1 Europe flirts with deflation (The New York Times)
Some analysts and public officials say the beleaguered euro zone is finally on
the road to recovery. Unemployment has decreased slightly, though it remains
high at 12 percent, and the euro zone as a whole grew by 0.3 percent in the
last quarter of 2013.
But theirs is an overly optimistic view. Recent data
show that the economies of many European countries remain very weak, and the
euro zone as a whole could soon experience deflation, a decline in the general
level of prices, if government officials and central bankers do not take steps
to bolster the economy. Last month, inflation in the 18 countries that use the
euro was just 0.7 percent, down from 0.8 percent in December. That is far below
the European Central Bank’s target for an inflation rate of just under 2
percent.
Deflation is a pernicious and self-reinforcing
phenomenon that debilitates economies, as Japan experienced for much of the
past 15 years. When prices fall broadly, consumers put off purchases and businesses
see little value in investing for the future, creating a downward spiral.
Deflation also makes it more difficult for governments and other borrowers to
repay their debts.
Earlier this month, the central bank’s president,
Mario Draghi, dismissed the fear of deflation, but his words were hardly reassuring.
The central bank’s inaction is particularly disconcerting because it is the
only public institution that could provide a boost to the weak euro-zone
economy. Under pressure from Germany, governments across the euro zone have
committed to cutting spending and raising taxes in a counterproductive effort
to reduce their fiscal deficits.
http://www.nytimes.com/2014/02/18/opinion/europe-flirts-with-deflation.html?hpw&rref=opinion&_r=0
2 WhatsApp's boss moves from welfare to billionaire (Adam
Satariano in San Francisco Chronicle) The $19 billion deal to sell WhatsApp to
Facebook started at Yahoo! more than five years ago, when Jan Koum became
disillusioned at the way Internet companies were fixated on advertising. He
left Yahoo in 2007 with one of the company’s other engineers, Brian Acton, and
started a company by 2009 that shuns advertising altogether. The strategy
allowed them to concentrate on creating an easy-to-use messaging product
instead of developing new ways to glean customer information for their
marketing pitches, Koum said in a 2012 blog post.
Their
approach paid off. WhatsApp amassed 450 million monthly users -- twice as many
as Twitter -- who send billions of messages a day. Yesterday, Facebook Chief
Executive Officer Mark Zuckerberg bought their five-year-old company in the
largest Internet deal since Time Warner’s $124 billion merger with AOL in 2001,
a deal that will almost certainly make Koum and Acton billionaires several
times over.
For Koum,
38, the windfall would stand in stark contrast to his years as a teenager, when
his family relied on food stamps after emigrating from Ukraine. The experience
of living in a country where phone lines were often tapped, instilled the
importance of privacy in him. WhatsApp doesn’t collect information like name,
gender, address or age. Instead, users are approved after their phone numbers
are authenticated.
The
partners are old enough to remember the first dot-com bust. Acton, 42, grew up
in Michigan and was employee No. 44 at Yahoo, working on advertising, shopping
and travel services, according to Wired. He invested during the boom and lost
millions of dollars when the market imploded, according to Forbes. He
later hired Koum at Yahoo and served as his mentor, inviting him over to his
house and taking him skiing, Forbes said. After exiting Yahoo, Acton said on
Twitter that he was turned down for a job at Facebook in 2009.
Venture
capital firm Sequoia Capital invested $8 million in WhatsApp in 2011, for a
more than 15 percent stake that is now worth about $3.5 billion, according to
people with knowledge of the deal. Koum’s aversion to advertising
contrasts with Facebook’s efforts to make more money from people using its
service on mobile devices. He said in a statement on the company’s website that
WhatsApp will remain autonomous and operate independently.
http://www.sfgate.com/business/bloomberg/article/WhatsApp-Founder-Goes-From-Welfare-to-Facebook-5252552.php
Guardian reporters saw 21 corpses on Independence Square, the crucible of the mass rebellion against Yanukovych, and in a nearby hotel converted into a makeshift field hospital. Oleh Musiy, head doctor for the opposition movement, said 70 protesters died on Thursday, bringing the death toll in 72 hours to about 100.
As Moscow encouraged Yanukovych to crack down harder on the unrest and threatened to withhold crucial financial aid unless he did, and the European Union announced limited sanctions on individual Ukrainian officials, three EU foreign ministers spent almost five hours with the president, desperately seeking a way back from the brink through a compromise between his increasingly hardline regime and opposition leaders.
Dependent on Russian money and gas supplies since he spurned trade and political pacts with Europe in November, the spark for the crisis, Yanukovych was told by Moscow to maintain a hard line and warned that the financial aid could be turned off if he did not. Dmitry Medvedev, the Russian prime minister, said that Yanukovych would have to restore order to qualify for the Russian help and that if he did not the opposition forces would use him as "a doormat".
http://www.theguardian.com/world/2014/feb/20/ukraine-dead-protesters-police.
4 Wal-Mart profit drops 22% (BBC) The world's largest
retailer, Wal-Mart, has reported a 22% drop in quarterly profit and given a
weaker-than-expected earnings forecast for the coming year. Net income for the
three months to 31 January fell to $4.4bn from $5.6bn a year earlier. Wal-Mart
said tough winter weather, cuts to government benefits and higher taxes
contributed to the fall.
Wal-Mart
said reduced food-stamp benefits had been partly behind its lower profits, along
with competition from heavy discounting during the holiday season. Comparable
sales at its US stores fell by 0.4% in the three-month period. Wal-Mart's total
revenue for the quarter rose by 1.4% to $129.7bn. Chief executive Doug McMillon
said he would "innovate to improve productivity" to keep prices low.
http://www.bbc.co.uk/news/business-26274055
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