Italy’s Monte Paschi faces shareholder fury as scandal widens | Reuters
“Enraged shareholders of Monte Paschi bank lashed out at its management on Friday as questions grew about central bank oversight of the historic lender following the uncovering of nearly $1 billion of losses in complex derivatives deals.”
Osborne’s economic strategy has failed | Larry Elliott | Business | guardian.co.uk
“The strategy has failed. The public knows it. The International Monetary Fund knows it. The credit rating agencies know it. Even George Osborne knows it, although he can’t bring himself to admit as much.”
The triple dip recession talk in the UK underpins how nonsensical the 2-quarter GDP shorthand is in identifying recessions. Britain has been in recession the whole time.
“Britain could be on course for its third recession in four years after the economy shrank 0.3% in the last three months of 2012.
The figures were worse than expected and could put pressure on the government to consider a “plan B” that would stimulate demand.
A fall in manufacturing output dragged down the economy, countering a small rise in construction between October and December, according to the Office for National Statistics. The economy achieved zero growth for the year as a whole.”
PressTV – Joseph Stiglitz warns of US inequality
“”America likes to think of itself as a land of equality and opportunity, the so-called American dream is very deep to our sense of identity,” Stiglitz told the BBC on the sidelines of the forum in Davos.
“The stats show otherwise, the U.S. has one of the worst opportunity rates of any of the advanced economies,” he added.”
Banks to repay €130bn of crisis loans – The Irish Times – Fri, Jan 25, 2013
“Banks generally borrowed cash for three reasons: as an insurance policy in case the euro zone crisis worsened and left them short of liquidity; as a “carry trade” to finance purchases of higher yielding government bonds; or to fund their loan books if they were struggling to access cheap funding.
Spanish and Italian banks were among those which ploughed the money into their own countries’ sovereign bonds, yields on which were then at record highs but have since tumbled as a result of the ECB’s loans and its September bond-buying pledge.
They were seen as less likely to pay back the cash at the earliest opportunity, preferring instead to keep holding bonds on which they are likely to have made big profits as the euro zone crisis has eased.”
Tim Geithner: banking bailouts looked like ‘giving aid to the arsonist’ | Business | guardian.co.uk
“”My own view was that it was going to be very hard, if not impossible to design a financial rescue that was going to be effective in protecting all the innocent victims hit by the crisis and still satisfy the completely understandable public desire for justice and accountability. Those things were in direct and tragic tension, never resolvable at that time,” he said.”
Best Buy takes Mac price cuts further: $200 off all MacBook Airs for 2 days
“Just days after triggering a sweeping series of MacBook price cuts in Apple’s reseller channel, big-box retailer Best Buy on Friday went a step further Friday when it kicked off a special two-day sale, slashing Apple’s MacBook Air lineup by $200 across the board, with the entry-level 64-gigabyte model now available for just $799.99.”
Forget 1500, S&P 500 Will Hit 1600 This Year: Deutsche Bank – MarketBeat – WSJ
“David Bianco, who Friday morning lifted his S&P 500 price target to 1600 from 1575, implying the index has another 7% upside from current levels.”
Cyprus’s now-certain default | Felix Salmon
“Many congratulations to Stephen Fidler, who has managed to get some actual news in Davos: EU economics commissioner Olli Rehn went on the record telling him that Cyprus is going to have to restructure its debt — just two weeks after ruling such a thing out.
That might come as little surprise, given that Cypriot banks were loaded up to the gills with Greek debt, and Greek debt suffered a 70% haircut. Cyprus is tiny, and could never afford the €17 billion needed to bail out the banks and the government — especially since that would bring the country’s debt load up to more than 140% of GDP.
Still, after the EU forced Greece to default, it drew a line in the sand: no more sovereign defaults”
Britain is experiencing ‘worse slump than during Great Depression’ – Telegraph
“”It’s the worst economic performance since at least 1830, outside of post-war demobilisations,” he told The Daily Telegraph. “It’s worse than the 1920s, it’s worse than the Great Depression.””
New home sales fall, housing recovery still on track | Reuters
“New single-family home sales fell in December although the previous month’s reading was revised to show the fastest sales pace in over two years, a sign the country’s housing recovery remains on track.”
The Biggest Housing Bubble in the World Is in … Canada? – Matthew O’Brien – The Atlantic
“As realtors like to remind us, every market’s different, but there are three big takeaways here.”
You’ll never guess who was the big smartphone winner last quarter — Tech News and Analysis
“If you guessed Huawei, you’d be right.
According to IDC, all of the top 5 smartphone vendors showed sales growth in last year’s final quarter: Combined, these companies sold 141.6 million of the total 219.4 smartphones sold in the last three months of 2012. Look at the chart, though, and you’ll note that Huawei grew its final quarter sales by 89.5 percent from the year-ago period. That’s impressive considering the company has essentially no foothold here in the U.S., where we’re practically addicted to our handsets.”
