1 From idea networks to action networks (The New York Times) Networks are valuable when it comes to having an idea because, in fact, broad-ranging networks give you access to lots of ideas to choose from. Call these idea networks. No one idea will likely be any good but, with enough ideas, one will. More importantly, however, no idea is going to be good enough. The act of making it real will change it beyond recognition—and that’s where very different networks, action networks, are required.
As an old story goes: A pig and a chicken open an outlet together, selling ham and eggs. The chicken says, “This is fun, we’ll split the profits.” The pig looks down for a while, then at the chicken, then says: “I don’t think so. You’re contributing but I’m committed.” With that in mind, idea networks are wonderful in their time and place. As Thomas Jefferson said: “My knowledge is like a candle; with it I can light your candle, and now we both have light.” The other side of that is, in giving you his idea, he didn’t commit much. Idea networks are low-commitment networks. When it’s time to do something, it’s necessary to switch over to action networks. Whether it’s in a big company or a startup, This entails a very different approach (and very different set of skills). Discussions have to happen: about ideas, about goals, about timing, about roles, and about what has to happen next.
2 How Greeks live now (The New York Times) By many indicators, Greece is devolving into something unprecedented in modern Western experience. A quarter of all Greek companies have gone out of business since 2009, and half of all small businesses in the country say they are unable to meet payroll. The suicide rate increased by 40% in the first half of 2011. A barter economy has sprung up, as people try to work around a broken financial system. Nearly half the population under 25 is unemployed. Last September, organizers of a government-sponsored seminar on emigrating to Australia, an event that drew 42 people a year earlier, were overwhelmed when 12,000 people signed up. Greek bankers said people had taken about one-third of their money out of their accounts; many, it seems, were keeping what savings they had under their beds or buried in their backyards. One banker, part of whose job these days is persuading people to keep their money in the bank, said to me, “Who would trust a Greek bank?”
The situation at the macro level is, if anything, even more transformational. The Chinese have largely taken over Piraeus, Greece’s main port, with an eye to make it a conduit for shipping goods into Europe. Qatar is looking to invest $5 billion in various projects in Greece, including tourism infrastructure. Other, relatively flush Europeans are trying to make “Greece the Florida of Europe,” Theodore Pelagidis, a Greek economist at the University of Piraeus, said there were plans to turn islands into expensive retirement homes for wealthy people from other parts of the continent. Whether or not the country pays its debts, he went on, other nations and foreign companies “now understand the Greek government is powerless, so in the future they will take over viable assets and run parts of the country by themselves.”
3 Shame on Europe for betraying Greece (The Guardian) The "austerity package", as the newspapers like to call it, seeks to impose on Greece terms that no people can accept. Even now the schools are running out of books. There were 40% cuts in the public health budget in 2010. Greece's EU "partners" are demanding a 32% cut in the minimum wage for those under 25, a 22% cut for the over 25s. Already unemployment for 15-24-years-old is 48%. Overall unemployment has increased to over 20%.
When we casually use a term like "bailout", it is important to remember that it is not people who are being bailed out, or at least not the Greek people. The bailout will not save a single Greek life. The opposite is the case. What is being "bailed out" is the global financial system, including the banks, hedge funds and pension funds of the other EU member states, and it is the Greek people who are being ordered to pay – in money, time, physical pain, hopelessness and missed educational opportunities. The relatively neutral, even stoic, term "austerity", is a gross insult to the Greek people. This is not austerity; at best it is callousness.
In essence, this crisis is a failure of the EU states to show solidarity in the face of an onslaught from the financial markets. At first glance this seems to be a very simple fight. In one corner you have nation states, which have the wellbeing of their citizens as their raison d'être; in the other you have global capitalism as represented by the financial markets, which has the wealth of a tiny few as its raison d'être. But the nation state has, for a considerable time, identified itself with those same markets. States have agreed to see themselves as economies rather than societies. More recently we have been led to believe that the market alone can provide everything the citizen needs and much more efficiently than the structures that the citizens normally rely on and which they have, over generations, erected as protections against the revenge of the market. This is the triumph of capitalism, that it has persuaded the world that capitalism is the world.
4 India woman wins right-to-toilet fight (BBC) A newlywed woman in a village in the Indian state of Madhya Pradesh has won her struggle to have a toilet at her husband's home. Anita Narre left husband Shivram's home two days after her marriage in May last year because the house had no toilet. She returned eight days later after Shivram, a daily wage worker, built one with savings and aid from villagers.
An NGO announced a $10,000 reward for Mrs Narre for her "brave" decision and forcing her husband to build a toilet. More than half-a-billion Indians still lack access to basic sanitation. The problem is acute in rural India and it is the women who suffer most. Shivram said he was not able to build a toilet at home because of lack of money. Under new local laws in states including Chhattisgarh, people's representatives are obliged to construct a flush toilet in their own home within a year of being elected. Those who fail to do so face dismissal.
5 Apple share price goes over $500 (BBC) Shares in technology giant Apple have crossed $500 a share for the first time. It caps a remarkable turnaround for the iPhone maker, whose shares were once worth as little as $3.19 in 1997, when it faced the possibility of bankruptcy. Apple is now worth $460bn. Last month, Apple reported record-breaking net profits for the last three months of 2011, up 118% to $13.06bn from the same period a year earlier. The profits were the fourth-biggest in US corporate history. Apple is in an escalating patent war with rivals Google and handset-makers such as Samsung and HTC over their operating systems.
6 Syrians take to pigeon mail (Dawn) Cut off by a relentless barrage of government shelling, activists in the besieged Syrian city of Homs have reverted to the age-old practice of using carrier pigeons to communicate with each other. “From the activists in Old Homs (district) to those in Baba Amr, please tell us what you need in terms of supplies, medicine and food,” reads one message attached to a pigeon’s leg. “God willing, we will deliver them to you,” says the message.
“We thank Bashar for taking us back to the Middle Ages,” says Omar, an activist in the Bab Sbaa neighbourhood of the city, referring to Syrian President Bashar al-Assad. Omar is seen standing among pigeons on the rooftop of a building in Bab Sbaa in one of the YouTube videos uploaded to the Internet via a satellite feed. He carefully scrawls a message on a small piece of paper to his counterparts who are little more than two kilometres away in Baba Amr, which has suffered some of the heaviest shelling. Syrians were among the first people to use pigeons as messengers and this was often the sole source of communication in the region.
7 India’s awesome threesome (Khaleej Times) Indian women have been discriminated against by their male counterparts for centuries and there are ancient texts justifying their inferior status. This discrimination is clearly shown in the preference most Indian couples have for the male child. Yet – and this is the paradox – the most powerful political personality in India is a woman, the Italian-born Sonia Gandhi.
Which brings me to the three women of this column, each remarkable in her own way, who presently hold sway over an immense swathe of India: Mayawati, Jayalalithaa and Mamata Banerjee. Mayawati is the Chief Minister of India’s most populous State, Uttar Pradesh (UP), Jayalalithaa of Tamil Nadu, and Mamata of West Bengal.
Together, they control the destiny of 360 million Indians, a third of the country’s population, and more than the entire population of the USA. All these three women, completely different otherwise, have one trait in common: They are single and have made it to the top of their respective States, on their own. They had no family name or kinship, did not even belong to a major national party. So, their achievement is all the more remarkable. How does one explain their success in a largely male-dominated society? Space constraints prevent a comprehensive answer. However, note how these ladies are called by their devoted followers: “Amma” (mother) for Jayalalithaa, “Didi” (elder sister) for Mamata, “Behenji” (also sister) for Mayawati. A matriarchal-like, or elder sister-like figure is easier to deal with, or look up to, than a wife wanting equality. In India, mothers and elder sisters, along with goddesses such as Parvati, Laxmi and Kali, are both revered and feared. And these three women are a combination of all of them.
8 The reasons for political dynasties (The Wall Street Journal) How can we explain the anomaly of dynastic politics in a thriving democracy? As the third phase of voting gets underway in Uttar Pradesh, members of the Nehru-Gandhi (and now perhaps also Vadra) clan will be very much in evidence on the hustings. In the upcoming election in the state of Goa for instance, a third of the candidates that the Congress party is fielding come from just five families. It looks like dynastic politics is here to stay.
Pradeep Chhibber, a political science professor at Berkeley, argues that internal party organization in India is indeed a key factor determining whether a party becomes dynastic or not. He pinpoints three conditions that promote dynasticism. The first is a party whose leadership is self-perpetuating and oligarchic, rather than independent and democratically accountable. The second is the absence of large-scale voter mobilization through independent civil society bodies. The third and perhaps most crucial factor is that campaign funding is collected and dispersed by central party officials and not devolved to the local level. It’s pretty obvious that all of these conditions apply in spades to the Congress party, in power at the center, and many regional parties as well. Several major parties, such as the various Communist parties and the Bharatiya Janata Party are not dynastic in their organization, but that doesn’t mean they too don’t have hereditary MPs in Mr. French’s sense of the term.
The Chhibber study matches the results of research on other countries in which dynastic politics are prevalent. It’s worth remembering that politics in that other great democracy, the United States, also has strong dynastic features. This is quite apart from well-known political dynasties such as the Bush and Kennedy families. In their study, Ernesto Dal Bo, Pedro Dal Bo and Jason Snyder establish that the US Congress is also heavily dynastic. They find that this is not because political families are somehow more capable of the job of politics than everyone else. Rather, as they put it, “in politics, power begets power.” All of this begs the question: parties may be dynastic, but why do voters passively accept it? One possibility is that dynastic politicians bring more public spending or other benefits to their constituencies compared to non-dynastic politicians.
9 Photograph in The Times of India showing a couple being punished by a woman police constable in Dhanbad for celebrating Valentine’s Day. (Considering the noise around the ban on Salman Rushdie attending the Jaipur literary festival recently, this photo deserved better placement.)
10 Pocker cartoon in The Financial Chronicle on Indians stashing $500bn worth illegal funds abroad: That’s why the India story still sells overseas and never in India.
Tuesday, February 14, 2012
Britain's AAA rating in doubt; Tech cos seek to own every moment of users; 'Indians stashed away $500bn'; Singlehood thoughts on Valentine's Day
1 Britain’s AAA rating in doubt (The Guardian) Moody's issues credit warnings on nine European countries including the UK. Negative outlook for Austria, France and the UK. Italy, Malta, Portugal, Spain, Slovakia, Slovenia and Malta have ratings cut.
Britain's AAA credit rating was thrown into doubt after the ratings agency Moody's said the ongoing euro crisis and a credit squeeze on the banking sector put the country at a higher risk of defaulting on its debts. Moody’s said countries including the UK, France and Italy would be put on negative watch after citing "uncertainty" over Europe's handling of its ongoing debt crisis. The possible loss of the UK's much coveted triple-A status will be a bitter blow for the chancellor George Osborne who has staked his reputation on distancing Britain from the ailing eurozone. The AAA rating is the highest awarded to a country and allows it to borrow at the lowest interest rates.
2 Tech cos seek to own every moment of users (The New York Times) Technology used to be so simple. In the old days, you listened to music on your iPod while exercising. During an idle moment at the office you might use Google to search for the latest celebrity implosion. Maybe you would post an update on Facebook. After dinner, you could watch a DVD from Netflix or sink into a new page-turner that had arrived that day from Amazon. That vision, where every company and every device had its separate role, is so 2011.
The biggest tech companies are no longer content simply to enhance part of your day. They want to erase the boundaries, do what the other big tech companies are doing and own every waking moment. The new strategy is to build a device, sell it to consumers and then sell them the content to play on it. And maybe some ads, too. Last week’s news that Google is preparing its first Google-branded home entertainment device — a system for streaming music in the house — might seem far afield for an Internet search and advertising company, but fits solidly into an industry-wide goal in which each tech company would like to be all things to all people all day long. “It’s not about brands or devices or platforms anymore,” said Michael Gartenberg, an analyst at Gartner. “It’s about the ecosystem. The idea is to get consumers tied into that ecosystem as tightly as possible so they and their content are locked into one system.”
3 ‘Indians have stashed away $500bn’ (BBC) The chief of India's federal investigation agency says Indians have illegally deposited an estimated $500bn in overseas tax havens. Central Bureau of Investigation (CBI) director AP Singh said Indians were the largest depositors in foreign banks. Funds were being sent to tax havens such as Mauritius, Switzerland, Lichtenstein and the British Virgin Islands among others, he said. Analysts say this flight of capital has helped widen inequality in India.
