Links: 2013-01-07
I have a ton of links here since I haven’t been able to post since New Year’s Eve. I hope to have a bit more link commentary coming forward in upcoming links posts. A few of the Spain links are older articles I thought relevant to today.
North America
Canadian unemployment rates for provinces in month of December | Economy | News | Financial Post
” Canada’s national unemployment rate was 7.1% in December. Here’s what happened provincially (previous month in brackets):”
Payrolls in U.S. Climb 155,000 as Jobless Rate Holds at 7.8% – Bloomberg
“Payrolls rose by 155,000 workers last month following a revised 161,000 advance in November that was more than initially estimated, Labor Department figures showed today in Washington. The median estimate of 82 economists surveyed by Bloomberg called for a increase of 152,000. The unemployment rate held at 7.8 percent, matching the lowest since December 2008.
Average hourly earnings climbed 2.1 percent from December 2011, to $23.73, the biggest gain in a year, today’s report showed. The average work week for all workers climbed to six minutes to 34.5 hours.”
Bond Buyer Online – Muni Rates to Slightly Increase in 2013
“Despite projections that 2012 would see higher yields, municipal bond interest rates continued their descent, falling even further to hit record lows in November.
Municipal Market Data’s generic 10-year triple-A bond began the year at 1.88%, and the 30-year started at 3.57%. On Nov. 28, those yields dropped to lows of 1.47% and 2.47%, respectively.
Bank of America Merrill Lynch expects some modest increase in muni rates next year of around 25 basis points to 1.93% on the 10-year triple-A bond,and 3.10% on the 30-year triple-A bond. That estimate is based on B of A’s average ratios to Treasuries, which are estimated to go up during the second half of 2013 to 2.0% in the 10-year and 3.25% in the 30-year.”
Service sector growth hits 10-month high in December: ISM | Reuters
“The vast U.S. services sector grew at its fastest clip in 10 months in December, boosted by a rise in new orders, according to an industry report released on Friday.”
PIMCO’s Gross warns investors of looming inflation | Reuters
“Bill Gross, founder and co-chief investment officer of bond giant PIMCO, wrote in his first letter to investors this year that money printing by central banks will lead to a destructive bout of inflation.”
Fed split over when to halt QE3 – FT.com
“According to the minutes, a “few” of the 12 voting FOMC members want to keep buying assets until the end of 2013. They are backed by a “few” more who want “considerable accommodation” but did not set a date.
But “several” other members want “to slow or to stop purchases well before the end of 2013” and one member opposes them altogether.”
California court: Victim wasn’t married, rape conviction reversed – Salon.com
“the judges made two recommendations: One, try Morales for a rape charge because he had sex with an unconscious woman. Two, change the law so what he did is also fraud, whether she was married to her boyfriend or not. A jury will now likely decide the first part. The second recommendation will require enough sustained outrage to get it through the legislature.”
U.S. Consumer Spending in December Highest in Four Years
“Americans were in a generous mood when it came to spending this past December, as they reported spending an average $83 per day in stores, online, and in restaurants, excluding household bills and a home or car purchase. That is up from $73 in November and the highest monthly figure Gallup has reported since December 2008. It is also the first reading above the $80 mark since the 2008-2009 recession.”
BBC News – US car sales rise 13.4% to hit five-year high
“US car sales rose 13.4% in 2012, making it the best year for the industry since 2007, industry figures have shown.”
Geithner Said to Plan Departure Before Debt Ceiling Deal – Bloomberg
“Treasury Secretary Timothy F. Geithner plans to leave the administration at the end of January, even if President Barack Obama and congressional Republicans haven’t reached an agreement to raise the debt ceiling, according to two people familiar with the matter.”
Senate Budget Pact Would Crimp Not Crush U.S. Growth – Bloomberg
““It’s going to definitely present a headwind for the economy,” Michael Feroli, chief U.S. economist for JPMorgan Chase in New York, said of the fiscal pact that the Senate approved early today, sending it to the House of Representatives. “We’re looking for a downdraft in growth in the first half of the year, with the economy coming back in the second.”
