Hands On With The Xperia Z2, Sony’s Multimedia-Loving 4K-Shooting Flagship Phone

Source: TechCrunch

Sony’s new flagship Android, the Xperia Z2, risks being overshadowed here at MWC by Samsung’s latest electronic tub-thumper, the Galaxy S5. But not on the show floor at least — where a phalanx of Z2 are massed in Sony’s booth, ready for the masses to fondle.

Over the way at Samsung’s hall-sized stand there is no shortage of electronic trinkets for the hoards to eyeball — indeed, as per usual, the Samsung stand positively heaves with gizmos (and hoards). But its latest bauble is not there. The SGS5 is being displayed in a separate viewing area for media only. Sorry, suits.

It would certainly be a shame for the Xperia Z2 to be overshadowed by its big brash Android rival, for although elements of Sony’s hardware and software design continue to be a little fussy — and its Android skin still drags its feet at times (despite a beefy 2.3GHz quad-core Snapdragon engine and 3GB of RAM) — Sony’s screen, camera and multimedia expertise is definitely starting to shine through. And that puts some clear blue water between Sony and other Androids OEMs — even the really big South Korean one.

The Z2 packs a 5.2-inch display, which is only a marginal increase on the 5-inch panes on last year’s Z1 and Z, gently edging the handset into phablet territory. Yet this generous size is offset by its weight — or rather its lightness. It feels crazy light to handle. Add to that it’s just 8.2mm thin so really this is more screen than phone. Just as well, then, that the screen is a thing of beauty.

Unlike many of its Android-powered rivals, Sony does not go in for the cartoon unreality of over-saturated displays. And that quest for tonal truth pays off on the Z2′s big screen — resulting in something that, paradoxically, can make real life appear more glamorous when you’re looking at it through the lens of this device.

Seeing your mundane surroundings sensitively lit up via Sony’s portal can lend them a little of the cinema vs the shrill high-contrast crudity you get with less pro phone screen and camera tech. Clearly, the Z2′s raison d’être is multimedia. This is a phone for viewing and capturing photos and video. (The 20.7MP rear camera is the same as the earlier Z1 but the quality of the shots it delivers means there’s nothing to complain about there).

The Z2′s waterproof and dustproof special powers just feed into that function — allowing the user to be unafraid to take the Z2 out in a variety of environments to film and snap cool stuff.

The handset’s flagship feature is an ability to capture 4K footage — although its full HD res itself is not 4K, so you still need that Sony (or so Sony hopes) ultra HD 4K TV to view the full footage. Otherwise you can watch a standard HD version of your 4K footage on the device. 4K TVs are hardly common at this point in time, so there’s certainly an element of gimmick in the addition of this feature right now. But it does allow the Z2 to raise a flag to recruit multimedia nerds to its ultra high res cause.

Also on board: a suite of (new) made-by-Sony camera and video apps that offer the user a variety of special effects for augmenting videos and photos. Effects include the ability to add slow motion and Instagram style filters to video footage. There’s also a Lytro-style background defocusing mode for altering background blur in photos to generate an impression of movement, or better draw the eye to your subject.

Here too, there is some gimmicky stuff — a 3D special effects mode that augments your video footage with virtual scenery and characters, including dinosaurs and, er, volcanos, is certainly not subtle. But full marks for effort Sony.

The Z2′s screen also has IPS tech for improved multi-angle viewing, so you and more buddies can huddle around the phone to watch more stuff. The front of the device also has stereo speakers. And there’s stereo audio recording to complement the 4K video ability. Plus digital noise canceling tech to smooth any rough environmental edges off of your multimedia viewing experience. Smooth, Sony, smooth.

The most unattractive aspect of the device is Sony’s Android skin. Which has never been beautiful but has not dated well at all. It remains cluttered, fiddly and visually unappealing — with ugly widgets and gimmicky 3D animations to contend with. Landing back in these unappealing digital environs after you’ve been looking at the world through the Z2′s portal/lens definitely feels like an anticlimax. Hopefully Sony’s next job will be giving that Android skin a much-needed makeover — to do justice to its high-end multimedia focus.

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Rolls-Royce’s Drone Cargo Ships Will Rule Tomorrow’s Oceans, Shipping Containers.

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If you’re rooting for the drone team, then chalk up another win: Rolls-Royce is working on unmanned cargo ships that would roam the Earth’s oceans packed with crates of goods, controlled by captains safe on shore using virtual reality facilities to pilot their fleets. In other words, tomorrow’s salty tales of ghost ships with no one left on board could be all too verifiable and hardly cause for alarm.

