Links: 2013-04-06
As I wrote yesterday, I have a big backlog of links to show you, so I am going to try to post them through the weekend in order to catch you up on what I think is the important news. Here is the next batch. Enjoy.
News links for 6 Apr 2013
North America
“Any hopes of a rebound in housing demand are slipping away and the signs of a significant real estate downturn are everywhere. National home sales declined 2.1% from January to February, according to the Canadian Real Estate Association, and actual activity came in 15.8% below levels in February, 2012. Almost 80% of local markets posted year-over-year declines in house sales while new listings dropped 60%; worst in Toronto, Vancouver, Montreal and Saskatoon.
A real-estate correction of sorts is already under way in Vancouver and in Toronto’s overbuilt gleaming condominium market. But signs of another bust in the making point directly to the Greater Montreal area, which has as many individual homes for sale right now as Toronto and Vancouver combined — just under 32,000 — while at the same time, it has twice as many condominiums on the market than Toronto. Meanwhile, Quebec City posted a 30% decline in house sales year over year in March while Ottawa has not only seen its MLS inventory spike, its condo market has seen active listings jump by a whopping 40% year over year as prices fell 4% during the same period.”
Sequestration and the Jobs Report – NYTimes.com
“Government employment at all levels actually climbed during March, if you exclude the Postal Service, which shed nearly 12,000 workers. Economists expect the government ranks to take a hit as agencies and offices carry out their budget cuts before the end of the fiscal year in September.
But not yet. The budget cuts formally came into effect on March 1, and many agencies waited to see if Congress might undo them later in the month. Furloughs, layoffs, contract changes and other disruptions have started accumulating, but remain very small at this point. Economists expect the jobs hit from sequestration to be significant, but backloaded toward the end of the year.
But another change emanating from Washington seems as if it might be having a serious effect on jobs: the expiration of the payroll tax cut. “
Discouraged job seekers behind shrinking labor force | Reuters
“Americans giving up the hunt for jobs were likely behind a sharp drop in the U.S. workforce last month, a bad sign for an economy that is struggling to achieve a faster growth pace.
The number of working-age Americans counted as part of the labor force — either with a job or looking for one — tumbled by 496,000 in March, the biggest fall since December 2009, the Labor Department said on Friday. That pushed the so-called workforce participation rate to a 34-year low of 63.3 percent.”
Fed Dissenter George Says Policy ‘Overly Accommodative’ – Real Time Economics – WSJ
“Federal Reserve Bank of Kansas City President Esther George warned Thursday that current central bank policy is risky and may be creating new financial bubbles that could eventually hurt economic growth and job gains.
“I support an accommodative stance of monetary policy while the economy recovers and unemployment remains high,” Ms. George said. “But I view the current policies as overly accommodative, causing distortions and posing risks to financial stability and long-term inflation expectations with the potential to compromise future growth,” the official warned in the text of a speech to be delivered in El Reno, Okla.”
Commodity Currencies Are ‘Safest of All Havens’ – Real Time Economics – WSJ
I don’t buy this at all, especially given the housing bubbles in those economies.
“Commodity-linked currencies like the Australian and Canadian dollars are “the safest of all havens” as the euro-zone debt crisis wages on, says Dennis Gartman, editor and publisher of The Gartman Letter.”
March Jobs Report: Mediocre, Not Disastrous – Barrons.com
“Based on the employment report for March released Friday, nonfarm job gains in the private sector averaged 171,000. Over the past 12 calendar quarters, there were six that ran faster and five slower. For the full 12 quarters since March 2010, private-job gains have averaged 177,000, about the same as the 171,000 average in the recent quarter.
This long-term view should help put the disappointment over the March jobs report in perspective. Nonfarm payrolls increased just 88,000 against a consensus expectation of 200,000, while the unemployment rate was essentially unchanged at 7.6%. With the usual drop in government employment—this month due to a job decline in the U.S. Postal Service—the private sector tacked on 95,000, and with upward revisions to prior months, 127,000. Given the already strong performance in January and February, the first quarter did about as well as the three-year average.”
New bill would end Basel III and hike bank capital requirements to 10%. Read the draft here – Quartz
“The draft calls for bank regulators to look to the 19th century—before the Federal Reserve, deposit insurance and the income tax—when setting capital equity levels, and seems to rule out risk-weighting as a way to dilute the rules. By that standard, none of America’s largest banks would have reached the bill’s proposed minimum capital requirement of 10% in the second quarter of last year (pdf). And that’s not even counting the additional 5% capital surcharge on banks with more than $400 billion in assets.”
