Links: 2013-04-11
News links for 11 April 2013
France’s explosive picket lines – FRANCE 24
“In France, more and more factories are closing. Many employees who risk losing their jobs find themselves torn between anger and despair. Our reporters went out to the picket lines and met workers willing to do anything to keep their jobs.”
“Canadian housing starts edged higher in March and building permits were weaker than expected in February, reports released on Tuesday showed, offering some reassurance that Canada’s housing sector is simply cooling, not crashing.
While housing starts rose for a second straight month, all the strength was in the rural market — urban starts dropped sharply — and a longer-term trend showed construction is continuing to moderate, according to a report from government agency Canada Mortgage and Housing Corp.
Meanwhile, data from Statistics Canada showed the value of Canadian building permits rose a weaker-than-expected 1.7% in February as a sharp decline in plans for multi-family housing partially offset strength in other projects.”
HTC Makes the One the Android to Beat – Katherine Boehret – The Digital Solution – AllThingsD
“Those looking for a new take on Android, and especially a better smartphone camera, should consider the HTC One.”
Samsung’s Going to Ship a Ton of Smartphones This Year – John Paczkowski – Mobile – AllThingsD
“RBC Capital analyst Mark Sue, who predicts that Samsung will gobble up significant smartphone market share in the coming months.
Sue figures that Samsung will ship 10 million S4s in the device’s first month at market, and 70 million over the course of the year (Note: Standard shipments-not-sales caveat applies here). Add to that shipments of the company’s lower-end and mid-tier smartphones — handsets that are particularly popular in emerging markets — and it’s possible that Samsung’s smartphone growth might outpace that of the broader market this year, and of Apple, as well. For the March quarter, Sue predicts that Samsung will capture 35 percent of the global smartphone market. Meanwhile, he expects Apple to snag around 20 percent.
The reason for that predicted disparity? That low-end iPhone that’s missing from Apple’s handset portfolio.”
An iPhone Lover’s Take On The Facebook Phone | TechCrunch
““This is not a Facebook Phone.” Yeah, whatever. The HTC First is the first phone that has Facebook partnering up with an OEM to bake an Android pie with Facebook Home filling, so I’m calling it the Facebook Phone. There will be more. This is just the first. And guess what?
It’s really good.”
BBC News – Belgium protests over German low pay in EU complaint
“The European Commission is studying a complaint from Belgium about low wages at some German firms, described by Belgium as unfair “social dumping”.”
BBC News – Pension scheme deficits up ‘at worst time’
These deficit numbers are also rising in the US
“The deficit of private sector, final-salary pension schemes rose in March, figures show, during a key review period for company pensions.
The collective deficit of the UK’s 6,316 schemes rose to £237bn at the end of March, from £201bn a month earlier.”
Waarom de Duitsers niet rijk zijn – De Standaard
More on the ECB’s wealth study here. This Belgian daily offers 4 reasons why German households are not rich: 1. they don’t own residential property – only 44%, whereas in Belgium it is almost 70%. 2. Pensions. Private pensions are relatively unimportant in Germany. 3. West/East divide since Germany is really still two countries on the wealth scale. 4. Size of the household. No country has more one-person households than Germany.
Duitsland ongelijkheidskampioen in eurozone – De Standaard
Germany has the biggest gap between top earners and lowest income earners in the EU. According to a recent ECB study, the gap between the top 10% and the bottom 10% is 100 times income in Germany. By contrast, that number is 4 times in the Netherlands, 15 times in Belgium and 56 times in France.
Luxembourg and Belgium have the wealthiest retirees as the average 65-74 year old in Belgium has 287,300 euros of assets. 75 and over have 272,500 euros. But the median Belgian household only has 2,800 euros in assets. In most countries the least wealthy groups have negative net assets, Netherlands foremost with 28,100 euros of negative net assets.
