Links: 2013-01-24


BBC News – Nokia returns to profit but drops dividend payment

“Nokia, the struggling mobile phone maker, swung back into profit in the last three months of 2012.

But Nokia said the trading outlook was tough and that no dividend would be paid, the first time in 20 years that shareholders have missed out.”

Apple’s weak results spark fresh round of price target cuts | Reuters

“Weaker-than-expected holiday sales of Apple Inc’s iPhone reinforced fears that it is losing its dominance in smartphones, driving down its shares and drawing another round of stock price target cuts early on Thursday.”

Verizon’s “Six Strikes” Anti-Piracy Measures Unveiled | TorrentFreak

“During the coming weeks the controversial “six-strikes” anti-piracy system will kick off in the U.S. While none of the participating ISPs have officially announced how they will handle repeat infringers, TorrentFreak has obtained a copy of Verizon’s full policy. Among other things, offenders will have to watch a video about the consequences of online piracy, before their speeds are reduced to 256kbps. Also worth mentioning is that the copyright alert system will also apply to business customers.”

Inside H-P’s Missed Chance –

“Within days of agreeing to buy Autonomy, in the summer of 2011, H-P was looking for a way to get out of it. Before the deal even closed, H-P canned the CEO who pushed it. Then last fall, H-P wrote down the value of the software firm by $8.8 billion, blaming more than $5 billion of that on what it said was improper accounting at Autonomy designed to inflate its revenue and profit. Autonomy’s founder denied any wrong accounting.”

Patent Bully: Steve Jobs’ Unethical Use of Patents | Patent Progress

“Yesterday, a sworn statement by former Palm CEO Edward Colligan became part of the public record in a civil antitrust lawsuit brought by 5 employees at major Silicon Valley tech firms.  Colligan alleged, supported by email records, that Steve Jobs contacted him and “proposed” an arrangement in which Apple and Palm would agree not to hire each other’s employees.  If Palm did not agree, Jobs threatened Colligan with patent lawsuits.”

Apple Earnings Good, Not Great – John Paczkowski – News – AllThingsD

“After a suffering a near 30 percent decline in share price over the past three months, Apple needed an old school top line beat for the holiday quarter to ease fears that its pace of growth is slowing.
But the company didn’t quite manage it. While it beat its own guidance — earnings per share of $11.75 on $52 billion in revenue — it didn’t trounce the Street.”

Apple Sold 2M Apple TVs In The Holiday Quarter, Up 60% From A Year Ago | TechCrunch

“The growth in Apple TV sales shows continued demand for an understated device that is now five years old. It also comes as users and analysts alike continue to wait for Apple to produce an actual TV. For years, prognosticators have forecast Apple would get into the HDTV market. But with no real timeline for building its software into a streaming display, its streaming box continues to sell well.”

Dear Tim Cook, The Retina Display Is Great But It’s Not The Best | TechCrunch

“Since size is based entirely on opinion, there’s no need to delve into that. But when it comes to pixel density and display technology, a 326ppi LCD screen doesn’t really compete with the brand new stuff coming out of the Android pen. Consider the 5-inch 1080p SLCD3 display on the Droid DNA, with 440ppi. It’s already available, and getting rave reviews.

Then there’s the Xperia Z, from Sony. It hasn’t been released yet, so we haven’t played with it extensively, but some hands-on time at CES proves that Sony, too, is capable of a stunning 1080p 5-inch display, topping out at 440ppi. The LG Optimus G Pro, not yet announced, is also said to have a 5-inch 1080p display.”

IBM Milks Lotus as It Tries to Update Software Group –

“IBM has spent billions of dollars on dozens of software acquisitions in recent years, which have helped the company deliver a flow of steady earnings. Still, much of its software revenue flows from technologies like Lotus that it acquired or developed at least a decade ago. The company needs to modernize its portfolio for a new technology era by selling more software aimed at fast growing areas like social media, cloud computing and mobile.”

