EU loses AAA rating in S&P downgrade

Credit rating agency Standard & Poor's incited the ire of European Unionofficials on Friday when it snatched away the region's top AAA rating, citing tensions between member states and a deterioration in their overall financial health.

Downgrading the EU to AA+, the agency said the 28 countries' combined creditworthiness had declined – but officials and leaders shot back with an assertion that the region had barely any outstanding debt relative to GDP.

Olli Rehn, the European commissioner for economic and monetary affairs, said: "The commission disagrees with S&P that member states' obligations to the budget in a stress scenario are questionable. All member states have always, and also throughout the financial crisis, provided their expected contributions to the budget in full and in time."

S&P, which recently cut its ratings on the Netherlands and France, said the wider region faced growing risks and "cohesion among EU members has lessened".

"EU budgetary negotiations have become more contentious, signalling what we consider to be rising risks to the support of the EU from some member states," the agency said.

There was more upbeat news for the eurozone, however, with European commission data showing consumer confidence had picked up to a 29-month high this month.

Howard Archer at IHS Global Insight commented: "Hopefully, the renewed and appreciable strengthening in consumer confidence in December and the help to purchasing power coming from muted inflation across the eurozone (just 0.9% in November) will increasingly underpin consumer spending and help eurozone economic recovery to gradually gain traction over the coming months."

Source: theguardian

China spent 25% more than US on mobile ads in Q3 2013

China spent 25 percent more than the United States on mobile ads in the third quarter of this year, according to mobile advertising platform AppFlood  . Chinese mobile advertisers like Baidu(NASDAQ:BIDU) and Qihoo(NYSE:QIHU) increased their spending on mobile advertising by 151 percent between March and September.

“Mobile ad spend by Chinese developers picked up in July and even surpassed USA’s ad spend by September,” adds AppFlood spokesperson Francis Bea.

Earlier this year we commented on Chinese internet companies’ reluctance to expand overseas. That no longer seems to be the case, but developers in China aren’t competing on Americans’ turf.

“Their target regions aren’t solely focused on the West,” says Bea. “Rather, they’re spending more on traffic from South East Asia and the Middle East than North America.” [sic]

The surge in overseas ad spending demonstrates Chinese developers’ eagerness to expand internationally. AppFlood’s report shows less than one percent of their advertising budgets were spent on acquiring Chinese users. In contrast, 7.2 percent was spent on India, 6.5 percent on Saudi Arabia, 4.9 percent on Indonesia, and 3.8 percent on Thailand. Overall, they spent 28 times more on Southeast China than their own domestic market.

Source: TECHINASIA

Researcher sending stem cells into space to observe rate of growth

A drawback for the use of stem cells in medical treatment is their limited supply due to slow rate of growth in conventional laboratories. Dr Abba Zubair of the Cell Therapy Laboratory at Mayo Clinic in Florida believes this problem could be overcome and stem cell generation sped up by conducting the process in space. He will now have the opportunity to put his hypothesis to the test, courtesy of a US$30,000 grant that will see Zubair send human stem cells to the International Space Station (ISS) to observe whether they do in fact grow at a greater rate than on terra firma.

According to the Mayo Clinic, experiments conducted on Earth using microgravity (replication of gravitational field about 250 miles (402.3 km) from Earth’s surface) have shown that these conditions are more conducive to stem cell growth than conventional laboratories.

“On Earth, we face many challenges in trying to grow enough stem cells to treat patients,” says Zubair. “It now takes a month to generate enough cells for a few patients. A clinical grade laboratory in space could provide the answer we have all been seeking for regenerative medicine.”

In his laboratory in Florida, Zubair currently grows cells that induce the regeneration of neurons and blood vessels in sufferers of hemorrhagic strokes. He believes that if these cells were generated in space instead, their population would increase rapidly, allowing for treatment of a wide variety of conditions.

“If you have a ready supply of these cells, you can treat almost any condition, and theoretically regenerate entire organs using a scaffold,” says Zubair.

The next step for Zubair is to work with engineers at the University of Colorado to build a specialized cell bioreactor, which they hope will be taken to the ISS within a year to begin the experiment.

One-off fat trike attempts world record Antarctic trip

last winter, polar explorer Eric Larsen attempted to become the first person to cycle to the South Pole. Continually stymied by deep, unrideable snow, Larsen fell behind schedule and was forced to abandon the attempt. This year, several others are taking up the challenge. Thirty-five year-old British adventurer Maria Leijerstam is hoping the ticket to success is a fat-tired recumbent trike built to task.

