No revenues and an illusion of value; Poor outlook for Nokia; Further downturn for UK; Spanish jobless at record high; Our gangster state; India: Downgraded and unchanging; Global car design toes Chinese line

1 No revenues and an illusion of value, again (The New York Times) The gears of Silicon Valley continue to mesh and turn because of money, not necessarily technological innovations. And there are certain things about that money machine that denizens of the Valley would rather keep quiet. First, they’ll never acknowledge the possibility of a bubble. An even more bizarre activity in the Valley than shushing the talk of a bubble is how some start-ups are advised by investors not to make money. This concept may sound ridiculous from a business standpoint, but for investors, it fuels the get-richer-quicker mentality that exists here.

“It serves the interest of the investors who can come up with whatever valuation they want when there are no revenues,” explained Paul Kedrosky, a venture investor and entrepreneur. “Once there is no revenue, there is no science, and it all just becomes finger in the wind valuations.” For start-ups, fewer numbers in the equation mean a projected valuation can be plucked out of thin air. Look how well this worked for Instagram, which had zero in revenue and was bought for $1bn.

So why does the lunacy of building companies with no revenue or business model work? Jeffrey Pfeffer, a professor at Stanford’s Graduate School of Business, used that dirty word that investors scoff at: bubble. “This is 1999 all over again, but this time, it’s gotten worse,” he said, referring to the last technology bubble to burst. “We’re back to companies throwing around funny money. The economic values don’t add up.”

2 Nokia is rated junk (San Francisco Chronicle) Nokia's rating has been lowered to junk by Standard & Poor's, the second debt rating company to strip the Finnish mobile-phone maker of an investment grade after losses at its handset business. The ranking was cut by one step to double-B-plus from triple-B-minus with a negative outlook, meaning Standard & Poor's may further reduce the rating. Fitch Ratings made the same move last week. Moody's Investors Service still rates Nokia's debt the lowest investment grade.

Nokia is burning cash 14 months after linking up with Microsoft to make Lumia smart phones, which run on the Windows operating system. The company reported a first-quarter operating loss for its handset unit this month and said the margins will be similar or worse in the current period. Chief Financial Officer Timo Ihamuotila said the company's financial position, with net cash of 4.9 billion euros as of March 31, "remains strong."

3 Further downturn forecast for UK (The Guardian) Banks and insurers face a rocky 2012 as insolvencies rocket to levels not seen since the 1990s, according to a report by the Ernst & Young Item Club. The economic slowdown will also hamper corporate lending by the banks, the report said, which came after recession became official last week with figures showing the economy contracted 0.2% in the first quarter of the year. Lending to businesses is unlikely to recover to its 2008 peak before 2016, the report predicts.

Britain joined many other EU nations in recession, including Belgium, the Netherlands and Spain, following a sharp fall in construction and poor figures from the financial and business services industries. The Item Club said financial services faced a "worsening outlook as the real effect of sluggish growth continues to impact creditor and consumer behaviour". It said write-offs on corporate loans will increase to 1.9% of loans in the corporate sector, from 1.6% in 2011. "Insolvencies are likely to rise more sharply in the north-east of England and Wales, where economic output is set to contract by 0.1% and 0.3% respectively," it said.

4 India federalism faces strain (Soutik Biswas on BBC)Why are leaders of opposition-ruled states making life difficult for India's federal government? In West Bengal, the feisty Mamata Banerjee has refused to give her consent to Delhi’s water-sharing treaty with Bangladesh, put her foot down on allowing foreign direct investment in supermarkets, and has complained that Delhi is not helping her state, which is drowning in debt. Emboldened by her moves, leaders of other non-Congress ruled states are also speaking up against what is arguably one of the most enfeebled governments India has seen.

These developments have a sense of deja vu around them. For long, states have complained of an overbearing and arrogant centre, which defeats the spirit of federalism. What national parties - specially the Congress - sometimes forget is that federalism has radically changed since the rise of smaller, regional parties and the decline of the Congress. The rise of powerful regional identity-driven parties has virtually altered the nature of federalism. Displaying political nous, these parties support federal governments strategically, extracting concessions, like "lucrative" ministerships, money and projects. For many, this is a triumph of federalism.

5 ILO finds labour market ‘alarming’ (BBC) The International Labour Organization has warned that the global employment situation is "alarming" and unlikely to improve soon. The agency said that austerity measures, especially in advanced economies, were hurting job creation. It said the situation was likely to get worse amid slowing global growth and more people entering the workforce. "It is unlikely that the world economy will grow at a sufficient pace over the next couple of years to both close the existing jobs deficit and provide employment for the more than 80 million people expected to enter the labour market during this period," the agency said in its latest report.

6 Spanish jobless at record high (BBC) The number of unemployed people in Spain reached 5,639,500 at the end of March, with the unemployment rate hitting 24.4%, the national statistics agency said. The figures came hours after rating agency Standard & Poor's downgraded Spanish sovereign debt. Last week, the Bank of Spain said the economy contracted by 0.4% in first three months of this year, after shrinking by 0.3% in the final quarter of last year. In the first three months of the year, 365,900 people in Spain lost their jobs. The country has the highest unemployment rate in the European Union and it is expected to rise further this year.

7 Samsung is new Phone No.1 (BBC) Samsung Electronics has overtaken Nokia to become the world's largest maker of mobile phones, according to research firm Strategy Analytics. Nokia took the top spot in 1998 from Motorola, but in the first quarter of 2012 Samsung shipped 93m phones compared to almost 83m by Nokia. Samsung also reported its highest quarterly profit since 2008. Net profit was $4.5bn in the quarter ending 31 March, up 81% from last year. Samsung is also the world's biggest TV and flat screen maker.

