Thursday, August 30, 2012
After 18 wonderful years with The Economic Times, it is painful for me to write this note, saying I have got to go. In the process, I would also like to believe that I’m at the finishing line of the formal, full-time career that I so enjoyed over nearly three decades, a majority of that with ET.
Two reasons influence the decision to hit the pause button: That I’ve turned 50 recently – a milestone I had kept in mind at which to stop – and the need to be by my father’s side as he negotiates the nineties. Thus far, at 94, he’s been doing it nimbly!
I hope a few snatches from a little memoir I’m preparing on my career are enough to explain the absolute pleasure I derived through these years. So, here goes:
What fun, what joy, what diverse experiences and what satisfaction right through, and how it all went by in a flash! Geography and topography ensured that there would be wonderful diversity even in the commute to work: By boat to the
Fort Cochin office, by suburban electric train in Bombay, by foot in , driving a car to the Thiruvananthapuram office, and in the rickety comfort of the auto-rickshaw in Chennai. Coimbatore
Each day brought its share of wonderful, colourful and intelligent people to interact with. What joy having a chat about his emirate with the king of Ras al Khaimah, Shaikh Saud bin Saqr Al Qasimi in his palace, or hearing Thevan Raja Mannan, one of only two tribal kings in India, describe social changes among his Kani tribe. How interesting, listening to Jeffrey Sachs explain the importance of linking food subsidies to school education, getting Noam Chomsky’s version of the Middle East peace process, hear Richard Stallman describe the role he saw for free software, or listen to US secretary of state Hillary Clinton analyse the latest geopolitics.
I would love to go on with these thoughts but I can hear a voice advising me against it: The voice of the young sub editor of 1984 who had the beauty of brevity drilled into him, saying that there is a time for everything. And this is the time to leave.
Word-play comes naturally to journalists, so do excuse me when I say I’ll be moving from fourth estate to rubber estate, as I join my father in managing our little rubber plantation at Koovappally, near Kanjirapally in Kottayam district. Should you be passing by, do drop in because I hope to have all the time in the world to not only stop and smell the roses, but also indulge in easy conversation. We could pick a spot under a lemon tree or a nutmeg tree to sit and chat, if not under the rubber trees. I can assure you I haven’t come across anyone for whom I’d put a chair under a coconut palm.
As I say goodbye to a full-time career, I feel like a school final year boy who cannot sit in class the next year, regardless of the exam result. But just as each day in school was savoured, I enjoyed every day at work. Thank you for making it so memorable.
God bless you
Joe A Scaria
Senior Assistant Editor
The Economic Times
Chennai, July 31, 2012
(Today, August 30, 2012 is my last day in office.)
Since I have your attention, may I add the first thing on my plate for the immediate future: A 20-page ‘resignation book’ that I’ve written is almost ready for publication. It chronicles my 28-year career, and how India and the world changed during the time. Request your support for the book, which is priced at Rs 100, and can be read through in a flash. Thanks.
Apple rot starts with Samsung lawsuit win; Iron ore as the newest, biggest bubble; India's 'arranged' marriages; An India banker speaks his mind
1 Apple rot starts with Samsung lawsuit win (Michael Wolff in The Guardian) Apple came close to destroying its business in the late 1980s by pursuing a suit against Microsoft claiming that Windows infringed the look and feel of the Mac desktop metaphor. Apple focused its hopes and business future on this lawsuit, while its market share dwindled. Rather than competing, it litigated. And lost. Last week, it litigated against Samsung over its iPhone design and won.
The first justifiable conclusion might be that big companies get their way. The second might reasonably be that Apple doesn't change much: its business model remains aggressive self-righteousness. The third is what everybody knows: patent rules and philosophy are all screwed up.
The Apple that has won against Samsung is the same Apple that lost against Microsoft. In other words, it is the kind of company that, through sheer willfulness, discipline, and perfectionism, can achieve brand hegemony of a singular type. But it is, too, the kind of company that becomes, perhaps inevitably becomes, the bete noire of consumerists, regulators and, of course, most of all, its competitors. This is the story between the lines of its great victory and its further share price surge. On the one hand, there is this seemingly golden company. On the other hand, there is anybody with any sense of history knowing this is going to end badly.
Companies that acquire the nation's imprimatur often, if not invariably, over-reach. It is a characteristic of American capitalism: the price of getting really big and overbearing is that you incur an inverse reaction. In the early 1990s, an ambitious department of justice commenced its assault on Microsoft. For better or worse, by the time the feds were finished, the company, with its rotten operating system, besieged and beleaguered, had become just one of many not-very-adept players in the space. Apple, and its rotten phone, have a ways to go. But karma should not be underestimated as a factor in this game.
2 Iron ore as the newest, biggest bubble (The Guardian) Marc Faber, the Swiss investor and ultra bear, says there have been four mega bubbles in the past 40 years. In the 1970s it was gold; in the 1980s it was the Nikkei, and in the 1990s it was the Nasdaq. Bigger than all of them, though, has been the iron ore bubble, a tenfold increase in prices in less than a decade.
Iron ore is the raw material for steel, production of which has rocketed as a result of
's economic boom. Consider the following facts. In the past 15 years, China China has built 90 million new homes – enough to house the populations of the UK, France and combined. A quarter of global steel demand is for Chinese property and Chinese infrastructure. Germany
3 Outcry in
over vaginal cream (The Guardian) What do you think of when you hear the words "female empowerment"? Equal pay, the pill, the vote… Or, according to Indian pharmaceutical company, Ultratech, a tighter vagina. An advert for the dubiously named 18 Again, a "vaginal tightening and rejuvenation cream", has caused an outcry in India . The video is ridiculous, but it has prompted serious debate. While it is not the first cream of its kind it does demonstrate conflicting forces in modern Indian society. Attitudes to sexuality are beginning to relax, particularly in big cities – but conservative morality remains powerful. India
For the vast majority of people in
, premarital sex is taboo. A survey in India showed the average age at which Indians lose their virginity dropping from 23 in 2006 to 19.8 in 2011. Behaviour, then, is changing, particularly in urban areas. But whatever people are doing behind closed doors, social attitudes are slower to catch up. While India is fast becoming the next superpower, this rapid economic growth is not matched by a corresponding sexual revolution. India
's enormous size and range in terms of development and attitudes makes it difficult to generalise, shame culture remains powerful and pervasive. The obsession with virginity – a manifestation of the desire to control the female body – is a symptom of this. India
4 India's 'arranged' marriages (Dawn) An overwhelming majority of Indians prefer marriages arranged by family members instead of “love matches”, a survey showed, despite rapid social change in the country over recent decades. A total of 74% of respondents from across
voted in favour of traditional “arranged” marriages, according to the poll by private television channel NDTV. India
India often choose husbands or wives for their children, although the trend for “love marriages” has grown during ’s economic transformation. The survey also found 89% of Indians preferred living in an extended family set-up rather than a “nuclear” family comprising only parents and children. India
banker speaks his mind (The Wall Street Journal) It’s not often that cash reserve ratios make news. But they did this week in India , when a central bank official told a commercial banker to take a hike for suggesting the country should scrap the ratio. Central banks around the world ask lenders to keep a small percentage, or ratio, of their cash deposits with them. It’s a measure aimed at giving the central bank a war-chest to manage liquidity in the banking system and hopefully avoid instability. India
Pratip Chaudhuri, chairman of the State Bank of
India, a state-run commercial bank, complained last week he felt the ratio in should be phased out as it helped no one and was draining scarce capital out of the financial system. That led to an angry retort by KC Chakrabarty, a deputy governor of the Reserve Bank of India , the central bank, who said Mr. Chaudhuri should find “some other place” to do business, presumably not at a state-run bank. The question is whether Mr. Chaudhuri had a point. India
“There are both plus and minuses to having a cash reserve ratio. But it can’t be totally abolished, though in the current times, offering some interest on these funds will help banks,” an economist said.
Wednesday, August 29, 2012
US middle class shrinks as incomes fall; I made the robot do it; The clock ticks for men, too; Hindi films have given up on us; More Chinese opt for home schooling
1US middle class shrinks as incomes fall (San Francisco Chronicle) All those things our two political parties swear they'll do for the middle class? They'd better hurry up because the middle class is fast approaching the endangered species list. Not only has the middle class "endured a lost decade for economic well-being," it has shrunk significantly, from 61% of the adult population in 1971 to 51% in 2011, and continues to "fall backward in income and wealth, and shed some - by no means all - of its characteristic faith in the future."