While most of us are buying last-minute gifts and preparing to welcome loved ones into our homes, Leijerstam is pedaling herself and 99 lb (45 kg) worth of gear across the frozen continent. Unlike Larsen, who made his attempt without competition from other cyclists, Leijerstam is racing against Spaniard Juan Mendez and American Daniel Burton. They will take different routes, but they are all striving to be the first to the Pole.

Larsen used a customized Surly Moonlander fat bike during his attempt last winter, and both Mendez and Burton are using two-wheelers. Leijerstam has a different idea: a recumbent trike designed by the UK's Inspired Cycle Engineering (ICE).

"Fat bikes fail because they get blown over in the high winds, or can’t ride fast enough through the snow to stay upright," Leijerstam explains on ICE's blog. "I knew I needed something that would overcome these limitations."

Nicknamed the White ICE Cycle, Leijerstam's trike offers stability, balance and increased aerodynamics that bicycles simply can't match. Instead of expending energy trying to stay balanced, Leijerstam will be able to focus on moving forward during grueling, 18-hour days, even when it entails 50 mph (80 km/h) winds and stiff climbs up the crevasse-littered Leverett Glacier.

ICE used its Sprint trike as the basis for the extreme build, including standard components like its ergonomic mesh seat and indirect steering system. In order to prepare the vessel for the harsh challenges of extended Antarctic travel, ICE upgraded the design from a US$3,000 stock trike to a ~$33,000 extreme polar-cycle.

ICE started by reinforcing the frame, replacing aluminum elements with aircraft-grade, heat-treated 4130 chromoly steel. It added a mid-drive to step gearing down 2 to 1, providing easier pedaling for the steep uphill slogs. It also reworked the rear-end geometry to accommodate the low gearing and fat snow tires.

The trike's reinforced wheels are mounted on Hope Fatsno hubs. The front wheels are wrapped in 4.7-in Surly Big Fat Larry tires, and the rear wheel uses a 4.8-in Surly Lou with spikes added for extra traction and muscle. A custom rack system handles gear storage.

"The trike is amazing," reports Leijerstam. "It’s completely stable, even in extreme winds and I can take on long steep hills that I’d never be able to climb on a bike."

Leijerstam is wheeling over a route that ICE describes as "virtually untested by polar explorers." The trip will take her more than 400 miles (644 km) from the edge of the Ross Ice Shelf, up over Leverett Glacier, and onward to the South Pole. Along the way she'll face some of the harshest terrain and weather conditions on Earth, including temperatures as low as -31° F (-35° C), snowstorms and deep snowdrifts. She'll need to rely on every bit of her training and competition experience from places like Siberia and Iceland.

Leijerstam arrived at the Novo Russian Airbase in Antartica on December 12 and got underway on the trike journey on the 17th, making it 25 miles (45 km) up the Leverett Glacier before retiring to her tent for the night. Her plan calls for pedaling and camping for up to 20 days.

Founder Lei Jun Talks About Xiaomi, China’s Disruptive Phone-Maker

If you’re familiar with the Chinese tech scene, chances are you are also familiar with serial entrepreneur Lei Jun (pictured above). Recently, I had a chance to speak to him to learn more about his story as an entrepreneur, and about his latest venture, the disruptive phone-maker Xiaomi.

His journey goes back to 1992 when he joined software maker Kingsoft  after graduating from Wuhan University. Kingsoft back then had just five or six people, but today the company has more than 3,000 employees. The company IPO’d in Hong Kong in 2007. While working at Kingsoft (HKG:3888), Lei Jun ran the site Joyo.com as a side project. Joyo started as a downloads website but later it became an online bookstore. Success followed, and Amazon subsequently acquired Joyo for a whopping $75 million in 2004 – now it’s today’s Amazon China, at Amazon.cn.

After Kingsoft went public, Lei Jun jumped full-time into angel investing which saw him invest in over 20 startups, including browser maker UCWeb, clothing e-tailerVancl, and payments service Lakala. All of his investments targeted companies in the mobile internet space. Lei Jun says that from 2007 to 2010, he has overseen over 70 funding rounds among his portfolio companies. And through his angel investing experience, Lei Jun became familiar with many local and international investors which he says have helped greatly in what would be his next venture – Xiaomi. He tells me:

 

We got to know a lot of investors and know what they like and don’t like. Through many co-investments opportunities, we have built trust among these investors. So when it came to investing in Xiaomi, things were a lot easier.

The birth of Xiaomi

Through his experience as an angel investor, Lei Jun firmly believes the mobile internet would be the next wave. And he believed in the importance of creating a channel, through hardware, in the mobile internet industry in China. “A phone as a channel,” he emphasizes. That idea gave birth to Xiaomi on April 6, 2010, over a year before its first smash-hit phone was revealed. 