Bloomberg reports on the project, which aims to make the seafaring shipping industry safer, less expensive and easier on the environment. The market is worth $375 billion annually, and despite our mastering of flight, we shill ship 90 percent of traded goods over the waves, according to the article. These automated versions would aim to make that huge volume safer and more efficient, but of course it’ll have to contend with a variety of concerns first, including worries about safety and labour concerns from unions and workers.

Stripping all those accommodations needed by fleshy human labor from the huge cargo liners would clear up even more room for cargo, according to Rolls-Royce’s early designs – while also making them 5 percent lighter, with 12 to 15 percent less fuel burn per trip. Plus you’re saving up to $3,300 per day in crew costs, which currently make up 44 percent of the total overall operating expenses for manned ocean-bound shipping.

Before you get too excited there, Mr. Shipping Magnate, know that these things are currently probably at least a decade out from being anywhere near sea legal, and the largest union on the sea vocally opposes the idea outright, saying that drone ships are no replacement for human intellect and perception. Plus, if these ever replace our current waterborne shipping mechanisms, future generations will never experience coming-of-age stories like the one depicted in David Mamet’s Lakeboat (warning: this contains all the cusses so watch the volume if you’re at work).

Despite all the cautioning, however, there’s no question that logistics companies are hungry for this kind of automation, since it means cheaper prices overall decades down the road, plus faster and more efficient delivery from warehouse to customer (especially important as more shopping moves online). People will not accept the coming shipping bots readily, but that doesn’t mean they won’t still arrive eventually. And the waves will be waiting.

Source: TechCrunch

Airbnb Tops 10 Million Guest Stays Since Launch, Now Has 550,000 Properties Listed Worldwide

This is what hockey-stick growth looks like: Peer-to-peer lodging marketplace Airbnbannounced this morning that it’ll top 10 million guest stays since being launched in 2007. That’s a big number, for sure, but the bigger overall point is that the company had more than 6 million guest stays on the platform in 2013, more than doubling its total over the past year.

Of course, we kind of knew this was coming, based on data Airbnb had shared in October. Back then it touted 9 million stays, so it’s added another million in the past two months alone.

The company’s user base continues to skew international. Of the 6 million guest stays over the past year, about a third were American. The company has said in the past that about 75 percent of its stays have an international component — that is, either a foreign guest staying in a U.S.-based property or a U.S. guest staying in a foreign property, or a non-U.S. guest staying in a non-U.S. property — so that’s not surprising.

But the distribution of guests to lodgings has a funny sort of symmetry: Airbnb says that travelers from more than 175 different countries used the platform over the past year, staying in listings from more than 175 different countries.

While Airbnb has seen really impressive demand, its supply of listings has also grown dramatically in 2013. More than 250,000 properties have been added to the platform over the past year, bringing the total number of listings to 550,000 worldwide.

The company has added more than 50,000 in the past month alone, when Airbnb launched new mobile apps to facilitate the process of adding your home to the platform.

Airbnb’s big year came after the company raised $200 million in funding from Founder’s Fund last fall. The company has been using that funding to aggressively expand worldwide, something that appears to be working out.

Y Combinator-Backed Superhost Is A Property Management Service For Airbnb Listings

Source: TechCrunch

Airbnb is officially no longer just a cute way to make some extra cash by renting out a spare room in your apartment. It’s a big business now. And like most other big businesses, it’s entered a period where managed services have emerged to support super users on the platform.

Enter Superhost, which has quietly emerged as a property management service for Airbnb hosts.

Superhost reduces the pain associated with managing your Airbnb listing — like updating your listing’s calendar and responding to guest emails, as well as setting up cleaning services for your listing in between guest stays. That’s important because the faster a host responds to a guest request, the more likely they are to stay at a certain place. And cleanliness is increasingly becoming an important part of boosting ratings of your listing.

It does all that by hooking into hosts’ Airbnb accounts and taking control of all the details that most hosts don’t want to deal with. It’s not all about having a dedicated service team, however.

“We see this as a software problem to automate the process,” co-founder Koby Soto tells me. That software can be used to optimize pricing based on hotel and other Airbnb inventory.

But Superhost can help hosts in other ways. For newcomers to Airbnb, the service can help hosts determine a price for their listings, as well as optimize their profile to be more attractive to guests.

It also helps to choose which guests to accept and which not to, and helps navigate their stay. That means providing 24/7 support during stays, including scheduling key drops and troubleshooting issues that might pop up.

