In biggest IPO, Facebook raises $16bn; HP to cut 30,000 jobs; Austerity 'will send Greece to hell'; A tale of two Rupees; 'ANC sitting on time bomb'

1 In biggest IPO, Facebook raises $16bn (The New York Times) Facebook pulled it off.  As investors raced to buy shares, the sprawling social network raised $16 billion on Thursday, in an initial public offering that valued Facebook at $104 billion. While the IPO shares, 421 million of them, are being sold at $38 each, the feverish anticipation of their debut could drive them higher on Friday. Newly public technology stocks — particularly ones that have captured investors’ attention like Facebook — often achieven double-digit gains in a one-day pop.

Investors who buy Facebook shares are taking a stake in a unique and potentially valuable business. But they are also exposing themselves to the risks posed by a relatively young company operating in uncharted territory. The IPO signals a rapid evolution for the company. In just eight years, Facebook has gone from a scrappy college service founded in a Harvard dormitory to the third-largest public offering in the history of the US, behind General Motors and Visa. At $104 billion, the social network’s market value is higher than those of McDonald’s, Citigroup, Amazon and all but a handful of other American companies.

2 Hewlett Packard to cut 30,000 jobs (The New York Times) Hewlett Packard’s chief executive, Meg Whitman, plans to cut 30,000 or more jobs next week, according to officials familiar with the plan. Her goal, they said, is to spend the money she saves on increasing the efficiency of the company’s sales force and on creating new products. The executives, who spoke on the condition of anonymity because they were not authorized to speak for the company, said that HP would seek layoffs and voluntary retirements from across the company. The total could be as much as 10 percent of HP’s 324,000-person work force. China, which is one of HP’s highest growth areas, will probably be spared, as will its research and development efforts.

Ms. Whitman, who became HP’s chief executive last September, “is trying to build a new company,” one senior executive said of the job cuts. “You can count this as a part of that.” Considered a slow-moving giant in the tech industry, HP had revenue of $127 billion in fiscal 2011, but net earnings of just $7.1 billion. While it has a leading position in the sales of low-margin personal computers, HP has been late or unsuccessful in many recent tech trends like providing cloud computing services for big companies and smartphones and tablet computers.

3 Working off the rolls in Spain (The New York Times) More than six months ago, a 37-year-old worker here named Juan was laid off from his job delivering and assembling furniture for customers of Ikea, joining the legions of unemployed in Spain. Or so it would seem. Since then, Juan has continued doing more or less the same work. But instead of doing it on the payroll of  a transport subcontractor to Ikea, he hovers around the parking lot of the megastore, luring customers of his own by offering not only to deliver their furniture but also to do “general work,” like painting and repairs, all for the bargain price of $51, a day.

As Spain’s recession deepens, more workers like Juan are being shunted into an underground economy that amounts to as much as a fifth of Spain’s gross domestic product, according to some estimates, with broad implications as the country tries to revive itself, reform its labor market and keep at bay the kind of wrenching crisis that now threatens to push Greece out of the euro zone. The happy news is that the size of the underground economy means that more Spaniards are working than it might seem, and that the official unemployment figure of 24.4% — the highest in Europe — may be overstated by as much as five to nine percentage points, economists say.

4 Eurozone may be ready for Greek exit (The New York Times) It is increasingly conceivable that Greece may leave the euro zone, not just because of its own political dysfunction but also because the consequences of such an exit for the rest of Europe and the global economy no longer seem quite so scary. The foot-dragging and brinkmanship of the last few years have won the other members of the currency union valuable time to prepare for life without Greece. Banks have recorded losses on Greek investments, companies are making contingency plans and Europe has bolstered rescue funds for other vulnerable nations like Portugal, Ireland and Spain.

But some experts say Europe’s preparations remain incomplete and the potential costs of a Greek exit are highly uncertain and potentially substantial. That reality helps to explain why Germany continues to profess its determination to keep Greece in the currency union if at all possible. What once seemed unthinkable is being reduced to a budget line. Economists at a German bank recently estimated that a Greek exit would cost the German government about $127 billion, or about 3% of the nation’s annual economic output.

5 Warren Buffet buys 63 local papers (San Francisco Chronicle) Warren Buffett is buying 63 newspapers from Media General. Berkshire Hathaway, the billionaire's conglomerate, will pay $142 million for papers including the Richmond Times-Dispatch in Virginia as Buffett bets community-focused publications will weather an advertising slump. Berkshire already owns the Omaha World-Herald in its Nebraska hometown and the Buffalo News in New York and is the largest shareholder of Washington Post Co.