In a report in November 2010 the US-based group, Global Financial Integrity, said India had lost more than $460bn between 1948, a year after Independence, and 2008 because of companies and the rich illegally funnelling their wealth overseas. India's underground economy accounted for 50% of the country's gross domestic product, it said.
4 Many faces of Arab Spring (Dawn) None of the Arab leaders seriously addressed the deleterious effects of the neo-liberal economics adopted under western advice. Against this backdrop, western powers can achieve only limited success in redirecting the Arab upsurge to their advantage. President Nicolas Sarkozy began by offering French assistance to the then Tunisian president, Zine El Abidine Ben Ali, to put down the protests. Washington made pro-Mubarak noises. Once the West comprehended the scale of the uprising, it switched to the lexicon of freedom and liberation.
Nothing defines the complexity of the Arab Awakening better than Syria where all the sub-texts are heading for a bloody denouement. Bashar al-Assad has lost support of Arab states and, no less significantly, of neighbouring Turkey. He now depends heavily on Russia and China that vetoed a Security Council resolution which might have conceivably created space for foreign intervention.
5 The price of keeping women illiterate (Dawn) ‘If you educate a man you educate an individual, but if you educate a woman you educate a nation’ is an African Proverb which is reiterated by many dignitaries since it was first articulated by Dr James Emmanuel Kwegyir-Aggrey, a Ghanian scholar. It is easy to repeat these words in front of an audience, however, the true wisdom hidden in these words is evidently misconstrued by many people in Pakistan, especially a particular religious cleric, representing a mosque located in one of the chicest areas of Karachi, who during the Friday prayers sermon, conveniently chants that the primary reason why the Muslim world is supposedly headed towards a rampant decline is because “Muslims have become beghairats (people who lack self-esteem) as they send their daughters abroad to acquire education and invite ‘God’s wrath’.
Women, who are known to lay the fundamentals of any society, need equal, if not more, education than men because it is them that sensitises their children in formulating the society they live in – a place which could become a realm of equality and tolerance, if education is promoted. Hence, it is indispensable to educate women. The lack of education amongst the female populace of Pakistan is perhaps one of the many reasons why women have submitted to the system as being dysfunctional because fighting back has never been an option. Women, who fight against all adversities and refuse to become a victim are agents of change who have been amiss for so long. It is their time to bring about a revolution that will challenge, if not change, the status quo.
6 India bank chief criticises government spending (The Wall Street Journal) India's central bank chief heightened his criticism of government spending, saying that without a credible plan to rein in debt, it will be hard to bring down inflation and accelerate the country's disappointing growth rate. The comments by Duvvuri Subbarao, governor of the Reserve Bank of India, comes as India's leaders grapple with the toughest economic period in years. Through much of the past two decades, India had one of the fastest-growing economies in the world. But in the past year, persistent inflation, lofty interest rates, government gridlock on economic overhauls, a plunging currency and a swelling fiscal deficit have raised concerns that India's economic boom is waning.
Mr. Subbarao, himself, has been blamed for the slowdown, as outside economists say he kept interest rates too low for too long after he took over the central bank during the 2008 global financial crisis. Then, with inflation shooting higher, he raised rates repeatedly last year, snuffing out credit and slowing the economy.
7 Singlehood thoughts on Valentine’s Day (Business Line) Amidst all the mushy Valentine's Day promotions that marketers have been dishing out, a few companies have taken a different tack - rubbishing mush and even promoting ‘singlehood.' Online shoe retailer Fashos.com says that it will reward all those who can declare to the world this Valentine's that they love being ‘single and smart.' Fashos.com has personalised its Facebook fan engagement by deploying an application around February 14. Here fans can post and tell the world that they are single, smart and their reason for liking singlehood.
“Turning the concept of Valentine's on its head and doing a counter is something that vibes with young audiences looking for witty entertainment on social media platforms,” says Mr Sumit Agarwal, Founder of Fashos.com. Similarly, Milagrow, the tablet PC maker, is promoting its product with the statement: Mushy Valentine's Day gifts ‘are now history;' women professionals should be gifted with the tab top PC, the ad says. “Tired of Valentine's parties in the city?' screams a hoarding by the Bangalore-based The Park Hotel, which is on the Anti-Valentine's Day track. No candies, no candles, no flowers, just a singles night out at I-Bar, says the promotion.
Britain's AAA credit rating was thrown into doubt after the ratings agency Moody's said the ongoing euro crisis and a credit squeeze on the banking sector put the country at a higher risk of defaulting on its debts. Moody’s said countries including the UK, France and Italy would be put on negative watch after citing "uncertainty" over Europe's handling of its ongoing debt crisis. The possible loss of the UK's much coveted triple-A status will be a bitter blow for the chancellor George Osborne who has staked his reputation on distancing Britain from the ailing eurozone. The AAA rating is the highest awarded to a country and allows it to borrow at the lowest interest rates.
2 Tech cos seek to own every moment of users (The New York Times) Technology used to be so simple. In the old days, you listened to music on your iPod while exercising. During an idle moment at the office you might use Google to search for the latest celebrity implosion. Maybe you would post an update on Facebook. After dinner, you could watch a DVD from Netflix or sink into a new page-turner that had arrived that day from Amazon. That vision, where every company and every device had its separate role, is so 2011.
The biggest tech companies are no longer content simply to enhance part of your day. They want to erase the boundaries, do what the other big tech companies are doing and own every waking moment. The new strategy is to build a device, sell it to consumers and then sell them the content to play on it. And maybe some ads, too. Last week’s news that Google is preparing its first Google-branded home entertainment device — a system for streaming music in the house — might seem far afield for an Internet search and advertising company, but fits solidly into an industry-wide goal in which each tech company would like to be all things to all people all day long. “It’s not about brands or devices or platforms anymore,” said Michael Gartenberg, an analyst at Gartner. “It’s about the ecosystem. The idea is to get consumers tied into that ecosystem as tightly as possible so they and their content are locked into one system.”
3 ‘Indians have stashed away $500bn’ (BBC) The chief of India's federal investigation agency says Indians have illegally deposited an estimated $500bn in overseas tax havens. Central Bureau of Investigation (CBI) director AP Singh said Indians were the largest depositors in foreign banks. Funds were being sent to tax havens such as Mauritius, Switzerland, Lichtenstein and the British Virgin Islands among others, he said. Analysts say this flight of capital has helped widen inequality in India.
In a report in November 2010 the US-based group, Global Financial Integrity, said India had lost more than $460bn between 1948, a year after Independence, and 2008 because of companies and the rich illegally funnelling their wealth overseas. India's underground economy accounted for 50% of the country's gross domestic product, it said.
4 Many faces of Arab Spring (Dawn) None of the Arab leaders seriously addressed the deleterious effects of the neo-liberal economics adopted under western advice. Against this backdrop, western powers can achieve only limited success in redirecting the Arab upsurge to their advantage. President Nicolas Sarkozy began by offering French assistance to the then Tunisian president, Zine El Abidine Ben Ali, to put down the protests. Washington made pro-Mubarak noises. Once the West comprehended the scale of the uprising, it switched to the lexicon of freedom and liberation.
Nothing defines the complexity of the Arab Awakening better than Syria where all the sub-texts are heading for a bloody denouement. Bashar al-Assad has lost support of Arab states and, no less significantly, of neighbouring Turkey. He now depends heavily on Russia and China that vetoed a Security Council resolution which might have conceivably created space for foreign intervention.
5 The price of keeping women illiterate (Dawn) ‘If you educate a man you educate an individual, but if you educate a woman you educate a nation’ is an African Proverb which is reiterated by many dignitaries since it was first articulated by Dr James Emmanuel Kwegyir-Aggrey, a Ghanian scholar. It is easy to repeat these words in front of an audience, however, the true wisdom hidden in these words is evidently misconstrued by many people in Pakistan, especially a particular religious cleric, representing a mosque located in one of the chicest areas of Karachi, who during the Friday prayers sermon, conveniently chants that the primary reason why the Muslim world is supposedly headed towards a rampant decline is because “Muslims have become beghairats (people who lack self-esteem) as they send their daughters abroad to acquire education and invite ‘God’s wrath’.
Women, who are known to lay the fundamentals of any society, need equal, if not more, education than men because it is them that sensitises their children in formulating the society they live in – a place which could become a realm of equality and tolerance, if education is promoted. Hence, it is indispensable to educate women. The lack of education amongst the female populace of Pakistan is perhaps one of the many reasons why women have submitted to the system as being dysfunctional because fighting back has never been an option. Women, who fight against all adversities and refuse to become a victim are agents of change who have been amiss for so long. It is their time to bring about a revolution that will challenge, if not change, the status quo.
6 India bank chief criticises government spending (The Wall Street Journal) India's central bank chief heightened his criticism of government spending, saying that without a credible plan to rein in debt, it will be hard to bring down inflation and accelerate the country's disappointing growth rate. The comments by Duvvuri Subbarao, governor of the Reserve Bank of India, comes as India's leaders grapple with the toughest economic period in years. Through much of the past two decades, India had one of the fastest-growing economies in the world. But in the past year, persistent inflation, lofty interest rates, government gridlock on economic overhauls, a plunging currency and a swelling fiscal deficit have raised concerns that India's economic boom is waning.
Mr. Subbarao, himself, has been blamed for the slowdown, as outside economists say he kept interest rates too low for too long after he took over the central bank during the 2008 global financial crisis. Then, with inflation shooting higher, he raised rates repeatedly last year, snuffing out credit and slowing the economy.
7 Singlehood thoughts on Valentine’s Day (Business Line) Amidst all the mushy Valentine's Day promotions that marketers have been dishing out, a few companies have taken a different tack - rubbishing mush and even promoting ‘singlehood.' Online shoe retailer Fashos.com says that it will reward all those who can declare to the world this Valentine's that they love being ‘single and smart.' Fashos.com has personalised its Facebook fan engagement by deploying an application around February 14. Here fans can post and tell the world that they are single, smart and their reason for liking singlehood.
“Turning the concept of Valentine's on its head and doing a counter is something that vibes with young audiences looking for witty entertainment on social media platforms,” says Mr Sumit Agarwal, Founder of Fashos.com. Similarly, Milagrow, the tablet PC maker, is promoting its product with the statement: Mushy Valentine's Day gifts ‘are now history;' women professionals should be gifted with the tab top PC, the ad says. “Tired of Valentine's parties in the city?' screams a hoarding by the Bangalore-based The Park Hotel, which is on the Anti-Valentine's Day track. No candies, no candles, no flowers, just a singles night out at I-Bar, says the promotion.
Sunday, February 12, 2012
Who's bailed out in Greek bailout?; Greece adopts austerity package; Facebook and fatwas; NRI who dresses Mrs Obama; Sixty years of Queen Elizabeth II
1 Who’s being bailed out in the Greece bailout? (BBC) It’s called the Greek "bailout" or the "Greek rescue package". But, who, exactly, is now being rescued? Is it the Greeks? Or is it international investors - and the euro? In a traditional IMF "bailout", a lot of the money lent to the country in trouble will almost inevitably flow right out again. In a sense, that is what the rescue money is for: the country needs the IMF because it has a load of international obligations that, for one reason or another, it finds itself unable to meet. The IMF steps in to help bridge the gap, while the country sorts out how to re-win the confidence of lenders, and live within its means.
So, it's always unpleasant for the country being rescued. And the "rescue" money often goes to bond investors rather than widows and orphans. But, again, in the Greek crisis it's all a lot more extreme - and the pros and cons, for the Greeks, are getting more complicated by the day. German and French banks will lose from the proposed "voluntary" write-down of a large part of their Greek bond holdings. But they would lose even more from a disorderly default. Likewise, eurozone ministers may be tempted to think that life would be easier for the area with a Greek default.
But many wise heads in the financial markets would tell the Europeans to think long and hard about the potential fall-out from a default before they push Greece out the door. Sure, Greece would have a terrible time after a messy default. But then, the life they are signing up to under the terms of the deal is going to be pretty terrible too. And if eurozone ministers get their way, it's a life that Greek voters are not going to be allowed to reject.
2 Greeks grin and bear it (BBC) Greece's parliament has passed a controversial package of austerity measures, demanded by the eurozone and IMF in return for a 130bn-euro ($170bn) bailout to avoid default. The vote came amid violent scenes in capital, Athens, and elsewhere, with protesters outside parliament throwing stones and petrol bombs. PM Lucas Papademos urged calm, saying violence had no place in a democracy.