For all that, Superhost takes just 1 percent of each booking — that is, for now. It expects to raise that to 3 percent after it becomes a bit more established. In the meantime, it’s growing about 40 percent week-over-week.

The company was founded by twin brothers Amiad and Koby Soto, with service is available for listings in the U.S. and in Israel. Over time, the team wants to expand into other geographies, as well as making its service available on other services, like Homeaway and VRBO.

Water.org.; Delivering Water and Sanitation Solutions that are Sustainable

While drilling a well can be easy, delivering water and sanitation solutions that are sustainable in the long haul is not and involves a number of important components. Read below to learn about our program philosophy, which has been refined based on field experience gained over the past twenty years.

• Local Partners
• Community Ownership
• Appropriate Technology
• Addressing Sanitation and Hygiene
• Measuring and Monitoring Success
• The WaterCredit Initiative

Local Partners

We believe people in developing countries know best how to solve their own problems. That's why we forge partnerships with carefully-screened, indigenous partner organizations that understand, and are part of, the local culture. The result: a solution tailored to the needs of each community, instead of a technological fix the community has no way of maintaining. More benefits:

• Locally-based partners are better positioned to understand and navigate social, political, and economic issues impacting projects.
• Locally-based partners have more savvy at leveraging local financial resources for cost-sharing in projects.
• Local expertise exists to implement projects.
• Working through local partners is more cost effective than maintaining expatriate staff.
• Because Water.org is not tied to any single partner organization, we constantly search for and fund the organizations producing the highest quality projects.

Selecting partner organizations

Water.org's rigorous process for screening and certifying top quality partner organizations has been developed and refined over the past two decades. Primary elements include: (1) a preliminary screening; (2) field visits and evaluations of completed and in-progress projects; (3) interviews with the field staff of potential partner organizations, community leaders, and beneficiary households of water and sanitation projects; and (4) surveys including questionnaires completed by staff at the potential partner organization as well as by community members served through past and present projects. Water.org requires that the beneficiary communities are at the center of the project planning process and invested as stakeholders. Women in the community must play a significant role in the projects. Lastly, all projects undertaken with the community must be structured to complement existing programs and integrated into and coordinated with all political and social structures.

Community Ownership

Community ownership is at the heart of Water.org’s philosophy. Regardless of whether the project is funded entirely by a grant or involves WaterCredit (small loans for water and sanitation), community ownership is at the center. For a project to be truly successful, communities must be viewed and must view themselves as the owners of the project.

Communities with a water or sanitation need contact our in-country partner organization. Our partner organization evaluates the communities and makes recommendations on water and sanitation projects.

One of the first project activities is for the community to elect a local water committee. Because women disproportionately bear the burden of collecting water, it’s essential that the committee include female members. The water committees play a critical role in the project’s success. 

BILLIONS DAILY AFFECTED BY WATER CRISIS II

Without water, life would not exist. It is a prerequisite for all human and economic development.

Yet today, 780 million people – about one in nine – lack access to clean water. More than twice that many, 2.5 billion people, don’t have access to a toilet.

There has been significant public attention paid to the issue of water scarcity, and for good reason. Although water is a renewable resource, it is also a finite one. Only 2.53 percent of earth’s water is fresh, and some two-thirds of that is locked up in glaciers and permanent snow cover. But despite the very real danger of future global water shortages, for the vast majority of the nearly one billion people without safe drinking water, today’s water crisis is not an issue of scarcity, but of access.

In most developed nations, we take access to safe water for granted. But this wasn’t always the case. A little more than 100 years ago, New York, London and Paris were centers of infectious disease. Child death rates were as high then as they are now in much of Sub-Saharan Africa. It was sweeping reforms in water and sanitation that enabled human progress to leap forward. It should come as no surprise that in 2007, a poll by the British Medical Journal found that clean water and sanitation comprised the most important medical advancement since 1840.

The health and economic impacts of today’s global water crisis are staggering.

