Archive for the ‘Uncategorized’ Category

Record unemployment, low inflation underline Europe’s pain

Joblessness in the 17-nation currency area rose to 12.2 percent in April, EU statistics office Eurostat said on Friday, marking a new record since the data series began in 1995.

With the euro zone in its longest recession since its creation in 1999, consumer price inflation was far below the ECB’s target of just below 2 percent, coming in at 1.4 percent in May, slightly above April’s 1.2 percent rate.

That rise may quieten concerns about deflation, but the deepening unemployment crisis is a threat to the social fabric of the euro zone. Almost two-thirds of young Greeks are unable to find work, exemplifying southern Europe’s ‘lost generation’.

Economists and policymakers including Germany’s finance minister, Wolfgang Schaeuble, have said the greatest menace to the unity of the euro zone is now social breakdown from the crisis, rather than market-driven factors.

In France, Europe’s second largest economy, the number of jobless rose to a record in April, while in Italy, the unemployment rate hit its highest level in at least 36 years, with 40 percent of young people out of work.

“I’ve sent CVs everywhere, I come to the unemployment agency every day, for 3 or 4 hours to look for work as a truck driver and there’s never anything,” said 42-year old Djamel Sami, who has been unemployed for a year, leaving a job agency in Paris.

Thousands of demonstrators from the anti-capitalist Blockupy movement cut off access to the ECB in Frankfurt on Friday to protest against policymakers’ handling of Europe’s debt crisis.

Some economists believe the ECB, which meets on June 6, will have to go beyond another interest rate cut and consider a U.S.-style money printing program to breathe life into the economy.

“We do not expect a strong recovery in the euro zone,” said Nick Matthews, a senior economist at Nomura International in London. “It puts pressure on the ECB to deliver even more conventional and non conventional measures.”

In the past, the euro zone has needed economic growth of around 1.5 percent to create new jobs, according to Carsten Brzeski, an economist at ING. With the Organisation for Economic Cooperation and Development forecasting this week that the euro zone economy would contract by 0.6 percent this year, unemployment is set to worsen long before it turns around.

“We do not see a stabilization in unemployment before the middle of next year,” said Frederik Ducrozet, an economist at Economist at Credit Agricole in Paris. “The picture in France is still deteriorating.”


ECB President Mario Draghi, whose pledge to buy the bonds of governments in trouble helped protect the euro zone from break-up last year, has so far left the onus on governments to reform.

A majority of economists polled by Reuters do not expect the ECB to cut its deposit or main refinancing rates soon, although the OECD this week called for the bank to consider printing money for asset purchases to revive growth.

ECB policymaker Ignazio Visco said on Friday it stood ready to take further action but that monetary policy alone could not solve the euro zone’s economic problems.

The Commission, the EU’s executive, told governments this week they must focus on reforms to outdated labor and pension systems to regain Europe’s lost business dynamism, shifting the policy focus away from debilitating budget cuts towards growth.

EU leaders are expected to put the problem of joblessness at the forefront of a summit in Brussels at the end of June.

European Council President Herman Van Rompuy, who chairs the meetings, said last week youth unemployment was one of the most pressing issues for the 27-nation European Union as a whole.

Ministers from France, Italy and Germany called this week for urgent action to tackle youth unemployment, with Schaeuble describing it as a “battle for Europe’s unity” and warning of revolution if Europe’s welfare model is abandoned.

In April, 5.6 million people under 25 were unemployed in the European Union, with 3.6 million of those in the euro zone.

Even if governments take on unions and vested interests to enact reforms, they will take time to produce benefits.
Read the full article here:

U.S. ITC won’t ban Microsoft’s Xbox as Google requests

IDG News Service – The U.S. International Trade Commission has turned down a request for a ban on Microsoft’s Xbox after finding that the gaming device did not infringe a patent owned by Google’s Motorola Mobility unit.

The ITC’s ruling Thursday has essentially confirmed an initial ruling by administrative law judge David P. Shaw in March that the Xbox did not infringe a Motorola patent relating to wireless peer-to-peer communications.

“We’re disappointed with this decision and are evaluating our options,” Motorola’s spokesman William Moss said in an email on Thursday.

The patent in question was the last in the dispute which was filed in the ITC in November 2010 by Motorola which accused Microsoft of infringing five of its patents.