This according to a
survey of self-described middle-class adults in July, and data from the US Census Bureau and the Federal Reserve. Median wealth for the middle class - assets minus debts - has taken a particularly heavy hit in the past decade, falling by 28% from $130,000 to $93,000, while median income for a family of four fell 5%, to $68,000. According to those describing themselves as middle class, a household income of $70,000 is about what it takes to enjoy that way of life. Pew Research Center
And, yes, the better off got better off, though not by much (to $575,000 in median wealth, up from $570,000), while the poor got a lot poorer: a 45% plunge in median wealth from $18,000 to $10,000.
2 I made the robot do it (Thomas L Friedman in The New York Times) While visiting the design workshop of Rethink Robotics, near
’s airport, I did something I’ve never done before: I programmed a robot to perform the simple task of moving widgets from one place to another. And therein lie the seeds of a potential revolution. Rethink’s goal is simple: that its cheap, easy-to-use, safe robot will be to industrial robots what the personal computer was to the mainframe computer, or the iPhone was to the traditional phone. That is, it will bring robots to the small business and even home and enable people to write apps for them the way they do with PCs and iPhones — thus speeding innovation and enabling more manufacturing in Boston . America
The Rethink robot will be unveiled in weeks. Actually, the robots will eliminate jobs, just as the PC did, but they be will lower-skilled ones. And the robots will also create new jobs or enlarge existing ones, but they will be jobs that require more skills. I watched a Rethink robot being tested at the Nypro plastics factory in
A single worker was operating a big molding machine that occasionally spewed out too many widgets, which forced the system to overload. The robot was brought in to handle overflow, while the same single worker still operated the machine. Clinton, Mass.
This is the march of progress. It eliminates bad jobs, empowers good jobs, but always demands more skill and creativity and always enables fewer people to do more things. We went through the same megashift when our agricultural economy was replaced by the industrial economy in the late 19th and early 20th centuries. Therefore, what this election should be about is how we spawn thousands of Rethinks that create new industries, new jobs and productivity tools.
3 No crime, no punishment (The New York Times editorial) When the Justice Department recently closed its criminal investigation of Goldman Sachs, it became all but certain that no major American banks or their top executives would ever face criminal charges for their role in the financial crisis. Justice officials and even President Obama have defended the lack of prosecutions, saying that even though greed and other moral lapses were evident in the run-up to the crisis, the conduct was not necessarily illegal.
As far back as 2009, when the Justice Department lost a financial fraud case against a pair of hedge fund managers at Bear Stearns, it seems to have made an institutional determination that it could not win against big banks and top bankers. The result is a public perception that the big banks and their leaders will never have to answer fully for the crisis. After all these years, what is still needed are cases with convictions and settlements severe enough to deter future bad behavior. If institutions operating at the heart of the economy really cannot be held to account, the solution should be to break them up, not give them and their leaders a pass.
4 The clock ticks for men, too (The New York Times) On Wednesday, various news organizations reported findings of a study in the journal Nature. There was convincing evidence, the study concluded, that — in a fraction of cases — increased mutations found in the sperm of older men meant that they were more likely than their younger counterparts to father children with autism or schizophrenia.
Traditionally, the question of a man’s age has largely been absent from discussions of complications from pregnancy, while a woman’s age has been connected with an increased risk of Down syndrome, genetic disorders and even autism.
But if men start worrying about their biological clocks even 10% as much as women do, commentators seemed to suggest, that would signal a notable social shift — one that’s in line with a broader gender shift we’re seeing. Far more men are feeling anxious about worries (work-life balance, pressure to look attractive, even whether they’re good cooks) that used to weigh more heavily on women. We used to think the gender revolution meant that women would become more like men. Has it turned out the real shift is that men are becoming more like women?
5 Hindi films have given up on us (Gautam Chintamani in Dawn) Forget the quality of present day popular Hindi cinema. The real debate should be ‘is there any sense of morality left in our films?’ The moral code of our cinema, or the apparent lack of it, could be blamed on the successful filmmakers and their rather apathetic sense of attachment towards things around them and, maybe, even their viewers. But that would just be half the story. Looking at films, the characters, the successes and the super hits, one could give up on any hope that things would change but that’s not as tragic as the realisation that perhaps our films have given up on us.
Present day commercial Hindi cinema is all about being cool. The kids are cool and the dads are cooler, the villains might cease to be dispassionate but the heroes are more aloof than ever before. It’s not enough for a character to simply kill the other; today they have to mouth some inane profanity and then hear something worse before pulling the trigger or parking the fatal blow.
Sadly it seems like the failure of the smaller or different films has ensured that big, bad Bollywood extracts its pound of flesh on its viewers. The slow but sure exit of people like Shyam Benegal, Govind Nihalani, Saeed Mirza from the spotlight along with the new dictum of box-office-success-by-any-means-necessary has defined a new sense of hollow morality.
The acceptance of films like Gangs of Wasseypur (2012), Dabangg, Ghajini or Once Upon a Time in Mumbaai (2010), Rowdy Rathore is a result of this new thought process and we as audiences seem to be guilty of showering it with our blessings. If you thought that was bad enough try coping with the reality that perhaps it was we, the viewer, who might have killed Hindi cinema’s morality in the first place.
6 More Chinese opt for home schooling (Dawn)
China has made impressive progress in rolling out universal education across the country, with urban areas such as claiming a perfect school enrolment rate. The United Nations says Shanghai has a youth literacy rate of 99%. But many parents complain about the focus on rote learning and passing exams, which means that children spend long hours in class. China
Chinese children spend an average of 8.6 hours a day in school, with some spending 12 hours in the classroom, according to a 2007 survey conducted by
China’s Youth and . Lao Kaisheng, an education policy researcher at Children Research Center , said growing numbers of Chinese parents were demanding more of a say in how their children were educated. “There’s been a rapid rise in home schooling, especially in the past few years,” he said. “Parents who home school tend to have more strict requirements for their children’s education, and feel that schools won’t meet their children’s individual needs.” Beijing Normal University
7 Manmohan Singh and our 'descendants' (Rupa Subramanya in The Wall Street Journal) In the recent Oscar winning film, “The Descendants,” George Clooney plays a character who has to make a decision that will affect the lives of many others. Mr. Clooney’s character is the executive trustee of an old family trust that owns a huge swath of priceless beachfront property in
which is saddled with debts. He must figure out what to do to benefit all the other trustees who are the “descendants” of the original property owners referred to in the title. Hawaii
In real life, Manmohan Singh, playing his role as
’s prime minister, faces such difficult situations all the time. As prime minister, he heads a government which is charged with, among other things, managing the country’s natural resources for the best interests of its citizens. In a sense, every Indian citizen is a descendant whom Mr. Singh or anyone else who might be prime minister has to look out for. India
Spoiler alert: In the movie, Mr. Clooney’s character decides not to sell the land to a local property developer, in part because of a plot twist related to his comatose wife. But more importantly, from his point of view, because selling the land for a quick buck would imperil future generations, both his own family and the other residents of
If a recent report by India’s Comptroller and Auditor General is accurate, Mr. Singh’s government has done something very like what Mr. Clooney’s character decided not to do, which is to give away valuable coal deposits (which all Indians own collectively but the government manages for them) to a few private sector players at what the CAG asserts are bargain-basement prices. And the beneficiaries in this case weren’t sleazy real estate agents but include some of
’s biggest and most respected private sector companies. According to the report, the potential losses amount to a sum worth the equivalent of $34 billion. India
8 Zapiro cartoon in Johannesburg Times
Tuesday, August 28, 2012
Lessons from Apple, Facebook; India infra investment plunges; US arms sales at record $66bn; Men, who needs them?; Time up for wrist watches?
1 Lessons from Apple, Facebook (Francesco Guerrera in The Wall Street Journal) The gap between the values placed by investors on Apple and Facebook — around $621 billion and $42 billion, respectively — is large enough to fit the economy of South Africa. But the distance between the yin and the yang of the
stock market is more telling than that and offers three insights into investors' current thinking. US
First, pervasive uncertainty and ultra-low interest rates are prompting the market to look at the long term. By ascribing such a large value to Apple, investors are betting on the company being alive and well for a long time. This isn't just a gut reaction but a belief in Apple's continued ability to generate profits. Low rates help this process by effectively reducing the value of money invested today—think of the meager interest you get from your bank— and increasing the importance of future returns.