• More than 3.4 million people die each year from water, sanitation, and hygiene-related causes. Nearly all deaths, 99 percent, occur in the developing world.1
• 2.5 billion people lack access to improved sanitation; 1.1 billion still practice open defecation.2
• Lack of access to clean water and sanitation kills children at a rate equivalent of a jumbo jet crashing every four hours.3
• 443 million school days are lost each year due to water-related illness.4
• Women and children bear the primary responsibility for water collection in the majority of households. This is time not spent working at an income-generating job, caring for family members, or attending school.5

References

1. World Health Organization (WHO). (2008). Safer Water, Better Health: Costs, benefits, and sustainability of interventions to protect and promote health; Updated Table 1: WSH deaths by region, 2004.
2. Estimated with data from WHO/UNICEF Joint Monitoring Programme (JMP) for Water Supply and Sanitation. (2012). Progress on Sanitation and Drinking-Water, 2012 Update.
3. WHO/UNICEF Joint Monitoring Programme (JMP) for Water Supply and Sanitation. (2010). Progress on Sanitation and Drinking-Water, 2010 Update.
4. Estimated with data from Diarhhoea: Why children are still dying and what can be done. UNICEF, WHO 2009
5. United Nations Development Programme (UNDP). (2006). Human Development Report 2006, Beyond Scarcity: Power, poverty and the global water crisis

 

BILLIONS DAILY AFFECTED BY WATER CRISIS UNDP

Every 21 seconds, a child dies from a water-related illness



Women spend 200 million hours a day collecting water



More than 2.5x more people lack water than live in the United States


The majority of illness is caused by fecal matter



More people have a mobile than a toilet


Lack of community involvement causes 50% of other projects to fail

TechCrunch: How Could Snapchat Make Money? College Kids

Over 77 percent of college students are using Snapchat at least once every single day, according to research by Sumpto.

And even more stunning, 45 percent of college kids aged 18-24 would open a snap from a brand they didn’t know, while 73 percent of students would open a snap from a brand they already know. Though Snapchat hasn’t yet determined a revenue model, data like this suggests that native advertising is a pretty viable route.

Snapchat could let brands send their own animated (or taped) videos to the entire Snapchat user base, or even targeted demographics based on location, age, and other factors. Snapchat’s own Terms of Service explain that it has access to more than enough of personal data (like name, phone number, email, location, device info, and age) to start pin-pointing users for brands, and the ToS even provides for Snapchat to use this data for “advertisements.”

The Sumpto data also mentioned that 69 percent of college students are willing to add a brand on Snapchat if they already follow that brand on another social channel like Twitter or Facebook. Sixty-seven percent of respondents were interested in receiving discounts or promotions through the service, while 58 percent said they would be likely to purchase products or services using a Snapchat coupon.

And all that without any connection whatsoever to Facebook or Facebook Connect.

We’ve already seen brands succeed on Snapchat without any infrastructure from the app itself. DoSomething’s recent Valentines Day campaign saw an 11 percent response to the call to action put within a Snapchat Story.

Unfortunately, Snapchat’s new Story feature doesn’t seem to be picking up steam with the coveted 18-24 demographic. The majority of students (60 percent) report using Snapchat Stories less than 10 percent of the time they’re in the app.

Sumpto, the data provider, has a network of over 50,000 college students that respond to surveys in exchange for rewards. This report comes from more than 1,650 students from over 200 different colleges, who responded to survey.

Snapchat is one of the hottest apps on the market right now, with $123 million in funding and over 400 million snaps sent daily. The company was even said to reject a $3 billion acquisition offer from Facebook.

But for all that hype, we know shockingly little about the actual data behind the company. Many believed that the app was all about sexting, presuming that the only reason for self-destructing photos is to hide something naughty from parents. Turns out, Snapchat hasn’t really affected the sexting lives of college students, according to the report.

Before Snapchat, around 83 percent of college students said that less than 10 percent of all messages they sent (across any platform) was a sext. After downloading Snapchat, 81 percent of students said that less than 10 percent of all their messages are sexts.

Sexting aside, the real story here is how Snapchat will monetize what seems to be an excited and active user base. Cofounder Evan Spiegel said in June that in-app purchases would be the company’s first step into monetization. But the company is obviously teasing other options.

When Stories launched, Snapchat experimented with a “Click To Buy” button below Stories from musical artists, which sent the user straight to that artist’s iTunes page.

Source: TechCrunch

Women Outnumber Men For The First Time In Berkeley’s Intro To Computer Science Course

For the first time in its history, Berkeley saw an introductory computer science course with predominantly female students – 106 women vs. 104 men. This slight turnaround signals a promising trend in the male-dominated STEM world.

To be sure, Berkeley is an exception: according to the National Science Foundation, just 18.4% of computer science degrees were given to women (as of 2010), a trend that has been steadily decreasing since 1991, when it was a more impressive 29.6%.

