News links for 20 Mar 2013
Zoom, Zoom! Early Samsung Galaxy S 4 benchmark shows fastest phone yet — Tech News and Analysis
“Sorry iPhone 5, HTC One, and BlackBerry Z10: Samsung’s new Galaxy S 4 looks to take the performance crown based on early benchmarking tests: Geekbench 2 scores on the GS4 are nearly double that of the iPhone 5.”
Most Popular Google Reader Alternative: Feedly
“By a massive 65% of the vote, Feedly was your Google Reader alternative of choice, partially because it’s free, cross-platform, and available on multiple devices. Plus, they make importing your Google Reader subscriptions so ridiculously easy that it’s worth a try. As of right now, they still use Google for syncing, but the team at Feedly is planning their own syncing engine to replace their dependence on Google Reader before it shuts down. With luck, all Feedly users will have a seamless transition to a post-Google Reader era, and never even notice that Google turned off the lights.”
Apple predicted to gain additional U.S. smartphone share over Samsung in 2013
“Reiterating the lack of excitement surrounding Samsung’s “Broadway-style” launch of the Galaxy S 4, Yankee Group research has stated Apple is likely to gain ownership share in U.S. smartphones this year, “rather than the other way around.””
CHYPRE. Le plan de sauvetage rejeté, la zone euro “réitère” – Le Nouvel Observateur
This French account confirms what I have read elsewhere, that the Eurogroup has not changed its stance in the wake of Cyprus’ no vote on the bank levy.
Eurogroep kiest harde lijn tegen Cyprus | Het Financieele Dagblad
This article says that the Eurogroup is taking a ‘hard line’ against Cyprus and not budging on their negotiating position. That means that the Cypriots need to find 5.8bn euros in some fashion. The EU has reiterated its claim that they support not taxing insured deposits. However, their chief goal is to get the money.
Cyprus, EU Work on Contingency Plans – WSJ.com
“after Tuesday’s “no” vote, the ECB issued a statement reaffirming its commitment to provide liquidity to banks “as needed within the existing rules.”
The statement implied that banks would get the help if Cyprus’s Parliament agrees to the rescue package, analysts said. But if the deal was rejected, the banks would be insolvent and the ECB would withdraw its support.
The contingency measures, described by three European officials, may not need to be implemented if the deposit outflow looks containable.
The measures include imposing limits on daily withdrawals from bank accounts; capping the amount of money that can be electronically taken out of the country and making these transactions slower to clear; and introducing border checks to cap the amount of cash leaving the country.
One official also said the IMF had been tasked with developing a plan to merge the country’s two biggest banks—Laiki Bank and Bank of Cyprus—putting their healthy assets into a smaller entity and the nonperforming assets into a “bad bank” that wouldn’t do new business.
A spokeswoman for the IMF had no immediate comment.”
Cyprus Blackmail Risks EU Slow Death, Orphanides Says – Bloomberg
“Euro-area finance ministers’ decision to tax bank deposits in Cyprus as part of a bailout signals the “slow death” of European political integration and will hurt the economy, according to former Cypriot central bank governor Athanasios Orphanides.
“What we have seen in the last few days is a very serious blunder by European governments that essentially are blackmailing the government of Cyprus to confiscate the money that belongs rightfully to depositors,” Orphanides said today in an interview on “Bloomberg Surveillance” with Tom Keene. “Not everybody is equal under the law the way European governments are behaving these days. It’s not clear how this can affect in a positive manner the European project going forward.””
Sugared Drinks Tied to 180,000 Deaths Worldwide Each Year – Bloomberg
“Sugary drinks and sodas may be associated with about 180,000 deaths a year worldwide, including 25,000 in the U.S., by exacerbating conditions such as diabetes, heart disease and cancer, a study found.
The beverages raised deaths worldwide from diabetes by 133,000, from cardiovascular disease by 44,000 and from cancer by 6,000, according to the study presented today at a meeting of the American Heart Association in New Orleans.”
Fannie Mae, Freddie Mac to repay U.S. sooner | Reuters
“Revamped terms of Fannie Mae and Freddie Mac’s taxpayer-funded bailout that went into effect this year will allow the mortgage finance firms to repay the Treasury sooner than would have otherwise been the case, a federal watchdog said on Wednesday.”