"What we are seeing with Apple's rise and Facebook fall is a long-term story," says Frank Partnoy, a professor of finance and law at the
, whose latest book, "Wait," extols the merits of thinking before acting. "People are looking at the two business models and saying: 'Apple is going to be around and Facebook might or might not be around.'" University of San Diego
The second message concerns the companies' management teams, which are both led by rookie chief executive officers. The difference between Tim Cook and Mark Zuckerberg however, is that the former is succeeding a legend while the latter has been hailed as a legend in the making. So far, the market has been unequivocal: Since Steve Jobs’ death, Apple's shares have risen 78%. Since Mr. Zuckerberg became CEO of a public company, Facebook's shares are down 49%.
The third issue is whether Apple's record value and Facebook's stock plunge should be seen as "sell" and "buy" signs, respectively. The price/earnings ratio: Apple is trading at less than 13 times next year's estimated earnings, while Facebook is at around 30 times. Despite its reputation for "irrational exuberance" and short-termism, the market appears remarkably cool and long-sighted in judging the prospects of two era-defining technology giants.
India infra investment plunges (The Wall Street Journal) The official word on ’s slowing infrastructure investment is out. While market-watchers focused their attention on the Reserve Bank of India ’s pledge to keep its eyes on inflation to guide its monetary policy on Friday, many missed another grim piece of news: the central bank’s data on investment in the infrastructure sector. The RBI said investment in new infrastructure projects fell 46% in the year through March, dropping from 3.9 trillion rupees ($70 billion) to 2.1 trillion rupees. India
The central bank added that planned investment in infrastructure projects for the year that began in April is down 52% from the previous year to 1 trillion rupees. Looking ahead, the RBI isn’t too cheery. It says the government’s target of achieving $1 trillion in investment in the infrastructure sector by 2017 seemed a “formidable” challenge.
Another piece of bad news for the sector comes from Credit Suisse, which said that infrastructure companies are piling up high levels of debt, which is making Indian banks more risk-prone. Credit Suisse said that the combined debt of the top 10 groups, focused on the infrastructure sector, grew over five times in last five years, to 5.39 trillion rupees from 993 billion rupees, at an average annual growth rate of 40%.
3 US arms sales at record $66bn (Dawn) Weapons sales by the US tripled in 2011 to a record high, pumped up by $33.4 billion in sales to Saudi Arabia, but the international arms market is not likely to continue growing, according to a comprehensive new congressional report. The
sold $66.3 billion of weapons overseas in 2011, accounting for nearly 78% of all global arms sales, which rose to $85.3 billion in 2011, the highest level seen since 2004. The previous United States record was set in 2008, when arms sales reached $38.2 billion, measured in 2011 dollars. US
“The extraordinary total value of
US weapons orders in 2011 distorts the current picture of the global arms trade market,” said the report by the non-partisan Congressional Research Service, calling $66.3 billion in arms sales “a clear outlier figure.” US France signed arms sales valued at $4.4 billion in 2011, up from $1.8 billion a year earlier, but , the world’s number two arms dealer, saw its sales nearly halved to $4.8 billion in 2011. The four major European suppliers — Russia France, the UK, Germany, and — saw their collective market share drop to 7.2% in 2011 from 12.2% a year earlier. Italy
4 German business confidence dips again (BBC) German business confidence has fallen for the fourth month in a row to a 29-month low, according to the closely-watched Ifo survey. The index compiled by the think tank fell to 102.3 in August from a downwardly revised 103.2 in July. The survey of 7,000 firms suggests businesses are increasingly nervous about
's ability to withstand the weak eurozone economy. Growth in Germany Europe's largest economy slowed between April and June to 0.3%.
5Arctic sea ice at record low (BBC) The Arctic has lost more sea ice this year than at any time since satellite records began in 1979, Nasa says. Scientists involved in the calculations say it is part of a fundamental change. What is more, sea ice normally reaches its low point in September so it is thought likely that this year's melt will continue to grow. Nasa says the extent of sea ice was 1.58m sq miles (410m sq km) compared with a previous low of 1.61m sq miles (4.17m sq km) on 18 September 2007. The thickness of the sea ice is also declining, so overall the ice volume has fallen far - although estimates vary about the actual figure.
6 Men, who needs them? (Greg Hampikian in The New York Times) Mammals are named after their defining characteristic, the glands capable of sustaining a life for years after birth — glands that are functional only in the female. And yet while the term “mammal” is based on an objective analysis of shared traits, the genus name for human beings, Homo, reflects an 18th-century masculine bias in science.
That bias, however, is becoming harder to sustain, as men become less relevant to both reproduction and parenting. Women aren’t just becoming men’s equals. It’s increasingly clear that “mankind” itself is a gross misnomer: an uninterrupted, intimate and essential maternal connection defines our species. With expanding reproductive choices, we can expect to see more women choose to reproduce without men entirely. Fortunately, the data for children raised by only females is encouraging. As the
Princeton sociologist Sara S. McLanahan has shown, poverty is what hurts children, not the number or gender of parents.
That’s good, since women are both necessary and sufficient for reproduction, and men are neither. From the production of the first cell (egg) to the development of the foetus and the birth and breast-feeding of the child, fathers can be absent. They can be at work, at home, in prison or at war, living or dead.
When I asked a female colleague if she thought that there was yet anything irreplaceable about men, she answered, “They’re entertaining.” Gentlemen, let’s hope that’s enough.
7 Big chem, big harm? (Nicholas D Kristof in The New York Times) New research is demonstrating that some common chemicals all around us may be even more harmful than previously thought. It seems that they may damage us in ways that are transmitted generation after generation, imperilling not only us but also our descendants.
Yet following the script of Big Tobacco a generation ago, Big Chem has, so far, blocked any serious regulation of these endocrine disruptors, so called because they play havoc with hormones in the body’s endocrine system. One of the most common and alarming is bisphenol-A, better known as BPA. The failure to regulate it means that it is unavoidable. BPA is found in everything from plastics to canned food to ATM receipts. More than 90% of Americans have it in their urine.
8 Time up for wrist watches? (Khaleej Times) Nearly a 100 years after watches became popular on wrists — including those of men — exciting new possibilities are being thought off by leading technology companies, who want to link that watch wirelessly to your handsets, tablets and other devices. Wristwatches, if you’ve noticed, are almost alien to teenagers who prefer tracking time on their mobiles or laptops. So is it time up for these devices and will they meet the same fate as cassettes and vinyl records? Not if it can be helped.
The race for the wrist is already on as tech giants including Apple and Sony, besides several start-ups are working out ways to wirelessly connect the ordinary wristwatch to their high-tech gadgets. California-based start-up Martian Watches has just launched wristwatches that not only tell you the time but enable you to read text messages from the mobile (kept in your pocket or handbag), answer calls while you are driving or lugging the shopping cart, or take your voice commands.
Monday, August 27, 2012
Big investors rethink social media; Nomura to cut jobs; The novel is in danger; For power-starved India, temporary generators
1 Big investors rethink social media (San Francisco Chronicle) The market pummeling of Facebook, Zynga and Groupon has forced some soul searching in
Silicon Valley. Venture capitalists and angel investors so hot on social media just months ago have largely turned their backs on the space, investors say. Even for the most promising social startups, they won't pay nearly as high a price to get into deals as they would have a year ago.
The renewed discipline includes avoiding riskier deals, paying less for the promising ones (particularly in the late stages) and holding off on IPOs until growth prospects are clear. After all, if the public markets have said one thing clearly, it's that they want to see a graph line that points up and to the right for the foreseeable future. Wall Street clobbered Facebook, Zynga and Groupon after it became clear that growth was already slowing, dramatically so in the latter two cases.
For the second quarter, Zynga posted a $22 million loss, a stunning turnaround from its $1.4 million profit a year earlier. Worse yet, it cut the financial forecast for the second half of the year roughly in half. The stock has plummeted nearly 70% from the IPO price. Earlier this month, Groupon dropped its third-quarter revenue expectations below those of analysts, sparking its own stock sell-off. Shares are off closer to 80% from the offering price.