In an email, Professor Dan Garcia, who taught the Berkeley course last spring, tells us that he attributes the gender flip to a drastic transformation in the curriculum, including team-based project learning, opened-sourced materials, and opportunities to become teaching assistants. “The course & curriculum really does capture the “Beauty and Joy” of computing; learning can be a lot of fun,” he writes.

There is still a long way to go. Worldwide trends in the gender balance aren’t any better than the U.S. Recent data from UK universities, shows that while women do earn a majority of the degrees (60% vs. 40%), they vastly underperform their male counterparts in computer science (82% vs. 17%).

The gap has its origins going back at least as early as high school. Statistics, biology, and calculus courses all have roughly equal gender balance, but in computer science, the pie chart skews heavily male. (chart by Exploring Computer Science, with data from the College Board).

Garcia says there are still barriers to keeping women interested throughout their entire tenure, such as “the lack of female role models in our industry, in our faculty, and in the graduate student population.” Even if they go on to advanced courses, there’s no guarantee they’ll get a job in the cut-throat tech industry.

Indeed, last fall, men slightly outnumbered women (53% men), but the spring enrollment is up again (50.6% women).

As one of the important feeder schools to Silicon Valley’s top companies, Berkeley is not a passive player. If it can succeed in dramatically increasing female enrollment, it could set a chain reaction that breaks down norms for future generations to come.

Source: TechCrunch

Facebook Investor,Silicon Valley libertarian Peter Thiel thinks that too many Americans have mistakenly blamed technology for rising inequality.

Early Facebook investor and noted Silicon Valley libertarian Peter Thiel thinks that too many Americans have mistakenly blamed technology for rising inequality. “Technology is an easy scapegoat,” he argued, in a big-think discussion put on by political lobby, FWD.us.

In a wide-ranging discussion with MIT professor Andrew McAfee, the two duked it out about technology’s role in social ills. “I think technology has helped,” Thiel said. “You have things like Facebook, like Google–technology has helped to offset some of the brutal effects of globalization”.

While globalization has flooded the low-skilled job market with ultra-cheap outsourced labor, technology has relieved the beleaguered middle-class with services in health, education and leisure that were once the exclusive domain of the wealthy, Thiel asserts.

Indeed, he partly blamed the failure to recognize the contributions of technology on an American mindset that is “anti-technology.” For instance, he notes, there was no financial industry-like bailout of Silicon Valley during the first dot-com bubble. He also notes that the nation’s general animosity toward tech can also be seen in the movie industry, which inundates the masses with tech super villains from “The Matrix,” “Avatar,” and” The Terminator” in a period of high tech hostility (compared to more tech-friendly movies, such as “Star Trek” in the ’60s and “Back To the Future” in the 80s, which is when he thinks the U.S. was less anti-tech).

As a self-avowed libertarian, Thiel wasn’t thrilled about the government bail-out of the financial industry. But he shocked the crowed when he openly supported more taxes in exchange for less regulation.

“I wouldn’t mind paying more in taxes if I could do anything I wanted to do with the rest of the money, which I’m largely restricted in what I can do, from the FDA on down to the San Francisco zoning department.”

San Francisco has an infamously restrictive policy on new housing developments, which has contributed to sky-high rents and evictions. Thiel’s comments were a transparent nod to the protests in front of Google’s private commuter buses, which have become a convenient symbol of the wealthy high-tech workers who have the free cash to cause upward demand pressure on San Francisco rents.

In other words, while protestors blame technology, Thiel hints at other causes — namely government.

For McAfee’s role in the discussion, he towed the traditional economist line on technology and financial disparity. “The observed rise in inequality across both developed and developing countries over the past two decades is largely attributable to the impact of technological change,” wrote a team of economists for International Monetary Fund–a sentiment widely shared in the academic community.

According to the economists, as technology automates jobs, it concentrates labor in a small slice of high-skilled workers.

Thiel rebutted this line of evidence by arguing that computers are complementary to people: they augment workers; they don’t replace them. “LinkedIn does not replace job recruiters,” he said.

Though he does admit that once computers begin to replicate humans (i.e. robots), he begins to get “scared” for the future job market.

Overall, it was a very thoughtful discussion; it was nice to see politically powerful techies lay out their contentious views on inequality for the public.

Source: TechCrunch

Wall Street holds near record high, yuan weaker

The repatriation of investors' cash into developed markets was underscored on Tuesday as Wall Street opened at an all-time high after China's yuan suffered its worst day in over three years.