Dalende huizenprijzen in eurozone – NOS Nieuws
Eurostat: House prices in the euro zone dropped 1.8% in year to Q4 2012. The largest drops were Spain at 12.8% and Slovenia at 8.8%
Brussel: neem de tijd voor huizenmarkthervormingen :: nrc.nl
Olli Rehn and the EC say that the Dutch need to take a gradual and cautious approach to fixing their mortgage market because it has caused internal imbalances for the economy. One of those is the record mortgage debt. Willem Buiter sees the deductability of mortgage interest as a key reason why this is a problem.
Rethinking the lithium-ion battery revolution over cost, safety | South China Morning Post
“The overheating of the batteries on two of Boeing’s high-tech 787 Dreamliners, which prompted regulators to ground the aircraft, served to underline the concerns and forced the plane maker to redesign the battery system.
On Thursday, battery experts will gather in Washington, DC, to discuss the technology in a forum organised by the National Transportation Safety Board, which is leading the investigation of one of the 787 incidents.
Experts are certain to point out red flags. Indeed, a growing number of engineers now say the lithium-ion battery revolution has stalled, undercut by high costs, technical complexity and safety concerns.”
Obama Budget’s Student Loan Gamble Filled With Long-Term Questions
“President Barack Obama’s proposed budget for next year would reduce interest rates on federal student loans in an attempt to remove staggering burdens confronting graduates facing one of the weakest job markets in recent times.
The White House proposal would tie interest rates on student loans to the government’s costs of funding the program. Most student borrowers with recent government loans are paying record relative interest rates on their debts, according to a Huffington Post review. Students now pay fixed rates set by Congress, while borrowing costs in the broader economy are at historic lows, allowing the government to profit on student borrowing.”
“John McCain’s campaign has gone even further, suggesting that best answer for the growing pressures on Social Security might be to cut cost of living adjustments or raise the retirement age. Let me be clear: I will not do either.”
Andy Haldane: simplify ‘Byzantine’ banking regulation – Telegraph
“Regulations have grown “Byzantine in their complexity and Heath-Robinson in their design”, Mr Haldane said, as he called for the old banking rule book to be ripped up and replaced with a “simple” set of standards.
Simpler regulation would stamp out regulatory arbitrage, level the playing field between big and small banks, and remove the “deadweight costs borne by society” of burdensome supervision.”
China’s forex reserves reach $3.4tn – FT.com
“China’s mountain of reserves reached $3.44tn – roughly the size of the German economy – in the first quarter, in an indication that the economy is once again facing heavy and unwanted capital inflows. The $128bn jump in the first quarter was the biggest quarterly increase since the second quarter of 2011.”
For Japan’s loan-starved banks, BOJ’s big bang carries risk | South China Morning Post
” the BOJ’s radical easing has put further downward pressure on already razor-thin margins on domestic lending. The average contract interest rates on loans for one year and longer fell to 0.942 per cent in February, the lowest level since the central bank began collecting such data in 1993.”
Rating agency raises Cyprus rating outlook to stable from negative | South China Morning Post
“Standard & Poor’s Ratings Services has raised its outlook on Cyprus to stable from negative, saying it expects the troubled government to agree to the terms of a bailout, averting any immediate risk of a sovereign default.
Cyprus, one of the euro zone’s smallest economies, has been forced to wind down one of its largest banks and slap losses on uninsured deposits in a second in order to qualify for a 10 billion euro lifeline from the European Union and the International Monetary Fund.
S&P rates the island CCC. It said it would likely lower the rating if, contrary to its expectations, the Cypriot government rejected the bailout terms. It would consider raising the rating if the economy were to stabilise sooner and at higher levels.”
Fed officials at odds over when to cut bond buys | Reuters
“The Federal Reserve should start cutting back on purchases of housing bonds as soon as its next meeting, one top Fed official said on Wednesday, just hours after another said talk of trimming the central bank’s bond buys was “premature.”