2 Nomura to cut jobs (The Guardian) Nomura Holdings is finalising plans to cut hundreds of jobs, mainly in equities and investment banking, in an overhaul aimed at restoring its overseas operations to profitability, people with knowledge of the planning within Japan's largest brokerage said.
While the size and scope of the streamlining are still being debated, one analyst estimated Nomura could target $750m in annual cost savings, on top of a nearly completed $1.bn cost-cutting drive. The plan will be made public early next month, according to people with knowledge of the matter who declined to be identified ahead of an official announcement.
Nomura's European operation, which employs about 4,000 people and generated 76bn yen, or $970m, in losses over the past year as the region slipped into its ongoing debt crisis, will account for the largest portion of the cuts. But Asia outside
Japan and the will be impacted as well. Americas
3 The novel is in danger (The Guardian) The novel is in danger, according to Howard Jacobson, the Man Booker prize-winning author of The Finkler Question. The fault, he said, lies not with novelists but with the lack of good readers. Jacobson said he felt a sense of heartbreak when he heard readers say: “I don’t like this book because I don’t sympathise with the main character.”
He added: “The language of sympathy and identity and what we call political correctness is killing the way we read. That’s like the end of civilisation. That is the end. In that little sentence is a misunderstanding so profound about the nature of art, education and why we are reading, that it makes you despair. Who ever told anyone that they read a book in order to find themselves?”
Speaking at the
international book festival, Jacobson said the reader needed a strong stomach and ought to be able to withstand the “expression of an ugly point of view” in a book. There was great danger in the politically correct pressure that urged: “You can’t write about women like that, you’ve got to be careful what you say about gays, what you say about Jews … You have to be able to say of the novel that it has free rein — it can go anywhere.” Edinburgh
4 For power-starved
India, temporary generators (BBC) Scottish firm Aggreko is holding talks with Indian officials over the possible supply of temporary power in . The discussions follow a recent massive power failure which left much of the nation without electricity. Aggreko declined to comment on the discussions in Delhi . India
However, a source familiar with the situation said Indian officials were talking to several temporary power specialists in a bid to prevent further blackouts. "The power problems in
are monumental and Aggreko alone cannot resolve them," he said. Last month almost half of India was left without power for two days in what was described as one of the world's worst blackouts. More than 600 million people were affected by the power cut after three electricity grids collapsed, one for a second consecutive day. India
Sunday, August 26, 2012
1 Armstrong and the moon moment (The Guardian) Neil Armstrong, the first man to walk on the moon, has died aged 82. The former US astronaut passed away as the result of heart complications following surgery. As commander of the Apollo 11 mission, he became the first person to set foot on the moon, on 20 July 1969, fulfilling the longheld dream of the US to get there before the Soviet Union. His first words as he stepped on to the surface – "That's one small step for man, one giant leap for mankind" – instantly became one of the most recognisable phrases ever uttered.
It was a moment that still defines what many have come to call the American century. Amid all the turmoil and horror of that most bloody 100-year stretch, the sight of the first human being to walk on the moon, transmitted on television screens all over the world, was a sublime vision, the power of which was not marred by the blurry images that brought it back to a breathlessly awaiting Earth.
This was the moment that Neil Armstrong stepped on to the lunar surface on 20 July 1969, and said the immortal words: "That's one small step for man, one giant leap for mankind." The fact Armstrong seemed to fluff his lines, omitting the vital, modest "a" before "man", did not matter a jot. Humanity had finally broken the bonds of earth and put one of the species on another planet. The rhetoric was universal, but it was really a wholeheartedly American triumph. The flag planted on the moon was an American flag.
The man doing the walking was born in the small town of Wapakoneta, Ohio: about as all-American as you can get. He was also fulfilling the dreams of that other icon of muscular American patriotism, President John F Kennedy, who had urged his nation in 1961 to go forwards to reach for the moon – and put one over the Soviets at the same time. Kennedy had died back in 1963, laid low by an assassin's bullet in another one of those moments that all Americans remember.
The landing sent a message that America could compete in and win the cold war. The nation had been startled and terrified by the Russian success in putting the first satellite, Sputnik, into space. Suddenly, there was a fear that America might never catch up. But, in eight short years, the Apollo programme dragged the country ahead.
For Armstrong himself, the moment was a mixed blessing. He passed into the history books and he was assured of global fame. But he was also a quiet person. After he returned home he was given a parade in New York and embarked on a 22-nation world tour. But within a few years he had accepted an academic job at a university in the Ohio city of Cincinnati. He even bought a farm and started to grow corn and raise cattle. He did not give many interviews and rarely talked of his experiences. Asked once what it had meant to him, he replied that it had made him feel "very, very small".
The Apollo programme itself had ended. When Armstrong landed on the moon, no one could have known that the last man to walk on the moon – fellow astronaut Eugene Cernan – would follow him just three years later in 1972. No one has been back since. At the time it had seemed the beginning of a remarkable new journey. But it was not. Rather, it was the summit of a nation's achievement. It was a peak of progress. Now the next person to land on the moon is almost certain to be Chinese. Armstrong's amazing step did not, in the end, lead America anywhere.
2 India's trust deficit (Khaleej Times) For India to grow rich, must its citizens become more honest? It’s a question that preoccupied Kaushik Basu, the government’s chief economic advisor, during his term in office. ‘We talk of good moral values as useful in themselves, but the fact that economic development and economic functioning can depend on these values is usually pushed aside,’ said Basu, who left his post last month.
Better behaviour such as respecting meeting times and public spaces, as well as more moral behaviour in terms of less cheating or thieving, are both desirable and necessary for economic development, he believes. ‘A modern market economy cannot function without a modicum of altruism and trustworthiness,’ said the academic who once wrote a research paper called ‘Why we don’t try to walk off without paying after a taxi ride.’ It concluded that ‘when people are not automatically fulfilling contracts, life becomes more cumbersome and costly.’
In India’s case, a lack of trust due to pervasive cheating brings with it enormous costs.‘The biggest cost is that you don’t start up activities because the transaction costs are so high,’ Basu said. He refers to an account 100 years ago by a frustrated European engineer in Japan named Kattendyke who wrote about supplies not arriving on time, workers showing up once and never returning, and a pervasive lack of punctuality. 'When you block out the Japan, it could be India,’ added the economics professor, who is now returning to academia and his former role at Cornell University in New York State.
3 Pakistan -- A country lost (Cyril Almeida in Dawn) It began with the flag. A strip of white slapped on, but separate and away from the sea of green — the problem was there from the very outset: one group cast aside from the rest. But why blame the flag? It began with the founding theory. A country created for Muslims but not in the name of Islam. Try selling that distinction to your average Pakistani in 2012. 1947 was another country and it still found few takers.
Pakistan’s dirty little secret isn’t its treatment of non-Muslims or Shias or the sundry other groups who find themselves in the cross-hairs of the rabid and the religious. Pakistan’s dirty little secret is that everyone is a minority. It begins with Muslim and non-Muslim: 97% and the hapless and helpless three. But soon enough, the sectarian divide kicks in: Shia and Sunni. There’s another 20% erased from the majority.
Next, the intra-Sunni divisions: Hanafi and the Ahl-e-Hadith. Seventy per cent of Pakistan may be Hanafi, five per cent Ahl-e-Hadith. Then the intra-intra-Sunni divisions: Hanafis split between the growing Deobandis and the more static Barelvis. And finally, within the 40% or so that comprise Barelvis in Pakistan, there’s the different orders: the numerous Chishtis, the more conservative Naqshbandis and the microscopic Qadris. In Pakistan, there is no majority.
Friday, August 24, 2012
1 India's struggle with the internet (Dawn) India’s attempt to block online material that it blames for fuelling ethnic tensions was described by Internet experts as "monumentally incompetent" and "completely illegal". The government over the past week has ordered Internet service providers to block 309 webpages, images and links on sites including Facebook, Twitter, Wikipedia, news channel ABC of Australia and Qatar-based Al-Jazeera. The orders were an effort to halt the spread of inflammatory material and rumours that Muslims were planning to attack students and workers who have migrated from the northeast region to live in Bangalore and other southern cities.
But Twitter users, legal experts and analysts criticised the government’s approach."The officials who are trusted with this don’t know the law or modern technology well enough," Pranesh Prakash, programme manager at the Centre for Internet and Society research group, told AFP. "It is counter-productive. I accuse them of monumental incompetence, given that the main problem is that they are getting really bad advice.