Google acquired Motorola last year for US$12.5 billion, in part for its patent portfolio.

Motorola dropped two patents relating to the H.264 video encoding standard from the investigation in January this year after Microsoft filed that it expected Motorola to withdraw claims relating to the patents in view of a settlement earlier in the month between Google and the U.S. Federal Trade Commission over standard-essential patents and other issues. Two other patents, relating to the 802.11 standard, were withdrawn by Motorola from the investigation in October last year.

Judge Shaw had in April last year recommended a ban on Xbox consoles in the U.S., and found that Microsoft failed to establish that Motorola’s alleged obligation to provide a license on FRAND (fair, reasonable and non-discriminatory) terms precluded a finding of violation of section 337 of the Tariff Act of 1930. Section 337 investigations conducted by the ITC most often involve claims regarding intellectual property rights, including allegations of patent infringement and trademark infringement by imported goods, and can lead to the ban on their imports into the U.S.
Read the full article here :

Greek 2015-16 Fiscal Gap Will Be Focus of Troika Talks, EU Says

Greece’s fiscal outlook after 2014 remains “inherently uncertain” and will be the focus of negotiations between Greece and its euro-area and International Monetary Fund creditors later this year, the European Commission said.

While Greece continues to make progress in its economic reform program under its bailouts from the euro area and the IMF, “major efforts” are needed in the fight against tax evasion, the European Union’s Brussels-based executive arm said in a report today. A fiscal gap of 1.7 percent of gross domestic product in 2015 and 2.1 percent in 2016 needs closing, according to the report.

“The fiscal outlook depends to a large extent on the strength of the recovery and improvement in taxpayer capability to service their tax obligations, as well as gains made from strengthening tax and social security administration,” the commission said. “The task of filling the gap in 2015-16 will be taken up in the context of the 2014 budget negotiations in the autumn.”

Since a budget deficit more than five times the euro area’s permitted limit forced Greece into its bailout in May 2010, the troika of officials from the commission, the IMF and the European Central Bank have held quarterly reviews and negotiations with Greek authorities on its compliance with the terms of the 240 billion euros ($309 billion) of loans.

Budget Deficit
The commission’s report today forecasts the budget deficit will narrow to 3.3 percent of GDP next year from 4.1 percent this year, while public debt will peak at 175.2 percent of GDP this year before gradually declining. Economic output will contract 4.2 percent this year, its sixth year of recession, before GDP increases 0.6 percent next year “led by investment and exports.”

Read the full article here:

US Consumers Less Positive as Economic Concerns Weigh

U.S. consumer sentiment eased in April as Americans remained concerned about their employment and financial prospects, a survey released on Friday showed.

The Thomson Reuters/University of Michigan’s final reading on the overall index on consumer sentiment fell to 76.4 from 78.6 in March, although it topped economists’expectations for 73.2.

(Click here to track the U.S. stock market following this economic report.)
It also was an improvement from April’s preliminary reading of 72.3.

The barometer of current economic conditions fell to 89.9 from 90.7, while the gauge of consumer expectations slipped to 67.8 from 70.8.

Just 23 percent of consumers anticipated a improvement in the unemployment rate during the coming year, while three out of four expected an unchanged or higher jobless rate. Read the full article here:

Is Prius next after Toyota’s decision to produce Lexus in U.S.?

Toyota’s announcement Friday that it will start building the Lexus ES 350 at a factory in Georgetown, Ky., is part of a larger policy of moving production of cars to the markets where they are sold that could result in the automaker’s Prius hybrid being built in the U.S.

In an interview with The Times, Toyota’s North American CEO Jim Lentz said the Prius would be the only major gap in Toyota’s North American production once the Lexus assembly line is up and running in Kentucky.

“If you look at most of the vehicles we sell in the U.S., most have been localized — from Camry to Corolla to the trucks. If you look at Lexus, the two biggest volume vehicles, the RX is made in Canada and now the ES will be made here,” Lentz said.

“The only vehicle that is really left out there is the Prius. If you look at global demand and global supply on the Prius, they are in sync,” he said. “There is no need to build more capacity now but at some time more capacity will be needed and we would be raising our hand here.”

The Prius was the bestselling vehicle in California last year. The automaker expects to sell about 250,000 of the hybrids nationally this year.