Report: Market For Paid Apps Hits $8B In 2012, While Average Revenue Per App Drops 27% | TechCrunch

“The mobile app economy continued to show impressive growth in 2012, with Apple’s App Store maintaining its course, while its rival, Google Play, was able to make some significant gains. A November report from mobile analytics firm App Annie showed that, while iOS revenues still hold a lead over its rival, Google Play revenues were up 311 percent overall from January 2012 and downloads were up 48 percent. And today, Darrell touched on a new year-end report from mobile analytics firm adeven, which expects the iOS App Store to add over 435,000 new apps to its roster in 2013, up from around 380K in 2012.

With the onslaught of apps likely to continue, this only serves to highlight two of the biggest problems facing the app economy in 2012 (and going forward): Discovery and revenue.”

Rumor: Samsung Galaxy S4 unveiling set for March 22, first shipment mid-April | Android and Me

“According to a “telecommunications industry” cited by Korea’s Asian Economies, Samsung will host an Unpacked event in the United States on Friday, March 22 to unveil the Samsung Galaxy S IV. SamMobile has also chimed in, claiming that Samsung will start shipping the Galaxy S IV in week 16 of 2013 (that’s the week of April 15 for those of you too lazy to pull up your calendar). New details regarding the phone’s specifications indicate the Galaxy S IV will ship with a 2,600 mAh battery. An optional dock and back cover with wireless charging capabilities will be available shortly after launch.”

LG’s 5-inch 1080p Optimus G Pro Confirmed On Japanese Carrier’s Website | TechCrunch

“In terms of specs, we’re looking at a beast.

The Optimus G Pro sports a larger 5-inch 1080p display, along with a 3,000mAh battery to power all those pixels. It also packs a quad-core 1.7GHz Snapdragon processor, 2GB of RAM, 32GB of on-board memory and LTE of course. You’ll also find a 13-megapixel camera (with 1080p video capture) on the back, and a 2.4-megapixel front-facing camera for video chat.

Perhaps the only tiny flaw you will find is that the Optimus G Pro ships with Android 4.1 Jelly Bean rather than the latest version of Google’s mobile operating system.

The Optimus G Pro will be available to the Japanese in late April”

Expect TweetDeck Ltd To Be Struck Off U.K. Business Register In April, But Twitter To Continue To Develop TweetDeck The Product | TechCrunch

 “TechCrunch understands that TweetDeck’s failure to file its U.K. accounts is part of a process to wind up the company’s status as a separate corporate entity to its parent company Twitter. We expect TweetDeck to be struck off the U.K. register in April when it exceeds Companies House’s final deadline for overdue account filing — but TweetDeck the product to continue to be developed by Twitter.”

Before Apple, Verizon planned to launch Siri as Droid line’s killer feature

“In some alternate universe, Verizon’s hallmark Droid line launched in 2009 with its own voice-activated personal assistant, courtesy of then little-known startup Siri. Droids began listening to their owners, then talking back, eventually developing sentience and leading to a war between humans and machines. OK, so none of that actually happened, but it could have. At least the part about Siri on the Droid.

You see, the story goes that Verizon signed a deal with Siri to include their voice assistant software on their flagship line of Android devices. It was going to be marketed as a killer feature, and commercials were even produced to showcase the app’s capabilities. Then Apple entered the picture, bought Siri, and the rest is history.”

Look Out Apple, The Samsung Galaxy S IV Display Is Rumored To Blow Past Retina Quality | TechCrunch

“The latest reports on the forthcoming Samsung Galaxy S IV suggest that the flagship device will feature a 4.99-inch 440ppi Full HD Super AMOLED display. It’s a mouthful, but when all is said and done, it simply means that Samsung will be delivering its best ever display on a smartphone.”

Apple resellers instate broad price cuts on MacBooks amid concerns of slowing growth

Likely, much of this has to do with the shift to mobile

“With whispers of slowing growth in Apple’s Mac business gaining traction and overall sentiment surrounding the company at its lowest levels in roughly a decade, several of its largest resellers this week instated unusually steep price cuts on almost all sub-$2000 MacBook Pros and MacBook Airs.”