Asia
Abenomics is the only way to stop Japan’s debt compound crisis – Telegraph Blogs
“Those who say Japan has been muddling through just fine in permanent deflation with an overvalued yen are indeed “macro-tourists”.
No nation can allow itself to atrophy in this way. The surprise is that it took Japan so long to wake up.”
Yellen-san supportive of BOJ’s aggressive easing | MacroScope
Yellen: “What Japan is doing is something that’s in their own best interest, it’s something that if successful will be good for stimulating growth in the global economy and it will be good for us too”
Europe
EU’s Rehn: Big depositors could suffer in future bank bailouts under new law | Reuters
“Big bank depositors could take a hit under planned European Union law if a bank fails, the EU’s economic affairs chief Olli Rehn said on Saturday, but noted that Cyprus’s bailout model was exceptional.”
Ulster Bank soaks up a third of RBS’s £45bn government bailout – Independent.ie
“ROYAL Bank of Scotland (RBS) has pumped the equivalent of almost a third of its £45bn (€53bn) UK government rescue into bailing out Ulster Bank.
RBS’s Irish division received a £2.93bn (€3.45bn) capital injection from its parent last year, bringing the total since 2009 to £14.3bn (€16.84bn).
Ulster Bank was acquired by RBS in 2000 and doubled its assets to £55bn (€54.8bn) in the four years before the property crash, according to a report published in 2011 by the UK Financial Services Authority (FSA).”
German industrial orders rebound strongly in February – Independent.ie
“The Economy Ministry said yesterday that orders increased 2.3 pc compared with the previous month. That was better than the 1.1pc increase economists had expected.
In addition, January’s figure was revised upward to show a 1.6pc decline instead of the original reading of 1.9pc. Andreas Rees, an economist at UniCredit in Munich, said the figures “are the first unambiguous signs of a turnaround in German hard data”.”
Portugal court rejects elements of budget – Telegraph
“Portugal’s constitutional court rejected four out of nine austerity measures from this year’s budget in a ruling that deals a blow to government finances, but is unlikely to derail the bailed-out country’s reforms.”
Bundesbank probes Deutsche over claims it hid billions – Telegraph
“Germany’s central bank is investigating claims that Deutsche Bank hid billions of dollars of losses at the height of the financial crisis in a bid to fend of a government bail-out.”
Fitch upgrades Lithuania to BBB+ | beyondbrics
“Good news for the Baltic state of Lithuania. One of the three major ratings agencies, Fitch, has upped the rating of its long-term foreign-currency sovereign debt to an investment grade of BBB+. This compares to a rating of BBB (one notch below) from Standard and Poor’s and Baa1 (investment grade) for Moody’s.
Now that two of the three agencies have Lithuania on investment grade, the country’s debt can be included in more funds, which should help drive down borrowing costs.”
HBOS: Regulator’s findings shame three executives who brought down a bank | Business | The Guardian
“Crosby sold two-thirds of his shares just before the banking crisis hit and the bottom fell out of share prices.
Unlike former Royal Bank of Scotland boss Fred Goodwin, Crosby has retained his knighthood and his £570,000 annual pension. Under pressure from parliament Goodwin’s pension was halved to £340,000.
The commission expressed “profound regret” that in the aftermath of the banking crisis the FSA had not imposed “fitting sanctions for those most responsible in a manner which might serve as a suitable deterrent for the next crisis”. Only one HBOS executive, Peter Cummings, who used to run the corporate division of the bank, has faced sanctions. He has been banned from the City and fined £500,000.”
Technology
Safari Still Winning the Mobile Browser War – John Paczkowski – Mobile – AllThingsD
“Apple’s mobile Safari browser is beset on all sides by eager challengers, but it continues to hold its own, as the latest market share data from Net Applications shows.
Safari for iOS captured 61.79 percent of all mobile browser Web traffic in March, according to Net Applications.* That was a nice jump from the 55.41 percent it grabbed in February — enough to reaffirm Apple’s dominance of the space for the time being.”
“AutoRip, for those unfamiliar, was launched in January, as a way to offer Amazon customers free MP3 versions of any CDs they had purchased from the site since the launch of its Music Store back in 1998.
Going forward, any physical disc purchased on Amazon now comes with a free digital copy which is placed in your also free Amazon Cloud Player – the digital copies of your purchased tracks don’t count against your free storage totals here.