Lentz also talked about whether it is politically difficult for Toyota to move production from Japan. The ES is now built at a factory in Kyushu, Japan.

“That is a difficult question for me to answer because I am not in the heart of Japan,” he said. “Akio [Toyoda, president of the automaker] has talked about maintaining production of 3 million vehicles in Japan. The ES makes sense to come here because Kyushu will get another product in 2014 that will have volume bigger than the car that is leaving.”

The ES is the bestselling Lexus and accounted for about 56,000 of the brand’s U.S. sales last year.

Lentz said that production of the Lexus will begin in mid-2015, and Toyota expects the factory to turn out about 50,000 annually. It will be the first Lexus built in the U.S.

“It will be built on a dedicated line on the plant. The assembly, paint and weld all will be for just the ES,” Lentz said.

Read the full article here:,0,5983468.story

Wholesale Prices in U.S. Fall More Than Forecast on Energy

Wholesale prices in the U.S. fell more than forecast in March as the cost of energy slumped by the most in three years.
The 0.6 percent drop in the producer price index was the biggest since May and followed a 0.7 percent gain in the prior month, the Labor Department reported today in Washington. The median estimate in a Bloomberg survey of 75 economists called for a 0.2 percent decline. A core measure of prices that excludes the volatile food and energy categories rose 0.2 percent for a third month.
Weakness in Europe and slower growth in other global markets are restraining demand for commodities including oil, limiting the ability of U.S. companies to raise prices. A smaller risk of inflation is giving Federal Reserve officials room to keep buying assets at an unprecedented rate as they seek to boost growth and lower unemployment.
“Inflation fortunately remains low and that will support spending,” said Gus Faucher, senior economist at PNC Financial Services Group Inc. in Pittsburgh. “Inflation is a non-issue.”
Another report showed retail sales unexpectedly fell in March by the most in nine months as employment slowed, showing household spending ended the first quarter on softer footing.
Retail Sales
The 0.4 percent decrease, the biggest since June, followed a 1 percent gain in February, according to the Commerce Department in Washington. The median forecast of 85 economists surveyed by Bloomberg called for no change in March. Department stores and electronics dealers were among the weakest showings.
Stock-index futures extended declines after the retail data. The contract on the Standard & Poor’s 500 Index expiring in June dropped 0.4 percent to 1,581.1 at 9:08 a.m. in New York after closing at an all-time high yesterday.
Economists’ estimates for producer prices ranged from a decrease of 1.1 percent to a 0.5 percent gain. Core wholesale prices were projected to rise 0.2 percent, the Bloomberg survey showed.
Compared with the same month last year, companies paid 1.1 percent more for goods, the smallest 12-month advance since July, today’s report showed. The core index increased 1.7 percent in the year ended in March, matching the prior month’s gain.
Energy Prices
The wholesale cost of energy, including gasoline, diesel fuel and natural gas, slumped 3.4 percent in March. The decrease was the biggest since February 2010.
Diesel prices dropped 12.8 percent last month, the most in four years. Gasoline costs decreased 6.8 percent, the biggest decline since November.
Read the full article here:

Zynga CEO Pincus to Receive $1 Salary

Mark Pincus, the CEO of San Francisco-based gaming company Zynga, sets his own salary.

$1 — with no cash bonuses, according to Reuters.

Pincus has been at the helm of the company best-known for “FarmVille” since 2007. He received $1.7 million in 2011, a year before the company became known for an IPO that debuted at $10 before plummeting to $3.45 a share this week.

Zynga was once one of the hottest companies, thanks to the many Facebook users who forked over real cash for in-game items.

But users have been leaving the company’s games — so Zynga hopes that starting online gambling games in the United Kingdom will restore its fortunes.

In the meantime, Pincus announced in filings this week that he’ll receive a grand total of $1 in compensation for all of 2013. His 2012 compensation package was not disclosed.