The first half slowdown will mean that the U.S. will make limited progress in reducing unemployment in 2013, according to projections by Ethan Harris, co-head of global economic research for Bank of America in New York. He sees the jobless rate falling to 7.5 percent in the fourth quarter of 2013 from 7.7 percent in November 2012.”
Twenty Female Senators Break Congressional Gender Gap Record – Bloomberg
“Today, 20 women make history.
When they are sworn in to the 113th Congress at noon, America’s female senators will comprise the largest-ever class of women in the upper chamber.
The 20 senators (three more than in the 112th Congress) are determined to make the change apparent. Their camaraderie and collaborative approach to legislating position them to get things done in the new Congress, they say in a joint interview with ABC’s Diane Sawyer, which airs tonight.”
Somewhere Over the Rainbow | The Big Picture
“We are 13 years into a secular bear market in the United States. The Nasdaq is still down 40% from its high, and the Dow and S&P 500 are essentially flat. European and Japanese equities have generally fared worse.
The average secular bear market in the US has been about 11 years, with the shortest to date being four years and the longest 20. Are we at the beginning of a new bull market or another seven years of famine? What sorts of returns should we expect over the coming years from US equities?”
Deal reached to avert US fiscal cliff – FT.com
“The more difficult negotiations, over spending cuts, have been postponed for two months.
Republicans believe they will have greater leverage to force the administration and Democrats to reduce spending during the debate over lifting the US debt ceiling, likely sometime in February.
The Senate deal lifts tax rates for households earning more than $450,000, marking the first time conservatives in Congress have agreed to higher taxes in about two decades.”
Alabama, Notre Dame: How Victory Tastes, 20 Years Later – WSJ.com
“Not surprisingly, about 20 of the players interviewed for this article played in the NFL. But in most cases, the pro game didn’t provide long-term financial security. When Ned Bolcar’s NFL career ended after four years, the former Notre Dame linebacker used the economics degree he’d gained to land a job on Wall Street, earning enough over 20 years to take time off recently to enjoy the birth of his and his wife’s first child. “The guys I knew from Notre Dame football all transitioned into something successful in the workforce,” Bolcar says.”
Trillion-dollar coin
Haushaltsstreit in USA – Der Trick mit der Eine-Billion-Dollar-Münze – Wirtschaft – Süddeutsche.de more from www.sueddeutsche.de
Schuldengrenze: Eine-Billion-Dollar-Münze aus Platin soll USA retten – SPIEGEL ONLINE more from www.spiegel.de
“the coin is a bargaining chip, meant to counter the equally ill-founded idea that Congress’ discretion over the debt ceiling was intended to be used regularly as a negotiating tool. (Congressional Republicans are explicitly promising, once again, to use the threat of national default to compel the president to cut spending in the next round of budgetary negotiations.)”
“A small but relentless group of impish bloggers and columnists – including Joe Weisenthal of Business Insider and Josh Barro of Bloomberg, as well as hapless Congressman Jerry Nadler – have created a large-scale trolling project that is meant to pressure the US Treasury into creating a trillion-dollar platinum coin to solve this problem”
The ‘Trillion Dollar Coin’ And The Republican Debt Ceiling Fight – Business Insider
“If the Republicans in Congress are really irresponsible and outrageous enough to hold the reputation and economy of the United States of America hostage just to win a few re-election points, then perhaps the appropriate response is for the Treasury to save the country by minting a “trillion-dollar coin.””
“This is basically the right way to think about it. Yes it’s silly to think of funding yourself with a coin, but it’s even sillier to think that defaulting might be a good idea, so you might as well do it.”
Europe
IMF’s economist: budget cuts may hurt growth less now | Reuters
“Belt-tightening in advanced economies may not be as harmful to growth now as it was during the height of the financial crisis, but governments should still be careful about drastic cuts, an International Monetary Fund research paper found on Thursday.”
UK service sector contracts for first time in two years | Business | guardian.co.uk
“‘Very disappointing’ fall in activity in dominant economic sector raises fears Britain is headed for triple-dip recession”
UK households reduce exposure to debt | Money | guardian.co.uk
“The drop in total lending to individuals was driven by a £169m fall in the value of loans secured on properties, which came despite suggestions lenders were making more mortgages available to would-be borrowers.”
