big department store chain here. But it is interesting because

:12:08.:12:14.

ten stores are up for closure, a big warehouse and distribution centre

:12:15.:12:17.

potentially at risk. This is being replicated around the world, these

:12:18.:12:21.

big department stores really struggling? Well, you've got three

:12:22.:12:26.

things going on. You've got the fact that consumers are being squeezed as

:12:27.:12:31.

prices go up, if income is don't keep pace with that. We have seen

:12:32.:12:35.

here in the UK that people are dipping into savings to keep

:12:36.:12:39.

consumption going. So there are big question marks specific to the UK.

:12:40.:12:44.

But globally, we have got this issue with department stores, people are

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shopping in a different way now. We will talk more about Debenhams a bit

:12:48.:12:52.

later. For now, thank you very much. We meet the woman behind

:12:53.:13:00.

the chocolate brand that says it can make a difference for

:13:01.:13:08.

cocoa farmers in Africa. You're with Business

:13:09.:13:19.

Live from BBC News. Sky and HBO have announced

:13:20.:13:34.

a co-production deal worth ?195 million, and have also promised

:13:35.:13:39.

a "ground-breaking" virtual reality experience in partnership

:13:40.:13:45.

with Sir David Attenborough The announcement comes as Sky

:13:46.:13:48.

reports sales up 11% to ?9.6 billion It also comes a few weeks

:13:49.:13:58.

after the Culture Secretary, Karen Bradley, referred 21st

:13:59.:14:07.

Century Fox's bid for Sky Let's get more with Alex De Groote -

:14:08.:14:09.

media analyst at Cenkos. Nice to have you on the programme.

:14:10.:14:22.

Skype coming out with so many different bits of news, what is your

:14:23.:14:27.

take on the HBO deal? They have a long-standing arrangement with HBO

:14:28.:14:30.

whereby probably half of the output that you would see on sky at

:14:31.:14:34.

Atlantic already comes from HBO. In a way, this development cements that

:14:35.:14:40.

pre-existing relationship. Sky in the UK for some time now has been

:14:41.:14:43.

going down the path of higher quality, more expensive drama.

:14:44.:14:47.

Primarily through sky at Atlantic also through some of their other

:14:48.:14:50.

channels. So, this is more of the same but it is a big commitment and

:14:51.:14:56.

should be seen as a real positive for HBO as well. And also, it is

:14:57.:14:59.

what these companies have to do, they have to have that content that

:15:00.:15:04.

viewers want to tune in for, that's what it's all about, isn't it? It

:15:05.:15:10.

is, this is the golden age of TV, maybe the second golden age of TV.

:15:11.:15:14.

One reason for that is the amount of money which is being put into this

:15:15.:15:18.

high end drama by the likes of Sky. If you go back 10-15 years, a lot of

:15:19.:15:23.

based around paying up for the footy based around paying up for the footy

:15:24.:15:27.

and hoping to draw in subscribers on that basis. That has kind of come to

:15:28.:15:31.

the end of the road now, so this is about trying to get perhaps a

:15:32.:15:35.

slightly different democratic, with pretty high end drama, starring guys

:15:36.:15:38.

who previously would only have worked in film. Boyd thank you for

:15:39.:15:49.

your time. As promised, a reminder, much more on the Debenhams story. It

:15:50.:15:56.

is part of a plan already being announced but clearly there are now

:15:57.:16:01.

implications for some stores. Ten hour before potential closure, one

:16:02.:16:06.

of those is loss-making, the other given some sense to prove

:16:07.:16:07.

themselves. You are with Business Live, our top

:16:08.:16:22.

story today, we are focused on the head of the European Parliament. He

:16:23.:16:26.

is at Downing Street today meeting with the British Prime Minister to

:16:27.:16:30.

discuss of course the Brexit negotiations. We will have more on

:16:31.:16:33.

that story in a moment. Quick look at the numbers for you. After a

:16:34.:16:38.

pretty volatile week, calling off the snap election, markets and

:16:39.:16:41.

occurrences not sure I'd one point what to make of it. You can see as

:16:42.:16:48.

the FTSE 100 is finally back in positive territory after a week of

:16:49.:16:52.

losses so far, on the back of that. But the FTSE 100, because most

:16:53.:17:00.

many of you may have been indulging over the weekend regardless of where

:17:01.:17:04.

you live in the world on chocolate. Many of us enjoy a sweet treat -

:17:05.:17:06.

but how do you combine that urge Well, our next guest

:17:07.:17:10.

believes you can do both. She's the boss of the Fair Trade

:17:11.:17:14.

chocolate maker, Divine. It's co-owned by a co-operative

:17:15.:17:20.

of cocoa farmers in Ghana and exports to more

:17:21.:17:25.

than ten countries. Last year, it had a turnover

:17:26.:17:27.

of around $15 million - not bad, when you consider it's

:17:28.:17:30.

a social enterprise. Sophi Tranchell, is Group

:17:31.:17:32.

