News links for 27 Apr 2013
“Japan’s core Consumer Price Index fell 0.5% in March from a year earlier, in a sign that the Bank of Japan is still far from its goal of achieving a 2% rise in prices in two years.
The decline was slightly worse than a 0.4% fall forecast by economists surveyed by Dow Jones Newswires and The Nikkei. It also comes after a 0.3% fall in February.
The reading of the core index, which excludes fresh food prices, marked the fifth straight month of falling prices. It also shows that Japan has still yet to emerge from 15 years of deflation.
A government official briefing reporters on Friday’s data said that one of the biggest factors in the fall was the fact that a rise in kerosene and gasoline prices hadn’t been as steep as the previous year.
A decrease in the price of televisions and home air conditioning units also contributed to the fall.”
“Simmering tensions in the eurozone have been laid bare by a ruling French Socialist party document denouncing Chancellor Angela Merkel’s “selfish intransigence” over austerity and Britain’s “Thatcherite” prime minister.
The attack, in a leaked draft paper on European policy, capped a week in which calls have mounted from several European leaders for a review of austerity policies championed by Germany. The leak is likely to embarrass President François Hollande, who insists he has a good working relationship with Ms Merkel, despite acknowledging “friendly tension” between them.
The document bitterly attacked the conduct of right-leaning administrations during the eurozone crisis, including David Cameron’s British government, but reserved its harshest words for Ms Merkel.”
“Finance Minister Jim Flaherty’s determination to balance Canada’s budget in two years increases the likelihood the government will lean on Mark Carney’s replacement at the head of the Bank of Canada to boost growth in the nation’s economy.
Flaherty’s plan to eliminate the deficit in time for elections in 2015 limits scope for further fiscal stimulus and increases the responsibility for the country’s next central banker to take the lead in responding to any economic slowdown.
“If you are going to be wedded to tighter fiscal policy, then you are sort of left with the need for weaker monetary policy” if the economy slows, said Mark Chandler, head of fixed-income strategy at RBC Capital Markets in Toronto.”
I actually believe this is true. This is why I think Greece outperforms here.
“In an interview published on Friday by Bloomberg, Provopoulos argued that Greece is making “good progress” in its efforts to ease eurozone debt concerns and is now closer to rebalancing its economy after six years of painful recession and three years of austerity.
“What is important is that at some point in the near future, certainly by mid-2014 and probably sooner, we will see the economy picking up. We could expect some positive signs even earlier, as the government continues to implement reforms,” the BoG governor said.”
“The party rages on for borrowers tapping the high-yield debt markets.
On Thursday, yields on so-called junk bonds slipped to a record low of 5.39%, according to a Barclays index dating back to July 1983. That beat the previous low of 5.47% reached just two weeks ago on debt issued by companies with ratings that fall below investment grade.
“Junk is a misnomer,” said Jeff Cohen, co-head of U.S. syndicated loan capital markets at Credit Suisse. The demand for the riskier debt “reflects investor sentiment; they are desperate for the paper.”
The $136 billion of junk bonds issued in the U.S. market so far this year is the busiest start to any year on record, underscoring how companies are feeding the demand, according to Dealogic records going back to 1995. In 2012, about $121 billion in junk debt had been issued by this point in the year.”
“It’s disingenuous to claim their error is just an ‘academic kerfuffle’. Reinhart and Rogoff sold debt-cutting to governments hard”
I don’t like this at all. But it is yet another step toward the full on monetary blitz now ongoing to deal with this debt crisis.
“As the Bank of Japan ramps up its monetary stimulus to include buying equities, Jim O’Neill, chairman of Goldman Sachs Asset Management, said it makes sense for central banks to own stocks. O’Neill spoke with CNBC at the Goldman Sachs Growth Markets Summit in New York.”
It’s ridiculous to suggest that the US has been in recession for nine months when GDP has increased all along the way. Revisions will not revise this away. Achuthan has lost a lot of credibility.
“Earlier today, we learned that real GDP grew at a 2.5% rate in Q1.
While this was much lower than the 3.0% growth rate forecasted by economists, it still seems to be a clear indicator of economic growth.
But not everyone sees it that way.
Lakshman Achuthan of the Economic Cycle Research Institute has long argued that the U.S. economy slipped into a recession in mid-2012.”
“The leader of the main opposition SYRIZA, Alexis Tsipras, was in Lisbon on Friday for an official visit aimed at expressing solidarity with Portugal where the government has also imposed tough economic measures in exchange for foreign rescue loans and as part of the leftist leader’s broader drive to forge an anti-austerity front in southern Europe.”
“Prices fell by 3pc in the past year across the State, following a drop of 0.5pc in March, according to the Central Statistics Office.
However, housing experts said this pointed to an easing in the pace of property value falls because the fall of 3pc compares with a drop of 16.3pc recorded in the 12 months to March 2012. In Dublin, prices were 1.4pc higher compared with a year ago, despite a fall in March.
Calculations based on the CSO figures show that the price of a property nationally is now €155,000, down from €314,000 at the peak of the housing boom in 2007.
Dublin prices now average €188,000, down from a peak of €430,000. Outside the capital, the average property is now selling for €138,000, down from a high of €268,000.”
“LivingSocial saw a major hack to its computer systems, reported Friday, that could impact the accounts of more than 50 million users.”
“Residents of rural Vermont are getting gigabit networks that will cost $35 a month. No, not from Google, but from their incumbent telco provider.”
“My pick for a must-have Android app in 2013 was AirDroid, but now I have to update that selection. It was just displaced with AirDroid 2 which adds remote phone access over 3G/4G and more features.”
As I wrote in a recent note, Samsung is taking the ‘suprmarket’ approach here by filling the channel with slightly varying product in order to capture as much of the market as possible.
“The company in July also plans to launch a more rugged version of its flagship smartphone, the Galaxy S 4. The new phone, tentatively called the Galaxy S 4 Active, will be waterproof and dust proof, but Samsung is aiming to maintain the look and feel of the S 4, according to this person.
Samsung is also set to launch a compact version of its Galaxy S 4 phone that would measure just 4.3 inches, in July, according to this person.
The raft of new products—variations of its popular devices and a rugged smartphone that can be deployed by governments for use in tough operating environments like war zones—could be attractive to the corporate and government clients.”