Wall Street  started steadily after Monday's record high as confidence in the United States and Europe helped cool markets after the yuan's plunge and a sharp drop in Beijing and a number of other emerging market bourses .

Uncertainty over China is stoking worries about a faster-than-projected slowdown in its massive economy and is dovetailing with political worries in other big emerging markets like Ukraine, Thailand, Nigeria and Turkey.

The U.S. Federal Reserve has also started to scale back its huge stimulus.

It's a potent mix that has seen a hefty $38 billion pulled out of emerging markets over the last 17 weeks and $44.2 billion stuffed into developed market equity funds since the start of the year. 

The moves have been reinforced by Wall Street's recent run and Ramin Nakisa, a global macro strategist at UBS, said the contrast with sliding emerging markets underscored their limited appeal in the current difficult environment.

"We think there will be further flows into the U.S. as the Fed cuts back on its stimulus," he said. "If you could earn 3-3.5 percent on U.S. Treasuries for example would you risk money in volatile emerging market debt for a small premium."

The yuan has entered a dramatic weakening cycle in recent weeks, guided by a series of moves by the central bank aimed at instilling caution into those who for years have been betting on its rise versus other major currencies.

Tuesday saw a significant acceleration in the move. The yuan's sharpest drop since November 2010 extended its fall in the past week to just over 1 percent, amid talk the People's Bank of China (PBOC) had been discreetly intervening in the spot market.

China allows the yuan to move 1 percent above or below a midpoint set daily but experts believe the recent depreciation is intended to set the stage for a widening of that band to 2 percent or more this year to make it more free moving.

MSCI's all world index , which tracks stocks in 45 countries, was in positive territory for the 13th session in 15 as it sat at a six-year high.

In Europe, the urge to take profits after seven straight sessions of gains was strong and the pan-regional FTSEurofirst 300  sagged 0.4 percent, led by a 1 percent drop from London's FTSE  due to its prevalence of China-influenced mining firms .

The euro and benchmark German government bonds kept to tight recent ranges and there was little impact from new European Commission forecasts which slightly increased its growth estimate for the euro zone to 1.2 percent in 2014, with a further 1.8 percent expansion next year.

Inflation was seen at 1 percent this year and 1.3 percent in 2015, still well short of the European Central Bank's target of just below 2 percent. The ECB meets early next month and will be armed with its own in-house forecasts.

Goldman Sachs pushed back on Tuesday its prediction of a rate cut until April, although it didn't rule out a move by the ECB to keep money market liquidity topped up by ending its weekly 'sterilisation' of past government bond purchases.

Away from China, Japan's Nikkei  bolted ahead by 1.4 percent to breach the 15,000 barrier, which in turn gave the dollar a slight lift on the yen, although it later sagged.

It had followed in the footsteps of Wall Street, where the benchmark S&P 500 hit an intra-day record on Monday as the Nasdaq punched to peaks last seen almost 14 years ago.

Another data deluge is due, including confidence readings, housing market surveys and retail sales figures , while stocks are likely to remain on alert after Monday's fresh flurry of merger and acquisition activity.

U.S. Treasuries prices, which provide the benchmark for global borrowing costs, were steady after a dip overnight, with yields on the benchmark 10-year noteholding just below 2.74 percent in early U.S. trade.
Source: Reuters

EU watchdog says will take care in fragile bond market

The European Union's securities watchdog said it will tread carefully in regulating government and corporate bonds to avoid crimping liquidity in already fragile markets that are key to funding economic growth.

Verena Ross, executive director of the European Securities and Markets Authority (ESMA), said changes to market practices were inevitable under new EU rules in 2016.

Many bonds are traded privately but under the rules, known as MiFID II, traders would have to post prices to the wider market - a step critics say will force some banks to only trade the most popular bonds as it would be harder to make a market in less liquid ones.

Ross said ESMA was, however, mindful of the need not to damage liquidity which it acknowledges is already under pressure.

Issuance of sovereign bonds in Europe in the second half of last year fell to 429 billion euros, its lowest level since the height of the financial crisis in 2008.

"It is clear that liquidity in bond markets is still pretty fragile and that ESMA's regulatory framework may have a role in order to safeguard the functioning of this market," Ross told a conference organised by the Association for Financial Markets in Europe (AFME), a banking lobby, on Tuesday.

ESMA will face political as well as industry pressure to go easy on corporate bonds as politicians look for ways to boost trading in a bid to reduce companies' reliance on banks for funding. [ID:nL5N0LH4HV]

Poor liquidity in corporate bonds is already prompting policymakers to look at alternative ways of funding companies, such as by reviving securitisation or pooling of loans into bonds.

