Links: 2013-08-10
Japan’s Debt Exceeds 1 Quadrillion Yen as Abe Mulls Tax Rise – Bloomberg
There’s no way out of deflation for Japan if they want to tax more. This is the eternal problem in that country and it shows how uncomfortable people are with massive government deficit spending. Note the primary surplus. I am not optimistic about the long-term solution here.
““Ballooning public debt underlines the need for Abe to push for a sales-tax increase,” said Long Hanhua Wang, an economist at Royal Bank of Scotland Group Plc in Tokyo. “This is a minimum policy requirement for his government.”
The levy on consumption is due to be raised to 8 percent in April from the current 5 percent, followed by an increase to 10 percent in October 2015. Abe said he would make a final call on the plan after the release of revised second-quarter gross domestic product data on Sept. 9.
The country’s debt is more than twice the size of the economy, and its fiscal deficit will expand to 10.3 percent of GDP this year from 9.9 percent in 2012, according to OECD data compiled by Bloomberg.
Japan will still run a primary budget balance deficit equivalent to 2 percent of the economy in the fiscal year starting April 2020 even if it raises the tax as planned, a Cabinet Office estimate showed yesterday.”
Exclusive: China to let banks sell off loans in prelude to possible bailout | Reuters
“China is developing a new trading platform to enable banks to sell off loans to a wider range of investors, in a move that could pave the way for a government bailout of lenders or distressed asset sales to private investors.”
China’s credit bubble and its fiscal space | Gavyn Davies
“A particularly comprehensive analysis was published last week by Kenneth Ho, Asian credit strategist at Goldman Sachs. His conclusion is that the total credit/GDP ratio is now 219 per cent, having increased by a remarkable 56 percentage points in the past 5 years. If correct, this would mean that China’s credit ratio is much higher than any comparable economy at a similar stage of development.
Ho estimates that if they opt for a rapid work-out, the maximum fiscal costs could be about 10 per cent of GDP, while greater forbearance might result in costs as high as 21 per cent of GDP. Experience in other countries suggests that an even higher fiscal burden could easily occur; in the Asian crisis of 1997, fiscal costs varied from 30-55 per cent of GDP.”
China’s economy stabilising, say data – FT.com
“Small targeted measures from Chinese policy makers seem to have, at least temporarily, reversed a growth slowdown with factory production, investment and real estate building all picking up in July, according to official data released on Friday”
Samsung Galaxy S4 Zoom review | PC Pro
“A cracking phone and camera combination; not the best of both worlds, but a fantastic bargain”
Schneier on Security: Lavabit E-Mail Service Shut Down
“This illustrates the difference between a business owned by a person, and a public corporation owned by shareholders. Ladar Levison can decide to shutter Lavabit — a move that will personally cost him money — because he believes it’s the right thing to do. I applaud that decision, but it’s one he’s only able to make because he doesn’t have to answer to public shareholders. Could you imagine what would happen if Mark Zuckerberg or Larry Page decided to shut down Facebook or Google rather than answer National Security Letters? They couldn’t. They would be fired.
When the small companies can no longer operate, it’s another step in the consolidation of the surveillance society.”
ITC Says Samsung Violated Apple Patents, Calls For Sales Ban On Older Samsung Devices | TechCrunch
“The punishment? A ban on the importation and sale of those devices in the United States, should the decision pass muster during a period of presidential review. President Obama has the option to overrule the ITC’s decision in this case (an ability he took advantage of before, to Apple’s benefit), but unless he does so Samsung and its U.S. subsidiaries can only continue to sell those devices for 60 days.”
Asustek Pulls Plug on Windows RT Tablet – WSJ.com
“Taiwanese personal computer maker Asustek Computer Inc. (2357.TW) said Friday it will no longer make Windows RT tablets, which run a version of Microsoft Corp.’s (MSFT) Windows 8 for ARM Holdings PLC’s (ARMH) chips, citing weak sales.
“It’s not only our opinion, the industry sentiment is also that Windows RT has not been successful,” Asustek Chief Executive Jerry Shen told The Wall Street Journal on the sidelines of its post-earnings conference. “
NSA memo says the agency monitors 1.6 percent of all internet traffic | The Verge
“According to an NSA memorandum, the agency “touches” 1.6 percent of the estimated 1,826 petabytes of information that flow through servers every day. Of that 1.6 percent of monitored traffic, the NSA said it selects 0.025 percent for review. The agency sought to downplay the amount of data if collects.”