The West is misreading risks in China, says Li Daokui – Telegraph

““The reason I do not worry about GDP growth per se if the country is … still a very poor country,” he said, citing the GDP per capita measure, which is less than one fifth that of the US.
Mr Daokui, speaking at the 2013 World Economic Forum in Davos, also thought issues around China’s currency policies and its exporting might, long a sorce of tension with net importers such as the US, were lessening.”

BBC News – Japan posts record high trade deficit in 2012

“Japan has posted a record high trade deficit for 2012, as exports to Europe and China continued their plunge.”

Japanese PM Shinzo Abe hails ‘monetary regime change’ – Telegraph

“Japan’s prime minister Shinzo Abe declared a “monetary regime change” on Tuesday as the central bank bowed to government pressure, setting a 2pc inflation target aimed at helping the country emerge from its prolonged bout of deflation.”

China HSBC flash PMI hits two-year high in January | Reuters

“Growth in China’s giant factory sector accelerated to a two-year high in January, a preliminary private survey showed, as manufacturers received more local and foreign orders in an encouraging sign for the country’s economic rebound.”

China Looks Like a Bubble Economy, GMO Says – Emerging Markets Daily –

“How about its bubble economy? That’s what keeps GMO’s Edward Chancellor and Mike Monnelly underweight–and up at night, according to a new report.

Take China’s rapid credit growth. In 2009, non-financial credit expanded by the equivalent of 45% of the nations 2008 GDP–and has needed an increasing amount of credit to keep growing. From 2007 to 2012, the ratio of credit to GDP has increased to 190%. That’s faster than the credit booms of Japan in the 1980s or the U.S. during before the financial crisis. And the speed of growth, rather then the actual amount is often more problematic.”



Más del 10% de los hogares españoles tienen a todos sus miembros en paro | Economía | EL PAÍS

For the first time ever, more than 10% of Spanish households have no one employed.

BBC News – House sales rose by 5% in 2012 to five-year high, says HMRC

“House sales in the UK rose by 5% last year, according to figures from HM Revenue and Customs (HMRC).

The number of completed sales was 932,000, up from 885,000 the previous year, and the highest since 2007.”

Europe car sales sink to 17-year low – Telegraph

“Demand for new cars in Europe have fallen to the lowest level since 1995, closing a year burdened by heavy declines in all major eurozone economies.”

Valencia government assumes control of city’s stricken football club | Football | The Guardian

“With local health and education services hit by austerity programmes, the regional government’s effective takeover of Valencia and its squad of highly paid soccer players has provoked fury. But it became inevitable after the club defaulted on interest payments on an €81m (£68m) loan which was only granted after the regional government offered to stand as guarantor. The total debt is now €86m. The acquisition presents yet another administrative headache for the regional government, whose properties include the new but unused airport of Castellon and a hospital at Lliria that it cannot afford to open.”

World’s oldest bank hit by scandal amid state rescue bid | South China Morning Post

Hat tip Ida: “Giuseppe Mussari, former chairman of the Monte dei Paschi di Siena Foundation, resigned from his post as head of Italy’s banking lobby ABI after it emerged he had personally signed off on a derivative contract that may cost the world’s oldest bank 220 million euro (US$293 million) in losses.”

Portugal returns to long-term debt market –

“Lisbon’s bond deal follows a successful Spanish bond sale on Tuesday and comes as EU officials moved to ease the return of Portugal and Ireland to the long-term government debt market.
Portugal’s 10-year bond yield on Wednesday fell to the lowest level since September 2010.
“It is a sign of how markets are re-opening up that not just Spain and Italy have been able to get bonds away,” said Andrew Milligan, head of global strategy at Standard Life Investments.
Olli Rehn, the EU’s monetary affairs commissioner, said on Tuesday that Portugal and Ireland could draw on a European Central Bank bond-buying programme to help them regain market access. Under its €78bn bailout agreement, Lisbon is scheduled to resume issuing long-term government debt by September, ahead of a €5.8bn bond repayment that falls due in the same month.”