The Xiaomi Mi2, unveiled this summer and set to launch later this month.

Xiaomi was inspired by Apple, and Lei Jun pays great credit to Steve Jobs who he believes has shaped how the world uses phones and the mobile internet. Lei Jun saw the opportunity to create a smartphone tailored for China, a hardware company which can ride on the mobile internet wave. Lei Jun tells me that Xiaomi is built on three building blocks:

1. E-commerce
2. The openness of the Android platform and Xiaomi’s own MIUI skin
3. Xiaomi’s fans

Regarding e-commerce, Lei Jun said Xiaomi could sell phones online without having physical stores, and that greatly reduces costs. The saved resources can be put into making better quality phones. Before Xiaomi launched the first-gen M1 phone, theattractive and versatile MIUI, an Android ROM, had already been in the works for a year and was already used by lots of keen Android tweakers who flashed it onto their phones. Lei Jun says that MIUI gained the recognition of Android fans across the world. Every Friday, there will be a new MIUI update to keep the Android ROM updated and fresh.

In the near future, Xiaomi aims to operate in different mobile operating systems, which may include Windows Phone,” said Lei Jun. But that won’t come too soon, he noted.

Feedback from fans about their perfect phone

Fans play a huge part in Xiaomi’s success. What Xiaomi has become today is largely due to fans’ feedback. For example, to test the upcoming Mi2 phone , Xiaomi invited over 1,200 fans to provide feedback which the company could then learn from. For example, some users of the first-gen phone, the Xiaomi M1, didn’t know that the SIM card has to be pushed into the slot until a “click” sound is heard. In its revamped Mi1S unveiled this summer as a cheaper alternative to the new Mi2, Xiaomi has added in instructions to inform users that the SIM has to be pushed in. Lei Jun says of the company’s enthusiastic fans:

 

Most of the fans have ideas about their perfect phone. But many of them can’t do it because building a phone is tough. So they would give us feedback about the features that they think should be included in our next model. And if we incorporated that in our new phone, they will share the good news with their friends.

Besides providing feedback voluntarily, Xiaomi fans also serve as an echo chamber for the phone-maker. Lei Jun says that word of mouth marketing is perhaps one of the company’s best promotional channels. He describes Xiaomi users as people who are usually banded in a group. If one person starts using a Xiaomi phone, his or her friends would most likely start using it too. And in that way, the word spreads. Fans’ enthusiasm over Xiaomi was apparent when we attended the recent Xiaomi Mi2 launch event in Beijing. Fans paid to be there (the ticket revenue was donated to charity) and wore orange to show that they are fans of Xiaomi.

Xiaomi has so far sold 3.52 million units of its outgoing M1 smartphone and aims to sell over 5 million total units by the end of this year with the Mi2 soon available – a bit later this month – in the market. Lei Jun says that his company has already hit more than $1 billion in revenue and is expected to hit $2 billion by the end of 2012. He also claims that Xiaomi is perhaps the fastest company to hit $1 billion in revenue in just a year of full operations.

Xiaomi is already a profitable company and is looking to expand to Taiwan and Hong Kong in the near future. When asked about markets outside of Greater China, Lei explains:

 

We’re not thinking about other markets like India or Indonesia, yet. We want to stay focused on the Chinese market first before expanding.

Lei Jun has also communicated to all his investors that Xiaomi has no plans to IPO within the first five years of operation. He explained that the focus right now should be on building a world-class phone and business model around Xiaomi, and not worry about the exit just yet. Plus, the recent Facebook IPO has shown the negative side of being a public company. Figures and statistics have to be revealed to investors and the public, which he believes will distract from the company’s focus on building a great product.

Will Xiaomi expand into tablets? The answer is “No,” says Lei. He feels that the tablet is a very competitive market already thanks to Apple’s iPad. He pointed to the recent iPhone 5 launch event whereby Apple’s CEO Tim Cook revealed that the iPad has cornered 68 percent of the tablet market share, with 91 percent of all tablet web traffic coming from the iPad.

When asked about Xiaomi’s greatest barrier, he explains that integrating software and hardware with a beautifully crafted mobile phone design is always the greatest challenge. To overcome that, Xiaomi’s core team members include people who previously worked at Motorola, Google, Microsoft, and Kingsoft. Plus, the team also has the network of contacts to attract more quality talent moving forward.

To date, Xiaomi has raised $347 million in total funds – the series C of $216 million was revealed this June – and the company is already profitable. But Lei Jun insists that Xiaomi still has a long way to go before it can become a world class product which can compete on the world stage. Things are looking great for Xiaomi and most people in the Chinese tech industry will agree that its selling-like-hot-cakes phone and mobile platform is a force to be reckoned with.