Lawmakers have also approved a related deal to write off 100bn euros of Greek debt held by private banks. There is mounting public anger in Greece and a feeling that the impact on ordinary people is beyond the value of the bailout. The austerity measures include: 15,000 public-sector job cuts, liberalisation of labour laws, lowering the minimum wage by 20% from 751 euros a month to 600 euros, and negotiating a debt write-off with banks.
3 A general’s retreat (Dawn) Although it has been a while since we separated, Pakistanis cannot help but peep into Indian territory to find out what is cooking there. Routinely, what we see there leads to comparisons with our own little broth here. It is almost natural then for the episode involving the executive, the army chief and the judiciary in India to have been closely followed this side of the Wagah. It was intriguing to find a serving army chief going all the way to the court when all he wanted was a one-year extension of his tenure.
The issue at the base of the affair was itself no less mystifying, given the sub-continental habit of forgetting birthdays. Gen VK Singh contested the papers had wrongly recorded his date of birth as May 10, 1950, claiming this amounted to pushing back the auspicious occasion by a year. He believed he was born on May 10, 1951 and therefore would attain the age of retirement (62 under Indian law), not in May 2012 but in May 2013. The court ruled that Gen Singh’s words and the facts were not the same thing. The executive has welcomed the gesture. This should ensure 60-odd birthday bumps for the general on his big day.
4 Facebook and fatwa (Dawn) Saudi Arabia’s top cleric, Abdul Aziz Al Shaikh, says that Twitter is a platform for “promoting lies.” Two years ago, Al-Azhar’s Abd Al-Hamid Al-Atrash said that Facebook “breaks up families.” Social media doesn’t lure a person to flirt with someone, spread a lie about someone, or harness envy, jealousy and hate. Though it is a grandiose statement, it is fair to say that we, human beings have been lying since time immemorial. Infidelity is nothing new either.
Perhaps it is easier to issue a fatwa (religious edict) against inanimate websites than to tell people to their faces “you’re promoting lies,” or “you’re enviously staring at pictures of people in your network.” The Egyptian cleric, who later denied having issued a fatwa against Facebook, had allegedly blamed the site for the increasing divorce rate. The clerics probably mean well, but the strategy that they have adopted will never bear the intended fruits. There seems to be a gulf between the clerics and their audience; the one factor that I feel is constantly missing is goodwill between the two. The reasons for accusing social networking sites epitomises deep ethical and moral flaws that cannot be easily amended through a fatwa or a Friday sermon.
5 Whitney Houston broke records, barriers and hearts (The Straits Times) Pop legend Whitney Houston, who was found dead Saturday, was the vocal star of a generation whose soaring voice broke records and inspired millions of fans before substance abuse sent her on a downward spiral.
'She was a legend. These people don't come around often,' British television host and producer Simon Cowell, of American Idol and Britain's Got Talent fame, told CNN television. 'No one could sell a song like Whitney.' She was a trailblazer who proved that a female artist could dominate the pop market, Cowell said. With a ferociously powerful voice and a dazzling range, Houston achieved stardom as a pop-soul singer known as 'the Voice' and the 'Queen of Pop' in the 1980s and 1990s. Her fantastic success - and that of fellow pop icon Michael Jackson - was propelled by a brand new device at the time: the pop music video.
6 The NRI who dresses Mrs Obama (The Wall Street Journal) It’s hardly surprising that Rachel Roy’s name graces the list of 23, big-league American fashion designers behind “Runway to Win”, a fund-raising venture directed towards President Barack Obama’s re-election campaign. The 38-year-old designer, of Bengali and Dutch descent, joins the ranks of heavy-hitters like Vera Wang and Diane von Furstenberg, creating an exclusive range of limited-edition merchandise, unveiled on Feb 7. While The First Lady regularly relies on a cluster of South Asian designers, including Naeem Khan and Prabal Gurung, Ms. Roy remains an easy favorite, having dressed Mrs. Obama nearly 20 times.
Influenced by Gandhian rhetoric from a young age –“in high-school, I had his quotes on my wall,” she said—the avant-garde designer is particularly taken with the notion of quiet, dignified action. “Gandhi is the perfect example of being powerful from the inside and that graceful power is one of the most life-changing things,” explained Ms. Roy. “The more peaceful you are, the more confident you will be,” she continued. “I love that juxtaposition.”
7 Sixty years of Queen Elizabeth II (Al Jazeera) Queen Elizabeth II is celebrating 60 years on the throne. She is a figure of global stature, ruling over the United Kingdom and 15 other countries, including Canada, New Zealand and Australia. Furthermore, she is only the second monarch to reach that milestone, after Queen Victoria, who reigned from 1837 to 1901. When she began her reign, the world was a very different place. Manchester United were English champions, as they are today, but almost everything else has changed.
Her first prime minister was wartime leader Winston Churchill. Britain was then a global power at the centre of a large empire. Singapore, Uganda, Kenya and Fiji were among the countries yet to gain their independence from colonial rule. At home, basic staples such as butter, tea and sugar were rationed. This applied to everyone, so even the Royal Family had ration books. Like other children, infant Prince Charles was limited to 55 grams of sweets each week.
In the UK, Queen Elizabeth's personal popularity prevents serious questions being asked about the monarchy, but she is 85 years old and, although she appears to be in robust health, she can't go on forever. After six decades on the throne, Queen Elizabeth is on her twelfth prime minister. Her supporters say that she has been a source of continuity, unity and wise advice. For others, the fact that they are subjects and not citizens makes a powerful statement about inequality. They ask: "How can Britain be fully democratic when the highest office in the land is chosen by accident of birth?"
8 Freight index crashes 66% in two months (Business Standard) Freight rates for dry bulk cargo, as reflected by the benchmark Baltic dry bulk index, have crashed in the past two months. The index, at 1,930 on December 12, fell 66.5% to 647 in early February and moved up marginally, to 695, in the past few days. Industry leaders say the crash was due to lower demand, along with new capacity having been added in the segment recently. The crash was echoed by the wet bulk index, down 17% in the past two months.
Vishal Ajmera, deputy manager, research, at rating agency CARE, said, "While the demand for cargo was lower, what added to that was the constant flow of vessel deliveries during 2010 and 2011. Vessel deliveries in this segment globally aggregated 13.1 million gross tonnage during 2011.” Meanwhile, the Baltic tanker index was at 939 prior to the Christmas holidays and is currently at 795 — a drop of a little over 15%.
So, it's always unpleasant for the country being rescued. And the "rescue" money often goes to bond investors rather than widows and orphans. But, again, in the Greek crisis it's all a lot more extreme - and the pros and cons, for the Greeks, are getting more complicated by the day. German and French banks will lose from the proposed "voluntary" write-down of a large part of their Greek bond holdings. But they would lose even more from a disorderly default. Likewise, eurozone ministers may be tempted to think that life would be easier for the area with a Greek default.
But many wise heads in the financial markets would tell the Europeans to think long and hard about the potential fall-out from a default before they push Greece out the door. Sure, Greece would have a terrible time after a messy default. But then, the life they are signing up to under the terms of the deal is going to be pretty terrible too. And if eurozone ministers get their way, it's a life that Greek voters are not going to be allowed to reject.
2 Greeks grin and bear it (BBC) Greece's parliament has passed a controversial package of austerity measures, demanded by the eurozone and IMF in return for a 130bn-euro ($170bn) bailout to avoid default. The vote came amid violent scenes in capital, Athens, and elsewhere, with protesters outside parliament throwing stones and petrol bombs. PM Lucas Papademos urged calm, saying violence had no place in a democracy.
Lawmakers have also approved a related deal to write off 100bn euros of Greek debt held by private banks. There is mounting public anger in Greece and a feeling that the impact on ordinary people is beyond the value of the bailout. The austerity measures include: 15,000 public-sector job cuts, liberalisation of labour laws, lowering the minimum wage by 20% from 751 euros a month to 600 euros, and negotiating a debt write-off with banks.
3 A general’s retreat (Dawn) Although it has been a while since we separated, Pakistanis cannot help but peep into Indian territory to find out what is cooking there. Routinely, what we see there leads to comparisons with our own little broth here. It is almost natural then for the episode involving the executive, the army chief and the judiciary in India to have been closely followed this side of the Wagah. It was intriguing to find a serving army chief going all the way to the court when all he wanted was a one-year extension of his tenure.
The issue at the base of the affair was itself no less mystifying, given the sub-continental habit of forgetting birthdays. Gen VK Singh contested the papers had wrongly recorded his date of birth as May 10, 1950, claiming this amounted to pushing back the auspicious occasion by a year. He believed he was born on May 10, 1951 and therefore would attain the age of retirement (62 under Indian law), not in May 2012 but in May 2013. The court ruled that Gen Singh’s words and the facts were not the same thing. The executive has welcomed the gesture. This should ensure 60-odd birthday bumps for the general on his big day.
4 Facebook and fatwa (Dawn) Saudi Arabia’s top cleric, Abdul Aziz Al Shaikh, says that Twitter is a platform for “promoting lies.” Two years ago, Al-Azhar’s Abd Al-Hamid Al-Atrash said that Facebook “breaks up families.” Social media doesn’t lure a person to flirt with someone, spread a lie about someone, or harness envy, jealousy and hate. Though it is a grandiose statement, it is fair to say that we, human beings have been lying since time immemorial. Infidelity is nothing new either.
Perhaps it is easier to issue a fatwa (religious edict) against inanimate websites than to tell people to their faces “you’re promoting lies,” or “you’re enviously staring at pictures of people in your network.” The Egyptian cleric, who later denied having issued a fatwa against Facebook, had allegedly blamed the site for the increasing divorce rate. The clerics probably mean well, but the strategy that they have adopted will never bear the intended fruits. There seems to be a gulf between the clerics and their audience; the one factor that I feel is constantly missing is goodwill between the two. The reasons for accusing social networking sites epitomises deep ethical and moral flaws that cannot be easily amended through a fatwa or a Friday sermon.
5 Whitney Houston broke records, barriers and hearts (The Straits Times) Pop legend Whitney Houston, who was found dead Saturday, was the vocal star of a generation whose soaring voice broke records and inspired millions of fans before substance abuse sent her on a downward spiral.
'She was a legend. These people don't come around often,' British television host and producer Simon Cowell, of American Idol and Britain's Got Talent fame, told CNN television. 'No one could sell a song like Whitney.' She was a trailblazer who proved that a female artist could dominate the pop market, Cowell said. With a ferociously powerful voice and a dazzling range, Houston achieved stardom as a pop-soul singer known as 'the Voice' and the 'Queen of Pop' in the 1980s and 1990s. Her fantastic success - and that of fellow pop icon Michael Jackson - was propelled by a brand new device at the time: the pop music video.
6 The NRI who dresses Mrs Obama (The Wall Street Journal) It’s hardly surprising that Rachel Roy’s name graces the list of 23, big-league American fashion designers behind “Runway to Win”, a fund-raising venture directed towards President Barack Obama’s re-election campaign. The 38-year-old designer, of Bengali and Dutch descent, joins the ranks of heavy-hitters like Vera Wang and Diane von Furstenberg, creating an exclusive range of limited-edition merchandise, unveiled on Feb 7. While The First Lady regularly relies on a cluster of South Asian designers, including Naeem Khan and Prabal Gurung, Ms. Roy remains an easy favorite, having dressed Mrs. Obama nearly 20 times.
Influenced by Gandhian rhetoric from a young age –“in high-school, I had his quotes on my wall,” she said—the avant-garde designer is particularly taken with the notion of quiet, dignified action. “Gandhi is the perfect example of being powerful from the inside and that graceful power is one of the most life-changing things,” explained Ms. Roy. “The more peaceful you are, the more confident you will be,” she continued. “I love that juxtaposition.”
7 Sixty years of Queen Elizabeth II (Al Jazeera) Queen Elizabeth II is celebrating 60 years on the throne. She is a figure of global stature, ruling over the United Kingdom and 15 other countries, including Canada, New Zealand and Australia. Furthermore, she is only the second monarch to reach that milestone, after Queen Victoria, who reigned from 1837 to 1901. When she began her reign, the world was a very different place. Manchester United were English champions, as they are today, but almost everything else has changed.
Her first prime minister was wartime leader Winston Churchill. Britain was then a global power at the centre of a large empire. Singapore, Uganda, Kenya and Fiji were among the countries yet to gain their independence from colonial rule. At home, basic staples such as butter, tea and sugar were rationed. This applied to everyone, so even the Royal Family had ration books. Like other children, infant Prince Charles was limited to 55 grams of sweets each week.