6 Austerity ‘will send Greece to hell’ (The Guardian) The two main figures in what promises to be Greece’s most electric election in living memory were on a collision course on Thursday, with one predicting "hell" if Athens adheres to EU-mandated austerity and the other forecasting a "nightmare" if the nation abandons reforms and gives up the euro. The leftwing Syriza leader, Alexis Tsipras, said the international accord that Greece had signed up to in return for rescue loans was catastrophic for the country. Instead of a rescue, the debt-stricken nation has been thrown into its worst recession since the Second World War. "With this policy [bailout agreement] we are going directly to hell," he said.

Earlier in the day, Antonis Samaras, who heads the conservative New Democracy party, painted a very different picture in a speech that conjured images of a living hell if Athens quit the EU. In the event of the debt-stricken country reneging on the pledges it had made, the road ahead would be a "nightmarish" one, he said. Reversion to the drachma would mean wages, deposits and property values all being "cut in half", and the price of imported commodities, such as food and fuel, skyrocketing, he predicted. "This is the nightmare that those who speak of a unilateral condemnation [of the loan agreement] will bring," he said.

7 Moody’s downgrades 16 Spanish banks (BBC) Ratings agency Moody's has cut the credit ratings of 16 Spanish banks, a further blow to a country that is struggling to deal with the bad debts of its banking sector. It also cut the debt rating on Santander UK, a subsidiary of the Spanish banking giant. It comes after shares in struggling lender Bankia fell another 14%. They have almost halved in value this month. Fears about losses at Spanish banks has hit shares across Europe.

8 A tale of two R upees (Khaleej Times) I would use any rise in the rupee to establish new shorts, with a target (initially at least) of the December low at 54.30. I notice the latest RBI move has not reassured the Indian rupee FX options market, with the implied volatility for one month rupee options still as high as 11%. I notice rupee six-month offshore NDF contracts trade as high as 55. I see the Indian rupee as low as 56-58 in the next six months.

The Pakistani rupee has depreciated to 90 against the dollar with inflation higher than 11%, among the highest in Southeast Asia. The Taleban insurgency, terrorist attacks, lower US aid as the Pentagon exits Afghanistan, tensions in the PPP government, election risk and power blackouts mean near zero FII inflows. Economic growth is rarely three per cent while inflation could well rise to 12%. The rupee is therefore almost a certain loser in the FX market and IMF loan repayments will gut State Bank hard currency reserves. I expect the Pakistani rupee to fall to 94 against the dollar in the next twelve months.

9 ‘ANC sitting on time bomb’ (Johannesburg Times) Cosatu general secretary Zwelinzima Vavi warned the ANC yesterday it was sitting on "a ticking time bomb that is starting to explode” and needed to get its house in order or face a revolt similar to the 1976 riots against Bantu education. Vavi said the party had landed itself in a "very dangerous place” and needed to do some serious introspection to salvage its losses and improve the lives of ordinary citizens.

"South Africa as a country is sitting on a ticking bomb that one day will explode. Another 1976 is waiting to happen,” he said. "If we preoccupy ourselves with palace politics while Rome is burning, history will judge us equally and harshly.” The warning was given a day after thousands of DA supporters marched on Cosatu’s headquarters in Braamfontein, Johannesburg. The march ended in chaos following violent incidents between DA and Cosatu supporters. The ANC will hold its elective conference in Mangaung in December, when President Jacob Zuma is expected to fight for re-election. Earlier this month, the International Labour Organisation issued statistics that showed unemployment in South Africa was at 23.9% and 70% of the unemployed were between the ages of 15 and 34.

10 Pakistan’s debt volcano (Dawn) One of the most worrying elements in Pakistan’s current economic condition is the rapid accumulation of public debt since 2008. Total debt obligations on the sovereign balance sheet have touched Rs12.83tr as of end December 2011 — over 65% of GDP. By comparison, this figure was around Rs6.5tr on June 30, 2008 — representing a near doubling of debt and liabilities on the public-sector balance sheet in less than four years.

More worryingly, the inability of the government to rein in high fiscal deficits, and the recourse to high-cost, short-maturity domestic borrowing has amplified the problem. The cost this rapid accumulation of debt is imposing can be gauged from the fact that debt servicing now accounts for over 80% of net revenue (after transfer to provinces). This fiscal squeeze means that the government is progressively left with less and less to pay for all the other demands on the budget — including for making critical public-sector investments or for social-sector expenditures.