Chief Executive and MD And she has brought lots of slabs of

:17:33.:17:46.

the staff as well, over the studio. We had the out of the hands of a

:17:47.:17:50.

floor manager and manager and directors and various others to give

:17:51.:17:54.

it in the studio. Nice to see you, welcome. Let's start with the

:17:55.:17:57.

product, because I think it is really interesting. Defoe got

:17:58.:18:03.

involved in this, you had no experience of retail, no experience

:18:04.:18:06.

of chocolate, and yet you are now running this global chocolate

:18:07.:18:10.

business. Tell us your story. I had a tin chocolate, so I did know what

:18:11.:18:16.

it was! I was running a film distribution company and a cinema

:18:17.:18:19.

group in London, and we were distributing foreign films, so we

:18:20.:18:25.

brought in that in America films, and the early Almodovar films. We

:18:26.:18:28.

were getting people to watch subtitled films and back in the 90s

:18:29.:18:32.

young people didn't do that so that was quite a challenge. I saw an

:18:33.:18:38.

advert in a newspaper, a very little advert, because they were recruiting

:18:39.:18:44.

a team to run Divine chocolate, they already had the name, the recipe of

:18:45.:18:47.

the first buyer and the ownership structure, and I just thought it was

:18:48.:18:55.

a great project. The idea that it was owned by a cooperative of cocoa

:18:56.:18:59.

farmers in Ghana that would get the benefits from the money that

:19:00.:19:01.

chocolate lovers spend on the chocolate was just an irresistible

:19:02.:19:05.

combination. My thought it was a great idea and inner way I had

:19:06.:19:09.

nothing to lose, because I had no experience in retail at know how

:19:10.:19:14.

difficult a task I was taking on. I hadn't really recognise that you are

:19:15.:19:16.

entering into a category dominated by enormous Tom Preece la global.

:19:17.:19:24.

It just seemed a lovely idea, why wouldn't you want to lead chocolate

:19:25.:19:28.

that tasted great that would give benefit to farmers? When you think

:19:29.:19:31.

of the big names in chocolate, it is almost David Empoli of, Nestl and

:19:32.:19:37.

Cadburys and all those dominant chocolate brands but the less about

:19:38.:19:40.

how this company works because it is very unusual. Even people like Anita

:19:41.:19:43.

Roddick have been involved, the founder of the body shop. It is all

:19:44.:19:47.

about ethical shopping and consumption. Yes, it is about

:19:48.:19:52.

offering people all over the world who like chocolate a genuine choice

:19:53.:19:56.

to buy something that taste nice, a big range of products, but also they

:19:57.:20:00.

know that the farmers really benefit because they own 44% of the company,

:20:01.:20:04.

which means they have a seat on the board. They also get a share of the

:20:05.:20:09.

profits. It puts them much higher up the supply chain. Farmers who grow

:20:10.:20:15.

cocoa trade it on the international market, and that is very volatile.

:20:16.:20:18.

So the idea that they actually have a share in the chocolate company

:20:19.:20:23.

means they get a share in the world they are hoping to create. We are

:20:24.:20:28.

looking at pictures in Ghana, the fair trade logo is there. How has

:20:29.:20:31.

that changed, because I imagine when you started out doing this, there

:20:32.:20:36.

was a lot of education, but fair trade mean, have that affect farmers

:20:37.:20:40.

in Africa? People are more aware about where things come from the is

:20:41.:20:48.

there still an education involved? When we first started, people didn't

:20:49.:20:51.

know where chocolate came from, when you ask them, of course it comes

:20:52.:20:59.

from Switzerland or Belgium. That idea that cocoa comes from West

:21:00.:21:03.

Africa, 70% of the world's, and it makes a difference to the plight of

:21:04.:21:06.

the people who grow at how much you pay for it was completely foreign.

:21:07.:21:11.

So we were changing the narrative of the industry and fair trade was a

:21:12.:21:13.

nice way to do it. We had now people expect to behave properly

:21:14.:21:27.

to people in their supply chains, but there are companies that are

:21:28.:21:30.

turning a better and more thoroughly than other companies and there is

:21:31.:21:32.

now a whole range of products you can buy. Lots of things like clothes

:21:33.:21:39.

and stuff. Time is up, sadly, I could talk all day, but Sophi thank

:21:40.:21:52.

you. Lovely to see you. Let's return to the top story. We explained that

:21:53.:21:56.

the head of the European Union Parliament is meeting with Theresa

:21:57.:22:00.

made today in Downing Street. Vicky Ford is a member of the European

:22:01.:22:04.