Source: TECHINASIA

Bureau of Economic Analysis U.S. Department of Commerce Press release

Real gross domestic product -- the output of goods and services produced by labor and property
located in the United States -- increased at an annual rate of 4.1 percent in the third quarter of 2013 (that
is, from the second quarter to the third quarter), according to the "third" estimate released by the Bureau
of Economic Analysis. In the second quarter, real GDP increased 2.5 percent.

The GDP estimate released today is based on more complete source data than were available for
the "second" estimate issued on December 5, 2103. In the second estimate, the increase in real GDP was
3.6 percent (see "Revisions" on page 3). With this third estimate for the third quarter, increases in
personal consumption expenditures (PCE) and in nonresidential fixed investment were larger than
previously estimated.

The increase in real GDP in the third quarter primarily reflected positive contributions from
private inventory investment, PCE, nonresidential fixed investment, exports, residential fixed
investment, and state and local government spending that were partly offset by a negative contribution
from federal government spending. Imports, which are a subtraction in the calculation of GDP,
increased.

The acceleration in real GDP growth in the third quarter primarily reflected an acceleration in
private inventory investment, a deceleration in imports, and accelerations in state and local government
spending and in PCE that were partly offset by a deceleration in exports.

The price index for gross domestic purchases, which measures prices paid by U.S. residents,
increased 1.8 percent in the third quarter, the same increase as in the second estimate; this index
increased 0.2 percent in the second quarter. Excluding food and energy prices, the price index for gross
domestic purchases increased 1.5 percent in the third quarter, compared with an increase of 0.8 percent
in the second.

Real personal consumption expenditures increased 2.0 percent in the third quarter, compared
with an increase of 1.8 percent in the second. Durable goods increased 7.9 percent, compared with an
increase of 6.2 percent. Nondurable goods increased 2.9 percent, compared with an increase of 1.6
percent. Services increased 0.7 percent, compared with an increase of 1.2 percent.

Real nonresidential fixed investment increased 4.8 percent in the third quarter, compared with an
increase of 4.7 percent in the second. Nonresidential structures increased 13.4 percent, compared with
an increase of 17.6 percent. Equipment increased 0.2 percent, compared with an increase of 3.3 percent.
Intellectual property products increased 5.8 percent, in contrast to a decrease of 1.5 percent. Real
residential fixed investment increased 10.3 percent, compared with an increase of 14.2 percent.

Real exports of goods and services increased 3.9 percent in the third quarter, compared with an
increase of 8.0 percent in the second. Real imports of goods and services increased 2.4 percent,
compared with an increase of 6.9 percent.

Real federal government consumption expenditures and gross investment decreased 1.5 percent
in the third quarter, compared with a decrease of 1.6 percent in the second. National defense decreased
0.5 percent, compared with a decrease of 0.6 percent. Nondefense decreased 3.1 percent, the same
decrease as in the second quarter. Real state and local government consumption expenditures and gross
investment increased 1.7 percent, compared with an increase of 0.4 percent.

The change in real private inventories added 1.67 percentage points to the third-quarter change in
real GDP, after adding 0.41 percentage point to the second-quarter change. Private businesses increased
inventories $115.7 billion in the third quarter, following increases of $56.6 billion in the second quarter
and $42.2 billion in the first.

Real final sales of domestic product -- GDP less change in private inventories -- increased 2.5
percent in the third quarter, compared with an increase of 2.1 percent in the second.


Gross domestic purchases

Real gross domestic purchases -- purchases by U.S. residents of goods and services wherever
produced -- increased 3.9 percent in the third quarter, compared with an increase of 2.5 percent in the
second.


Gross national product

Real gross national product -- the goods and services produced by the labor and property
supplied by U.S. residents -- increased 4.4 percent in the third quarter, compared with an increase of 2.7
percent in the second. GNP includes, and GDP excludes, net receipts of income from the rest of the
world, which increased $12.7 billion in the third quarter after increasing $7.7 billion in the second; in the
third quarter, receipts increased $1.0 billion, and payments decreased $11.7 billion

Revisions

The upward revision to the percent change in real GDP primarily reflected upward revisions to
personal consumption expenditures and to nonresidential fixed investment that were partly offset by a
downward revision to residential fixed investment.