Spain’s Recession Deepens –

“”This budget consolidation effort has had a net contracting effect on activity throughout the year, especially in the last few months,” the central bank said. This year, meeting even stricter austerity targets “will require an additional, very ambitious fiscal effort by the central and regional governments.”

Those comments are in line with heightened concerns by local and foreign observers that accelerated austerity measures promoted by the European Union are self-defeating, as a collapse in economic activity makes it harder to boost tax revenue, putting pressure on budget deficits.”

Europe in 2013 | | MacroBusiness

“In the most part my expectations are that 2013 will be much like 2012 but with different risks in play. 2012 was marked by the ECB’s emergency programs that provided lender of last resort function to the Eurozone banking system which in turn supported sovereign governments. Since then the EU and the ECB have worked together to provide stability mechanism for governments including the yet to be activated OMT. There is no doubt that this combined action has significantly reduce “convertibility” and sovereign risk from the Eurozone but that isn’t the whole story.”



David Cameron’s referendum may never be necessary – Telegraph Blogs

“David Cameron’s pledge for an ‘in-or-out’ referendum on Europe will be overtaken by internal events long before we reach 2017. The vote may never be necessary. He is entirely right to play for time.
The eurozone’s North-South misalignment has not been resolved. The Club Med bloc is still sliding into deeper depression. The financial crisis — never more than a symptom — has graduated into a more intractable economic, social, and therefore political crisis.”

UK unemployment rate falls to 7.7% | Business |

“Jobless rate fell in the three months to last November as labour market improved in contrast to most of its European neighbours”

Unprecedented pay squeeze signals ‘jobs without growth’ economy – Telegraph

“An unprecedented squeeze on workers’ pay has led to a “jobs without growth” economy, with labour productivity and living standards falling, economists warn following record high employment figures.”


North America

Hussman Funds – Weekly Market Comment: The Good Without The Awful – January 7, 2013

“Generally speaking, the very best times to be long are when a market decline to reasonable or depressed valuations is followed by an early improvement in market internals (breadth, leadership, positive divergences, price-volume behavior, and so forth). This is a version of a general principle: bullish investors should look for uniformly positive trends to be coupled with an absence of particularly hostile features such as overvalued, overbought, overbullish conditions. Put simply, we are looking for the good without the awful.”

How Fed Learned to Stop Worrying and Love Zero – Bloomberg

“Sumner gave me more to think about. He believes that slow nominal and real growth accompanied by ultra-low interest rates are less a temporary phenomenon than the norm in developed nations with aging populations. Think Japan in the last two decades. The Bank of Japan tried to move its benchmark rate away from zero in 2000 and again in 2006, only to find its actions premature.
Like Japan and Europe, the U.S. is experiencing a “long- term secular decline in real interest rates, from 7 percent to negative 1 percent now, at the same time inflation has been trending down,” he said.
What that means is 3 percent 30-year Treasury bonds are the “new normal,””

Obama Channels Eisenhower With Anemic Government Spending Growth – Bloomberg

“Federal outlays over the past three years grew at their slowest pace since 1953-56, when Dwight D. Eisenhower was president. Expenditures as a share of the economy sank last year to 22.8 percent, their lowest level since 2008, according to Congressional Budget Office data. That’s down from 24.1 percent in 2011 and a 64-year high of 25.2 percent in 2009, when Obama pushed through an $831 billion stimulus package.” 

Union membership falls to lowest percentage in 76 years | Reuters

“The percentage of workers belonging to unions tumbled to 11.3 percent in 2012, the lowest percentage in 76 years, led by dramatic declines in states where lawmakers have put organized labor in the political crosshairs, government figures showed on Wednesday.”

Wells Fargo sued by German agency for $160 million in CDO losses | Reuters

“Wells Fargo Bank, N.A. was sued Wednesday by a German government agency that accused it of mismanaging a collateralized debt obligation, resulting in more than $160 million in losses.”