The divergent views, the former from inflation hawk Dallas Fed President Richard Fisher and the latter from policy centrist Atlanta Fed President Dennis Lockhart, are emblematic of a split also on display in minutes of the Fed’s latest policy-setting meeting.
Neither Fisher nor Lockhart are voting members of the panel, but both participate in the policy-setting discussion, which in March was marked by a deep dive into the costs, risks and benefits of the Fed’s current round of so-called quantitative easing.”
Nikkei Touches More Than 4-Year High – WSJ.com
“Although the dollar failed to breach the key ¥100 level, the Nikkei Stock Average welcomed weakness in the Japanese currency. The index jumped 2% to 13549.16, its highest level since July 24, 2008.”
Obama Reaches for Middle Ground With New Budget Plan – WSJ.com
“The White House budget proposal is structured in a way that would ramp up spending sharply in the next few years, which administration officials said would spur job growth, while locking in future spending cuts to lower the deficit. This would be done in part by rolling back across-the-board spending cuts known as the sequester, replacing them with tax increases and spending cuts, primarily later in the decade.”
Obama signs order for $109 billion in 2014 sequester cuts | Reuters
“Just hours after proposing a budget that would replace automatic spending cuts required by law, President Barack Obama on Wednesday set in motion the next $109 billion of the reductions to military and domestic programs for the year starting on October 1.”
Buy natural gas, Jeremy Grantham says – The Globe and Mail
“Jeremy Grantham, the famed and gloomy U.S. contrarian investor, has a few hot tips for people who want to make a lot of money over the next few years: Buy natural gas, copper ore and phosphorus miners.”
Microsoft Plans 7-Inch Tablet – WSJ.com
“Microsoft’s tablet ambitions, combined with planned price breaks for its flagship software and updates in coming months to its Windows operating software, paint the picture of a company trying to move more quickly than ever to counter urgent threats to its $75 billion software empire.
One person familiar with Microsoft’s product plans said the 7-inch tablets weren’t part of the company’s strategy last year, but Microsoft executives realized they needed a response to the rapidly growing popularity of smaller tablets”
Leaked eurogroup paper: trouble ahead for Portugal? | Brussels blog
“We at Brussels Blog got our hands on the 12-page options paper prepared for the ministers by the so-called “troika” of international lenders – European Commission, European Central Bank and International Monetary Fund – and staff of the eurozone’s €440bn bailout fund, and have posted it here. The document contains five different options: extend the payment schedule a few months; by 2.5 years; 5 years; 10 years or more; or a compromise of 7 years.
As we reported earlier in the week, the debate is now centred on the document’s recommended option, the 7-year extension plan, though there are still reservations in Berlin about moving forward.”
Australia jobless rate rises to 3yr high in March | South China Morning Post
“Australia’s jobless rate rose unexpectedly to hit its highest in over three years in March as employment fell and more people went looking for work, a disappointing report that led markets to narrow the odds on another cut in interest rates.
The Australian dollar eased off recent highs after Thursday’s data from the Australian Bureau of Statistics showed the unemployment rate rose to 5.6 per cent in March, from 5.4 per cent the month before. That was above expectations for a steady outcome and the highest reading since November 2009″
“Samsung has confirmed the arrival of a new sub-brand within its Galaxy range of mobile devices: the Galaxy Mega expands its mini-tablet-sized-phone (aka phablet) portfolio by firing two new devices into the category, building on the momentum generated by its extant Galaxy Note line.
Samsung said the Mega will be available globally — “beginning May from Europe and Russia”, adding that product availability will vary by market and roll outs will be gradual. There’s no official word on Mega pricing yet but since both devices pack dual-core chips (vs the Galaxy Note II’s quad-core chipset) it’s possible they will be a slightly more affordable than Samsung’s other phablets.”
“Cyprus plans to sell $530-million (400-million euros) worth of its gold reserves to finance part of its bailout, a move that marks the biggest eurozone bullion sale in four years.”