Gerard Depardieu arrives in Russia to collect his passport from Putin – Telegraph
“On Thursday, Russian President Vladimir Putin granted Russian citizenship to Mr Depardieu – a popular figure in Russia who objected to the new tax on millionaires planned by France’s socialist government.
Mr Putin’s spokesman Dmitry Peskov said the president would hold a private meeting with Mr Depardieu in the Black Sea resort of Sochi on Saturday evening.”
BBC News – Swiss bank Wegelin to close after US tax evasion fine
“Switzerland’s oldest bank is to close permanently after pleading guilty in a New York court to helping Americans evade their taxes.
Wegelin, which was established in 1741, has also agreed to pay $57.8m (£36m; 44m euros) in fines to US authorities. It said that once this was completed, it “will cease to operate as a bank”.
The bank had admitted to allowing more than 100 American citizens to hide $1.2bn from the Internal Revenue Service for almost 10 years.”
Latvia, Once Again – NYTimes.com
“So we’re looking at a Depression-level slump, and 5 years later only a partial bounceback; unemployment is down but still very high, and the decline has a lot to do with emigration. It’s not what you’d call a triumphant success story, any more than the partial US recovery from 1933 to 1936 — which was actually considerably more impressive — represented a huge victory over the Depression.”
Deposits stable in euro zone periphery in November: ECB | Reuters
“Consumers and firms’ deposits in banks in troubled euro zone member states remained mainly stable in November, European Central Bank data showed, indicating that worst fears of bank collapses or even a euro zone exit are receding.”
Ex-Iceland bank chief convicted of fraud – FT.com
“The former head of one of Iceland’s biggest lenders has become the first leading bank chief executive to be convicted of a crime related to the financial crisis.
Larus Welding, the former chief executive of Glitnir, which was Iceland’s third-largest bank before its collapse in October 2008, was on Friday sentenced to nine months in prison for fraud, although six months were suspended for two years.”
Portugal braced for ‘fiscal earthquake’ – FT.com
““A fiscal earthquake”, “armed robbery”, “tax napalm”. Descriptions of the income tax increases facing Portuguese families from January 1 make the fiscal cliff looming in the US sound tame by comparison.
Lisbon plans to lift income tax revenue by more than 30 per cent, raising the effective average rate by more than a third from 9.8 to 13.2 per cent. Anyone receiving more than the minimum wage of €485 a month, including pensioners, will also pay an extraordinary tax of 3.5 per cent on their income.”
Experts back Deutsche whistleblowers – FT.com
“Accounting experts say Deutsche Bank appears to have improperly accounted for billions of dollars of credit derivatives trades by failing to value adequately the risk that its trading counterparties could walk away.”
Spain
“In the years of the housing boom, Spain’s banks offered 100% mortgages. Now, while receiving millions in public aid, they are throwing people out of their homes. But there’s a rebellion under way, report Monica Muñoz and Giles Tremlett”
Spain to overhaul rescued banks as condition of aid | Reuters
“Three nationalized Spanish banks will more than halve their balance sheets in five years, cut jobs and impose losses on their creditor bondholders in return for a euro zone rescue, while a fourth will be sold off, the European Commission said.”
Spain to get EU bank aid December 15 in return for job losses: report | Reuters
“European authorities will transfer 35 billion euros to Spain’s state bank rescue fund on December 15 in exchange for massive layoffs at Spain’s four nationalized banks, including state-rescued Bankia (BKIA.MC), El Pais newspaper reported on Sunday.”
BBC News – Spain sees jobless total fall in December
“The number of people registered unemployed in Spain fell in December, the Labour Ministry has said, a rare glimmer of hope for its recession-hit economy.
Adjusted for seasonal swings, the total fell by 41,023, or 0.8%, in December from the previous month, the first drop since July.
Spain now has 4.85 million jobless.
But across 2012, the number registered out of work was 10% higher than a year earlier.”