8 Our gangster state (Justice Malala in Johannesburg Times) Now that the ANC has managed to get rid of Julius Malema, its troublesome youth league president, the party might want to concentrate on something meatier. It might want to ask its president, Jacob Zuma, what kind of rotten state he is running in its name. The ANC sent Zuma to the Union Buildings. In its name, he governs South Africa. He should be accountable to it if he is not accountable to the rest of us, the citizenry.

He should now account to the ANC about why Richard Mdluli, the head of crime intelligence in the SA Police Service, is back at his desk and not in a court of law or behind bars for corruption. Nothing smacks of corruption in this country as much as the figure of Mdluli, a man who is being mentioned as a possible national police commissioner. Nothing scares me more than the possibility that such a compromised figure stands to assume so much power.

Mdluli was up on charges of murder, kidnapping, assault and intimidation. Where are the voices of Gwede Mantashe, Kgalema Motlanthe, Cyril Ramaphosa, Trevor Manuel and others when this rot is being perpetrated in their name? Where is the ANC of OR Tambo? It is silent, quivering in fear of its own "deployee", Jacob Zuma, a man who is running what is now clearly a gangster state.

9 India: Downgraded and unchanging (Khaleej Times) Last Wednesday, ratings agency S&P cut its outlook on India’s BBB- rating to negative from stable and warned it had a one-in-three chance of losing investment-grade status, sending shockwaves through the ministry. Its decision could raise costs for Indian borrowers and undermine foreign investor confidence in Asia’s third-largest economy. Finance Minister Pranab Mukherjee’s first public comment on the cut - “don’t panic” - seemed aimed as much at his own ministry as at the general public.

India has lost some of its shine recently. After growing at an enviable average rate of more than 8% annually for the previous five years, it expanded less than 7% in the last fiscal year, its slowest pace in three years. “S&P’s warning effectively says India’s rating is at risk of slipping to “junk”.  Sceptics say India is politically unable to take major steps to rein in ballooning subsidies, now more than 2% of GDP. Private economists also say the government will struggle to rein in its current account and fiscal deficits and revive GDP growth while world energy prices are high, and with a period of election spending looming.

Officials said India plans to take incremental steps to support projected growth and trim its fiscal deficit to 5.1% in the current year while - as one minister put it - “praying for good rainfalls and stable crude oil prices”. “The real issue in India is not that the problems are unknown or that the solutions are unclear; it is that solutions are not being implemented,” said Rajeev Malik, a senior analyst at CLSA Singapore. “That is unlikely to change substantially.”

10 Global car designs toe Chinese likes (Straits Times) As more and more Chinese buy cars, automakers say consumer tastes in the Asian nation have a growing influence on vehicle design the world over. China emerged as the world's top car market in 2009, and though the sector stalled last year, with sales rising just 2.5% to 18.51 million, carmakers are convinced it is where the industry's future lies. 'We want to have more China elements in our design for global cars,' said Ms Shen Li, spokesman for Nissan China. 'The designers find inspiration in traditional paper cutting, or in Tang (dynasty) paintings representing opulent women. Every model in the future has to have a good potential in China.'

11 India not high on Arcelor investment list (The Wall Street Journal)  ArcelorMittal, the world's largest steel producer, is focusing its investments on Canada, Brazil and Liberia, but India, where it has made little headway with three prominent steel projects, doesn't figure high on its list of investment destinations. Chairman Lakshmi Mittal, an Indian steel magnate who is also one of the world's richest people, said three steel plants the company had planned to build in India continue to face regulatory hurdles. "Capital is scarce, and in India for our projects, the process of approvals is still going on," Mr. Mittal said. "I feel bad; I feel a bit concerned" about delays in the steel projects. "There's no way I can ignore India, and I am not giving up on these projects," Mr. Mittal said. But India isn't an investment priority for ArcelorMittal at the moment, he added.

India's bureaucracy and Byzantine regulations have deterred foreign investment in several industries. their enthusiasm toward the country. Mr. Mittal said six years ago that ArcelorMittal would set up two steel plants in eastern India, and in 2010 his company said it would build another steel plant in the south of the country.

These projects have yet to move forward, as ArcelorMittal faces problems experienced by several industrial projects in India: difficulty in acquiring land because of regulatory issues; refusal of landowners to sell, a lengthy process for getting environmental clearances, and delays in the issuance of mining leases.

12 India’s social scientists must take the floor (Rama Bijapurkar in The Economic Times) India has a deeply entrenched knowledge caste system. 'Science' is superior to 'arts', 'quantitative' better than 'qualitative'; oncology and computer science will benefit the country more than sociology or psychology. Economics is superior to other 'arts' because it is quantitative. Consequently even the most pressing problems of national character and society and polity are sought to be solved by technofixes or higher GDP growth rate.

Seriously addressing such problems, however, requires rising above the caste system and getting social science disciplines to urgently work on them, or else they will rot the foundations of the country. Social scientists must be given wider platforms that will amplify their messages. As one prominent business media person said reflectively, "I have had several socialites and socialists on our channel but never really had a sociologist on it".

13 End of road for India service sector (Business Standard) India’s service sector prowess is already under challenge, and will be entirely overshadowed unless our policymakers wake up from their current complacent slumber, and pretty quickly at that. The Economic Survey of India this year finally reported what was a known fact for the past five years — that India is rapidly losing ground to China when it comes to global exports of commercial services.

A cause for worry is that a recent forecast from the US-based Hackett Group is that offshoring of jobs (in finance, IT, and other business services) to India will begin to decline starting 2014, and will reach the end of its life-cycle in eight years. Should that forecast come true, it will have serious implications for sectoral revenues and export earnings, and the last bastion of India’s supremacy in services trade would have been breached.