Starting today, any customer who buys a supported vinyl record on Amazon.com will also receive a digital copy of those tracks added to their Cloud Player library, which is also available across a number of devices, including iOS and Android smartphones and tablets, the Kindle Fire, connected TVs, and more, in addition to the web.”
One Year Later, Nearly Half Of Instagram’s 100 Million Users Are On Android | TechCrunch
“you have to remember that Instagram spent more than a year on iOS as an exclusive before opening up the Android-flavored flood gates. A year later, Instagram’s decision to include Android seems to have paid off handsomely.”
“With Android, Zuckerberg notes, Facebook doesn’t even really have to partner with Google.
“Google is aware of what we are doing,” Zuckerberg said. “Fundamentally, Android is just a more open system.”
And Zuckerberg doesn’t see that changing anytime soon.
“It would have to be a complete 180,” he said.”
Facebook Home’s Four Most Promising Advantages Over Stock Android | TechCrunch
“Facebook’s event today is all about a new “Home on Android,” and that’s exactly what Facebook Home delivers. The Android launcher integrates Facebook features into most aspects of the Android smartphone experience, eliminating the need to jump into a dedicated Facebook app in most situations. It brings a very different experience vs. vanilla Android, and here are the features that make it something users might consider switching for.”
Why Facebook Home bothers me: It destroys any notion of privacy — Tech News and Analysis
“Facebook’s history as a repeat offender on privacy, and playing loose and easy with our data means that need to be even more vigilant about privacy issues, thanks to this Home app/faux-OS.”
Facebook Home Boots Google Search Off The Homescreen On Most Android Phones | TechCrunch
“while the version of Facebook Home that ships with the just-announced HTC First will have Google search built in, the version they’ve built for everyone else to download will not. On the handsets that don’t come with this pre-installed, you’ll need to pop into Chrome, open up a dedicated search app, or drop down into your old homescreen (which is surprisingly easy — check out the video of it below.)
Why does that matter? Remember: search (or, more accurately, advertisements on search results) is a pretty massive part of Google’s business model. Having search on the homescreen makes searching an impulse, thus increasing the volume of searches dramatically. “
It’s no Facebook Phone: Home looks nice but could have limited impact — Tech News and Analysis
“Fundamentally, keeping users inside Facebook is great for Facebook (and when the company eventually rolls out ads to the cover screen photos, it could be quite lucrative.) But for Android users who already have the Facebook app and can customize their launchers? There doesn’t seem to be a lot about this announcement that changes that experience.”
Google Says Facebook Home Demonstrates Android’s Openness, Framing Apple As Restrictive | TechCrunch
“You’ll notice that the first thing that the company says is that there are “hundreds” of different types of devices running its mobile operating system. In the past, that’s been seen as a bad thing, due to fragmentation. Here, Google is clearly positioning this as an advantage, that is has more choices for consumers than say, Apple has.
Secondly, “this latest device,” being the HTC First, which is pre-installed with Facebook Home, demonstrates flexibility. There’s that word again. Clearly, Google is firing a rocket at its competitor Apple, which is notoriously very stiff when it comes to customization. In Apple’s mind, its users don’t know what they want to see until it shows it to them. By letting a company like Facebook take over the first experience users have when they wake up their phone, they are giving away pretty much everything. Again, Google points this out as a competitive advantage.”
Fragmentation means nearly half of Android users won’t get Facebook Home
This is the typical complaint from Apple fans. I think it’s not a good one in this case since no iPhone will get Facebook Home.
“The “openness” of Google’s Android platform may have made Facebook’s new Home experience possible, but the fragmented nature of the Android market means that nearly half of all Android users will be unable to run its new Home feature.”
Samsung pre-announces earnings, profits surge 53% to $7.7 billion
“Apple’s main rival Samsung pre-announced its earnings on Friday, revealing that the company had an even stronger-than-expected quarter with operating profits of 8.7 trillion won, or $7.7 billion U.S.”
Elsewhere
Tiger Woods Is No. 1 Again, But Golf Hardly Missed Him – WSJ.com
“”Every 10 to 15 years you have a passing of the baton from one face to the other,” says Ty Votaw, the tour’s executive vice president. “We were about at that 15-year mark with Tiger.” There was one problem, though—there wasn’t any obvious candidate ready to grab the torch from Mr. Woods, and the consensus among sports-industry executives was that professional golf was headed for trouble.
Defying predictions, the post-Tiger collapse never happened, thanks to the rise of a flashy new crop of players. By nearly every measure, professional golf became richer, more competitive and more stable while Mr. Woods was dealing with the sex scandal and injuries that sent his career careening off course.”
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