Spain: What Are Its Funding Needs? – MarketBeat – WSJ
“Spain’s funding needs are far larger than those of Ireland or Greece. Over the next three years, Spain will need approximately EUR 350 billion to roll over existing debt and fund deficits. This figure would probably exceed amounts available through the EFSF after loans are disbursed to Ireland and after subtracting guarantees from the weaker Eurozone members (including Spain itself, as it would not make sense for the country to guarantee its own debt through the EFSF”
Spain Taps Pension Fund in Borrowing Spree – WSJ.com
“Spain has been quietly tapping the country’s richest piggy bank, the Social Security Reserve Fund, as a buyer of last resort for Spanish government bonds, raising questions about the fund’s role as guarantor of future pension payouts.
Now the scarcely noticed borrowing spree, carried out amid a prolonged economic crisis, is about to end, because there is little left to take. At least 90% of the €65 billion ($85.7 billion) fund has been invested in increasingly risky Spanish debt, according to official figures, and the government has begun withdrawing cash for emergency payments.”
BBVA Bond Blowout Shows Hunger for Yield – WSJ.com
“What a difference a year makes. In 2012, it took until Jan. 31 for a Southern European bank to issue senior unsecured bonds—and then it was an 18-month deal. This year, Spain’s Banco Bilbao Vizcaya Argentaria reopened the market globally on Jan. 3, selling €1.5 billion ($1.98 billion) of five-year bonds—and paid less than the Spanish government to do so. That is encouraging news for Europe’s banks, but also a sign of investors’ increasing hunger for yield.
For BBVA, the deal was a blowout. It quickly drew orders of more than €5 billion from more than 400 investors, even as it cut the yield on offer by 0.15 percentage point to around 3.8%. That delivered an attractive funding cost for BBVA, while still generating a chunky spread of 2.95 percentage points over benchmark interest-rate swap rates for investors.”
Los depósitos en la banca de las familias y empresas se recuperan en noviembre | Economía | EL PAÍS more from economia.elpais.com
Spain Cash-Starved States Nudge Rajoy Toward Rescue: Euro Credit – Bloomberg
“Spain’s regions are adding to pressure on Prime Minister Mariano Rajoy to seek a European bailout as the funding needs of the country’s cash-strapped states swamp government expectations.
Nine of the 17 states have already requested support worth 93 percent of Spain’s 18 billion-euro ($23 billion) regional rescue fund, known as FLA. While the 10-year Spanish bond yield has fallen 251 basis points from a euro-era record of 7.75 percent on July 25, most of the states remain shut out of markets, forcing the government to weigh the cost of extending the rescue facility for another year.”
Spain’s Rajoy says it may be difficult to meet deficit target | Reuters
“Spain’s Prime Minister Mariano Rajoy said meeting the country’s 6.3 percent deficit target for 2012 would be difficult and he did not rule out seeking a bailout, in an interview published in La Razon newspaper on Sunday.”
Asia
Japan’s Bonds Drop as Stocks Jump; 30-Year Yield Most Since 2011 – Bloomberg
“The yield on the 30-year bond rose to as high as 1.995 percent before trading at 1.99 percent as of 4:52 p.m. in Tokyo from 1.975 percent on Dec. 28, according to Japan Bond Trading Co., the nation’s largest interdealer debt broker. The 1.9 percent security maturing September 2042 fell 0.275 yen to 98.32. Forty-year yields added two basis points to 2.17 percent, the most since Nov. 7. Japan’s financial markets had been closed since Dec. 28 for the New Year holiday.
The benchmark 10-year rate increased four basis points to 0.835 percent, the highest since Sept. 13. The 20-year yield touched 1.79 percent, the most since April 5, before moving to 1.78 percent from 1.755 percent. The five-year yield climbed to 0.2 percent, a level unseen since Nov. 2, while the two-year rate was little changed at 0.095 percent.”
Japan plans ‘nationalisation’ of factories to save industry – Telegraph
“Japan’s government is to take the unprecedented step of buying factories and machinery directly with taxpayer funds, the latest in a series of radical steps to lift the country out of its deep slump.”