ABC issued a statement saying it was "surprised by the action and we stand by the reporting" after one of its stories about ethnic unrest between Muslims and Buddhists in Myanmar was included on the blocking list. Vivek Sood, senior Supreme Court lawyer and an author on Internet legalisation, said he believed the government was acting unlawfully. "It’s completely illegal under the Indian IT Act," he told the Economic Times. "It’s a gross abuse of power by the government."
2 In tech tussle, Apple crushes Samsung (Dan Gillmor in The Guardian) A home-town jury has given Apple the world, or at least the US, in its campaign to control the smart phone and tablet markets. Samsung, which decisively lost the highest-profile case to date in Apple's sue-everywhere strategy against the Android operating system, will surely appeal the verdict handed down the San Jose, California, federal court on Friday afternoon. And even if Samsung ultimately has to pay the $1bn judgement, the company can afford it.
But we're likely to see a ban on many mobile devices from Samsung and other manufacturers in the wake of this case, as an emboldened Apple tries to create an unprecedented monopoly. If so, the ultimate loser will be competition in the technology marketplace, with even more power accruing to a company that already has too much.
Now, I'm not a fan of Samsung. Like so many others in the technology world, it has has behaved in ethically questionable ways. But in recent years, I have become even less a fan of Apple. It is now the uber-bully of the technology industry, and is using its surging authority – and vast amounts of cash – in ways that are designed to lock down our future computing and communications in the newest frontier of smart phones and tablets. In the end, Apple will settle for nothing less than outright capitulation by Samsung – and, by extension, other Android device makers – in what Jobs called a "thermonuclear war", which he planned, before his death, to wage on Android.
3 The boomerang generation (Sally Koslow and Hannah Booth in The Guardian) The number of adultescents living in their parents' homes looks like nothing less than a stampede of chicks coming home to roost, victims of a flatlined economy. According to the Office for National Statistics, nearly three million British adults aged 20-34 lived with their parents in 2011, up 20% since 1997. More than one million under-25s are now unemployed, and with the introduction of higher tuition fees, future students should expect to finish their degree with debts approaching Pounds 60,000 according to a survey.
These experiences may result in a severe hit to self-esteem; returning home to loving parents can sometimes soothe that wound. Many young adults, however, exist in a cloud of overconfidence, with an illusion of endless time. "This is a more entitled generation than their parents' and grandparents'," says William J Doherty, professor of family social science. "We're seeing young adults tethered to family in the sense that they live at home, but with no major responsibility to work as contributing members."
Today's parents are likelier to treat young adults like pampered teens, reinvesting in dormant parenting roles, especially if their kids are floundering. "The subliminal message that comes with all the giving and doing is, 'We don't think you can do it on your own,'" says Marie Hartwell-Walker, psychologist and mother of four adult children, two of whom came home to live with her and her husband.
Eurozone faces second recession; Coal scam darkens India prospects; China confronts pile of unsold goods; Rather scrub toilet than have a new password; Finding a spouse in modern China
1 Eurozone faces second recession (BBC) The eurozone's economy is set to contract by 0.5%-0.6% in the July to September quarter, tipping it into its second recession in three years, a closely-watched survey suggests. The Markit Flash Eurozone PMI Composite Output Index, which measures new orders in manufacturing and services, was 46.6 in August, compared with 46.5 in July. A score below 50 indicates contraction. Output declined in both the manufacturing and services sectors, Markit said. This is the seventh consecutive month of contraction in the eurozone's private sector.
Even Germany, the eurozone's strongest economy, showed an accelerating decline in output, with its Composite Output Index falling to a 38-month low of 47.0, down from 47.5 in July. German blue-chip companies ThyssenKrupp and Opel are reducing working hours because of weaker demand, while Bosch has announced it is negotiating reduced working hours with its workforce. The findings contrast with more positive news relating to Germany's public finances, which were back in the black for the first six months of the year, according to Destatis, the country's federal statistics office.
2 Coal scam darkens India prospects (The Wall Street Journal) An impasse between the government and opposition parties in India over a controversial allocation of coal blocks from 2004 to 2011 has dimmed prospects of economic reforms that economists say are vital to revive growth. Global investors and the Indian industry have been clamoring for the government to move on key issues such as easing foreign investment rules to attract overseas capital in industries such as aviation, insurance and retail.
Government officials repeatedly have suggested that several moves were imminent. But the reform efforts have been abruptly halted by a standoff in what is known as the monsoon session of Parliament that started earlier this month and is scheduled to run until Sept. 7. On Thursday, for the third successive day, opposition parties blocked all legislative proceedings as they continued to demand the resignation of Prime Minister Manmohan Singh over the coal allocations. The furor was sparked by a report from the Comptroller and Auditor General which questioned the government's policy of allocating rights for mining coal without a competitive auction, a strategy that the auditor claimed cost the treasury several billion dollars in potential revenue.
3 China confronts a pile of unsold goods (The New York Times) After three decades of torrid growth, China is encountering an unfamiliar problem with its newly struggling economy: a huge buildup of unsold goods that is cluttering shop floors, clogging car dealerships and filling factory warehouses. The glut of everything from steel and household appliances to cars and apartments is hampering China’s efforts to emerge from a sharp economic slowdown. It has also produced a series of price wars and has led manufacturers to redouble efforts to export what they cannot sell at home.
The severity of China’s inventory overhang has been carefully masked by the blocking or adjusting of economic data by the Chinese government — all part of an effort to prop up confidence in the economy among business managers and investors. But the main nongovernment survey of manufacturers in China showed on Thursday that inventories of finished goods rose much faster in August than in any month since the survey began in April 2004.
4 Housing bust in world's carpet capital (The New York Times)
It’s lemonade time here in Dalton, Ga., a town that calls itself the carpet capital of the world. How else can you look at it when you have recently shed more jobs than any other metropolitan area in America? This stretch of carpet mills and floor covering outlets between Atlanta and Chattanooga lost 4,600 jobs, or 6.9%, from June 2011 to June 2012, according to a new report from the US Bureau of Labor Statistics.
Not that long ago, the mills that once produced nearly half the world’s carpets could not find enough workers. The road along the Interstate was jammed with out-of-towners who drove hundreds of miles to find bargains amid the rolls of remnants and stacks of samples. More than a million new homes a year were being sold by the mid-2000s, and they all needed fresh carpet. By 2008, the housing boom was over. The town’s unemployment rate, once about 4%, nearly doubled in a blink, and is now more than 12%.
5 Rather clean toilets than have a new password (San Francisco Chronicle) You know that sense of dread that fills your body when a website asks you to create a new user name, or when your company’s IT department sends another e-mail reminding you that it’s time to change your password again? Turns out you’re not alone. A new survey commissioned by social software services company Janrain found that 38% of Americans would rather clean a toilet or come up with a plan for world peace than think of a new online password. And that’s because most of us already have five unique passwords to remember and it taxes our memory.
"With all of the different websites consumers login to on a regular basis – from email and social networks to online banking and e-commerce sites – it’s no wonder people are struggling to remember such a large number of passwords," Janrain CEO Larry Drebes said in a news release. "What’s surprising is that consumers think cleaning their bathroom, or in the extreme cases trying to solve world peace, sounds preferable to adding yet another password to the list."
The survey found that: 38% of adults would rather do household chores "like cleaning the toilet or doing the dishes" than have to come up with another user name or password. 38% of adults also believe it’s easier to solve world peace than to remember all their passwords. 58% of adults have to remember five or more unique online passwords, while 30% have 10 passwords. And 8% have to memorize at least 21 passwords.
6 SA society failing at many levels (Johannesburg Times editorial) If the chairman of platinum miner Lonmin, Roger Phillimore, was not on a plane to South Africa on Friday evening, he should be ashamed of himself. In the wake of easily the worst state-on-citizen violence in South Africa since we became a democracy in 1994, protesting mineworkers at Lonmin’s Marikana mine near Rustenburg have shattered the company’s share price and sharply inflated the global price of platinum. That is almost a sideshow to the nearly 50 deaths that the strike has triggered so far — 34, according to the most recent confirmed figures, in a hail of police bullets at the mine on Thursday afternoon.