 Advance Estimate Second Estimate Third Estimate
 (Percent change from preceding quarter)

Real GDP................................................ 2.8 3.6 4.1
Real GDI................................................. --- 1.4 1.8
Current-dollar GDP................................ 4.8 5.6 6.2
Gross domestic purchases price index... 1.8 1.8 1.8

US Bureau of Labor Statistics Press Release Regional and State Employment and Unemployment data

Regional and State Employment and Unemployment Summary

For release 10:00 a.m. (EST) Friday, December 20, 2013    USDL-13-2394

Technical information:
 Employment:    (202) 691-6559  *  sminfo@bls.gov    *  www.bls.gov/sae
 Unemployment:  (202) 691-6392  *  lausinfo@bls.gov  *  www.bls.gov/lau

Media contact: (202) 691-5902  *  PressOffice@bls.gov


      REGIONAL AND STATE EMPLOYMENT AND UNEMPLOYMENT -- NOVEMBER 2013


Regional and state unemployment rates were generally lower in November. Forty-five
states and the District of Columbia had unemployment rate decreases from October
and five states had no change, the U.S. Bureau of Labor Statistics reported today.
Forty-two states had unemployment rate decreases from a year earlier, seven states
and the District of Columbia had increases, and one state had no change. The
national jobless rate declined to 7.0 percent from October and was 0.8 percentage
point lower than in November 2012.

In November 2013, nonfarm payroll employment increased in 43 states and decreased
in 7 states and the District of Columbia. The largest over-the-month increases in
employment occurred in California (+44,300), Texas (+28,700), and Indiana (+25,200).
The largest over-the-month decrease in employment occurred in Ohio (-12,000),
followed by North Carolina (-6,500) and Washington (-6,000). The largest over-the-
month percentage increase in employment occurred in Indiana (+0.9 percent), followed
by Nevada (+0.8 percent) and Vermont (+0.7 percent). The largest over-the-month
percentage declines in employment occurred in the District of Columbia, Nebraska,
North Carolina, Ohio, and Washington (-0.2 percent each). Over the year, nonfarm
employment increased in 49 states and the District of Columbia and decreased in
Alaska (-1.0 percent). The largest over-the-year percentage increase occurred in
North Dakota (+4.0 percent), followed by Florida and Texas (+2.5 percent each) and
Georgia and Idaho (+2.3 percent each).

Regional Unemployment (Seasonally Adjusted)

In November, the West continued to have the highest regional unemployment rate, 7.6
percent, while the South had the lowest rate, 6.7 percent. Over the month, all four
regions had statistically significant unemployment rate declines: the Northeast
(-0.3 percentage point) and Midwest, South, and West (-0.2 point each). Significant
over-the-year rate changes occurred in three regions: the West (-1.1 percentage points),
the Northeast (-0.8 point), and the South (-0.6 point). ()

Among the nine geographic divisions, the Pacific had the highest jobless rate, 8.0
percent in November. The West North Central again had the lowest rate, 4.9 percent.
Seven divisions had statistically significant over-the-month unemployment rate
changes, all of which were declines. The largest of these declines occurred in the
Middle Atlantic (-0.4 percentage point). Five divisions had significant rate changes
from a year earlier: the Pacific (-1.3 percentage points), South Atlantic (-1.2 points),
Middle Atlantic (-1.1 points), Mountain (-0.7 point), and West North Central (-0.5 point). 

State Unemployment (Seasonally Adjusted)

Nevada and Rhode Island had the highest unemployment rates among the states in November,
9.0 percent each. The next highest rates were in Michigan, 8.8 percent, and Illinois,
8.7 percent. North Dakota continued to have the lowest jobless rate, 2.6 percent. In
total, 18 states had jobless rates significantly lower than the U.S. figure of 7.0
percent, 8 states and the District of Columbia had measurably higher rates, and 24 states
had rates that were not appreciably different from that of the nation. (See tables A and 3.)

Twenty-five states and the District of Columbia had statistically significant over-the-
month unemployment rate decreases in November, the largest of which occurred in Idaho,
New Jersey, and North Carolina (-0.6 percentage point each). The remaining 25 states had
jobless rates that were not measurably different from those of a month earlier, though
some had changes that were at least as large numerically as the significant changes.
(See table B.)

Seventeen states had statistically significant unemployment rate changes from November
2012, all of which were declines. The largest of these occurred in North Carolina (-2.0
percentage points), followed by New Jersey (-1.8 points) and Florida (-1.6 points).
(

Economic news

S&P has lowered the EU's long-term credit rating to AA+ from AAA, due to the "overall weaker creditworthiness of the EU's 28 member states" and concerns about budget talks. The downgrade doesn't affect the ratings of individual countries, the agency said, although it does follow cuts for Italy, Spain, Holland and France in recent years. The euro was flat at $1.3657 at the time of writing.