In the UK, Queen Elizabeth's personal popularity prevents serious questions being asked about the monarchy, but she is 85 years old and, although she appears to be in robust health, she can't go on forever. After six decades on the throne, Queen Elizabeth is on her twelfth prime minister. Her supporters say that she has been a source of continuity, unity and wise advice. For others, the fact that they are subjects and not citizens makes a powerful statement about inequality. They ask: "How can Britain be fully democratic when the highest office in the land is chosen by accident of birth?"
8 Freight index crashes 66% in two months (Business Standard) Freight rates for dry bulk cargo, as reflected by the benchmark Baltic dry bulk index, have crashed in the past two months. The index, at 1,930 on December 12, fell 66.5% to 647 in early February and moved up marginally, to 695, in the past few days. Industry leaders say the crash was due to lower demand, along with new capacity having been added in the segment recently. The crash was echoed by the wet bulk index, down 17% in the past two months.
Vishal Ajmera, deputy manager, research, at rating agency CARE, said, "While the demand for cargo was lower, what added to that was the constant flow of vessel deliveries during 2010 and 2011. Vessel deliveries in this segment globally aggregated 13.1 million gross tonnage during 2011.” Meanwhile, the Baltic tanker index was at 939 prior to the Christmas holidays and is currently at 795 — a drop of a little over 15%.
Thursday, February 9, 2012
White underclass; China's imports, exports fall; Gadget-challenged parents; End of road for Kodak cams; Fast-paced childhood; Investors shy of India
1 The White underclass (The New York Times) Historically, “underclass” has often been considered to be a euphemism for race, but increasingly it includes elements of the white working class as well. That’s the backdrop for the uproar over Charles Murray’s latest book, “Coming Apart.” Murray critically examines family breakdown among working-class whites and the decline in what he sees as traditional values of diligence.
Americans think of rural American heartland as a lovely pastoral backdrop, but these days some marginally employed white families in places like Yamhill seem to be replicating the pathologies that have devastated many African-American families over the last generation or two. One scourge has been drug abuse. In rural America, it’s not heroin but methamphetamine; it has shattered lives in Yamhill and left many with criminal records that make it harder to find good jobs. With parents in jail, kids are raised on the fly.
I fear we’re facing a crisis in which a chunk of working-class America risks being calcified into an underclass, marked by drugs, despair, family decline, high incarceration rates and a diminishing role of jobs and education as escalators of upward mobility. So let’s get real. A crisis is developing in the white working class, a byproduct of growing income inequality in America. The pathologies are achingly real. But the solution isn’t finger-wagging, or averting our eyes — but opportunity.
2 US states negotiate $26bn deal with homowners (The New York Times) Government authorities and five of the nation’s biggest banks have agreed to a $26 billion settlement that could provide relief to nearly two million current and former American homeowners harmed by the bursting of the housing bubble, state and federal officials said. It is part of a broad national settlement aimed at halting the housing market’s downward slide and holding the banks accountable for foreclosure abuses. Despite the billions earmarked in the accord, the aid will help a relatively small portion of the millions of borrowers who are delinquent and facing foreclosure.
The agreement is the broadest effort yet to help borrowers owing more than their houses are worth, with roughly one million expected to have their mortgage debt reduced by lenders or able to refinance their homes at lower rates. Another 750,000 people who lost their homes to foreclosure from September 2008 to the end of 2011 will receive checks for about $2,000. The aid is to be distributed over three years.
3 China’s imports, exports fall (BBC) China's exports fell in January, the first decline in more than two years, raising fresh concerns about the impact of a global slowdown on its economy. Exports fell 0.5% from a year earlier amid sluggish global demand. Shipments were also hurt as factories were shut during the Lunar New Year. Meanwhile, imports dipped 15.3% raising fears about slowing domestic demand.
Analysts said while the closure of establishments during the Chinese New Year affected the numbers, the decline could not be attributed to the festival alone. They said that the bigger-than-expected drop, especially in imports, was worrying as it gave an indication of slowing growth. "The collapse of imports begs particular attention," said Ren Xianfeng of IHS Global in Beijing. "A fall of over 15% in January cannot be entirely explained by the lunar calendar, and adds weight to the view that economic output is slower than headline indicators might suggest."
4 Shock loss for Tata Steel (BBC) Tata Steel, the largest producer in India, unexpectedly reported a loss for the last three months of 2011, hit by weak demand. The company saw a net loss of 6.03bn rupees ($122m) in the third quarter. That compares with a net profit of 10bn rupees a year earlier. Higher prices for raw materials as well as falling demand and prices in Europe contributed to the decline, Tata said. The company operates two thirds of its capacity in Europe, where the debt crisis is hitting demand.
The head of Tata's European operations said he did not expect demand to pick up this year. Analysts said Tata Steel was being squeezed from both sides. "There hasn't been a demand uptick that was expected, so prices have come down," said Ravindra Deshpande from Elara Securities in Mumbai. "At the same time, none of their production costs are lower, so margins are under pressure."
5 Gadget-challenged parents (The Guardian) Once parents relied on their children to help them set the video recorder. But in the age of apps, iPods and 3D portable games consoles, the digital divide may have got a little wider. One in six –16% – of parents admitted buying their children a device or gadget that they did not fully understand how to use, according to a survey.
The online survey by ParentPort featured 1,800 respondents from the UK's two largest online parenting communities, Mumsnet and Netmums. ParentPort said it revealed the "challenges and pressures parents face when it comes to keeping the media their children see age-appropriate". More than four-fifths – 82% – of parents said they closely supervised what films and television programmes their children watch, and 77% said they always or usually know what websites their children visit.But parents were also concerned about their children being given smartphones and laptops as gifts which would give them unsupervised access to the internet, and inappropriate 18-rated video games.
6 End of the line for Kodak cameras (The Guardian) Kodak, the company that pioneered home photograph, is to give up making cameras after more than 110 years. The company, whose little yellow film boxes could once be found throughout the world, said on Thursday it plans to “phase out its dedicated capture device business”, which includes all digital cameras, video cameras and digital photo frames.
It comes less than a month after Kodak Eastman filed for bankruptcy protection in the US as it finally succumbed to a digital revolution that left its products obsolete . Kodak said it hopes pulling out of cameras will save the company, which has $6.8bn of debts, more than $100m a year. It will stop all production of capture devices within the first half of 2012. Exiting the business is expected to cost Kodak $30m. The company has already closed 13 factories and cut 47,000 jobs. It ceased manufacturing its famous Kodachrome film in 2009. The definitive end of the "Kodak moment" comes more than 130 years after a "not especially gifted" high school dropout, George Eastman, founded the company that dominated photography for most of the 20th century.
7 Likelihood of a class revolution in Pakistan (Dawn) A thought came to mind as I stepped out of a shoe store. I had just spent more money on a pair of shoes than a large portion of Pakistanis have to survive on for a month. Some of these people we know well. They cook for us, they drive us around, they clean our homes and take care of our every whim. These are the very same people who suffer the most from the skyrocketing inflation and the rise in food prices, but who also see the lifestyles of the people they serve improving.
It’s a thought that’s been bugging me constantly since I returned to Pakistan. I’ve found it hard to come to terms with the extent of inflation in the country and the explosive gap between the rich and poor. If the Arab Spring has taught us anything, it’s that people always have a breaking point at which they say “enough is enough.” Those who don’t pay attention to history are destined to repeat it. The irony will be that if our country allows this go on — if ‘we’ let this go on — we’ll be culpable in our own demise, and we will have deserved it.
8 Fast-paced childhood (The Khaleej Times) Sometimes, we see something in our children to reflect the past. We often associated their future with their education. Perhaps we put too much emphasis on schools and overlook the more important things. We now know that the earliest memories linger on to haunt us later in life. Schooldays is one of them. We remember our parents fighting, frequently moving houses, changing schools, the relations we had with friends and siblings. These memories make us wonder what we are now and influence us into making many bad decisions.
There are no second chances in your childhood because somebody else made decisions for you. However, we can use our past knowledge to make growing up a more memorable experience for our children. Don’t make any mistake about it, they will one day look for those memories, like you did, to expose your weaknesses as a parent. All we have to remember is that every decision you make now will influence the course of your children’s life.
I was walking back home, still deep in thought, when a car sped past me. It swerved, skidded, hit a pavement and did a U-turn to accelerate towards me again. I glimpsed a youth having dangerous fun in his father’s expensive car. I am not sure if he was past his sixteenth birthday. He probably was but kids like him get a taste of the fast life very early these days. Whether his father knew about it or the teenager stole the car key, does not make a difference. I also see nine-year old kids walking around with mobile telephones presented to them as birthday gifts. I am not sure how to react to this type of upbringing and I sincerely hope their parents do not regret it.
9 Investors turn shy on India (The Wall Street Journal) A pick-up in foreign direct investment in India last year doesn't show the whole picture. Actually, the numbers mask deep problems. FDI likely touched $30 billion in 2011, nearing the record highs of 2009. But the data are skewed by a few blockbuster deals. The two biggest deals alone – BP’s investment in Reliance Industries' oil and gas blocks, and Vodafone’s purchase of a bigger stake in its Indian unit – add up to $14.46 billion, according to Dealogic data. Just five investments represent more than two-thirds of the total. In fiscal 2010, the top five were less than a quarter of all FDI.
In fact, many investors are skeptical about India in the near term. Compared to other emerging markets, India lags when it comes to FDI. In the first three quarters of 2011, FDI inflows were less than half of Brazil's share and one-sixth of China's, according to the Organization for Economic Cooperation and Development.
Corruption is a big factor, of course. A $7 billion telecommunications-sector scandal has dragged on for years. A court last week canceled 122 second-generation wireless licenses in connection with the fiasco. That was seen as a strong, anticorruption ruling, but it also left some foreign businesses in a difficult spot. Foreign-domestic joint ventures held 61 of the licenses now scrapped. Norway's Telenor, which has invested $1.5 billion for a 67.3% stake in Unitech Wireless, says it might consider exiting India altogether after its 22 licenses were among those canceled. Indian red tape is a stereotype, but it is a real deterrent too. Meanwhile, planned reform to regulation that blocks investment in sectors like multi-brand retailing and aviation has been under discussion for years. So far, positive change has been limited.
Americans think of rural American heartland as a lovely pastoral backdrop, but these days some marginally employed white families in places like Yamhill seem to be replicating the pathologies that have devastated many African-American families over the last generation or two. One scourge has been drug abuse. In rural America, it’s not heroin but methamphetamine; it has shattered lives in Yamhill and left many with criminal records that make it harder to find good jobs. With parents in jail, kids are raised on the fly.
I fear we’re facing a crisis in which a chunk of working-class America risks being calcified into an underclass, marked by drugs, despair, family decline, high incarceration rates and a diminishing role of jobs and education as escalators of upward mobility. So let’s get real. A crisis is developing in the white working class, a byproduct of growing income inequality in America. The pathologies are achingly real. But the solution isn’t finger-wagging, or averting our eyes — but opportunity.
2 US states negotiate $26bn deal with homowners (The New York Times) Government authorities and five of the nation’s biggest banks have agreed to a $26 billion settlement that could provide relief to nearly two million current and former American homeowners harmed by the bursting of the housing bubble, state and federal officials said. It is part of a broad national settlement aimed at halting the housing market’s downward slide and holding the banks accountable for foreclosure abuses. Despite the billions earmarked in the accord, the aid will help a relatively small portion of the millions of borrowers who are delinquent and facing foreclosure.
The agreement is the broadest effort yet to help borrowers owing more than their houses are worth, with roughly one million expected to have their mortgage debt reduced by lenders or able to refinance their homes at lower rates. Another 750,000 people who lost their homes to foreclosure from September 2008 to the end of 2011 will receive checks for about $2,000. The aid is to be distributed over three years.
3 China’s imports, exports fall (BBC) China's exports fell in January, the first decline in more than two years, raising fresh concerns about the impact of a global slowdown on its economy. Exports fell 0.5% from a year earlier amid sluggish global demand. Shipments were also hurt as factories were shut during the Lunar New Year. Meanwhile, imports dipped 15.3% raising fears about slowing domestic demand.
Analysts said while the closure of establishments during the Chinese New Year affected the numbers, the decline could not be attributed to the festival alone. They said that the bigger-than-expected drop, especially in imports, was worrying as it gave an indication of slowing growth. "The collapse of imports begs particular attention," said Ren Xianfeng of IHS Global in Beijing. "A fall of over 15% in January cannot be entirely explained by the lunar calendar, and adds weight to the view that economic output is slower than headline indicators might suggest."