Lonmin may not be directly responsible for the violence accompanying the strike, but it has wide and deep duties that it is spectacularly failing to fulfil. It has a duty to its shareholders, to its customers, to its staff, to the mining industry in South Africa generally and, ultimately, to all South Africans. But it is nowhere to be seen. Its CEO, Ian Farmer, is ill in hospital. Its spokesman appears not to be available. The chairman resides in England. Is he on holiday along with the rest of Europe?
The strike and the tragedy of Thursday will be with us for a very long time. It represented a failure of our new society on many levels, most strikingly the inability of the majority black establishment (of which the NUM and the ruling African National Congress and union umbrella Cosatu are leaders) to come to terms with the majority of black, marginalised, poor and desperate people.
7 Swat Valley: The paradise that was (Dawn) The Valley of Swat is famous for its fruit laden orchards, fertile lands, snowcapped peaks, the mighty and zigzagging River Swat, waterfalls, lush green pastures, azure lakes and not the least, the relics of Gandhara and Darada civilisations. But extremists distorted its hospitable image by their activities. It is rightly called Switzerland of Pakistan. In 2002, a Swiss tourist declared Swat more beautiful than her homeland.
8 Finding a spouse in China (Straits Times) Young Chinese women in swishy dresses and strappy sandals sit in a row clutching forms that list their weight and measurements as they wait for an interview with the "appearance consultant". Dressed as if for a beauty contest, they are among more than 1,000 bidding to make it to the next stage of this bizarre competition - the chance to join an exclusive group of 50 vying for marriage to a multimillionaire.
The testing process screens everything from looks and education to family background and astrological compatibility. The 50 lucky qualifiers win the chance to meet 32 men worth at least 100 million yuan (S$19.7 million). Although it is at the extreme end of the scale, the matchmaking event arranged by the China Entrepreneur Club for Singles in Beijing reflects the growing challenges of finding a spouse in modern China.
Friday, August 17, 2012
India in panic as strife radiates; Social networks can decline fast, too; Why sex could be history; The disinformation age; Four most annoying India Inc phrases
1 India in panic as strife radiates (Jim Yardley and Hari Kumar in The New York Times) Like a fever, fear has spread across India this week, from big cities like Bangalore to smaller places like Mysore, a contagion fueling a message: Run. Head home. Flee. And that is what thousands of migrants from the country’s distant northeastern states are doing, jamming into train stations in an exodus challenging the Indian ideals of tolerance and diversity
What began as an isolated communal conflict here in the remote state of Assam, a vicious if obscure fight over land and power between Muslims and the indigenous Bodo tribe, has unexpectedly set off widespread panic among northeastern migrants who had moved to more prosperous cities for a piece of India’s rising affluence. A swirl of unfounded rumors, spread by text messages and social media, had warned of attacks by Muslims against northeastern migrants, prompting the panic and the exodus.
The hysteria in several of the country’s most advanced urban centers has underscored the deep roots of ethnic tensions in India, where communal conflict is usually simplified as Hindu versus Muslim, yet is often far more complex. For decades, Indian leaders have mostly managed to isolate and triangulate regional ethnic conflicts, if not always resolve them, but the public panic this week is a testament to how the old strategies may be less effective in an information age.
2 Social networks can decline fast, too (The New York Times) With battered Facebook shares closing Friday at just over half their offering price in May, no one’s talking anymore about a social media "bubble." Just a year ago, social media seemed the next big thing. With dizzying user growth at Twitter, Zynga and especially Facebook, investors were euphoric about Internet sites that connected people with shared interests and experiences, seemingly the perfect media for targeted advertising.
What went wrong? Every company has its own story, but the euphoria over social media companies as a group was rooted in what economists call the network effect. The more users a site attracts, the more others will want to use it, which creates a natural monopoly and a magnet for advertisers. The network effect is a double-edged sword, Ken Sena, a consumer Internet analyst at Evercore, said this week.
"The network effect allowed these companies to grow so fast, but the decline can be just as ferocious," Mr. Sena said. "If any of them misstep with users, they can leave, and the network effect goes into reverse." The textbook case is Myspace, once the most visited social networking site, that is now a shadow of its former self.
3 Why sex could be history (Kira Cochrane in The Guardian) Over tea at her north London home, Aarathi Prasad is talking calmly, coolly, about reproduction. But not sex. Specifically not sex. Her subject is technologies that would take intercourse out of the reproductive equation, advances that could challenge everything we know about family and the relationship between men and women. Their potential is summed up in the final paragraphs of her new book, Like a Virgin: How Science is Redesigning the Rules of Sex.
Here she describes the "ultimate solo parent" of the future. This woman can use her own stem cells and an artificial Y chromosome to produce healthy new eggs and sperm at any age, is capable of reproducing entirely alone by making one of her eggs behave like a pseudo-sperm that can be used to fertilise herself, and has no need to carry the embryo in her own body. Instead it gestates in an artificial womb, which acts as a highly evolved incubator.
The same field of technology would enable gay couples to have children created from both their DNA, and make it just as easy for a man to become a single parent as a woman. Prasad writes that this would be "the great biological and social equaliser" before adding that the question isn't if it will happen, but when.
4 The disinformation age (Khaleej Times) We are being barraged by information from all sides; our phones, twitter accounts, mailboxes and Facebook pages constantly feed snippets of new details every second into our brains. But is being so information savvy necessarily a good thing? Late American author Michael Crichton said that we don’t live in the information age, but rather the disinformation age. And this criticism is valid — we don’t quite have a mechanism to ascertain the veracity of "facts" that come our way on the Internet.
In fact hackers are now more likely to take advantage of the flood of unfiltered information to psychologically manipulate their enemies and the public. For example, as the gory ground battle continues between Assad’s regime and Syria’s tenacious rebels, another kind of offensive has flared up in the cyber domain. During this month the Reuters blogging platform has been hacked twice by a pro-Syrian regime group. On Wednesday, there was a false blogpost on the website saying that Saudi Arabia’s foreign minister Prince Saud Al Faisal had passed away. It isn’t much of a surprise that supporters of Bashar Al Assad would be involved in spreading malicious rumours about the Saudi regime, since the latter has vehemently opposed the Ba’athist government in recent months.
The developments negate the widely prevalent belief that a free flow of information would actually limit a government or a group’s ability to spread propaganda and lies. In fact, (dis)information spreads on social networking sites like a raging forest. Even remotely exciting news triggers a feverish flurry of Twitter updates and a sea of blog posts. So before hastily shooting out a tweet about some news you just read, take a moment to judge its truthfulness. And remember: Seeing is believing, as the age-old saying goes, but googling definitely is not.
5 Shooting deaths stun South Africa (San Francisco Chronicle) President Jacob Zuma announced an official inquiry into a police shooting of striking miners that left 34 dead and 78 wounded, an incident that police claimed was self-defense despite video recordings suggesting the protesters were not attacking them but running from clouds of tear gas.Wives of miners at the Lonmin platinum mine northwest of Johannesburg searched for loved ones missing from Thursday's shooting and staged a protest, demanding to know why officers fired automatic rifles, pistols and shotguns at the strikers, many of whom had been armed with spears, machetes and clubs.
"Police stop shooting our husbands and sons," read a banner carried by the women on Friday. They kneeled before shotgun-toting police and sang a protest song, saying "What have we done?" in the Xhosa language. At least 10 other people have been killed during the week-old strike, including two police officers battered to death by strikers and two mine security guards burned alive when strikers set their vehicle ablaze. Tensions remained high Friday among strikers, who are demanding monthly salary raises from $625 to $1,563.
6 Four most annoying India Inc phrases (The Wall Street Journal) a. Negative profit: Seriously? Seriously. Clearly, some business chiefs just cannot bring themselves to use the word "loss" to describe their company’s results. b. 200 years of experience: You have 20 people at your investment bank who each have 10 years of experience. That does Not mean that your team has 200 years of experience, as executives often like to tell us in interviews. That would be accurate only if someone in the team was around in 1812. c. Investment hygiene: We have no clue what that means, but it sure sounds sophisticated, raising the specter of some sort of contamination. Money managers or human-resources managers often use the phrase "those are just hygiene issues" in circumstances when they are clearly not referring to cleanliness. d. Right-sizing: Talk about euphemisms. When was the last time a company "right-sized" their staff by adding to it? When you’re letting go of people just acknowledge that’s what you’re doing.
