On Spain’s overestimating bank profits and more on Apple’s patent wars

By Edward Harrison On Jul 3, 2012

Here’s a second batch of links.

I think the Bloomberg piece on Spanish banks is a big highlight here. Essentially, Bloomberg tells us that Spain may be overestimating bank profits and therefore underestimating the capital shortfall of its banks. I believe this is the correct analysis and it is a primary reason to believe that the euro summit deal we just witnessed isn’t that big of a deal. The data on Spain is generally worse, but we did see a nice uptick in employment in Spain last month. Moreover, tourism in Spain is doing pretty well, in contrast to in Greece where the riots have scared tourists away. But at the end of the day, we see house prices still falling in Ireland and this strongly suggests – as Spain is further behind the curve than Ireland – that Spain has more property price declines to beat back and therefore a lot of writedowns to take. Expect Spanish banks to need a lot more liquidity.

Spain Overestimating Bank Profit Risks Seeking Too Little – Bloomberg

BBC News – Spain’s jobless level falls by 100,000 in June

In the mobile world, Apple continues its assault on Google and Android by proxy, suing handset makers for patent infringement. Apple has been successful against Samsung but have lost to HTC for now. Until we get a root and branch overhaul of our patent laws expect large business competitors like Apple to abuse their market position and stifle competition by protecting relatively mundane and hum drum design elements with patents. Nokia, apparently, is looking at suing Asus and Google over the new Google tablet Nexus 7. Stay tuned.

Links commentary

Iceland: The Iceland story is an interesting one. Paul Krugman is using Iceland in the same way supporters of austerity use Latvia to support their philosophical world view. In both cases, the situation is more complex than those with the easy narrative would have you believe. For example, Iceland and Ireland have not grown nearly as fast as Latvia, Lithuania or Estonia. This contradicts the easy narrative Krugman puts forward in support of more stimulus. But at the same time, it is true that Latvia has been in an economic depression and one has to always ask whether their current upturn is sustainable. Personally, I would be more interested in hearing what Poland is getting right than taking up the bitter argument over unorthodox and radical economic agendas that often cannot be replicated.

That’s it for now.

BBC News – California approves homeowner mortgage law

Microsoft in $6.2bn ad business writedown – FT.com

GlaxoSmithKline fined $3bn for healthcare fraud | Business | The Guardian

BBC News – Microsoft in $6.2bn write-down of aQuantive

Argentines’ latest weapon against currency controls? Shopping abroad | beyondbrics

The real victor in Brussels was Merkel – FT.com

The Consumerist » 1994 Tax Billing Error Forces Woman Into 5-Year Legal Battle To Save Her House

Debt crisis: Finland threat to plans to unleash ESM – Telegraph

The Consumerist » T-Mobile Doesn’t Really Care That Your House Burnt Down

François Hollande struggles to rebrand austerity as French budget looms | World news | The Guardian

Blow to Chancellor’s infrastructure plans – Telegraph