 As anticipated, the Bank of Japan has left its key interest rate at 0.1% and maintained its program of expanding the monetary base by ¥60-70T a year. The BOJ expects the annual rate of core CPI to rise "for the time being," while the bank also maintained its view that the economy will continue recovering moderately. However, the BOJ believes that demand will increase before a rise in sales tax in April and then fall after the hike is implemented.

The Federal Reserve's balance sheet has topped $4T for the first time after rising $14.1B this week to $4.01T. The milestone comes as the central bank plans to scale back its bond-buying program to $75B a month from $85B. Prior to this third round of QE in September 2012, the central bank held $2.82T in assets. Its balance sheet has quadrupled since 2008.


 Having approved a two-year budget deal on Wednesday, Congress now has until late February or early March to raise the $16.7T debt ceiling, Treasury Secretary Jacob Lew has warned. During the last brouhaha over the matter in October, the cap was suspended until February 7. From that date, the Treasury will be able to juggle the money about for a bit to stave off a default before running out of cash.

Source: Seeking Alpha

Chinese Stocks down fear of another cash crunch

Chinese stocks closed down for the ninth consecutive session, the worst run since 1994, amid increasing fears of another cash crunch in the short-term money markets. The seven-day repurchase rate soared 100 bps to a six-month high of 7.6%, representing a jump of 328 bps this week. The spike today came as borrowing remained difficult despite the People's Bank of China making an emergency cash injection in the financial system yesterday after being inactive for over two weeks. The Shanghai Composite closed -2%.

Seeking Alpha

BlackBerry Reports Massive $4.4 Billion Quarterly Loss, Inks a Deal With Foxconn

BlackBerry, the troubled Canadian smartphone company, just reported its quarterly results and, well, let’s just say its troubles aren’t getting any smaller.

Its loss, on a GAAP basis, came out to $4.4 billion on revenue of $1.2 billion. That works out to a per-share loss of $8.37. The loss was the result of a huge $2.7 billion charge against assets, and another $266 million restructuring charge.

After backing out those charges, the company lost $354 million, or 67 cents a share. It exited the quarter with $3.2 billion in combined cash and short-term investments. Sales fell by 56 percent compared to the year-ago quarter. It sold 4.3 million BlackBerry devices during the quarter.

BlackBerry shares fell in pre-market trading by more than five percent, to $5.94, after the news was announced. The shares have fallen by more than 47 percent this year.

John Chen, thenew CEO who took over afterThorstenHeins was fired   tried to set a positive tone in a statement:

“We have accomplished a lot in the past 45 days, but still have significant work ahead of us as we target improved financial performance next year. However, the Company is financially strong, has a broad and trusted product portfolio to work with, a talented employee base and a new leadership team dedicated to implementing our new roadmap.”

The company also said it has cut a five-year strategic partnership with Foxconn, the China-based contract manufacturing giant that builds much of the world’s consumer electronics. Under the terms, Foxconn will help BlackBerry develop new phones, build them, and then manage the inventory. The first target of the effort will be a phone aimed at the Indonesian market.

Source: AllThingsD

US Corporate Profits

 
                                       

Released On 12/20/2013 8:30:00 AM For Q3:13

Prior Actual After-tax Profits - Y/Y change 5.8 % 5.6 %

 

Corporate profits in the third quarter were revised to $1.869 trillion versus the initial estimate of $1.872 trillion, up from $1.821 trillion the prior quarter. Profits in the third quarter increased an annualized 10.8 percent, following a gain of 8.5 percent in the second quarter. Profits are after tax but without inventory valuation and capital consumption adjustments. Corporate profits on a year-on-year basis increased 5.6 percent versus 5.3 percent in the second quarter.

Definition Corporate profits, as reported by the Bureau of Economic Analysis (BEA), are summarized briefly as the income of organizations treated as corporations in the national income and product accounts. The BEA reports several measures of profits. Profits from current production (corporate profits with inventory valuation and capital consumption adjustment), are also known as operating or "economic" profits. Capital consumption adjustment deals with the differences in depreciation allowances used for accounting and income tax purposes. Inventory valuation adjustment (IVA) deals with the difference in measuring the cost of inventory replacement. Book profits amount to operating profits subtracting out inventory valuation and capital consumption adjustments. After tax profits are book profits after taxes are subtracted. The Econoday reports focus on after tax profits reported by the BEA, since these are the most relevant

U.S. GDP Grows 4.1% in Q3; Biggest Gain Since 2011

The U.S. economy grew at a healthy 4.1% annual rate in the third quarter, stronger than previously estimated, as new data showed consumer spending accelerated in the summer.