Marc to Market: Great Graphic: Yen Since Onset of the Financial Crisis
“S dollar against the Japanese yen since the beginning of the financial crisis. The dollar fell almost 40% from the peak in 2007 until the low in 2011.
The dollar has recovered nearly 21% of the lows to return to the congestion area from 2010″
Kenneth Rogoff: World is right to worry about US debt – FT.com
“Many foreign observers look at the US budget shenanigans with confusion and dismay, wondering how a country that seems to have it all can manage its fiscal affairs so chaotically. The root problem is not just a hugely elevated level of public debt, or a patently unsustainable trajectory for old age entitlements. It is an electorate deeply divided over the direction of government, with differences compounded by changing demographics and sustained sluggish growth. It is hard to escape the notion that today’s budget battles are but a skirmish in a much longer-term war that won’t be settled soon.”
Samsung Dominated Apple And Nokia With A Record 213M Smartphones Shipped In 2012 | TechCrunch
“The battle’s been raging between Samsung and Apple for global smartphone domination, but according to the latest numbers out of Strategy Analytics, Samsung has extended its lead over rival manufacturers to capture a 30 percent marketshare worldwide.
According to the research firm, Samsung’s 213 million smartphones shipped over the course of 2012 sets a record for most units shipped by a smartphone vendor in a single year. The previous record holder was Nokia, which shipped 100.1 million units in 2010.”
Moody’s warns of further bailouts if banks fail to come clean – Irish, Business – Independent.ie
“”We believe that many banks, in particular in Spain, Italy, Ireland and the UK, require material amounts of additional provisions to fully clean up their balance sheets,” Moody’s said in its global banking outlook for 2013.
“Some banks have in recent years delayed full recognition of embedded loan losses, partly by restructuring loans,” the report said.
Parts of the report echoes last week’s complaint by the Central Bank’s Fiona Muldoon, who said banks were still not being realistic about debts that would never be repaid.
“This strategy of buying time (often tolerated by regulators) limits a bank’s capacity for new lending and poses risks for creditors of European banks,” Moody’s said.”
The Best First Job (and It’s on Wall Street) | LinkedIn
“It can be a bit tough to recommend Wall Street as a career choice for new graduates these days. But there’s one job there that I think is the perfect first (or, for me, third) job out of school: sellside research. Here’s why”
Amazon’s $775 Million Acquisition of Kiva Systems Could Shift How Businesses See Robots | TIME.com
“Kiva’s dutiful orange robots aren’t likely to inspire any science fiction stories soon. Think of them as smart forklifts that bring inventory to the workers instead of making them walk around a large warehouse looking for it.
What’s interesting about Kiva — well, to somebody like me who covers the world of robots — is just how coordinated the system is.”
Samsung warns on smartphones slowdown – FT.com
“Daniel Kim, an analyst at Macquarie, said this suggested a quarter-on-quarter drop in Samsung’s total operating profit in the first three months of this year, which would be the first such decline for two years. This would be in part a result of a fall in orders of smartphone components from Apple, which has posted disappointing sales of its new iPhone 5, he added.”
Samsung warns of smartphone slowdown – Technology, Business – Independent.ie
“SAMSUNG has reported record quarterly profits up 76pc on the back of Galaxy smartphone sales, but warned there were signs that future growth could be held back by intensifying competition.
The note of caution follows soon after Apple’s iPhone sales disappointed investors.
“The furious growth spurt seen in the global smartphone market last year is expected to be pacified by intensifying price competition, compounded by a slew of new products,” Samsung said in its earnings statement.
It said that the strongest growth in the future would come in the market for low cost handsets in developing countries.”
Deficit Hawks Down – NYTimes.com
“Mr. Obama’s clearly deliberate neglect of Washington’s favorite obsession was just the latest sign that the self-styled deficit hawks — better described as deficit scolds — are losing their hold over political discourse. And that’s a very good thing.
Why have the deficit scolds lost their grip? I’d suggest four interrelated reasons.”
Unlocking cellphones without carrier permission will be illegal come Saturday
This smacks of corporatism. Is there any plausible reason why my using a phone I paid for is illegal? It might be blocked by the carrier but how is it illegal? Incredible. This is why people are distrustful of government.
” The company’s Q4 2012 revenue figure is 18.52 percent larger than it was in Q4 2011, and Samsung’s profit this quarter surged to an impressive 89.3 percent from what it reported last year. The company also released its fiscal 2012 figures — this past year, Samsung scored a net profit of 23.8 trillion won ($22.25 billion) on revenue of 201 trillion won ($187.9 billion).”