Parliament in the UK's governing Conservative Party. She joins us now

:22:05.:22:09.

from Cambridge in her is to Viglen constituency. Thank you for being on

:22:10.:22:15.

the programme. Tell us about this meeting and how important it is,

:22:16.:22:18.

given that the European Parliament won't be involved in the negotiation

:22:19.:22:22.

at all. The European Parliament is important because it has a vote on

:22:23.:22:26.

the outcome of negotiations. Santonio the journey is a new

:22:27.:22:30.

president of the parliament, dresses beginning of this year, quite a

:22:31.:22:34.

practical and pragmatic person and he clearly wants to find an ally

:22:35.:22:39.

couple relationship with the UK, post the negotiations as well, so

:22:40.:22:42.

this is very good that he is coming to Downing Street -- Antonio Tajani.

:22:43.:22:50.

The Parliament's position as set out in a vote that we had just before

:22:51.:22:57.

Easter is quite in line with the UK Government position on a number of

:22:58.:23:01.

issues. I am interested in the story on the front of the FT, Brussels

:23:02.:23:06.

starts to freeze Britain out of EU contracts. You might expect this of

:23:07.:23:10.

course, the UK leaving the European Union so maybe we are not entitled

:23:11.:23:13.

to have an active role in some of those contacts, but how worried

:23:14.:23:19.

should business be? It uses very specific examples are saying that

:23:20.:23:22.

Britain should not be invoked if it is not a member of the club. I am

:23:23.:23:27.

very interested in that, because Parliament's position is very clear

:23:28.:23:35.

that until Britain leaves the EU, we haven't left, so they should not be

:23:36.:23:40.

pre-emptive conditions like that. Key priorities like making sure that

:23:41.:23:47.

British and European citizens rights expected, both sides agree on that.

:23:48.:23:51.

Key issues on financial contributions, the European

:23:52.:23:53.

Parliament does not put a number on the ball, but they say that Britain

:23:54.:23:58.

should pay its commitments and the Prime Minister has said we are

:23:59.:24:04.

prepared to pay our commitments. So again there should in principle be

:24:05.:24:08.

an agreement on these issues, and then we need to start working on

:24:09.:24:13.

those long-term relationship issues, like what should be the likes of

:24:14.:24:17.

British businesses trading into Europe. Thank you very much. Alix

:24:18.:24:29.

has rejoined us in the studio, most CEO, Alix. Let's took on this one in

:24:30.:24:33.

the Financial Times. Emirates cut back on flights to the United States

:24:34.:24:37.

after heightened security. This is so interesting, because when it was

:24:38.:24:40.

announced at the time there was a lot of speculation that this was US

:24:41.:24:44.

airlines lobbying the president and therefore he would get tough on

:24:45.:24:47.

those Middle Eastern airlines, that they do not like, because they think

:24:48.:24:52.

they get unfair state aid. Yes, it has come at an interesting time of

:24:53.:24:56.

these airlines because they have been expanding capacity and growth

:24:57.:24:59.

is slower in their home countries because of the slow in the oil price

:25:00.:25:03.

so quite a good time to get competitive with them. They have

:25:04.:25:07.

talked about the security measures and the ban on electronics on the

:25:08.:25:10.

plains. And the Visa regulations changing as well. A lot of

:25:11.:25:16.

headwinds, to pardon the pun. But at the same time you have big carriers,

:25:17.:25:20.

the legacy terraces -- carriers in the US, the company they complain

:25:21.:25:24.

about the Gulf carriers, United airlines getting such bad press.

:25:25.:25:29.

Indeed, these guys have been winning a lot of market share, they have

:25:30.:25:34.

been growing very fast, the Gulf airlines, so it is putting a big

:25:35.:25:38.

tent and that is part of the policies of Trump to try to fight

:25:39.:25:41.

back on trade with these guys. Talk us through the story from Facebook,

:25:42.:25:47.

it is fascinating. Your thoughts activating computers to change

:25:48.:25:53.

things. There is this optical neuroimaging system which is

:25:54.:25:56.

supposed to be able to read your brainwaves, and mean that you can

:25:57.:26:00.

actually type with your mind. So scary! Interesting stuff, Alix,

:26:01.:26:03.

thank you very much.

:26:04.:26:07.