Ross said market practices and possibly their structures will change as a result of the new transparency requirements aimed at giving investors more information and allowing regulators to see what is going on in the market.

"I know some of you are concerned about this but things cannot stay as they are today," she said.

ESMA's first task will be to define liquidity so that it can then determine which bonds are subject to the transparency rules, but so far no single definition has emerged. Bonds deemed illiquid would get waivers or be exempt from some rules.

Ross sought to reassure bond traders in the audience that current tough transparency rules for shares would not be

"mechanistically" applied to bonds.

Rick Watson, AFME's head of capital markets, said Ross' speech made it clear the watchdog recognises the important differences between equity and bond markets and that it plans to calibrate liquidity based on fixed income specific data.

ESMA also recognised that fixed income markets will "require a flexible and dynamic approach to calibration and waivers thresholds", Watson said.

The watchdog will monitor the liquidity of bonds regularly once the new rules are in force, meaning that if a bond becomes less liquid over time as many do, they could be exempt later on from the toughest transparency rules.

Source: reuters

Euro zone inflation could stay low to 2016 -Nowotny

 Inflation in the euro zone could stay well below the European Central Bank's target until 2016, ECB policymaker Ewald Nowotny told an Austrian newspaper.

Reiterating that he saw no prospects of deflation in the euro zone, Nowotny told the Wirtschaftsblatt: "Overall we see ourselves confronted with inflation levels clearly under 2 percent for the euro zone perhaps until 2016.

"That is below the ECB price target of 2 percent, so we are in a low price environment but certainly not in deflation," he added in the interview, which the paper released on Tuesday ahead of publication on Wednesday.

Nowotny said some countries, especially in the south, were seeing falling price levels but "I would tend to see this as part of a necessary adjustment process".

JP Morgan analyst Malcolm Barr, in a research note, said he viewed the adjustment argument as the ECB rationalising its policy inaction rather than as a persuasive argument.

Barr added that there appeared to be an "absence of a policy tool the ECB is comfortable with deploying in order to keep the inflation path up to the objective."

The ECB holds its next policy meeting on March 6, when the Governing Council will have at its disposal new forecasts from the bank's staff that will stretch into 2016 for the first time.

Nowotny was speaking as the European Commission forecast euro zone inflation of just 1.0 percent this year and 1.3 percent in 2015. 

Asked what steps the ECB could embrace to avoid deflation and if negative rates were possible, he said:

"The ECB meeting at which we will discuss such measures takes place next week. I think one must be realistic about what individual measures can affect. For psychological reasons I am sceptical about negative interest rates."

He noted that banks that place short-term deposits at the ECB already get zero interest. "They would not change their behaviour even with a negative interest rate, which cannot be very high, perhaps 10 basis points. The negative interest rate would thus be a kind of insurance premium."

One possibility to promote lending would be to accept asset-backed securities as collateral, he said.

Nowotny, who is also head of the Austrian central bank, declined to speculate on whether Austrian banks would need to raise more capital as a result of reviews of their balance sheets, which he called "a strict and demanding process."

Source: Reuters

Italy and France to lag Germany in euro zone recovery

Germany is set to accelerate away from France and Italy in 2014 as the fragmented euro zone economy gradually recovers from its worst crisis, the European Commission said on Tuesday.

In a departure from the gloom of recent years, Brussels slightly increased its growth prediction for the bloc's 9-trillion-euro economy to 1.2 percent in 2014 from an earlier 1.1 percent.

It was powered chiefly by an expected 1.8 percent jump in the euro zone's biggest economy Germany.

The statistics also made clear the scale of the challenge facing Italy and its new prime minister, Matteo Renzi, in turning around the bloc's third-largest economy. The Commission predicts meagre growth of 0.6 percent this year.

No.2 economy France is expected to grow 1 percent in 2014.

For the bloc as a whole in 2015, the commission raised its forecast slightly to 1.8 percent.

"Recovery is gaining ground," said Olli Rehn, the EU commissioner in charge of economic policy. "The worst of the crisis may now be behind us," he said, cautioning, however, that the recovery was "still modest".

The improving growth outlook will relieve the European Central Bank, but policymakers there will also have to grapple with forecasts showing persistently low inflation and no significant drop in the region's record unemployment rate.

Meanwhile, the economic output figures outline how Europe still lags the United States. The U.S. economy is expected to grow by around 3 percent in 2014, buoyed by a massive money printing programme that the ECB has been unable to emulate.