4 Shock loss for Tata Steel (BBC) Tata Steel, the largest producer in India, unexpectedly reported a loss for the last three months of 2011, hit by weak demand. The company saw a net loss of 6.03bn rupees ($122m) in the third quarter. That compares with a net profit of 10bn rupees a year earlier. Higher prices for raw materials as well as falling demand and prices in Europe contributed to the decline, Tata said. The company operates two thirds of its capacity in Europe, where the debt crisis is hitting demand.
The head of Tata's European operations said he did not expect demand to pick up this year. Analysts said Tata Steel was being squeezed from both sides. "There hasn't been a demand uptick that was expected, so prices have come down," said Ravindra Deshpande from Elara Securities in Mumbai. "At the same time, none of their production costs are lower, so margins are under pressure."
5 Gadget-challenged parents (The Guardian) Once parents relied on their children to help them set the video recorder. But in the age of apps, iPods and 3D portable games consoles, the digital divide may have got a little wider. One in six –16% – of parents admitted buying their children a device or gadget that they did not fully understand how to use, according to a survey.
The online survey by ParentPort featured 1,800 respondents from the UK's two largest online parenting communities, Mumsnet and Netmums. ParentPort said it revealed the "challenges and pressures parents face when it comes to keeping the media their children see age-appropriate". More than four-fifths – 82% – of parents said they closely supervised what films and television programmes their children watch, and 77% said they always or usually know what websites their children visit.But parents were also concerned about their children being given smartphones and laptops as gifts which would give them unsupervised access to the internet, and inappropriate 18-rated video games.
6 End of the line for Kodak cameras (The Guardian) Kodak, the company that pioneered home photograph, is to give up making cameras after more than 110 years. The company, whose little yellow film boxes could once be found throughout the world, said on Thursday it plans to “phase out its dedicated capture device business”, which includes all digital cameras, video cameras and digital photo frames.
It comes less than a month after Kodak Eastman filed for bankruptcy protection in the US as it finally succumbed to a digital revolution that left its products obsolete . Kodak said it hopes pulling out of cameras will save the company, which has $6.8bn of debts, more than $100m a year. It will stop all production of capture devices within the first half of 2012. Exiting the business is expected to cost Kodak $30m. The company has already closed 13 factories and cut 47,000 jobs. It ceased manufacturing its famous Kodachrome film in 2009. The definitive end of the "Kodak moment" comes more than 130 years after a "not especially gifted" high school dropout, George Eastman, founded the company that dominated photography for most of the 20th century.
7 Likelihood of a class revolution in Pakistan (Dawn) A thought came to mind as I stepped out of a shoe store. I had just spent more money on a pair of shoes than a large portion of Pakistanis have to survive on for a month. Some of these people we know well. They cook for us, they drive us around, they clean our homes and take care of our every whim. These are the very same people who suffer the most from the skyrocketing inflation and the rise in food prices, but who also see the lifestyles of the people they serve improving.
It’s a thought that’s been bugging me constantly since I returned to Pakistan. I’ve found it hard to come to terms with the extent of inflation in the country and the explosive gap between the rich and poor. If the Arab Spring has taught us anything, it’s that people always have a breaking point at which they say “enough is enough.” Those who don’t pay attention to history are destined to repeat it. The irony will be that if our country allows this go on — if ‘we’ let this go on — we’ll be culpable in our own demise, and we will have deserved it.
8 Fast-paced childhood (The Khaleej Times) Sometimes, we see something in our children to reflect the past. We often associated their future with their education. Perhaps we put too much emphasis on schools and overlook the more important things. We now know that the earliest memories linger on to haunt us later in life. Schooldays is one of them. We remember our parents fighting, frequently moving houses, changing schools, the relations we had with friends and siblings. These memories make us wonder what we are now and influence us into making many bad decisions.
There are no second chances in your childhood because somebody else made decisions for you. However, we can use our past knowledge to make growing up a more memorable experience for our children. Don’t make any mistake about it, they will one day look for those memories, like you did, to expose your weaknesses as a parent. All we have to remember is that every decision you make now will influence the course of your children’s life.
I was walking back home, still deep in thought, when a car sped past me. It swerved, skidded, hit a pavement and did a U-turn to accelerate towards me again. I glimpsed a youth having dangerous fun in his father’s expensive car. I am not sure if he was past his sixteenth birthday. He probably was but kids like him get a taste of the fast life very early these days. Whether his father knew about it or the teenager stole the car key, does not make a difference. I also see nine-year old kids walking around with mobile telephones presented to them as birthday gifts. I am not sure how to react to this type of upbringing and I sincerely hope their parents do not regret it.
9 Investors turn shy on India (The Wall Street Journal) A pick-up in foreign direct investment in India last year doesn't show the whole picture. Actually, the numbers mask deep problems. FDI likely touched $30 billion in 2011, nearing the record highs of 2009. But the data are skewed by a few blockbuster deals. The two biggest deals alone – BP’s investment in Reliance Industries' oil and gas blocks, and Vodafone’s purchase of a bigger stake in its Indian unit – add up to $14.46 billion, according to Dealogic data. Just five investments represent more than two-thirds of the total. In fiscal 2010, the top five were less than a quarter of all FDI.
In fact, many investors are skeptical about India in the near term. Compared to other emerging markets, India lags when it comes to FDI. In the first three quarters of 2011, FDI inflows were less than half of Brazil's share and one-sixth of China's, according to the Organization for Economic Cooperation and Development.
Corruption is a big factor, of course. A $7 billion telecommunications-sector scandal has dragged on for years. A court last week canceled 122 second-generation wireless licenses in connection with the fiasco. That was seen as a strong, anticorruption ruling, but it also left some foreign businesses in a difficult spot. Foreign-domestic joint ventures held 61 of the licenses now scrapped. Norway's Telenor, which has invested $1.5 billion for a 67.3% stake in Unitech Wireless, says it might consider exiting India altogether after its 22 licenses were among those canceled. Indian red tape is a stereotype, but it is a real deterrent too. Meanwhile, planned reform to regulation that blocks investment in sectors like multi-brand retailing and aviation has been under discussion for years. So far, positive change has been limited.
Thursday, February 2, 2012
Downside of Facebook; Malaria myths shattered; India telecom licences annulled; UK recession looms; Indonesia is 'Fesbuk' nation; Plastic problems
1 Downside of Facebook (San Francisco Chronicle) In its eagerly awaited initial public offering filing, Facebook said its annual revenue last year totaled $3.7 billion as profits hit $1 billion. About 845 million people around the world check into the site at least monthly - and nearly 500 million do so daily - giving Facebook the kind of global reach usually associated with a century-old brand like Coca-Cola. But as Champagne goes on ice across Silicon Valley and workers tally up their options, it's worth taking a moment to think hard about what's at work behind these numbers.
For all the concern surrounding Google's behavior today, it's hard to dispute that the founders started with fairly exalted goals - organizing the world's information - and then wrapped a breathtakingly successful business model around them. With Facebook, it almost feels like the other way around. After Facebook's early success at Harvard, its founders spotted a great business opportunity and showered us with platitudes about "openness" and "connection." To be sure, social networking is entertaining and fun. But when you get down to it, as a colleague of mine said, "It's a thin coat of paint over a massive data-mining operation."
At least with television, we submit to advertising in exchange for professionally produced content. At least with Google, the trade-off is the best information retrieval tool going. Facebook just invites us into a big open room that we have to fill up with interesting things. And in exchange for free rent on that unfurnished virtual space, we hand over the intimate details of our lives: our relationships, weddings, illnesses and tragedies. All of which would be less unsettling if Facebook had proven a trustworthy steward of that personal information. But it hasn't.
2 Malaria myths shattered (The Guardian) Malaria kills twice as many people every year as formerly believed, taking 1.2 million lives and causing the deaths not only of babies but also older children and adults, according to research that overturns decades of assumptions about one of the world's most lethal diseases. Dr Christopher Murray and colleagues have systematically collected data on deaths from all over the world over a 30-year period, from 1980 to 2010, using new methodologies and inventive ways of measuring mortality in countries where deaths are not conventionally recorded. Their figure of 1.2 million deaths for 2010 is nearly double the 655,000 estimated in last year's World Malaria Report.
The good news is that they have confirmed the downward trend that the World Health Organisation's report showed, as a result of efforts by donors, aid organisations and governments to tackle the disease. The bad news is that the decline comes from a much higher peak – deaths hit 1.8 million in 2004, they say. That means the interventions such as better treatment and bed nets are working, but there is much further to go than everybody had assumed. The study demolishes conventional thinking on malaria – that almost all the deaths are in babies and small children under the age of five. The study found that 42% were in older children and adults.
3 Five things about Facebook (The Guardian) 1. Mark Zuckerberg is in control. If you thought Rupert Murdoch had a tight grip on News Corp, spare a thought for anyone at Facebook who disagrees with its founder. Mark Zuckerberg owns 28% of the company's shares, but has struck an agreement with 56.9% of shareholders that gives him control over their votes. 2. A lot of people are going to get very rich. No price has been set for the company yet, but estimates are ranging between $75bn and $100bn. At the top end of that range, Zuckerberg's stake is worth $28bn, equivalent to the gross domestic product of North Korea. James Breyer, a Facebook board member and a partner at Accel Partner, Facebook's largest investors, stands to make a fortune. Accel owns 11.4%. Dustin Moskovitz, Facebook's co-founder and former chief technology officer, has 7.6%. Yuri Milner, the Russian tycoon behind investor DST Global, will also increase his billions, since DST owns a 5.5% stake. 3. Even the losers are winners. Eduardo Saverin, Zuckerberg's early partner at Harvard who was depicted as having been cheated out of his share of the company in the film The Social Network, does not own more than 5% of Facebook – his holding was not listed in yesterday's documents – but he is still likely walk away with a fortune. Even the Winklevoss twins, Zuckerberg's mortal enemies, come away winners. They hold 1.2m shares from a court settlement over their claims that Zuckerberg stole their idea. Those shares are now potentially worth $300m. 4. But you won't make any money any time soon. For one thing, Facebook shares won't begin publicly trading for several months, because the SEC needs to assess the validity of a potential IPO. But even once trading begins, getting in on the action is a long shot, and for retail investors (ie the man in the street) odds are you will have to buy when the price has already spiked. 5. It's the cash, dear. The biggest reason for any IPO. Facebook only has $3.9bn in cash right now, a paltry sum if it's looking to strong-arm competitors like Google, which has cash and short term investments of close to $45bn. Then there's the fact that Facebook's investor base is growing. Federal law mandates companies with more than 500 investors and $10m in assets to disclose quarterly financial results and certain other information. So, basically, they had no choice. Poor dears.
4 AstraZeneca cutting 7,300 jobs (The Guardian) AstraZeeca is cutting 7,300 jobs globally as the pharmaceuticals company battles sliding profits and rapidly declining success rates in research and development. The cuts, to be made over the next three years, come on top of 21,460 jobs cut since 2007 as part of a global reorganisation of the group, including big reductions in its US sales force. AstraZeneca employs 61,000 people worldwide. The latest cuts, which will cost $2.1bn to implement, are expected to save $1.6bn a year by the end of 2014.
5 India Court cancels telecom licences (BBC) India's Supreme Court has cancelled 122 telecommunications licences awarded to companies in 2008. The licences were issued by former minister A Raja, who is accused of mis-selling bandwidth in what has been called India's biggest corruption scandal. Mr Raja denies wrongdoing. Government auditors say the scandal cost the country about $40bn. India is one of the world's fastest growing markets for mobile telephones with 893 million connections. Reports say Thursday's verdict is likely to affect about 5% of connections used by mobile phone customers. Petitioner Prashant Bhushan called it a "historic judgement". "It will change the manner in which corruption will be examined and dealt with in the country," he said.
Reports said some of the companies affected by the court order include Loop, Videocon, Idea Cellular, Tata Telecom, Uninor and Swan. Uninor, the Indian joint venture of Norway's Telenor, said it had been "unfairly treated" and "was shocked" by the court verdict. Telenor President Jon Fredrik Baksaas said the ruling was "extraordinary", and that "If the worst comes to worst, it will be the end of Telenor's business in India."