11 India’s transgenders struggle to survive (Dawn) Hundreds of thousands of transgenders in India  are ostracised, often abused and forced into prostitution due to no legal recognition, even as the world marked International Day against Homophobia and Transphobia on May 17. Male-to-female transgenders, also known as “hijras”, have a long history in South Asia, experts say. The Sanskrit texts of the Kama Sutra, written between 300 and 400 BC, refers to a “third sex”.

During the Mughal empire in the 16th and 17th centuries, castrated hijras, or eunuchs, were respected and considered close confidants of emperors, often being employed as royal servants and bodyguards. These jobs were so coveted that historians say some parents actually castrated their sons in order to attain favour with the Mughal kings and secure employment for their children. But despite acceptance centuries ago, hijras today live on the fringes of Indian society and face discrimination in jobs and services such as health and education.

12 India won’t do a China (Michael Pascoe in Sydney Morning Herald) Amidst the petty local political noise, the really big message in the speeches by BHP's chairman and CEO this week was entirely missed: implicit in the iron ore demand projections is that India isn't going to do a China, that India won't spectacularly industrialise in the East Asian manner.

The rise of India's middle class has been based on new industries that have arisen beyond the dead hand of the nation's vast and corrupt bureaucracy. That middle class is large in numbers by any other country's standards, but it remains a minority in India and the gap between middle class and the majority grows. Half of Indian homes don't have a toilet, by some reckonings, a third of the nation doesn't even have access to adequate sanitation. And there's no sign of such markers changing while the country remains on its current course.

The idea that India can somehow skip industrialisation and launch straight into a post-industrial economy is fanciful. Adding another half a billion people over the next four decades makes it fantastical.

13 Frustration for India’s construction cos (The Wall Street Journal) India’s engineering and construction companies are increasingly looking overseas to get business, frustrated with the slow pace of domestic spending on power, ports, airports and hydrocarbons and fed up with the lack of new policy initiatives. India has set a tall target of $1 trillion in public and private investments in infrastructure over the next five years. But that already looks unrealistic. “New project launches dropped by 32% in 2011-12, owing to lack of clearances and no clarity on policy reforms,” said a recent analyst report by Mumbai-based Angel Broking Ltd.

Thermax’s managing director, MS Unnikrishnan, said the country is unlikely to see any surge in infrastructure spending this financial year, which runs until March 31, 2013, except for some sectors such as roads and water supply systems. “If there are no investments in these sectors, there’s a danger of social unrest in the country,” he said.

14 Cartoon derails India legislation (The Wall Street Journal) These days the gatekeepers of democratic India — the Parliamentarians who are entrusted with passing laws that will make India a better place to live and do business in —  seem easily distracted. What’s causing a ruckus in that hallowed house this time around is a cartoon that dates back to 1949. The offending cartoon – which was sketched by a legendary political cartoonist of the era, K. Shankar Pillai – depicts Bhimrao Ramji Ambedkar, who was the head of the panel drafting the Constitution, sitting on a snail, holding a whip.

The word “Constitution” is written on the snail. Behind the snail stands then Prime Minister Jawaharlal Nehru, holding another whip. For most, the cartoon hinted that  Mr. Nehru was trying to goad the snail on. But instead of reading it as a comment on the slow pace of framing of the Constitution, several politicians saw it as an insult to Mr. Ambedkar.

It’s not that parliamentarians didn’t have more important things to worry about – they did. A total of 96 bills were pending in Parliament at the start of the ongoing Budget session, according to PRS Legislative Research, a nonprofit research firm based in New Delhi. Of these, the government listed 39 for consideration, in addition to the finance bill. So far only four have been passed by both houses of Parliament.

15 Shah Rukh Khan: King of brouhaha (The Wall Street Journal) Actor Shah Rukh Khan may face a ban from entering the Wankhede stadium in Mumbai for an altercation with officials from the Mumbai Cricket Association last night. He is no stranger to public controversy. And he seems to be courting it increasingly often.

Here are a few episodes in which he had featured, with the caveat that we are not in any way suggesting he was always at fault. 1. He got into a brawl with Shirish Kunder, husband of Farah Khan, in February over some snide remarks Mr. Kunder made about Mr. Khan’s movie, Ra.One. 2. In April, he was summoned by a lower court for smoking in the Sawai Man Singh stadium during an IPL match in Jaipur. 3. The actor was held up by US immigration in April, as he was on his way to Yale to deliver a lecture. He also hit the headlines for being stopped for a lengthy interrogation by US immigration as he tried to enter the US in 2009. 4. Then there is the much talked-about spat with Salman Khan at Katrina Kaif’s birthday party in 2008.