The press underplays the Geithner leak : Columbia Journalism Review

“Of all the things we expected to see in the 2007 Federal Reserve meeting transcripts released last week, Tim Geithner being accused by a fellow Fed president of leaking critical inside information to Wall Street was not one of them (although the Washington Post’s Neil Irwin got close).”

Junk-Bond Yields Fall to Fresh All-Time Low – MarketBeat – WSJ

“The price of U.S. high-yield company debt hit a fresh all-time high Wednesday, sending junk bond yields tumbling to a new low and bucking recent analyst talk of a bubble.

Setting the records: junk bonds tracked by a Barclays index rose to 105.83 cents on the dollar and yields fell anew to 5.68%. Yields dipped below the all-important 6% mark on Jan. 1 and had been over 7% as recently as July, more in line with recent post-crisis levels.”

NGDP level targeting: Yellen it from the rooftops, but nobody heard | FT Alphaville

“In other words, the optimal policy at the zero bound in FRB/US does not look like a Taylor rule but resembles an NGDP target. Exhibit 7 illustrates that Yellen’s optimal control simulation is equivalent to a specific form of an NGDP target. It plots the funds rate path that emerges directly from her simulation against the funds rate path that would be implied by a simple rule in which the funds rate depends on the NGDP gap implied by her simulation. The two funds rate paths are virtually identical to one another. Moreover, Exhibit 8 shows that Yellen’s results appear consistent with an NGDP gap of 6%—consisting of a real GDP gap of 4% and a price level gap of 2%—in late 2012 that is closed in late 2017.7”

Coach Stock May Fall More Amid Weak North American Sales –

“Like other apparel companies and retailers, holiday sales floundered as the economy snuffed consumer spending. And consumers are likely to keep a tight hold on their wallets.” 

Dr Doom says quantitative easing will create zombie banks, firms and borrowers | Business | The Guardian

“”Over time, you get zombie banking, zombie corporates, zombie households, which is damaging in the long term,” he said. The phrase “zombie banks” was coined in Japan, to describe insolvent lenders propped up by cheap cash.

Roubini stressed that “QE” had been critical in fending off a new Great Depression after the collapse of Lehman Brothers in 2008. But, asked to argue against the motion, “The short-term benefits of QE outweigh the long term risks,” he offered nine reasons why such unconventional monetary policy could damage the economy in the longer term.”

Calculated Risk: The Future’s so Bright …

“It looks like economic growth will pickup over the next few years. I’ve written about this before – a combination of growth in the key housing sector, a significant amount of household deleveraging behind us, the end of the drag from state and local government layoffs (four years of austerity nearing the end), some loosening of household credit, and the Fed staying accommodative (with a 7.8% unemployment rate and inflation below the Fed’s target, the Fed will remain accommodative).”

Koo: I’LL tell YOU when we’re delevered! | FT Alphaville

“I suppose what we might argue here to counteract some of the Koo pessimism is that the turning point in the deleveraging cycle is gonna be very hard to call. The decision by the private sector to start levering back up is, if not emotional, certainly complicated — code for “I dunno”. And one of the forces that has a good chance of leading the turning is a robust housing recovery and the powerful wealth effect it would generate; the prospects for this are unclear but on balance looking pretty good.

And if you do feel particularly down, we recommend dropping in on the excellent Bill McBride, for whom the future’s so bright, he’s gotta wear shades.”


Like Lance Armstrong, we are all liars, experts say – Los Angeles Times

“Though we profess to hate it, lying is common, useful and pretty much universal. It is one of the most durable threads in our social fabric and an important bulwark of our self-esteem. We start lying by the age of 4 and we do it at least several times a day, researchers have found. And we get better with practice.”

Argentina: watch out for a devaluation | beyondbrics

“Wiping 20 per cent off the value of the Argentine currency this year “isn’t off the wall”. So says Guillermo Moreno, the internal trade secretary and one of the tough guys in the government of Cristina Fernández.

What is this – rare honesty from an administration that denies the country has a problem with inflation?

(And to get a flavour of what that is like, back-to-school stuff, which has now started appearing in shops before the long summer holidays end in late February, is costing as much as 30 per cent more than last year.)”


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