Monday, October 12, 2015

Dell makes $67bn bet on EMC; Mad race for India; Calamitous hunger eradicated in last 50 years

1 Dell makes $67bn bet on EMC (Sam Thielman in The Guardian) American computer company Dell is buying digital storage giant EMC for $67bn in the largest tech acquisition in history and a move that marks another transformation for the once pre-eminent maker of consumer PCs.

Shares of EMC surged on news of the deal. Dell, by contrast, is not publicly traded. Founder and CEO Michael Dell took the company private at a price of $25bn in 2013 largely to escape the clutches of investors who wanted to oust him (notable among them activist investor Carl Icahn).

Most computer users will be familiar with Dell, the third-largest computer vendor in the world behind HP and Lenovo, but fewer will know EMC, a company with a large legacy business in packaging, selling and making software for computer storage systems.

It’s a core business that has been in decline as more companies move to cloud storage, and while EMC has invested in similar products related to the cloud, they have not managed to offset the declines in the company’s main business. Dell was the number one global PC vendor by market share between 2003 and 2006, thanks to aggressive marketing to institutional computer buyers, close alliances with hardware and software manufacturers and the “Dell dude,” a stoner-ish advertising pitchman.

But the company’s fortunes faded throughout the second half of the ’00’s as it lost share to HP and other cheaper rivals and its computers began to look dated compared to Apple’s stylish comeback. A major accounting fraud scandal cost Dell more than $100m in penalties in 2010.

A spokesman for HP took a shot at its now-larger competitor. “Two of our largest competitors are attempting a highly distracting, multi-year merger, just as we are launching two new, focused companies. The massive debt burden Dell and EMC are taking on undoubtedly means that they will have to radically reduce R&D, and integration inevitably will create disruption.”

2 Mad race for India (Khaleej Times) India is opening the door to foreigners to prod its powerful state governments into doing more to boost economic growth. Overseas investors can buy as much as Rs500 billion ($7.7 billion) of state debt through 2018 after the central bank opened the sector to develop India's financial markets. Barclays and Bank of America Merrill Lynch see strong demand for the bonds, which are as safe as sovereign notes and offer yields about 50 basis points higher.

Prime Minister Narendra Modi is pushing state leaders to play a greater role in jumpstarting an economy that is expanding below potential even as it boasts one of the world's fastest growth rates.

Modi is sharing a record 42 per cent of tax revenues with state governments and is trying to push through legislation that will unify them under a single national sales tax. Working together, India's 29 states would form a bloc that has a bigger economy than the whole of sub-Saharan Africa, more members than the European Union, and twice the population of North America.

State budget deficits have halved to about 2.5 per cent of gross domestic product over the past 15 years. Between April to September, their governments have spent more than Modi's administration and are poised to outstrip federal spending for the first time in at least six years.

The investment cap will be Rs35 billion this year, and will steadily rise to Rs500 billion by 2018. The limits will be "fully utilised" given the appetite for government securities among offshore investors, they wrote.

3 Calamitous hunger eradicated in last 50 years (San Francisco Chronicle) Calamitous famines appear to have vanished from the planet, but more must be done to eradicate all such scourges, including redrafting US terror legislation that inhibits life-saving humanitarian work, says a new report.

The study, part of the 2015 Global Hunger Index, says it's one of the "unheralded achievements" of the past 50 years: the elimination of calamitous famines that cause more than 1 million deaths, and reduction "almost to a vanishing point" of great famines, which cause more than 100,000 deaths.

"The trends are striking," said author Alex de Waal, executive director of the World Peace Foundation at Tufts University. Until the middle of the 20th century, millions died of famine every decade — from 27 million in 1900-1909 and more than 15 million in the 1920s, 1940s, 1950s and 1960s to a low of 1.4 million in the 1990s. So far this century, the death toll is near 600,000.

In an interview, de Waal attributed the progress to the end of colonialism, total war and leaders responsible for "gargantuan amounts of deaths" like Russia's Stalin and China's Mao.

The last calamitous famine was in Ethiopia in 1983-1985 and though Africa sometimes is stigmatized as the poster child of such scourges, the continent historically has suffered the fewest great famines, and only two calamitous famines in the past century, the other being the famine induced by the failed Biafran war to secede from Nigeria in 1967-1970. Cambodia suffered the third calamitous famine of the 20th century, when 1.8 million died under Pol Pot in 1975-1979.

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