Get the picture?
1 Stories from different Pakistan cities in today's Dawn: Woman killed over land dispute (Islamabad), Young man killed in sectarian attack (Karachi), HRCP raps shia killings, seeks arrest of culprits (Lahore) and, Eight militants killed in Orakzai gunfight (Peshawar).
2 Stories from The Wall Street Journal on India: Coal scandal, airport scandal, growth forecast cut, Bangalore exodus.
Get the general picture about the two countries, both celebrating their birthdays this week?
Wish you a safe weekend.
Thursday, August 16, 2012
In the ordinary, Silicon Valley sees next big thing; Schools pass debt to next gen; Lost decade looms for eurozone; Facebook stock plunges
1 In the ordinary, Silicon Valley finds next big thing (The New York Times) Square’s tie-up with Starbucks may be this year’s most important venture capital deal. The deal not only has the potential to change the way people pay for coffee and everything else, it also shows how small innovation applied to everyday tasks may be the next new thing for venture capital. Call it the rise of the ordinary innovators.
Under the deal announced last week, Square, the mobile payments device start-up, will process debit and credit card transactions for the coffee shop chain, whose customers will be able to use Square’s payment mobile phone app at participating stores. As part of the deal, Starbucks will invest $25 million in Square and Starbucks’s chief executive, Howard Schultz, will join the Square board.
It may sound boring, but the mobile payment sector is hot. The basic idea is to use your mobile device to pay for everything. Merchants can get in the game, too. Many of these companies aim to process all transactions, but Square’s business model is built on a basic premise: pushing payment devices to businesses that have had difficulty using credit cards. Not surprisingly, the food trucks and taxis of the world love this product. But the ease of use and Square’s flat fee of 2.75 percent of the total charge have hastened the product’s spread to other merchants. Square was begun in October 2010 and is already processing over $6 billion in payments on an annualized basis.
2 Schools pass debt to next gen (The New York Times) The deleveraging of America is well under way, as individuals and companies recover from the excess borrowing that helped to produce the boom and left many people vulnerable when the bust arrived. Household debt is down nearly $900 billion over the last four years, partly from repayments and partly from defaults.
For borrowing $105 million in 2011, taxpayers — or perhaps it would be more accurate to say the children and grandchildren of today’s taxpayers — will pay $877 million in interest between 2033 and 2051. The tax revolt that began with Proposition 13 in 1978 has made it harder and harder to finance education or other local government services. Assorted propositions approved by voters have made it very difficult to raise taxes at all.
According to a Thomson Reuters database, school districts issued nearly $4 billion in such bonds last year, and have sold almost $3 billion more this year. School districts’ logic for borrowing for construction projects always was that those who benefit should pay for a construction project. In the case of the Poway bond, however, it is at least possible that it will be the children of today’s students who end up paying the bill. By then, many of these school buildings may be obsolete, or at least in need of another refurbishing.
3 Lost decade looms for euro zone (The New York Times) The euro zone is hurtling back into recession, economists declared after official figures this week portrayed a shrinking economy. But by some measures the downturn has been under way for years. With the exception of Germany, none of Europe’s biggest economies have returned to the level of economic output they had at the beginning of 2008, before the subprime mortgage crisis in the US spread across the Atlantic, according to calculations by two US economists, Peter Rupert and Thomas F Cooley.
The figures suggest that Europe is already well into what could become a lost decade — a period of pernicious stagnation and wasted potential that could have lasting effects on ordinary citizens. Economic growth not realized represents investments in education that were never made, research that was never financed, businesses that failed and careers that ended too early or never got off the ground.
4 Facebook stock plunges (San Francisco Chronicle) Facebook's stock plunged to a new low Thursday as some of the social networking leader's early backers got their first chance to sell their shares since the company's initial public offering went awry. Analysts interpreted the unusually high trading volume as a clear sign that at least a few of the insiders were seizing on a fresh selling opportunity. That is stirring a debate over whether they're simply locking in long-awaited gains on investments made many years ago or bailing out of a company that has lost its luster.
The shares have plunged by nearly 50% amid concerns about whether Facebook is destined to become a passing fancy and worries about whether it will be able to sell more advertising on mobile devices as users gravitate there. Facebook' stock traded as low as $19.69 before bouncing back slightly.
Most painful read of the day
'Kill us too, please' (Johannesburg Times) "Kill us too, please, abelungu [whites]." These were the words of a miner wounded when the police opened fire on thousands of strikers at Lonmin's platinum mine in Marikana, outside Rustenburg, as he hurled insults at the police - and urged them to finish him off. The extremely tense week-long stand-off between police and striking workers at the mine in North West ended in just over two minutes of bloodshed when the police opened fire with semi-automatic assault rifles and pistols.
After the police operation, which lasted for about 15 minutes, at least 18 striking workers lay dead or wounded, covered in blood and dust, in the open veld near the notorious Marikana Hill. Ten other people, including two policemen, have been killed in violence at the mine since the weekend. President Jacob Zuma last night expressed sadness and alarm at the bloodshed, which started shortly after police advanced on the hill to disarm the strikers.
Risk rises as junk bonds boom; LatAm thrives amidst global crisis; China growth 'under pressure'; India at 65, chasing an illusion; Secret to touching 100
1 Risk rises as junk bonds boom (The New York Times) Money market funds pay next to nothing. Interest rates on US Treasuries are dismal. The volatile stock market has been dead money for more than a decade. The market for junk bonds, risky corporate debt that pays high interest rates, is red hot. Such debt, also known as high-yield bonds, has returned 10.2% year-to-date, according to a JPMorgan high-yield index. Junk bond funds are on a pace to take in a record amount of money this year. Companies with less than stellar credit are issuing hundreds of billions of dollars of bonds.
Fueling this frenzy are investors of all stripes — including individuals, mutual funds and state pensions — who are desperate for returns in their bond portfolios and willing to take more risk to get them. Demand is insatiable, even as analysts warn that the market has become overheated and is ripe for a fall. "In a yield-starved world, high-yield bonds are right now the only game in town," said Les Levi, a managing director at the investment bank North Sea Partners. "The market is giddy." But on Wall Street — as the old saying goes — somewhere, someone is making money. And these days, that somewhere is junk bonds.
2 Amidst global crisis, LatAm thrives (The Guardian) The cash machines in Santiago are running out of money, but it is not a run on the banks; shoppers in Chile are simply spending peso notes faster than the automated tellers can provide them. New skyscrapers are rising up in Bogotá to create the office and retail space needed by a growing economy. Mexico – the new darling of foreign investors – is outstripping GDP forecasts. Brazil, which overtook the UK as the world's sixth biggest economy last year, has just announced a $66bn stimulus plan in addition to the money it will splash out in preparation for the 2014 World Cup and the Olympics in 2016.
The economic mood music in Latin America for most of this year could hardly have been more of a contrast from that of the EU, mired in financial crisis, depressed by austerity, and dipping back into recession. Latin America is now being retuned, as most nations expect slower but still solid growth, and some prepare to tap extensive reserves to spend their way out of a global downturn.
Their ability to withstand the coming storm will have long-term implications for perceptions of a region that was until recently a byword for financial turbulence, irresponsible spending and whimsical policies. Recently, many of the region's governments have been praised by the UN, IMF and World Bank for building strong reserves and maintaining generally low levels of public debt.
3 China growth 'under pressure' (BBC) China's Premier Wen Jiabao has warned that the country's economy is under pressure and that it is facing problems that may last for some time. However, he said that Beijing will be able to meet its growth target, despite those issues. He said that easing inflation had given more room to policymakers to introduce measures to spur growth. China has been hurt by slowing global demand for its exports and lacklustre growth in domestic consumption.
Premier Wen's comments comes amid worries of a sharp slowdown in China's economy, the world's second-largest. Its gross domestic product grew at an annual rate of 7.6% during the April-to-June period. While that may be healthy compared to many developed Western economies, it was the slowest pace of expansion for China in three years.
4 Rumour makes thousands flee in India (BBC) Thousands of people from India's north-eastern states have fled the southern city of Bangalore amid fears that they are to be the target of attacks.Correspondents say the rumours of attacks may be linked to recent clashes in the north-eastern state of Assam. More than 300,000 people fled after fighting between indigenous Bodo tribes and Muslim settlers in Assam. There has been tension between indigenous groups and Muslim Bengali migrants in Assam for many years.