The Commerce Department previously pegged the annual rate of growth at 3.6% in July through September. Friday's new estimate showed gross domestic product, the sum of all goods and services produced in the economy, expanded at the fastest pace since the fourth quarter of 2011 and the second-fastest since the recovery began in mid-2009.

Economists surveyed by Dow Jones had forecast a revised third-quarter growth pace of 3.6%.

The higher estimate was driven largely by a revision in consumer spending, which Commerce now says grew at a 2% annual rate in the summer instead of the previously estimated 1.4%. The revision, now showing a slight pickup from the second quarter, reflected higher household spending across the board. Households stepped up purchases of big-ticket items such as refrigerators, daily items such as gasoline and on services, including healthcare.

The latest data shows growth in the quarter was driven by more than just a buildup in businesses' inventories.

A measure of business spending, nonresidential fixed investment, rose at a 4.8% annual rate last quarter instead of the earlier estimate of 3.5%. The revision was largely driven by a higher estimate of business spending on software.

Export growth was also revised higher, showing a 3.9% annual rate of growth instead of 3.7%.

The report is the latest to suggest the economy gained speed in the second half of the year, boosting expectations for stronger growth in 2014.

The forecasting firm Macroeconomic Advisers expects GDP growth to clock in at 2.2% in the current quarter. At that pace, growth in the second half of 2013 would average an annual rate of slightly above 3%, higher than the average rate of 1.8% in the first half. GDP grew by 2.8% in 2012 and by 1.8% in 2011, an overall sluggish pace that has kept unemployment historically high more than four years after the recession.

The question now is whether the economy is genuinely lifting off, heading into a healthier cycle in which job growth fuels stronger spending by consumers and businesses--and in turn more job growth. Previous bursts of strength during the recovery quickly evaporated, with the economy reverting back to subpar growth.

S. Sudan government says open to talks as Africans mediate

 South Sudan's government said on Friday it was ready for dialogue with rivals to prevent a return to war as African ministers sought to broker peace in the two-year-old nation, where hundreds have been killed in fighting this week.

The United Nations said on Thursday a crowd of Nuer tribesmen breached a U.N. compound in Jonglei State north of the capital and it had reports some people were killed.

Fighting that began on Sunday in the capital has swiftly spread, fuelled by ethnic divisions.

Kiir has said he is ready for dialogue. Machar told French radio that he was ready to "negotiate his departure from power" and said the army could force Kiir out if he did not quit.

"President Kiir has always said that he doesn't want his people to turn back again to war," Foreign Minister Barnaba Marial Benjamin told Reuters. "That is why the government has been negotiating with a lot of militia groups."

Source: Reuters

Chinese Huawei Technologies Co Ltd expects revenue from its 4G network to double in 2014

Chinese telecommunications equipment maker Huawei Technologies Co Ltd expects revenue from its 4G mobile network business to double to $4 billion in 2014 compared with this year, a senior executive said on Friday.

The company also expects revenue from the overall wireless market to total $12.9 billion next year, up from $11.7 billion this year, David Wang, president of Huawei Wireless Network, told reporters in Shanghai.

Earlier this month, China awarded 4G licenses to the country's three telecom carriers - China Mobile Ltd, China Unicom Hong Kong Ltd and China Telecom Corp Ltd - in a move that would benefit telecom equipment makers including Huawei and ZTE Corp.

Source: Reuters

Li tightens grip on Hong Kong mobile as Telstra bows out

Australia's Telstra Corp. has agreed to sell its Hong Kong mobile phone business to a company controlled by billionaire Richard Li in a deal worth $2.4 billion that boosts the scion's share of the city's saturated mobile phone market.

Australia's biggest phone company said in a filing that it had agreed to sell its 76.4 percent stake in its CSL New World to HKT , a listed arm of Li's PCCW Ltd  media conglomerate, for A$2 billion ($1.8 billion).

HKT will also buy the remaining stake in CSL held by Hong Kong-based New World Development Ltd., the property developer controlled by the family of billionaire Cheng Yu-tung,according to the filing.

The deal gives Telstra a cash war chest to pursue other assets as part of its Asia strategy, and strengthens Li's grip of the city's mobile phone market with the return of an asset he sold more than a decade ago. It also cuts the number of mobile carriers in the territory from five to four, easing competitive pressure.

The deal will give Li, the younger son of Asia's richest man, Li Ka-shing, about a third of the territory's mobile market, according to HKT.

Hong Kong has one of the highest mobile service subscription penetration rates in the world at 16.7 million subscribers, or about 2.3 per person, Hong Kong government figures show.

Smartphone penetration in the Asia-Pacific region is booming, according to Nielsen, with growth in a number of markets approaching saturation. The region has eclipsed penetration levels in the United States and many European nations, Nielsen said in a September report.