First Lavabit, now Silent Mail: what secure mail is left? — Tech News and Analysis
“With both Lavabit and Silent Mail shut down, we wondered if there were any other options for those seeking secure email? Here is a handy list of some that are still open for business.”
Obama announces surveillance reforms, but doesn’t think Snowden is a patriot | The Verge
Russia’s Economic Growth Slows – WSJ.com
“Russia’s economic growth slowed for a sixth consecutive quarter, bringing it closer to a recession and all but scrubbing President Vladimir Putin’s hopes for 5% annual growth in the near future.
Russia’s State Statistics Committee said the growth rate fell to 1.2% in the second quarter of the year, down from 1.6% in the first three months and far below government forecasts of 1.9%.”
Guest post: as China slows, Europeans rethink their strategies | beyondbrics
“In recent conversations with CFOs and heads of strategy at dozens of leading European companies, we found that many executives were re-evaluating the sustainability of their growth opportunities in China. The deceleration of Chinese growth, combined with clear signs of a recovery in mature markets, is making future Bric investment decisions more complex with increasingly high hurdles. CFOs are evaluating whether their current strategy in China remains relevant. Senior managers in companies that have extended their China footprint in the past five years are asking three key questions”
Apple Turns Tables Seeking U.S. Samsung Phone Sales Ban – Bloomberg
Note that the Samsung patents that got Apple products banned were essential whereas the Apple patents are non-essential. Not sure if this makes a difference politically in terms of South Korea wanting equal treatment given Obama’s interceding in ban on Apple’s products.
“If there is a violation, the commission could order a ban on imports. That too would be subject to review by the Obama administration, and the Korean Ministry of Trade said Aug. 5 it would be watching the case.
“Obama may issue the reprieve again for Samsung, and if not, it will only bring up even bigger international conflict,” said Lee Sun Tae, an analyst at Seoul-based NH Investment & Securities said by phone. “Consumers no longer care about Samsung’s ‘copycat’ image any more as it has somewhat vanished, because even with the ongoing litigation, the Galaxy S sales have continued to rise.” “
T-Mobile US posts first subscriber growth in four years | Reuters
“T-Mobile US on Thursday reported second-quarter subscriber growth that blew past analysts’ expectations and ended four years of customer losses, boosted by a big marketing push and its launch of Apple Inc’s iPhone.”
T-Mobile keeps improving with 1.1 million new customers, increased revenues | The Verge
Below is the key quote. Also see the chart o where subscriber growth is coming from. This will eventually put downward pressure on average revenue per user across the mobile landscape in the US.
“27.5 percent year-over-year, primarily thanks to the addition of MetroPCS, T-Mobile says. And as you might guess from its marketing, average revenue per user (ARPU) for T-Mobile’s own branded postpaid service is down, sinking 6.5 percent year-over-year to $53.60. That’s what happens when you position yourself as a low-cost carrier; in comparison, AT&T managed to increase postpaid ARPU in the latest quarter.”
T-Mobile reports largest growth in four years — Tech News and Analysis
“It looks like this whole “uncarrier” thing might be working out for T-Mobile after all. The wireless carrier on Thursday posted its second quarter earnings results, showing the largest growth it has seen in four years. Revenue increased to $6.23 billion, up from $4.68 billion a year ago. Much of this growth can be attributed to the company’s acquisition of MetroPCS in May. The company’s EBITDA, however, fell to $1.1 billion, down 16 percent from one year ago. T-Mobile attributes this to “higher promotional expenditures [and] significantly higher gross additions.”
The company added 1.1 million subscribers, including 685,000 postpaid customers. Much of this is thanks to T-Mobile’s launch of the iPhone on April 12, which accounted for 29 percent of the carrier’s sales. In all, T-Mobile sold 4.3 million smartphones, which made up 86 percent of its overall phones sales. That’s up from 71 percent last year.”
T-Mobile to remove iPhone 5 and 4S from ‘$0 Down’ sale as AT&T cuts ‘Next’ plan prices
The Science Behind the Netflix Algorithms That Decide What You’ll Watch Next | Underwire | Wired.com
“The company estimates that 75 percent of viewer activity is driven by recommendation. This summer it’s unveiling a profile feature enabling family members to demarcate their preferences with individual queues. In March the company shipped its 4 billionth DVD, but in the first quarter of 2013 alone, it streamed more than 4 billion hours. We spoke with Netflix’s recommendation dynamos—Carlos Gomez-Uribe, VP of product innovation and personalization algorithms (right), and Xavier Amatriain, engineering director—about how they control what you watch.”