“President Barack Obama proposed a US$3.77-trillion budget on Wednesday that combines controversial cuts to social safety net programs with tax increases on the wealthy.
The package is meant to lure Republicans to negotiate a broad deficit-reduction plan, but the details mirror a proposal Obama laid out last year that was rejected by Republican leaders.
Obama’s budget for fiscal year 2014, which begins on Oct. 1, would trim the deficit over three years by requiring people making more than US$1-million annually to pay more in taxes while enacting spending cuts that would replace the “sequester” reductions that went into place last month.
It has little chance of becoming law.”
Stumbling JGBs | FT Alphaville
“That’s all the bond yields popping sharply (with exception of perhaps the 10-year) since Kuroda hit the “quantitative and qualitative” button. The moves aren’t that big in nominal terms but for JGB’s they are dramatic — as Nomura said of the 30yr, it’s the sharpest three-day steepening in super-long zone since April 1995.
More broadly this might be profit-taking by large Japanese investors and banks in particular — see charts here — and we wouldn’t bet against a little front running of the BoJ move being unwound now it’s been announced. Another possibility is it might be the start of something much more dangerous”
LinkedIn Beefs Up Recruiter, the Company’s Biggest Revenue Driver – Mike Isaac – Social – AllThingsD
“It’s pretty clear from the update this morning that strengthening search is a priority. Part of LinkedIn’s power is much akin to Google’s; people who go to the sites have a clear intent, whether it be to find a potential new job recruit, or in Google’s case, to find the price of a fine French Camembert (or whatever it is people search for).
At the same time, LinkedIn — like Google — must remain “sticky”. Instead of having its users visit the page and then immediately leave after finding a result, adding features like suggested searches, the suggested “people you may want to hire” section and an increased focus on messaging give the company a better chance at increasing engagement in the long term.”
Big banks ‘more dangerous than ever’, IMF’s Christine Lagarde says – Telegraph
“Europe needs to recapitalise, restructure or shut down its banks as part of a vital clean-up of the industry, International Monetary Fund managing director Christine Lagarde said as she warned that the threat from world’s biggest lenders was “more dangerous than ever”.”
Junk bonds benefit from lack of options – FT.com
“A dearth of attractive investment options has pushed global investors back into the US junk market, sending yields lower and enabling borrowers with weak credit histories to raise funds at the lowest rates on record.
The latest push into junk bonds comes amid renewed worries over US growth and the eurozone – which have pushed down interest rates across the financial markets – and a sharp drop in the Japanese yen, with investors favouring dollar-denominated assets as an alternative.”
“The median price of a home in the District reached its highest point in history last month, according to the latest data from RealEstate Business Intelligence, a subsidiary of MRIS.
D.C.’s median sale price soared to $460,000 from $405,000 in March 2012, an increase of 13.6 percent year over year. For the entire metro area, the growth was more modest. The median sale price for the region rose 8 percent, to $372,500 last month from $345,000 in March 2012.”
FOMC Minute Signal End to QE – Tim Duy’s Fed Watch
“the minutes gave a clear indication that FOMC members were leaning toward pulling the plug on asset purchases by the end of this year”
Obama administration foresees $943 million bailout for FHA | Reuters
“The cash-strapped Federal Housing Administration will likely require a $943 million taxpayer bailout to cover expected losses from loans it insured as the U.S. housing bubble was deflating, the Obama administration said on Wednesday.”
BBC News – Brussels warns on Spanish and Slovenian ‘imbalances’
“Spain has already had its banking system bailed out and Slovenia is widely expected to become the next to ask for for a debt rescue.
The Commission said the pair are the worst of the 13 European Union countries currently under review.”
Microsoft cut to hold on PC ‘turmoil’ – MarketWatch
“Shares of Microsoft Corp. were downgraded Wednesday to hold from buy by BGC Partners which cited the “turmoil” in the personal computer industry. Microsoft shares were last trading up 2% at $30.21. “”
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