6 UK recession looms (BBC) The UK economy will enter recession in the first half of the year as households continue to cut back, an influential think tank has warned. The National Institute of Economic and Social Research (Niesr) expects the economy to shrink 0.1% in 2012, but to grow 2.3% in 2013 if the eurozone debt crisis is resolved. The UK is already close to another recession - defined as two consecutive quarters of economic contraction - after official figures in January showed that the economy shrank by 0.2% in the final three months of 2011.
7 TV channel fined for Gaddafi footage (Johannesburg Times) Television channel e.tv has been fined R35,000 for airing violent footage of the killing of Libyan leader Muammar Gaddafi. The Broadcasting Complaints Commission of SA (BCCSA) received complaints in October, the regulator said in a statement.
E.tv news and the eNews Channel showed the footage without providing an advisory warning its viewers about the violence. The complainant said there had been images of Gaddafi in newspapers and on television after his death. "But I was utterly outraged this morning when at 7.30am and every time e.tv news channel 403 ran its headlines. They showed the moments before Gaddafi's death, where he was surrounded by lots of men and was clearly being beaten and dragged," the complainant wrote. "The images were shown with no prior warning to viewers and repeatedly until at least 12 noon."
8 Facebook and Glenstrata: Which is bubblier? (BBC) Some would argue there are two great bubbles in the world right now, in internet shares and commodities, but goodness how they manifest themselves differently on the stock market. Today's manifestations of these phenomena are the merger talks between the mining and commodities trading groups Xstrata and Glencore, plus the announcement that Facebook will be coming to the stock market. Both represent big deals: a merger of Xstrata and Glencore would be worth around $110bn, and Facebook looks set to have a market value of around $80bn. But what's under their respective bonnets could not be more different.
Glenstrata or Xcore would have revenues well over £110bn a year and after tax earnings of £6bn. So its market value would be less than the money going through its books. As for Facebook, its revenues last year were £2.3bn or $3.7bn - which is less than a twentieth of its expected market valuation. And profits after tax were a billion dollars, an eightieth of what the company is likely to be worth when shares are traded. Now you might be tempted to conclude that Facebook is the bubble stock and Glenstrata can't possibly be.
But it is not quite as simple as that, because in the case of Glenstrata, the bubble may be in their earnings rather in the share price. For Glenstrata it is whether the rise in price and increases in demand for copper, iron and coal and all those other feedstocks of the still fast-growing Chinese economy can go on forever. And for Facebook the issue is whether its turnover will continue to rise at an exponentially fast rate - basically whether it can generate ever growing revenues from its 845m monthly active users.
9 Pain for Panasonic (The Straits Times) Japan's Panasonic is bracing for a record net loss of more than Singapore $11.5 billion for the year to March due to the strong yen, Thai floods and acquisition costs. The new forecast is the worst-ever loss for Panasonic and far exceeds its earlier projection of a 420-billion-yen hit.
10 Indonesia is ‘Fesbuk’ country (Dawn) Indonesia, a developing Muslim nation which claims the world’s third-largest community of Facebook users, has become a showcase for the social networking site’s global power and reach. Facebook has broken technological and social barriers to connect 40 million users in the sprawling Indonesian archipelago of more than 17,000 islands, some without even landline connections. With even cheap cell phones in Indonesia sold already bundled with Facebook applications, for many, “Fesbuk” – as it is written in the national Bahasa language – simply is the internet.
Internet penetration via computers is low in Indonesia at less than 10%, but many have leapfrogged that technology by using wildly popular smart-phones which have seen mobile internet penetration reach 57%. “It’s the Facebook capital of the world,” Peter Vesterbecka, Rovio’s Asia-Pacific manager, said recently in the capital Jakarta, which has more Facebook users than any other city in the world. But in the world’s most populous Muslim nation, known for its strong religious and cultural beliefs, Facebook is not all fun and games. Indonesians are learning everything from English to the Koran through Facebook groups. Facebook group “Gay Indonesia Only!” with more than 8,000 members is a forum for homosexuals to meet and interact online.
11 Mohammed Ali’s trainer dies (Dawn) Celebrated boxing trainer Angelo Dundee, Muhammad Ali’s cornerman in his greatest fights, died on Wednesday at the age of 90. While working with Ali for the majority of the boxing great’s career, Dundee trained 15 world champions in total, including Sugar Ray Leonard and George Foreman. Dundee’s work spanned six decades and he was inducted into the International Boxing Hall of Fame in 1994, cementing his legacy as an invaluable asset to some of the most decorated boxers of all time.
12 A world caught in ocean of plastic (Dawn) On Midway atoll in the North Pacific, dozens of young albatross lie dead on the sand, their stomachs filled with cigarette lighters, toy soldiers and other small plastic objects their parents have mistaken for food. That sad and surreal sight, says Hong Kong-based Australian film director Craig Leeson, is one of the many symptoms of a plague afflicting the world’s oceans, food chains and human communities: the onslaught of discarded plastic. “Every piece of plastic ever made since the 1950s exists in some shape or form on the planet,” Leeson says. “We throw plastic into a bin, it’s taken away from us and we never see it again – but it still comes back at us.”
Provisionally called “Away”, the film – backed by David Attenborough and the UK-based Plastic Oceans Foundation – brings together new research on the spread of plastic with missions by “explorers” such as Ben Fogle to show the diverse effects of plastic trash. Its message is that while you may throw out your plastic goods, they are never really thrown “away”.
13 India’s telecom muddle (The Wall Street Journal) Navigating India's bureaucracy while trying to run an honest business is already difficult. On Thursday a Supreme Court verdict made it harder. In response to a petition by anticorruption activists, the court issued a ruling which means that even if a company manages to keep its own nose clean and win regulatory approval without paying off greedy bureaucrats, it could still lose its license to operate if competitors bribed officials.
The court canceled all 122 mobile phone licenses Delhi awarded in 2008 because former Telecom Minister Andimuthu Raja decided to do so on a first-come, first-served basis, instead of through a fair auction. This approach was indefensible, and the case has snowballed into the largest corruption case in Indian history. It's hardly an aberration. Judging by reports, graft and abuses of power are reaching epidemic proportions. The impact of the decision on the affected companies and consumers will be harsh. The nine companies who hold these 122 licenses have four months to shut down their operations, which will inevitably lead to hefty write-offs of their investments to roll out cellular networks
14 Meetings are stand-up jobs (The Wall Street Journal) Atomic Object, a Grand Rapids, Mich., software-development firm, holds company meetings first thing in the morning. Employees follow strict rules: Attendance is mandatory, non-work chitchat is kept to a minimum and, above all, everyone has to stand up. Stand-up meetings are part of a fast-moving tech culture in which sitting has become synonymous with sloth. The object is to eliminate long-winded confabs where participants pontificate, play Angry Birds on their cellphones or tune out.
15 Raghu Dayal in The Times of India: What Delhi, Mumbai or Kolkatha are left to mean to an ordinary citizen is crime, grime and chaos; vast wastelands of miseropolis. (My take: He doesn't know much of Chennai, capital of Tamil Nadu.)
For all the concern surrounding Google's behavior today, it's hard to dispute that the founders started with fairly exalted goals - organizing the world's information - and then wrapped a breathtakingly successful business model around them. With Facebook, it almost feels like the other way around. After Facebook's early success at Harvard, its founders spotted a great business opportunity and showered us with platitudes about "openness" and "connection." To be sure, social networking is entertaining and fun. But when you get down to it, as a colleague of mine said, "It's a thin coat of paint over a massive data-mining operation."
At least with television, we submit to advertising in exchange for professionally produced content. At least with Google, the trade-off is the best information retrieval tool going. Facebook just invites us into a big open room that we have to fill up with interesting things. And in exchange for free rent on that unfurnished virtual space, we hand over the intimate details of our lives: our relationships, weddings, illnesses and tragedies. All of which would be less unsettling if Facebook had proven a trustworthy steward of that personal information. But it hasn't.
2 Malaria myths shattered (The Guardian) Malaria kills twice as many people every year as formerly believed, taking 1.2 million lives and causing the deaths not only of babies but also older children and adults, according to research that overturns decades of assumptions about one of the world's most lethal diseases. Dr Christopher Murray and colleagues have systematically collected data on deaths from all over the world over a 30-year period, from 1980 to 2010, using new methodologies and inventive ways of measuring mortality in countries where deaths are not conventionally recorded. Their figure of 1.2 million deaths for 2010 is nearly double the 655,000 estimated in last year's World Malaria Report.
The good news is that they have confirmed the downward trend that the World Health Organisation's report showed, as a result of efforts by donors, aid organisations and governments to tackle the disease. The bad news is that the decline comes from a much higher peak – deaths hit 1.8 million in 2004, they say. That means the interventions such as better treatment and bed nets are working, but there is much further to go than everybody had assumed. The study demolishes conventional thinking on malaria – that almost all the deaths are in babies and small children under the age of five. The study found that 42% were in older children and adults.
3 Five things about Facebook (The Guardian) 1. Mark Zuckerberg is in control. If you thought Rupert Murdoch had a tight grip on News Corp, spare a thought for anyone at Facebook who disagrees with its founder. Mark Zuckerberg owns 28% of the company's shares, but has struck an agreement with 56.9% of shareholders that gives him control over their votes. 2. A lot of people are going to get very rich. No price has been set for the company yet, but estimates are ranging between $75bn and $100bn. At the top end of that range, Zuckerberg's stake is worth $28bn, equivalent to the gross domestic product of North Korea. James Breyer, a Facebook board member and a partner at Accel Partner, Facebook's largest investors, stands to make a fortune. Accel owns 11.4%. Dustin Moskovitz, Facebook's co-founder and former chief technology officer, has 7.6%. Yuri Milner, the Russian tycoon behind investor DST Global, will also increase his billions, since DST owns a 5.5% stake. 3. Even the losers are winners. Eduardo Saverin, Zuckerberg's early partner at Harvard who was depicted as having been cheated out of his share of the company in the film The Social Network, does not own more than 5% of Facebook – his holding was not listed in yesterday's documents – but he is still likely walk away with a fortune. Even the Winklevoss twins, Zuckerberg's mortal enemies, come away winners. They hold 1.2m shares from a court settlement over their claims that Zuckerberg stole their idea. Those shares are now potentially worth $300m. 4. But you won't make any money any time soon. For one thing, Facebook shares won't begin publicly trading for several months, because the SEC needs to assess the validity of a potential IPO. But even once trading begins, getting in on the action is a long shot, and for retail investors (ie the man in the street) odds are you will have to buy when the price has already spiked. 5. It's the cash, dear. The biggest reason for any IPO. Facebook only has $3.9bn in cash right now, a paltry sum if it's looking to strong-arm competitors like Google, which has cash and short term investments of close to $45bn. Then there's the fact that Facebook's investor base is growing. Federal law mandates companies with more than 500 investors and $10m in assets to disclose quarterly financial results and certain other information. So, basically, they had no choice. Poor dears.
4 AstraZeneca cutting 7,300 jobs (The Guardian) AstraZeeca is cutting 7,300 jobs globally as the pharmaceuticals company battles sliding profits and rapidly declining success rates in research and development. The cuts, to be made over the next three years, come on top of 21,460 jobs cut since 2007 as part of a global reorganisation of the group, including big reductions in its US sales force. AstraZeneca employs 61,000 people worldwide. The latest cuts, which will cost $2.1bn to implement, are expected to save $1.6bn a year by the end of 2014.
5 India Court cancels telecom licences (BBC) India's Supreme Court has cancelled 122 telecommunications licences awarded to companies in 2008. The licences were issued by former minister A Raja, who is accused of mis-selling bandwidth in what has been called India's biggest corruption scandal. Mr Raja denies wrongdoing. Government auditors say the scandal cost the country about $40bn. India is one of the world's fastest growing markets for mobile telephones with 893 million connections. Reports say Thursday's verdict is likely to affect about 5% of connections used by mobile phone customers. Petitioner Prashant Bhushan called it a "historic judgement". "It will change the manner in which corruption will be examined and dealt with in the country," he said.
Reports said some of the companies affected by the court order include Loop, Videocon, Idea Cellular, Tata Telecom, Uninor and Swan. Uninor, the Indian joint venture of Norway's Telenor, said it had been "unfairly treated" and "was shocked" by the court verdict. Telenor President Jon Fredrik Baksaas said the ruling was "extraordinary", and that "If the worst comes to worst, it will be the end of Telenor's business in India."
