Links: 2013-02-23

News links for 23 February 2013

EconoMonitor : Ed Dolan’s Econ Blog » CPI Inflation Stuck at Zero as Fiscal and Monetary Policy Threaten to Turn Procyclical

“According to the textbook prescription, the ideal time to cut government spending and tighten monetary policy is when the economy begins to approach full employment and the first signs of excessive inflation appear. Economists call that kind of preemptive policy countercyclical  because it helps to keep an impending boom from running out of control. On the other hand, premature tightening when a recovery is still incomplete is procyclical. A procyclical policy makes slumps deeper, recoveries slower, and booms hotter than they would be if the economy were left to its own devices.”

Morgan Stanley expects 6% dividend, cheaper ‘iPhone mini’ after meeting with Apple CFO

“Morgan Stanley analyst Katy Huberty recently met with Apple Chief Financial Officer Peter Oppenheimer, and came away with the impression that Apple will likely increase cash return to shareholders, and potentially release a lower priced iPhone to maintain growth.”

Cost of Dropping Citizenship Keeps U.S. Earners From Exit – Bloomberg

“A high-income couple worth $100 million whose assets have $50 million in gains may have a $10 million tax liability if they decided to leave this year, said Henry Christensen, a partner at Chicago-based McDermott Will & Emery who manages the firm’s international private client practice.

While the number of people giving up their U.S. passports has been higher in the past few years than in the previous decade, the numbers are a small portion of the population. About 932 people gave up their U.S. citizenship in 2012, IRS data show. That compares with 1,781 in 2011 and 742 in 2009.”

Free calling moves from Messenger to main Facebook iOS app — Tech News and Analysis

“Facebook released an update on Friday that will allow users to place calls through the app as long as both parties have the most recently updated version. The function previously existed in the Messenger app, but will now be available to everyone.”

France freezes spending to hit EU targets as slump deepens – Telegraph

“France is to freeze spending on defence, higher education and research in a frantic bid to meet European Union deficit targets this year, tightening fiscal policy yet further as the country slides into deep slump.”

Obama Rated at 3-Year High in Poll, Republicans at Bottom – Bloomberg

“President Barack Obama enters the latest budget showdown with Congress with his highest job- approval rating in three years and public support for his economic message, while his Republican opponents’ popularity stands at a record low.

Fifty-five percent of Americans approve of Obama’s performance in office, his strongest level of support since September 2009, according to a Bloomberg National poll conducted Feb. 15-18. Only 35 percent of the country has a favorable view of the Republican Party, the lowest rating in a survey that began in September 2009. The party’s brand slipped six percentage points in the last six months, the poll shows.”

More evidence of tablets slowly killing the PC market — Tech News and Analysis

“Naysayers may continue to ignore the trend, but tablets aren’t toys and the tablet market isn’t a fad, as 2012 shipments show. This year, tablets could surpass both desktops and laptops.”

New Qualcomm LTE chipset could bring truly global iPhone with support for China Mobile

This is yet another reason the iPhone mini is doable in China.

“Apple supplier Qualcomm on Thursday announced a new “global LTE” front end solution that operates on 40 bands, including all existing LTE networks, which could usher in a truly global iPhone that even supports the obscure TD-SCDMA network used by the world’s largest carrier China Mobile.”

Icelanders question their lauded economic recovery | South China Morning Post

“Iceland’s biggest IT company CCP is what the island needs to leave its economic crisis behind. It is global, growing and employs hundreds but its tale is also one of frustration that echoes concerns about the country’s future.

For chief executive Hilmar Petursson, Iceland’s lauded recovery model that included a sharp currency fall coupled with capital controls may have pulled a US$13 billion economy back from the brink after a 2008 bank crash. But it is now a drag on firms like his.”

Apple’s Cash Isn’t As Big a Deal As You Think – MarketBeat – WSJ

I disagree here. The cash should be viewed compared to tangible assets.

“From Bespoke Investment Group:

“Of course, investors should really be looking at Apple’s cash as a percentage of its overall market cap…With Apple’s stock declining from $700 down to the mid-$400s over the last few months, its market cap has fallen by nearly $250 billion.  This has pushed Apple’s cash as a percentage of market cap up to 33%.

“While you might think this is high, back in the early 2000s, Apple’s cash as a percentage of market cap was above 50% for years.  And during the financial crisis, Apple’s cash got as high as 37%.

“Just something to be aware of as you hear all these calls for Apple to do something with its loot.””

A Phoenix Housing Boom Forms, in Hint of U.S. Recovery – Businessweek

” By 2008 the city was the epicenter of the country’s housing market crisis. Prices rose more precipitously and fell faster than most anywhere else. It was among the most overbuilt of the overbuilt sand cities, optimistic right up until the collapse. Home values fell by 55 percent from 2006 to 2011.

Today the city finds itself in a more encouraging situation, one that’s becoming more common around the U.S. Housing prices in metropolitan Phoenix climbed 22.9 percent in 2012, the highest in the nation, according to research firm CoreLogic. Homebuilders are rushing to buy land for new subdivisions or resume construction in ones they had abandoned.”