Fed’s Balance Sheet Tops $3 Trillion for First Time – Real Time Economics – WSJ
“The Fed’s asset holdings in the week ended Jan. 23 increased to $3.013 trillion from $2.965 trillion a week earlier, the central bank said in a weekly report released Thursday.”
BBC News – Microsoft reports dip in profit
“Microsoft has reported a modest rise in revenue but a fall in profits as the technology giant spent more on sales and marketing.”
Diverging Data on Manufacturing Signal Murky Outlook – Real Time Economics – WSJ
“The Fed surveys in New York, Philadelphia, Richmond and Kansas City reported contracting conditions among their respective regional manufacturers.
All four banks reported contracting orders this month. Thinner order books, in turn, have meant negative employment indexes and shorter workweeks. Layoffs on the factory floor put a downside risk on January payrolls, scheduled to be reported Feb. 1. The Dallas Fed will release its own survey next Monday.
In contrast, the factory report published Thursday by data provider Markit looks more promising. The flash purchasing managers’ index stood at 56.1 this month, the highest level in almost two years.”
“LabDoor, a San Francisco-based startup backed by digital health accelerator Rock Health, on Thursday launched web and mobile apps to help people research dietary supplements.”
Lenovo Says It Would Consider Bid for RIM, Others – Ina Fried – Mobile – AllThingsD
“With its core computing business in decline, Lenovo said it would consider acquisitions to help it expand its product line.
Among the possibilities would be struggling Canadian phone maker Research In Motion, which has been considering a number of strategic options even as it works to launch its all-new BlackBerry 10 operating system this year.”
The decline of spam: Read this and win million$!!! | The Economist
“In 2004 at Davos, Bill Gates predicted the death of spam. His prophecy may finally be coming true. Since a peak in 2008, the share of e-mails that are junk has steadily declined. In the past year it has fallen from around 80% to 67% of the global total, according to Kaspersky Lab, a cyber-security firm. Spam filters are doing their job. Sophisticated technology is authenticating senders. Police are cracking down on spammers. And web users are ignoring the spam that gets through. Many spammers have switched to peddling fake handbags and baldness cures via online ads, which are often cheaper and more likely to be clicked on.”
Apple price targets reduced as company’s growth slows to ‘normal’ levels
Good roundup up earnings views here.
“Apple is still growing, but not at the tremendous pace investors have become accustomed to over the last decade, which has prompted analysts to lower their price targets for the company’s stock.”
Here’s how much in content sales turn Kindle Fire into a money maker — Tech News and Analysis
“When Amazon launched its Kindle Fire hardware, the market knew it wasn’t making money on the devices. Turns out it doesn’t take that much in content sales for a 20 percent profit margin, according to ABI.”
Jobless Claims in U.S. Decrease, Prolonging Seasonal Swings – Bloomberg
““The swings are attributable to the calendar,” said Brian Jones, senior U.S. economist at Societe Generale in New York, who projected a drop to 328,000. He said the numbers probably will rise at the end of the month as the calendar returns to normal. “We’re going to pay for this,” he said.
A pickup in consumer spending last month may be helping employers look beyond the rancor in Washington over attempts to cut federal spending and trim the national debt. Nonetheless, an increase in the payroll tax at the start of the year has shaken household confidence, raising the risk that sales may cool.
“Away from the calendar swings, the numbers are getting better,” Jones said. “There’s an improvement in the labor market that is in fact going on.””
Highest Margin Leverage Versus Stock Market Cap Since 1929 $$ – Stock Trader’s Almanac Blog
This guy agrees with me!
““Margin Leverage closed 2012 at the highest level vs. Total Stock Market Capitalization in 83 years. Is Amazon the new Apple? Strong sell recommendations have been outlawed!”
“If anything has changed yet in 2013, we certainly do not see it. Despite the early post-fiscal cliff rally, this is the same beast we rode to the 2007 highs for the Dow Industrials.
The U.S. stock market is over leveraged, overpriced and has been commandeered by mechanical forces to such an extent that all holding periods are now affected by more risk than at any time in history.”
“Leverage: margin debt rose to the 14th highest monthly reading ever in November…. ten of the excessive events were all compiled in a ten month span from May 2007 to February 2008… The other three occurred from March to May 2011…”
“As of the end of November, our featured chart of margin debt versus stock market capitalization illustrates the highest year end reading since 1929.”
“We believe stocks are putting in a major high. A correction of at least 20% should be expected. Worse? Quite possible.””
Commerzbank to cut up to 6,000 jobs – FT.com
“Commerzbank plans to cut between 4,000 and 6,000 jobs as it attempts to hold down costs amid a battle for customers in German retail banking.
The bank, Germany’s second-largest by assets, is trying to turn round its underperforming domestic retail business as part of plans outlined to investors in November. Negotiations with staff unions were set to start in February with the job cuts implemented through to 2016, Commerzbank said.”