The main railway station in Bangalore was flooded with migrant workers from north-eastern states after rumours spread on Wednesday.The railways ran special trains to the north-east to cope with the rush, officials said. There are 250,000 people from north east living and working in Bangalore, many of them students. Around 4,000 fled on Wednesday, a senior police officer in the city said. He said that rumours about possible violence were spread by text messages.
5 India at 65, chasing an illusion (Pankaj Mishra in The Times of India) The millstone of an ideology of endless growth - one evolved by small predatory societies, which never took environmental sustainability into account - now hangs around our necks. Unlike the US and Europe in the 19th and 20th century, we lack expandable frontiers, and have no continents to conquer or native populations to subdue. So we assault and dispossess the pre-modern dwellers of our own forests.
The tryst with destiny recedes deeper into the future. And at 65, this most melancholy of anniversaries, we stumble from middle age into early senescence, with the guilty, helpless awareness of having spent the best years of our lives chasing an illusion.
6 Secret to living up to 100 (Sydney Morning Herald) Okinawa, the string of 160 subtropical islands east of Taiwan that constitute Japan's southernmost prefecture, contains more centenarians per head of population than anywhere else. Five times as many Okinawans live to be 100 years old as their compatriots elsewhere in Japan - and Japan has the highest life expectancy of any country.
There are several possible explanations. Okinawans are famously laid-back; the local business uniform of a Hawaiian shirt and slacks is certainly a world away from Tokyo's suited salarymen. Then there's the stress-free nature of the place itself: a subtropical archipelago of coral reefs, warm seas, lush jungles and NapiSan-white beaches. But nutritionists speculate that diet - and how their food is consumed - has much to do with it. Not only are Okinawans thought to be the only culture with a tradition of self-imposed calorie restriction (hara hachi bu), but their traditional diet has few calories to start with.
Pork may be acidic, but it is high in protein and its acidity is neutralised by lashings of mozoku, a local seaweed that is alkaline, calorie-free and constitutes the other staple of the traditional Okinawan diet. These ingredients are complemented by seafood, tofu, vegetables and a traditional intake of grains, salt and sugar that is much lower than in most cultures.
Tuesday, August 14, 2012
Eurozone on brink of double dip; Advertising sector's 'big change'; Whither does India go?; India & Pakistan: Neighbours in the dark; Creepy corpse business in South Africa
1 Eurozone on brink of double dip (The Guardian) The eurozone is on the brink of following Britain into a double-dip recession after its economy shrank between April and June. GDP across the 17-nation bloc fell by 0.2% in the second quarter of this year and economists believe the downturn is continuing. Better-than-expected figures from Germany and France were offset by sharp contractions elsewhere, with the Spanish, Italian, Finnish and Portuguese economies all shrinking. The wider European Union also suffered a 0.2% contraction.
Europe's debt crisis is hitting exports, domestic sales and consumer confidence, adding to the pressure on European leaders. Tim Ohlenburg, senior economist at the Centre for Economics and Business Research, said Europe's woes, including plunging business sentiment and weakening trade, are dragging the world economy down.
The eurozone has avoided entering a technical recession, defined as two consecutive quarters of negative growth, because growth was flat over the first three months of 2012. Howard Archer of IHS Global Insight predicted that GDP will fall again during the current quarter. Archer said the eurozone was "struggling against tight fiscal policy in many countries, high and rising unemployment, muted global economic activity and ongoing serious sovereign debt tensions that weigh down on confidence and limit investment."
2 Advertising sector's 'big change' (BBC) The advertising industry has been transformed by social media, says David Jones, boss of global agency Havas. He said the development of the likes of Facebook and Twitter meant the sector needed to be more "open and collaborative". He also said that social media meant companies had to re-evaluate how they approached sponsorship deals.
In particular, he criticised Visa's sponsorship of the 2012 Olympic Games.Under the terms of Visa's exclusivity agreement with the games, its cards are the only ones which can be used to buy tickets, or are accepted at the Olympic venues. Mr Jones said this had annoyed people. Visa has declined to comment.
Thanks to social media, companies can now connect directly - and cheaply - with customers. Mr Jones denied that this meant that the advertising industry was becoming irrelevant. He said this was shown by the fact that the advertising sector now outperforms the wider economy, whereas it used to track it. Yet he admitted that social media was a risk for the very largest advertising companies who were not quick or nimble enough to react.
3 Whither does India go? (Krishna Pokharel in The Wall Street Journal) "Whither do we go and what shall be our endeavour?" asked Jawaharlal Nehru on India's independence on August 15, 1947. Sixty-five years down the line, India is still aspiring to, and has yet to live up to the aspirations that Nehru said India should endeavor to achieve: "To bring freedom and opportunity to the common man, to the peasants and workers of India. To fight and end poverty and ignorance and disease. To build up a prosperous, democratic and progressive nation, and to create social, economic and political institutions which will ensure justice and fullness of life to every man and woman."
But those words mainly address the second part of the question. The key to achieving these worthy goals lies with the answer to the first part of the question: Whither do we go? For Nehru, the answer to that question, as evident from his actions, was a socialist utopia that was also secular and democratic. For Mahatma Gandhi, Nehru’s mentor and father of the new nation, the answer to that question was an India that lived through "self-rule" of its villages and individuals. They had rather different answers to the same important question. But answers they had and they tried to steer the nation in the direction they thought fit.
The tragedy with today’s India is the lack of leaders who can answer the question "Whither do we go?", or answer it with any hope of taking large numbers of Indians along the road they propose with them.
India and Pakistan; Neighbours in the dark (Mahir Ali in Khaleej Times) India and Pakistan have ostensibly followed different trajectories since independence, yet many of the problems they face are remarkably similar. Corruption, for instance — although Pakistan may have had something of a head start. Poverty, malnutrition and rapid population growth. The disparities in Pakistan are barely less grotesque. And wealth tends in both cases to trickle out rather than trickle down.
There’s something peculiarly schoolboy-ish about the clash between the executive and judiciary in Islamabad, but then there are a number of respects in which both Pakistan and India betray symptoms of juvenility. There are taboo areas; intellectual barriers that it’s considered unwise or unpatriotic to transgress. They revolve around matters of faith, interpretations of history, questions of territorial integrity.
It is not surprising that there should be unilluminated areas in a secular democracy, too, but surely the logical way of dispelling the darkness would be to bathe them in light? Perhaps one day the two of them will grow up, accept their shared history and immutable geography, and learn to coexist if not as the best of friends, then at least as congenial, cooperative neighbours. Perhaps.
5 India's tryst with destiny (Rahul Singh in Khaleej Times) Has India fulfilled that "tryst with destiny" that Nehru spoke of glowingly 65 years ago? Sadly, not yet. To gauge how far India has to go, one has to only look at China. In 1947, India was ahead of China in almost every parameter. Even as late as 1980, the gap between the two countries was small.
China started its big push over 30 years ago, a decade before India, when its leader declared that he did not care what the colour of a cat was, as long as it caught mice. The message was clear: Ideology would take the back seat. The country is almost fully literate and its healthcare system on a par with the developed world. To be sure, India scores over China as far as democracy and the rule of law goes. But it is only a matter of time before the Chinese government becomes more representative and accountable.
Economic power is usually reflected in the sporting arena. That is where the contrast with India is most glaring. At the just concluded London Olympics, China garnered the largest number of gold medals, almost 40, of any country except the USA. And India’s medal count? Six, not one of them gold! That says it all.
6 Creepy corpse business in South Africa (The Sowetan) For R50, unscrupulous undertakers can buy a list of all the patients who died at Chris Hani Baragwanath Hospital the night before. Mortuary staff at the hospital - the biggest on the continent - are accused of colluding with unregistered funeral undertakers, who, using the list, approach families of the deceased to sell them funeral packages even before the hospital has notified the family of the death.
This practice has enraged the Soweto region of the South African Funeral Practitioners Association, which said the practice had come to its attention. The association added that this was tarnishing the image of legal undertakers. An undertaker, who refused to be named, said undertakers camp at the hospital and wait for the night shift staff to give them the lists of those who had died. They then use the list, which has next-of-kin details, to contact the families of the dead. They offer them burial packages, with many extras they fail to provide.