It’s not likely Pincus is hurting for cash: he recently closed on a luxury San Francisco mansion and was at one time a billionaire before Zynga’s stock plummeted in value.
Read the full article here:

‘Facebook phone’ may ring true April 4

Facebook fueled fresh talk Friday about its own mobile phone after the leading social network scheduled a press announcement for next week.
Shortly after the Facebook invitation went out for the April 4 event, the technology news site TechCrunch reported the announcement would be a modified version of the Google Android operating system with “deep native Facebook functionality.”
Another report on “9 to 5 Google” said Facebook designing the software for the new smartphone, which would be made by Taiwan’s HTC.
Facebook’s invitation said only “Come See Our New Home On Android.”
The reports, if accurate, could explain the long speculation about a “Facebook phone” to help the social network better monetize its mobile platform by featuring Facebook prominently on the phone.
Facebook has long held firm it has no intention of building its own smartphone, saying instead it would rather weave access to the social network into software running the gamut of handsets.
News of the April 4 event at social network’s main campus in the Silicon Valley city of Menlo Park came as the research firm IDC released a Facebook-backed study showing that smartphones have become people’s close friends in the US.
US smartphone owners tend to be connected from the instant they rise until they fall sleep and revel in every minute of it, according to the study.
A weeklong IDC survey of more than 7,000 people ranging in age from 18 to 44 years old with iPhones or Android-powered smartphones showed that four out of five check their handsets within 15 minutes of waking.
The top three applications used were for messaging; Web browsing, and Facebook, in that order, according to IDC.
“People have a universal need to connect with others, especially those they care deeply about,” IDC researchers said.
“This coupled with mass market adoption of smartphones means that social engagement via phones has become mainstream.”
At a TechCrunch Disrupt conference in San Francisco in September, Facebook co-founder Mark Zuckerberg said the social network giant is focused on mobile devices.
“It is really clear from the stats and my own personal intuition that a lot of energy in the ecosystem is going to mobile, not desktop (computers),” Zuckerberg said during an on-stage interview.
“That is the future,” he continued. “We are going to be doing killer stuff there.”
Facebook has made a priority of following its more than one billion members onto smartphones and tablet computers, tailoring services and money-making ads for mobile devices.
“Now, we are a mobile company,” Zuckerberg said at the conference.
Read the full article here:

U.S. ‘Underwater’ Homeowners Regain Equity as Prices Rise

About 200,000 U.S. homeowners regained positive equity in their properties in the fourth quarter as prices rebounded from a more than five-year slump, according to CoreLogic Inc. (CLGX)
At the end of last year, 10.4 million homes, or 21.5 percent of all residential properties with a mortgage, were underwater, with owners owing more than the property was worth, the real estate data firm said in a statement today. That was down from 10.6 million homes, or 22 percent, at the end of the third quarter.
The U.S. housing market is rebounding as borrowing costs hover near record lows and employment improves, helping to fuel demand for a shrinking supply of property listings. Home prices jumped 9.7 percent in the 12 months through January, the biggest gain since April 2006, according to Irvine, California-based CoreLogic. About 1.7 million homeowners returned to positive equity in 2012, the company said today.
“The scourge of negative equity continues to recede across the country,” Anand Nallathambi, CoreLogic’s president and chief executive officer, said in a statement. “The trend toward more homeowners moving back into positive-equity territory should continue in 2013.”
The aggregate value of negative equity in the U.S. decreased to $628 billion from $670 billion at the end of the third quarter.
Nevada had the highest percentage of mortgaged properties in negative equity, at 52.4 percent, followed by Florida at 40.2 percent, Arizona with 34.9 percent, Georgia with 33.8 percent and Michigan with 31.9 percent.
The majority of home equity is concentrated at the high end of the housing market. For mortgaged homes valued at more than $200,000, 86 percent are above water, compared with 72 percent for properties worth less.
A 5 percent gain in prices would return another 1.8 million homes, or 3.7 percent of all residential properties with a mortgage, to positive equity, CoreLogic said.
Read the full article here:

Apple stock plunges 10%

Shares of Apple (AAPLFortune 500) plunged more than 10% in early trading, as investors grew skeptical about the iPhone maker’s growth prospects. Despite reporting arecord quarterly profit, Apple’s forecasts showed signs of slowing consumer demand for its products, particularly its iPhones.

Apple’s stock has been on a steady decline for months. In fact, shares have plunged more than 35% from their all-time intraday high of $705, reached Sept. 21, 2012.

Since then, Apple’s stock has dropped in value by nearly $230 billion, with its valuation slipping to $430 billion in just four months.

Almost exactly one year ago, Apple nudged out Exxon Mobil (XOMFortune 500) to become the most valuable publicly traded company in the world.

Read the full article here.

Return top