Cyprus seeks Russian bailout aid, EU threatens cutoff | Reuters
“Cyprus pleaded for a new loan from Russia on Wednesday to avert a financial meltdown, but won no immediate relief after the island’s parliament rejected the terms of a European bailout, raising the risk of default and a bank crash.”
Fed to stick to stimulus as Cyprus rekindles global risks | Reuters
“The Federal Reserve looks set to sustain its $85 billion monthly bond-buying stimulus despite improving economic data as a new flare-up in the euro zone crisis reminds officials of a risky global environment.”
Defying Gravity: Miami Condos Soar Again
“During the height of the housing boom, some likened the feverish flipping game in Miami’s condominium market to a circus. The circus is back, and more high-flying than ever.
How did it happen? Foreign, all-cash buyers like Venezuelans, Russians, Chinese, Canadians, and Brazilians. They were either looking for a safe-haven to park their money or were taking advantage of a weak dollar. Whatever the reason, they came, they saw, they bought.
“It’s mind boggling. I’m perplexed as to how all this can go forward this quickly,” said Peter Zalewski of CondoVultures.”
Cyprus, EU Work on Contingency Plans – WSJ.com
“After Tuesday’s no vote, the ECB issued a statement reaffirming its commitment to provide liquidity to banks “as needed within the existing rules.” The statement implied that banks would get the help if Cyprus’s parliament agrees to the rescue package, analysts said. But if the deal was rejected, the banks would be insolvent and the ECB would withdraw its support.
The contingency measures, described by three European officials, may not need to be implemented if the deposit outflow looks containable. But the plan includes imposing limits on daily withdrawals from bank accounts; capping the amount of money that can be electronically taken out of the country and making these transactions slower to clear; and introducing border checks to cap the amount of cash leaving in the country.
One official also said the IMF had been tasked with developing a plan to merge the country’s two biggest banks—Laiki Bank and Bank of Cyprus—putting their healthy assets into a smaller entity and the nonperforming assets into a “bad bank,” which wouldn’t do any new business.”
In letzter Minute: Zypern-Politiker plünderten ihre Bank-Konten | DEUTSCHE WIRTSCHAFTS NACHRICHTEN
According to this German-language article Cypriot ministers moved 4.5bn in personal funds out of Cypriot banks before the bank holiday. I will be looking into this further and report back if I have the info.
Freddie Mac sues more than a dozen banks over Libor | Reuters
“Mortgage finance company Freddie Mac (FMCC.OB) is suing more than a dozen banks for losses from the alleged manipulation of the benchmark interest rate known as Libor.”
ekathimerini.com | Cyprus branches set for absorption
“Greece is fully prepared to absorb the Cypriot banks operating in this country, although the rejection of a key bailout measure by the Cyprus Parliament on Tuesday evening has postponed developments for now.
The Finance Ministry, the Bank of Greece and the Hellenic Financial Stability Fund (HFSF) rapidly concluded the necessary groundwork over the long weekend and are now waiting for the Cypriots to proceed with the completion of the transaction, namely the sale of the Greece-based branches of Bank of Cyprus, Cyprus Popular Bank and Hellenic Bank.
At least four Greek lenders have expressed an interest in acquiring the Cypriots’ portfolios in Greece, which come to 20 billion euros in loans and 14 billion in deposits. These are National-Eurobank, Alpha, Piraeus and Hellenic Postbank. Sources say that the best offers are from Alpha – which on Tuesday tabled an improved bid – and Piraeus.
Bank sources say that as soon as the Cypriot side makes the necessary decisions, the HFSF will select the most attractive offer and the Cypriot portfolios will immediately be transferred to the local lender of choice. The same sources add that the recapitalization of the Greek arms of Cypriot banks will require about 1.5 billion euros, which will be evenly split between Greece and Cyprus.”
The Cyprus bailout blame game begins | Brussels blog
“With the eurozone’s €10bn Cyprus bailout now laid waste by the country’s parliament, the recriminations are likely to begin almost immediately. In fact, they started even before the vote was held — almost as soon as it was announced early Saturday morning that the programme included a 6.75 per cent levy on bank accounts under €100,000.
Since then, almost all officials involved in the talks have said it wasn’t their decision to seize deposits from small savers.