Population expected to post largest drop in 2012 | The Japan Times Online
“Japan’s population is expected to have shrunk by a record 212,000 people in 2012, the health ministry said Monday.
According to estimates by the Health, Labor and Welfare Ministry, the number of newborns in 2012 was expected to fall by 18,000 to a record low 1,033,000 from 2011.
Thus the natural population decline, which is calculated by deducting deaths from births, is estimated at 212,000, which is higher than the drop in 2011, which surpassed 200,000 for the first time.”
China Manufacturing Index Shows Third Straight Expansion – Bloomberg
“A gauge of China’s manufacturing showed a third month of expansion, adding evidence that the recovery in the world’s second-biggest economy will extend into the new year.
The Purchasing Managers’ Index was 50.6 in December, the National Bureau of Statistics and China Federation of Logistics and Purchasing said today in Beijing. That compares with the 51.0 median estimate in a Bloomberg News survey of 27 analysts and 50.6 in November. A reading above 50 indicates expansion.”
Technology
“By one account Apple is having a very strong quarter in the U.S. in smartphone sales on the strength of the iPhone 5, but overall, Android and specifically Samsung are continuing to dominate the market. According to figures out today from comScore, there are 123.3 million people in the U.S. using smartphones as of November 2012, and Android represents 53.7 of them. Among all mobile users — smartphone and otherwise — 26.9% of them are using Samsung devices.”
ComScore: Android, Samsung still holding strong as market leaders
“According to the latest data put forth by ComScore, Android’s meteoric rise began to slow, if not peak, towards the tail end of last year. Wrapping up the three month period ending with November, Android saw a modest increase to a 53.7 percent share of the overall smartphone market. While it’s still a comfortable lead over Apple, whose share grew to 35 percent, it’s only a few ticks higher than ComScore rankings for summer 2012. Android finished with 52.6 percent of the market for that period.”
All T-Mobile Stores To Carry The Nexus 4 Beginning This Month | | TmoNewsTmoNews
“We surmise that T-Mobile would only prepare to launch the device in all of their retail locations if they had the inventory to support such a launch. However, I wouldn’t place bets on stores receiving more than a few devices initially, but that’s certainly better than stores having no inventory at all. No firm date was provided for when devices will begin popping up in retail locations, but there’s only 30 days left in January so it has to be soon!”
Best Android Smartphones of 2012
“The year is almost over (in fact, we’re less than 24 hours a way if your calendar hasn’t been working as of late) and it’s time to take a look at what the best devices of 2012 have turned out to be. There were many heavy hitters from the camps of Samsung, Motorola, HTC and more, but only five — yes, five — make the cut for Phandroid’s year-in review. Let’s dive in!”
Elsewhere
Can Andrew Sullivan make post-industrial journalism pay? — Tech News and Analysis
“Blogging superstar Andrew Sullivan dropped a bombshell on Wednesday by saying he is leaving The Daily Beast and setting up his own subscription-based website. Can he become the first prominent success story in what some have called the move towards “post-industrial” journalism?”
Andrew Sullivan breaks from the Daily Beast; new Dish to charge $19.99/year — paidContent
“Andrew Sullivan announced Wednesday that his immensely popular politics-and-other-stuff blog, The Dish, is striking out on its own and leaving the Daily Beast, which has owned it since 2011. The new site will charge $19.99 per year.”
Andrew Sullivan goes it alone | Felix Salmon
“The big unanswered question about Sullivan’s business model is how the economics are going to play out. He seems to have brought in about $100,000 today, from loyal readers — that’s about 4,000 subscribers off the bat. But that $100,000 is going to go fast. Sullivan is coming off a fat contract at NewsBeast, signed when Tina Brown was flush with lots of Barry Diller cash. He almost certainly couldn’t get her to agree to replicate that contract when it came up for renewal, so it’s hard to know how much money he’d receive if he stayed at the Beast. But my guess is that Sullivan wants the staff of seven, including two paid interns, to earn somewhere in the neighborhood of $750,000 a year between them, plus benefits. Add in what Sullivan lumps under “legal, technological and accounting expenses”, and you’re well into seven digits.”
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