Bill Black On The DoJ’s Seven Biggest ‘Fails’ In The BofA Lawsuit | Zero Hedge
“The Department of Justice’s (DOJ) latest civil suit against Bank of America (B of A) is an embarrassment of tragic proportions on multiple dimensions. I’m “only” going to explore seven of its epic fails here. There are many more.”
Google donates 79 more patents to shield the cloud from lawsuits — Tech News and Analysis
“Google has taken an important new step in its effort to carve out a space where cloud computing innovators can work without fear of being sued.”
Gluskin Sheff’s Rosenberg: Expect Market Correction in Near Term
“”I think over the near term, the very near term, I can see the market struggling. I’m sure that comes as a big surprise, but I think we’re fully priced right now,” he told CNBC.
“You have price-earnings ratios bumping against cycle highs,” he said. “Margin debt is up 32 percent year over year. … My sense is that the economy is weak [and] earnings and revenue growth are back in low single digits.””
I would vote for abolishing Fannie and Freddie completely if I had a voice.
“Best leave the mortgage market in government control or abolish Fannie Mae and Freddie Mac entirely and let moral hazard rule”
Nearly 50% of Greek businesses commit tax fraud, says finance ministry | World news | The Guardian
“Tax inspectors’ investigation from end of July to early August finds rate of non-compliance as high as 85% in some areas”
Food-Stamp Use Rises; Some 15% Get Benefits – Real Time Economics – WSJ
“The number of recipients in the food stamp program, formally known as the Supplemental Nutrition Assistance Program (SNAP), is at 47.6 million, or nearly one in six Americans.”
Foreigners buy nearly 75% of new homes in inner London – FT.com
“Most new homes in central London are being sold at overseas events before being advertised to UK buyers, helping to fuel a boom that threatens to freeze out domestic purchasers.”
The buy-to-let boom will bring no social benefits | Zoe Williams | Comment is free | theguardian.com
“With foreign landlords snapping up property in London, rents will continue to rise and shut more people out of the housing market”
Moto X Works on T-Mobile’s Network, Not Sold in Its Stores Yet – Ina Fried – Mobile – AllThingsD
How Men and Women Use Social Media Differently (Infographic) | Entrepreneur.com
“When it comes to social media, male and female behavior is very different.
For instance, women do the bulk of Facebook sharing (62 percent), while more men are on LinkedIn than women (54 percent). Men also spend more time on YouTube each week than women, as guys clock an hour compared to 35 minutes for women.
Twitter appears to be dominated by women (62 percent) and, not surprisingly, Pinterest (70 percent). “
Europe Is Heading Toward Recovery, but Slowly – WSJ.com
Pickup in Europe, U.S. Growth Seen – WSJ.com
China Trade Data Beat Forecasts – WSJ.com
“The National Security Agency has a secret backdoor into its vast databases under a legal authority enabling it to search for US citizens’ email and phone calls without a warrant, according to a top-secret document passed to the Guardian by Edward Snowden.
The previously undisclosed rule change allows NSA operatives to hunt for individual Americans’ communications using their name or other identifying information. Senator Ron Wyden told the Guardian the NSA’s authorities provide loopholes that allow “warrantless searches for the phone calls or emails of law-abiding Americans”.
The authority, approved in 2011, appears to contrast with repeated assurances from Barack Obama and senior intelligence officials to both Congress and the American public that the privacy of US citizens is protected from the NSA’s dragnet surveillance programs.”
ekathimerini.com | Decline in hotel rates reverses
“The average online hotel rate for an overnight stay in a double room in Greece is 10 percent higher this month than a year ago, despite the average January-July rate being 4.1 percent lower, according to data by hotel search engine Trivago.
A strong rebound in foreign demand for Greek hotel accommodation appears to have pushed the rate to pre-recession levels, at 131 euros, compared to 119 last year.”
Prices of new Canadian homes continue to march higher in June | Financial Post
“Statistics Canada says its new housing price index rose 0.2% in June, following a pattern of similar gains over the past 15 months.
The federal agency says June’s rise comes after a 0.1% increase in May.
For the fifth month in a row, Calgary led the advance as prices for new homes rose 0.5% in June, largely because of higher costs for material, labour and land.”
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