6 UK recession looms (BBC) The UK economy will enter recession in the first half of the year as households continue to cut back, an influential think tank has warned. The National Institute of Economic and Social Research (Niesr) expects the economy to shrink 0.1% in 2012, but to grow 2.3% in 2013 if the eurozone debt crisis is resolved. The UK is already close to another recession - defined as two consecutive quarters of economic contraction - after official figures in January showed that the economy shrank by 0.2% in the final three months of 2011.
7 TV channel fined for Gaddafi footage (Johannesburg Times) Television channel e.tv has been fined R35,000 for airing violent footage of the killing of Libyan leader Muammar Gaddafi. The Broadcasting Complaints Commission of SA (BCCSA) received complaints in October, the regulator said in a statement.
E.tv news and the eNews Channel showed the footage without providing an advisory warning its viewers about the violence. The complainant said there had been images of Gaddafi in newspapers and on television after his death. "But I was utterly outraged this morning when at 7.30am and every time e.tv news channel 403 ran its headlines. They showed the moments before Gaddafi's death, where he was surrounded by lots of men and was clearly being beaten and dragged," the complainant wrote. "The images were shown with no prior warning to viewers and repeatedly until at least 12 noon."
8 Facebook and Glenstrata: Which is bubblier? (BBC) Some would argue there are two great bubbles in the world right now, in internet shares and commodities, but goodness how they manifest themselves differently on the stock market. Today's manifestations of these phenomena are the merger talks between the mining and commodities trading groups Xstrata and Glencore, plus the announcement that Facebook will be coming to the stock market. Both represent big deals: a merger of Xstrata and Glencore would be worth around $110bn, and Facebook looks set to have a market value of around $80bn. But what's under their respective bonnets could not be more different.
Glenstrata or Xcore would have revenues well over £110bn a year and after tax earnings of £6bn. So its market value would be less than the money going through its books. As for Facebook, its revenues last year were £2.3bn or $3.7bn - which is less than a twentieth of its expected market valuation. And profits after tax were a billion dollars, an eightieth of what the company is likely to be worth when shares are traded. Now you might be tempted to conclude that Facebook is the bubble stock and Glenstrata can't possibly be.
But it is not quite as simple as that, because in the case of Glenstrata, the bubble may be in their earnings rather in the share price. For Glenstrata it is whether the rise in price and increases in demand for copper, iron and coal and all those other feedstocks of the still fast-growing Chinese economy can go on forever. And for Facebook the issue is whether its turnover will continue to rise at an exponentially fast rate - basically whether it can generate ever growing revenues from its 845m monthly active users.
9 Pain for Panasonic (The Straits Times) Japan's Panasonic is bracing for a record net loss of more than Singapore $11.5 billion for the year to March due to the strong yen, Thai floods and acquisition costs. The new forecast is the worst-ever loss for Panasonic and far exceeds its earlier projection of a 420-billion-yen hit.
10 Indonesia is ‘Fesbuk’ country (Dawn) Indonesia, a developing Muslim nation which claims the world’s third-largest community of Facebook users, has become a showcase for the social networking site’s global power and reach. Facebook has broken technological and social barriers to connect 40 million users in the sprawling Indonesian archipelago of more than 17,000 islands, some without even landline connections. With even cheap cell phones in Indonesia sold already bundled with Facebook applications, for many, “Fesbuk” – as it is written in the national Bahasa language – simply is the internet.
Internet penetration via computers is low in Indonesia at less than 10%, but many have leapfrogged that technology by using wildly popular smart-phones which have seen mobile internet penetration reach 57%. “It’s the Facebook capital of the world,” Peter Vesterbecka, Rovio’s Asia-Pacific manager, said recently in the capital Jakarta, which has more Facebook users than any other city in the world. But in the world’s most populous Muslim nation, known for its strong religious and cultural beliefs, Facebook is not all fun and games. Indonesians are learning everything from English to the Koran through Facebook groups. Facebook group “Gay Indonesia Only!” with more than 8,000 members is a forum for homosexuals to meet and interact online.
11 Mohammed Ali’s trainer dies (Dawn) Celebrated boxing trainer Angelo Dundee, Muhammad Ali’s cornerman in his greatest fights, died on Wednesday at the age of 90. While working with Ali for the majority of the boxing great’s career, Dundee trained 15 world champions in total, including Sugar Ray Leonard and George Foreman. Dundee’s work spanned six decades and he was inducted into the International Boxing Hall of Fame in 1994, cementing his legacy as an invaluable asset to some of the most decorated boxers of all time.
12 A world caught in ocean of plastic (Dawn) On Midway atoll in the North Pacific, dozens of young albatross lie dead on the sand, their stomachs filled with cigarette lighters, toy soldiers and other small plastic objects their parents have mistaken for food. That sad and surreal sight, says Hong Kong-based Australian film director Craig Leeson, is one of the many symptoms of a plague afflicting the world’s oceans, food chains and human communities: the onslaught of discarded plastic. “Every piece of plastic ever made since the 1950s exists in some shape or form on the planet,” Leeson says. “We throw plastic into a bin, it’s taken away from us and we never see it again – but it still comes back at us.”
Provisionally called “Away”, the film – backed by David Attenborough and the UK-based Plastic Oceans Foundation – brings together new research on the spread of plastic with missions by “explorers” such as Ben Fogle to show the diverse effects of plastic trash. Its message is that while you may throw out your plastic goods, they are never really thrown “away”.
13 India’s telecom muddle (The Wall Street Journal) Navigating India's bureaucracy while trying to run an honest business is already difficult. On Thursday a Supreme Court verdict made it harder. In response to a petition by anticorruption activists, the court issued a ruling which means that even if a company manages to keep its own nose clean and win regulatory approval without paying off greedy bureaucrats, it could still lose its license to operate if competitors bribed officials.
The court canceled all 122 mobile phone licenses Delhi awarded in 2008 because former Telecom Minister Andimuthu Raja decided to do so on a first-come, first-served basis, instead of through a fair auction. This approach was indefensible, and the case has snowballed into the largest corruption case in Indian history. It's hardly an aberration. Judging by reports, graft and abuses of power are reaching epidemic proportions. The impact of the decision on the affected companies and consumers will be harsh. The nine companies who hold these 122 licenses have four months to shut down their operations, which will inevitably lead to hefty write-offs of their investments to roll out cellular networks
14 Meetings are stand-up jobs (The Wall Street Journal) Atomic Object, a Grand Rapids, Mich., software-development firm, holds company meetings first thing in the morning. Employees follow strict rules: Attendance is mandatory, non-work chitchat is kept to a minimum and, above all, everyone has to stand up. Stand-up meetings are part of a fast-moving tech culture in which sitting has become synonymous with sloth. The object is to eliminate long-winded confabs where participants pontificate, play Angry Birds on their cellphones or tune out.
15 Raghu Dayal in The Times of India: What Delhi, Mumbai or Kolkatha are left to mean to an ordinary citizen is crime, grime and chaos; vast wastelands of miseropolis. (My take: He doesn't know much of Chennai, capital of Tamil Nadu.)
Cash-strapped California; Facebook millionaires; Zuckerberg's masterplan for 'sharing economy'; Direction of global protests
1 Cash-strapped California (San Francisco Chronicle) California will run out of cash by March 1 if the Legislature does not take immediate action, Controller John Chiang told budget leaders at the Capitol in a letter. The controller recommends borrowing and delaying some payments to deal with the shortfall, which he projects will last seven weeks. Absent that kind of action, which lawmakers and the administration of Gov. Jerry Brown say is assured, the state would probably have to send IOUs and delay tax returns.
The controller said the overarching problem is that, as of the end of the calendar year, the state was spending $2.6 billion more than was included in the budget while tax revenue coming into state coffers was $2.6 billion below projections. He said $3.3 billion must somehow be found if the state is going to bridge the seven-week cash shortfall period, but the situation could get worse if there is more overspending and further reductions in tax income. Part of the problem, Chiang said, stems from court rulings. On Monday, a federal judge in Los Angeles issued a preliminary order blocking planned 10% rate cuts to providers of Medi-Cal, the state's health program for the poor.
2 Facebook millionaires (The New York Times) The graffiti artist who took Facebook stock instead of cash for painting the walls of the social network’s first headquarters made a smart bet. The shares owned by the artist, David Choe, are expected to be worth upward of $200 million when Facebook stock trades publicly later this year. The social network company announced its $5 billion public offering, which is expected to value the whole company at $75 billion to $100 billion. Ultimately, that offering will mint a lot of billionaires and millionaires. Some of them are well known, like Mark Zuckerberg, the company’s co-founder, but many others are not household names.
Facebook’s first outside investor, Peter Thiel, the billionaire contrarian, led a $500,000 investment in Facebook in late 2004. He has 44.7 million shares that could be worth more than $2 billion. Elevation Partners, the venture capital firm of Bono, the U2 frontman, paid $120 million for a chunk of Facebook’s shares in 2010 and could receive a payout that would help mask less sage investments in Palm and Forbes. Accel Partners, whose principal partner, Jim Breyer, invested in the start-up seven years ago, holds 201.4 million shares. Accel could have a thousand-fold return on some of its investment.
Netscape’s 1995 offering made millionaires of scores of people, including its founder Marc Andreessen, now a Silicon Valley venture capitalist who invested early in Facebook and holds 3.6 million shares worth nearly $200 million. When Google went to market with its $1.67 billion I.P.O. in 2004, hundreds of people joined the millionaire ranks, including secretaries, a company masseuse and a company chef. Bill Gates controlled only 49.2% of Microsoft as it went public in 1986. Google’s co-founders, Larry Page and Sergey Brin, each owned about 15% of their company when it went public in 2004.
3 Mark Zuckerberg’s masterplan for ‘sharing economy’ (The Guardian) Mark Zuckerberg believes he is not changing human nature but enabling it. He has created the platform for the sharing economy. He sees Facebook as an evolutionary step beyond Google and other net services. "They crawl the web," he said in an interview. "But there's nothing you can crawl to get information about people. It's all in our minds. So in order to have that service, you need to build the tools that let people share."
The two giants of the net are at war over what is called signal generation: the ability to get us to generate data about ourselves – who we are, where we are, what we like, whom we like, what we buy, what we want, what we know, what we want to know – so they can serve us more relevant and valuable content, services, and advertising. "In the world before the internet and things like Facebook, there was a huge amount of privacy through obscurity," he says. Now, he believes, the net gives us choice. "The default in society today still is, OK, I should not share it. The by‑far default today is that everything's anonymous," Zuckerberg laments. "In the future, things should be tied to your identity, and they'll be more valuable that way." There is the master plan.
4 The direction of global protests (Dawn) If 2011 felt, at times, like a rerun of 1848 with stereo headphones, 2012 is already exhibiting some of the features that made 1849 a byword for reaction. In Egypt, the secular democratic forces can still lead hundreds of thousands of youth and workers on to the streets, but Salafist Islam can gather seven million votes in the slums and villages. In Greece, the euphoria one could sense among the indignados camped in Syntagma Square last June has given way to an angry silence; to fragmented, anomic acts and the struggle to survive.
Yet in the past 12 months the technological drivers of the revolts led by young people have powered forward. There are now nearly one billion Facebook users: two-fifths of them joined since the start of the Arab Spring. By Feb 23, 2012, on current trend, the 500 millionth Twitter account will be created — the 400 millionth was created just four months ago, on the day Egyptians clashed with the army in an attempt to retake Tahrir Square.
So what remains of the revolution? As the events recede and solidify it becomes clear that 2011 was, above all, a cultural revolution: a loss of fear in the dictatorships of north Africa; a loss of apathy among educated youth in Europe, Latin America and the US. And the revolution consisted of this: a mass rejection of the values dominant during 20 years of free-market capitalism. It was free-market ideology that painted Hosni Mubarak, Muammar Qadhafi and Zine El Abidine Ben Ali as icons of economic progress. Free-market norms of regulation that created the banking crisis, and then demanded we should bankrupt states instead of banks. And free-market patterns of wealth distribution that created the most potent political meme of 2011 — which was not the Egyptian slogan ‘Bread, freedom, social justice’ but ‘We are the 99 per cent’.
5 South African youth desperately seek education (Daily dispatch) Yesterday we reported that the Eastern Cape’s four universities were unable to accommodate 60,000 matriculants who applied for places. Today we report that a number of pupils are unable to find places in bursting-at-the-seams township schools. These pupils – both primary and high – have been referred to former Model-C schools, which in turn claim they are filled to capacity. Where on earth are these young people supposed to go? What are they to do?