Google Makes Its Own High-End Laptop, the Chromebook Pixel – Liz Gannes – Product News – AllThingsD

“this is very much a first-generation device. Some of the Pixel’s hardware capabilities — like the third microphone, and gestures on the touchscreen — aren’t even supported by Google’s own services yet.

And that’s not the only awkwardness. The Pixel brings Google back to the perpetual question of why Google is building two operating systems, Chrome and Android, that are converging on each other.”

Google unveils Chromebook Pixel, a high-end, touch-enabled cloud machine: My impressions — Tech News and Analysis

“In an attempt to take on Microsoft and Apple, Google today announced a cloud computer that costs upwards of $1,299. The device designed in-house is part of Google’s transformation into a quasi-hardware company.”

Google’s Chromebook Pixel Looks Like A Pricey Boondoggle, Or The Platypus Of The Notebook World | TechCrunch

“Google unveiled is fabled Pixel Chromebook today, and the thing does indeed have what looks to be a gorgeous, high-resolution display. It also has a touchscreen, as rumored, and the list gets more confusing from there. 32GB (or 64GB) of onboard storage? ChromeOS? A 3:2 screen ratio? A $1299 starting price tag? Huh?”

Fed’s Commitment In Question – Tim Duy’s Fed Watch

“The Fed’s commitment to open-ended quantitative easing is more fragile than believed.  That is my first  takeaway from the minutes of the January FOMC meeting. My second takeaway follows from the first:  If the Fed is already wavering on the pace of quantitative easing, can it be long before they waver on their commitment to low rates as well?”

Fitch’s cree que España tampoco cumplirá con las metas de déficit en 2013 | Economía | EL PAÍS

El Pais’ report on Fitch’s revelation that it expects Spain to miss its 2013 deficit target. The target will either be weakened or Spain will miss it as it redoubles its austerity efforts. France is going to miss its target too but it’s in Spain where debt deflation is the problem where this matters. If targets are relaxed, it will be Spain and its unemployment that will be the rationale. Again, this is why I see the crisis flaring in Spain.

Florida Atlantic University: Major football stadium to be named after private prison company GEO Group | Mail Online

“Florida Atlantic University’s football stadium will be named after sponsor GEO Group Inc. The private prison company is the second largest operator in America”

Einhorn touts plan for Apple’s ‘war vault’ – MarketWatch

“Einhorn spent most of the call outlining his plan for “perpetual preferred stock,” or what he calls ‘iPrefs.” These are preferred shares that have a base value of $50 and would pay a dividend worth $2 per year for each share. He said this would satisfy demand in the market for “safe income paying instruments” with little risk to Apple’s existing cash flow.”

At Last, HP Beats Street in Q1 Earnings Report – Arik Hesseldahl – News – AllThingsD

“Hewlett-Packard’s quarterly results just crossed the wires, and for the first time in a while, they’re better than expected and there aren’t any nasty surprises.

Earnings on a per-share basis were 82 cents, beating the consensus view of 71 cents, while sales, at $28.4 billion, were better than the $27.8 billion analysts had expected. Sales were down by 6 percent versus the year-ago quarter.

It’s the first sign of improvement since a really tough year.”

Fitch reconoce los avances de España, pero cree que no cumplirá con el déficit en 2013 –

Fitch believes Spain will miss its deficit target for 2013 as the economy contracts 1.6%. They put the deficit at 6%.

Those Rumored Google Stores Are Starting To Make A Lot Of Sense | TechCrunch

“When talking about Apple’s rise from near-bankruptcy to become the most valuable company in the world, people often credit the amazing string of products from the iMac to the iPod to the iPhone to the iPad. And rightfully so. But just as important was another piece of the puzzle that ensured said products would find mainstream appeal and acted as an accelerant for Apple’s success: the Apple Stores.”

Bankia to reveal largest loss in Spanish corporate history – Telegraph

“Nationalised Spanish lender Bankia is expected to reveal a €19bn loss next week, the largest in the country’s corporate history.”

Argentina: lies, damned lies and statistics | beyondbrics

Altogether, if we take into account the administration both of Néstor Kirchner and of Cristina Fernández, the reduction in the public debt-to-GDP ratio is 33 percentage points, less than half the fall reported by the data with no correction or adjustment.

Bitter Pill: Why Medical Bills Are Killing Us |

“Dozens of midpriced items were embedded with similarly aggressive markups, like $283.00 for a “CHEST, PA AND LAT 71020.” That’s a simple chest X-ray, for which MD Anderson is routinely paid $20.44 when it treats a patient on Medicare, the government health care program for the elderly.

Every time a nurse drew blood, a “ROUTINE VENIPUNCTURE” charge of $36.00 appeared, accompanied by charges of $23 to $78 for each of a dozen or more lab analyses performed on the blood sample. In all, the charges for blood and other lab tests done on Recchi amounted to more than $15,000. Had Recchi been old enough for Medicare, MD Anderson would have been paid a few hundred dollars for all those tests. By law, Medicare’s payments approximate a hospital’s cost of providing a service, including overhead, equipment and salaries.”

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