HKT is already Hong Kong's top telecoms company, which together with PCCW provides the city with its quadruple-play platform: fixed line, broadband internet, television and mobile. The deal to buy back CSL takes HKT from the smallest to the largest player in the Hong Kong mobile market by customers, according to Reuters Breakingviews.

Source: Reuters

Target cyber breach hits 40 million payment cards at holiday peak

Target Corp said hackers have stolen data from up to 40 million credit and debit cards of shoppers who visited its stores during the first three weeks of the holiday season in the second-largest such breach reported by a U.S. retailer.

The hackers worked at unprecedented speed, carrying out their operation from the day before Thanksgiving to this past Sunday, 19 days that are the heart of the crucial Christmas holiday sales season.

Target, the third-largest U.S. retailer, said on Thursday that it was working with federal law enforcement and outside experts to prevent similar attacks in the future. It did not disclose how its systems were compromised.

The retailer was alerted its systems might have been compromised by credit card processors who had noticed a surge in fraudulent transactions involving credit cards that had been used at Target, according to a person familiar with the investigation who was not authorized to discuss the matter.

The timing of the breach could not have been worse for Target, coming just before three of the four busiest days of what has been a bruising holiday season for retailers, with the highest level of discounting in years. Target last month lowered its profit forecast for the year.

Source: Reuter

Everbright Bank slides in HK debut amid China cash crunch fears

China Everbright Bank Co Ltd  fell in its Hong Kong debut on Friday, as renewed cash crunch fears about China's banking system exacerbated weak sentiment towards a mid-sized lender that has taken three attempts to come to market.

Everbright , which raised $3 billion in its IPO, is the latest in a raft of banks rushing to tap investors to meet more stringent capital rules, and which have seen profits shrink and unpaid debts climb amid slower economic growth.

While other China bank IPOs have also been lackluster, Everbright's listing has been particularly unsung, with cornerstone investors accounting for about 60 percent of the offer - more than double the normal level - as underwriters sought to lock in as much institutional demand as possible.

Everbright, which is also listed in Shanghai, also had the misfortune to debut amid a spike in interbank rates. China's benchmark money market rate climbed to a six-month high on Friday despite attempts by the central bank to calm sentiment, with signs of a scramble for cash reminiscent of a massive crunch that occurred in June.

Although China stock markets have shown a more measured response than in June, some anxiety has set in and shares in Everbright dropped to HK$3.87, or 3 percent below its IPO price, which was near the bottom of its indicated range.

Source: Reuters

Carlyle Group invests in India's Global Health

 Private equity firm Carlyle Group LP  said it bought a minority stake in Indian hospital and health care providerprovider Global Health Pvt Ltd.

The investment included buying a significant equity stake held by an affiliate of Marc Lasry's hedge fund Avenue Capital Group, Carlyle said late on Thursday. The financial details of the deal were not disclosed.

Global Health owns and operates a super-specialty hospital located in northern India and also does drug research and development.

Source: Reuter

BOJ keeps massive stimulus while Fed begins tapering

The Bank of Japan kept monetary policy steady on Friday and maintained its view that the economy is recovering moderately, encouraged by growing signs that the benefits of its massive stimulus are spreading through broader sectors of the economy.

With the BOJ maintaining its ultra-easy policy even as the U.S. Federal Reserve begins to wind down its own mega-stimulus, the widening interest rate gap between the two economies will help keep the yen weak against the dollar, analysts say.

The dollar struck 104.44 yen on the EBS trading platform on Friday, its highest level since October 2008.

A weak yen benefits Japan's export-reliant economy, and will help the BOJ attain its target of 2 percent inflation target within two years to decisively Lift the country out of a long phase of debilitating deflation.

Governor Haruhiko Kuroda is likely to stress at a post-meeting news conference that the Japanese central bank's resolve to maintain its ultra-loose stimulus even as the Fed begins dialling back its massive asset-buying programme.

As widely expected, the BOJ voted unanimously to maintain its pledge of increasing base money, or cash and deposits at the central bank, at an annual pace of 60 trillion yen (351 billion pounds) to 70 trillion yen.

"Japan's economy is recovering moderately," the central bank said in a statement announcing the policy decision, unchanged from its assessment last month.

But the BOJ slightly tweaked its view on the outlook to signal that it was mindful of the potential pain on the economy from an increase in the national sales tax in April next year.

"The economy is expected to continue a moderate recovery as a trend, while being affected by an increase and subsequent decline in demand prior to and after the consumption tax hike," it said. Last month, the BOJ said the economy is expected to continue recovering moderately.

Source: Reuters