Wolfgang Schäuble, the German finance minister, was the first out of the gate, telling public broadcaster ARD on Sunday that it wasn’t his idea. “We would obviously have respected the deposit guarantee for accounts up to €100,000,” Schäuble said. “But those who did not want a bail-in were the Cypriot government, also the European Commission and the ECB, they decided on this solution and they now must explain this to the Cypriot people.”
That statement sparked anger over at the ECB, which denied any involvement in levying smaller depositors.”
ekathimerini.com | Cyprus Finance Minister Sarris on his way out
“Cypriot Finance Minister Michalis Sarris is about to be replaced upon his return from his current trip to Moscow, Kathimerini understands, as he no longer enjoys the support of President Nicos Anastasiades following his handling of the crisis.”
Cyprus Set to Reject Bailout, Citing Tax on Bank Deposits – NYTimes.com
“Cyprus’s Parliament is likely to reject an international bailout package that involves taxing ordinary depositors to pay part of the bill, President Nicos Anastasiades said Tuesday, despite a revision that would remove some objections by exempting small bank accounts from the levies.”
“Labour MEP Nessa Childers has called for EU economics commissioner Olli Rehn to resign over the Cypriot bailout.
She described as a “terrible mistake” the €10bn deal which includes small Cypriot depositors with less than € 100,000 in the levy on bank accounts.
Ms Childers has written to Europe an Commission President Jose Manuel Barroso asking for Mr Rehn’s resignation over the “fiasco”.
“It is simply unfair, undemocratic and could even lead to a bank run in other parts of Europe,” she said in a statement today.”
Calculated Risk: A few comments on Housing Starts
“Total housing starts in February were up 27.7% from the February 2012 pace. Single family starts were up 31.4%. This is a very strong year-over-year increase.
Even with this significant increase, housing starts are still very low. Starts averaged 1.5 million per year from 1959 through 2000, and demographics and household formation suggests starts will return to close to that level over the next few years. That means starts will probably increase more than 60% from the current level (917 thousand SAAR in February).”
The Biggest Mistake People Are Making About QE3 – Business Insider
From last June, but still relevant to those who say QE ’caused’ rates to decline. Sure, Qe in isolation and in theory might have some mild negative effect on long rates. But empirically, rates actually went up during QE periods in the US.
“Here’s one of our favorite charts, from Jeff Gundlach that everyone needs to sear into their minds, which shows that rates increased each time the Fed did QE, and fell each time the Fed stopped QE.”
Cyprus Plan Falls Short of Bailout Target – WSJ.com
“The draft bill, seen by the The Wall Street Journal, would spare savers with less than €20,000 (about $26,000) in their bank accounts from the deposit levy.
But a Cypriot lawmaker, citing the island’s central bank governor, said that the tax plan in the draft bill would fall €300 million short of the €5.8 billion revenue target the euro zone and the International Monetary Fund had demanded. A second official confirmed that the plan wouldn’t meet the promised amount.”
Monetary policy: Britain’s money tree | The Economist
This DOES depend on increasing credit, meaning it has no real value to GDP growth unless credit expands. Otherwise it just helps banks’ balance sheets.
“the FLS is essentially a collateral upgrade. It improves the balance sheets of all banks that participate, whether they are shrinking, standing still or growing. Take a bank wishing to maintain its current balance sheet size. It can swap 5% of its loan book for safer government assets. That means it can access ultra-cheap secured borrowing. But it also means should also be able to issue unsecured senior debt more cheaply too. So the FLS can lower banks’ own costs of borrowing significantly, even if they plan to lend exactly the same amount. Importantly, even if they plan to shrink, it should slow the pace at which they reduce lending. “
Apple’s Breakout Suggests Downtrend Has Ended – MarketBeat – WSJ
“The line, which has tracked Apple’s intermittent rally peaks since the stock started selling off last fall, had extended to just below the $448 level on the daily charts Monday.
“Irrespective of anything about Apple, the company, the breaking of the downtrend of the stock’s share price signals a change in market demand for the company’s stock,” said Tom McClellan, editor of The McClellan Market Report.”
Sorkin on Cyprus | Kid Dynamite’s World
“Math: 5 years ago, $ 100K USD bought 64,516 EUR. Multiply that by Sorkin’s calculated 1.1484 cumulative post-haircut return, and you have 74,090 EUR. At today’s exchange rate of 1.29, that’s worth $95,576. So no, you’re not better off if you were in Cypriot accounts instead of USD deposits.”