The figures draw a clear dividing line in the euro zone between southern countries such as Greece, struggling economically and arguing for more freedom to spend, and Germany, buoyed by strong exports and determined to enforce thrift.

Paul De Grauwe, an economist with the London School of Economics, blamed Germany for hampering the ECB and said the time had come for the central bank to act following its creation of a special emergency programme to buy state bonds through outright monetary transactions, known as OMT.

"They need to take some risks," he said. "The ECB has been bold once when they announced OMT but since that it has done nothing.

"The Germans are afraid of their own shadow. The U.S. has been willing to go further in stimulating the economy. As a result, growth has accelerated," he said.

ECB President Mario Draghi has less freedom, however. Under its statutes, the bank is banned from buying bonds directly from governments, although it can find ways to buy them from banks, for example, on the open market or accept them as security in return for finance.

Some in the market expect the ECB's next move could be to offer a further round of cheap, long-term loans to banks.

Complicating the picture further for the ECB, the Commission sees consumer price inflation at well below the central bank's target of just below 2 percent. Inflation is likely to be 1 percent in 2014 and 1.3 percent next year.

Whatever the modest improvement in economic outlook, unemployment will barely budge from record highs of 12 percent in 2015, according to the EU executive.

Here again, there is a stark contrast between Germany, with unemployment of just over 5 percent, and Spain, where one in four is unemployed.

"We know how difficult the situation remains in many member states, especially with unemployment and youth unemployment so high," European Commission President Jose Manuel Barroso told the European Parliament.

The problem of modest economic growth and high unemployment is compounded by the debts of Europe's top economies.

While Berlin will not spend more than it taxes, reaching a balanced budget this year and next, Madrid will see its budget deficit rise in 2015 to 6.5 percent of economic output, unless it deepens some of the toughest spending cuts in a generation.

That raises doubts about Prime Minister Mariano Rajoy's promises to cut income taxes as of next year, when a general election will be held. Spain is far from meeting the EU ceiling on deficits of 3 percent.

In the Commission's outlook, France too will miss a goal to reduce its deficit below 3 percent despite being given two extra years to meet this target. The Commission predicted a shortfall of 4.0 percent this year and 3.9 percent in 2015.

President Francois Hollande's government is hoping that the recovery will help it cut the public deficit, although the national audit office has said this is optimistic.

Economists doubt the wisdom of restricting spending at a time of weak growth. "There has been this narrative in Germany that in times of crisis you need to spend less," said De Grauwe.
"But we should not be spending less."

Source: Reuters

WSJ: Copper Futures Cut Losses as U.S. Stocks Soar

        The Wall Street Journal reports, "Copper futures pared earlier losses Monday as stronger U.S. equities partially offset worries about lower metal demand from China following rapid declines in the yuan.

The most actively traded contract, for March delivery, fell two cents, or 0.6%, to settle at $3.2400 a pound on the Comex division of the New York Mercantile Exchange.

The S&P 500 stock index rose to fresh all-time highs on Monday, giving copper futures a helping hand. The index rose as high as 1858.71, and if it closes above 1848.48, it would mark the 47th record high over the past 12 months. Copper and U.S. equities tend to move in the same direction as both assets are sensitive to shifts in economic outlook".

"A strong stock market generally speaks of better demand for commodities, and lends a bit of support to copper," said Frank Lesh, a broker and futures analyst with FuturePath Trading.

Mr. Lesh said that some traders likely took the opportunity to buy copper at the cheapest level in over a week after futures fell to $3.2260.

"There was likely some bargain hunting today," he said.

A gauge of German business confidence rose in February, pointing to cautious optimism in Europe's largest economy. The Ifo Institute's business confidence index climbed to 111.3 from an unrevised 110.6 in January, hitting its highest level since July 2011.

That data, along with a Federal Reserve Bank of Dallas report showing manufacturing activity in the Texas area held steady in February, offered some reprieve to copper's losses. Prices had traded at an intraday low of $3.2260, the lowest level since Feb. 13.

The U.S. is second behind top copper consumer China in global demand, but cedes that spot to Europe when the latter is considered as a region.

Still, many copper traders remained focused on China, after the yuan hit a four-month low against the dollar. China accounts for about 40% of the world's copper consumption, and a weaker domestic currency could curb factories' ability to buy the raw material, which is traded in dollars.

"There's a lot of fear about a slowdown in China," Mr. Lesh said.