A whopping 65.8% of South Africa’s population is estimated to be under the age of 30. Countries with a disproportionately large population of young people are said to have a youth bulge. This can have a disastrous outcome. Research by the advocacy group Population Action International shows that between 1970 and 1999, 80% of civil conflicts occurred in countries where 60% of the population or more were under the age of 30.
6 Statistics from The Economic Times: India’s GDP at constant prices of Rs 48.9trn is just 10 times Facebook’s valuation. India's two most valuable companies Reliance and Oil and Natural Gas Commission put together have a market capitalisation worth that of Facebook.
The controller said the overarching problem is that, as of the end of the calendar year, the state was spending $2.6 billion more than was included in the budget while tax revenue coming into state coffers was $2.6 billion below projections. He said $3.3 billion must somehow be found if the state is going to bridge the seven-week cash shortfall period, but the situation could get worse if there is more overspending and further reductions in tax income. Part of the problem, Chiang said, stems from court rulings. On Monday, a federal judge in Los Angeles issued a preliminary order blocking planned 10% rate cuts to providers of Medi-Cal, the state's health program for the poor.
2 Facebook millionaires (The New York Times) The graffiti artist who took Facebook stock instead of cash for painting the walls of the social network’s first headquarters made a smart bet. The shares owned by the artist, David Choe, are expected to be worth upward of $200 million when Facebook stock trades publicly later this year. The social network company announced its $5 billion public offering, which is expected to value the whole company at $75 billion to $100 billion. Ultimately, that offering will mint a lot of billionaires and millionaires. Some of them are well known, like Mark Zuckerberg, the company’s co-founder, but many others are not household names.
Facebook’s first outside investor, Peter Thiel, the billionaire contrarian, led a $500,000 investment in Facebook in late 2004. He has 44.7 million shares that could be worth more than $2 billion. Elevation Partners, the venture capital firm of Bono, the U2 frontman, paid $120 million for a chunk of Facebook’s shares in 2010 and could receive a payout that would help mask less sage investments in Palm and Forbes. Accel Partners, whose principal partner, Jim Breyer, invested in the start-up seven years ago, holds 201.4 million shares. Accel could have a thousand-fold return on some of its investment.
Netscape’s 1995 offering made millionaires of scores of people, including its founder Marc Andreessen, now a Silicon Valley venture capitalist who invested early in Facebook and holds 3.6 million shares worth nearly $200 million. When Google went to market with its $1.67 billion I.P.O. in 2004, hundreds of people joined the millionaire ranks, including secretaries, a company masseuse and a company chef. Bill Gates controlled only 49.2% of Microsoft as it went public in 1986. Google’s co-founders, Larry Page and Sergey Brin, each owned about 15% of their company when it went public in 2004.
3 Mark Zuckerberg’s masterplan for ‘sharing economy’ (The Guardian) Mark Zuckerberg believes he is not changing human nature but enabling it. He has created the platform for the sharing economy. He sees Facebook as an evolutionary step beyond Google and other net services. "They crawl the web," he said in an interview. "But there's nothing you can crawl to get information about people. It's all in our minds. So in order to have that service, you need to build the tools that let people share."
The two giants of the net are at war over what is called signal generation: the ability to get us to generate data about ourselves – who we are, where we are, what we like, whom we like, what we buy, what we want, what we know, what we want to know – so they can serve us more relevant and valuable content, services, and advertising. "In the world before the internet and things like Facebook, there was a huge amount of privacy through obscurity," he says. Now, he believes, the net gives us choice. "The default in society today still is, OK, I should not share it. The by‑far default today is that everything's anonymous," Zuckerberg laments. "In the future, things should be tied to your identity, and they'll be more valuable that way." There is the master plan.
4 The direction of global protests (Dawn) If 2011 felt, at times, like a rerun of 1848 with stereo headphones, 2012 is already exhibiting some of the features that made 1849 a byword for reaction. In Egypt, the secular democratic forces can still lead hundreds of thousands of youth and workers on to the streets, but Salafist Islam can gather seven million votes in the slums and villages. In Greece, the euphoria one could sense among the indignados camped in Syntagma Square last June has given way to an angry silence; to fragmented, anomic acts and the struggle to survive.
Yet in the past 12 months the technological drivers of the revolts led by young people have powered forward. There are now nearly one billion Facebook users: two-fifths of them joined since the start of the Arab Spring. By Feb 23, 2012, on current trend, the 500 millionth Twitter account will be created — the 400 millionth was created just four months ago, on the day Egyptians clashed with the army in an attempt to retake Tahrir Square.
So what remains of the revolution? As the events recede and solidify it becomes clear that 2011 was, above all, a cultural revolution: a loss of fear in the dictatorships of north Africa; a loss of apathy among educated youth in Europe, Latin America and the US. And the revolution consisted of this: a mass rejection of the values dominant during 20 years of free-market capitalism. It was free-market ideology that painted Hosni Mubarak, Muammar Qadhafi and Zine El Abidine Ben Ali as icons of economic progress. Free-market norms of regulation that created the banking crisis, and then demanded we should bankrupt states instead of banks. And free-market patterns of wealth distribution that created the most potent political meme of 2011 — which was not the Egyptian slogan ‘Bread, freedom, social justice’ but ‘We are the 99 per cent’.
5 South African youth desperately seek education (Daily dispatch) Yesterday we reported that the Eastern Cape’s four universities were unable to accommodate 60,000 matriculants who applied for places. Today we report that a number of pupils are unable to find places in bursting-at-the-seams township schools. These pupils – both primary and high – have been referred to former Model-C schools, which in turn claim they are filled to capacity. Where on earth are these young people supposed to go? What are they to do?
A whopping 65.8% of South Africa’s population is estimated to be under the age of 30. Countries with a disproportionately large population of young people are said to have a youth bulge. This can have a disastrous outcome. Research by the advocacy group Population Action International shows that between 1970 and 1999, 80% of civil conflicts occurred in countries where 60% of the population or more were under the age of 30.
6 Statistics from The Economic Times: India’s GDP at constant prices of Rs 48.9trn is just 10 times Facebook’s valuation. India's two most valuable companies Reliance and Oil and Natural Gas Commission put together have a market capitalisation worth that of Facebook.
Wednesday, February 1, 2012
Engineers, not MBAs, are startup stars; P&G to lay off 1,600; More QE in offing; India's battered toddler; Eurozone joblessness at 10.4%
1 Engineers, not MBAs, are startup stars (San Francisco Chronicle) It's been hinted at time and again that MBAs don't quite measure up to engineering degrees in the startup world. Now there's data to back up that claim. In a report out by Identified, a startup that pulls Facebook data to track employment trends, the difference isn't seen in the undergrad degrees. The spit happens in graduate school. "The company found 3,337 founder/CEOs have an advanced engineering background compared with 1,016 MBAs," according to the report, which looked at 36 million profiles in the company's database.
2 P&G to lay off 1,600 since Facebook can do the job (San Francisco Chronicle) Reality appears to have finally arrived at Procter & Gamble, the world's largest marketer, whose $10 billion annual ad budget has hurt the company's margins. P&G said it would lay off 1,600 staffers, including marketers, as part of a cost-cutting exercise. More interestingly, CEO Robert McDonald finally seems to have woken up to the fact that he cannot keep increasing P&G's ad budget forever, regardless of what happens to its sales. He said he would have to "moderate" his ad budget because Facebook and Google can be "more efficient" than the traditional media that usually eats the lion's share of P&G's ad budget. In the digital space, with things like Facebook and Google and others, we find that the return on investment of the advertising, when properly designed, when the big idea is there, can be much more efficient.
3 More QE in the offing (The Guardian) The prospects of fresh action by the Bank of England to boost growth increased on Tuesday after Threadneedle Street released figures showing a contraction in the money supply and weak borrowing by both companies and households. News of a drying up of credit left City analysts confident that a fresh round of quantitative easing would be announced by the Bank's nine-strong monetary policy committee when it meets next week.
Data from the Bank showed that consumers repaid credit card debts in December, while borrowing by the corporate sector fell at its fastest rate since the summer of 2009. The broad measure of the money supply – which includes notes and coins in circulation and bank balances – dropped by 1.4% in December, the biggest one-month decline on record. Howard Archer, UK analyst at IHS Global Insight, said: "The sharp drop in underlying money supply growth in December makes at least another £50bn of quantitative easing by the Bank of England look even more of a racing certainty at their February policy meeting next week." Threadneedle Street announced the first wave of QE in early 2009, buying £200bn of government gilts over the next 12 months.
4 Sizing up Facebook and Google (The Guardian) Bankers, bloggers, stock market traders and internet entrepreneurs are holding their collective breath. Facebook's record-breaking stock market listing, the largest ever for a technology company, is imminent. The world's leading social site, with 800 million members worldwide, is expected to sell off a 10% stake for between $7.5bn and $10bn, implying an overall value of $75bn to $100bn.
The multiples are on a par with those achieved by Google when it joined the Nasdaq in 2004. By then, Google's superior engineering had allowed it to secure an unassailable position in search, a utility without which the web would be impossible to navigate. Seven years on, and Google is making more than $10bn a quarter with a market capitalisation of $188bn. Does Facebook have the same potential? The bulk of Facebook's income will be from advertisers. WPP, the world's biggest marketing services group, already spends $200m a year with Facebook, an eighth of the $1.6bn it pays to Google.
The experience of Myspace, Britain's Bebo and Friends Reunited would suggest these forums can be passing fads, whose users are quickly drawn to other novelties. The social network founded eight years ago in Zuckerberg's Harvard dorm room has soared in membership while rivals melted away, but Google is biting at its heels. The search giant recently pegged staff bonuses to the success of its own social offering, Google+, and the effect has been dramatic. Its membership ramped up to 90m users in January, having doubled in three months.
5 India’s battered toddler (BBC) For close to two weeks, the distressing story of a two-year-old toddler has grabbed India's attention. A teenage girl brought the battered toddler to a hospital in Delhi and left her there. Doctors found she had serious injuries - human bite marks all over her body, broken arms and a partially smashed head. They said they had not seen abuse of this level on such a small child.
We still do not know who the toddler's parents are, why she was abandoned and why she suffered such brutality. The story is, sadly, not unusual and mirrors the neglect, abuse and social bias that girl children suffer in largely patriarchal India. India has one of the highest female infant mortality rates in the world. Unchecked illegal sex selection abortions have led to a skewed sex ratio - 112 boys are born for every 100 girls in India, against the natural sex ratio at birth of 105 boys for every 100 girls.
6 Hong Kong sees difficult year (BBC) Hong Kong has unveiled measures worth $10bn to help local residents and businesses prepare for a "difficult year." The measures, announced in the annual budget, include tax rebates, loan guarantees, and subsidies. Hong Kong's financial secretary said the package would boost the economy by 1.5 percentage points in 2012. John Tsang warned that "bleak" economic prospects for the US and Europe would lead to slower growth in Hong Kong. "I am not optimistic about Hong Kong's export performance in the first half of the year," he said.
7 Eurozone unemployment at 10.4% (BBC) Unemployment in the eurozone hit a record high at the end of last year, the Eurostat agency has said. The jobless rate in the 17 countries that use the single currency was 10.4% in December, unchanged from November's figure which was revised up from 10.3%. Some 16.5 million people were out of work in the eurozone in December, up 751,000 on the year before. The highest unemployment rate remains in Spain (22.9%), while the lowest is in Austria (4.1%).
8 Spanair’s abrupt collapse (BBC) Spain's fourth-largest airline Spanair has collapsed, leaving more than 20,000 passengers stranded across Europe and Africa. The Barcelona-based firm stopped operating on Friday and more than 200 flights were abruptly cancelled. In 2010, Spanair reported an operating loss of 115m euros. The collapse comes after Qatar Airways stopped takeover talks, ending the prospect of further financing, and also reflects weak demand for air travel in Spain. The airline was seen as a flagship of the regional government of Catalonia, which had helped it stay afloat with more than 150m euros of subsidies.
9 $3.8bn net loss for Sharp (Straits Times) Japanese electronics maker Sharp said on Wednesday that it expected a full-year net loss of $3.8 billion, blaming falling prices, a high yen and the global economic slowdown. The firm expects a net loss of $4.8 billion for the year to March.
10 Battle of newspaper brands in India (Wall Street Journal) A battle of brands between two of India’s leading English dailies is brewing, with The Hindu newspaper launching an advertisement campaign suggesting that The Times of India contains trivial news that leaves its readers unenlightened on issues that matter. A senior official at The Times of India declined to comment, while the company’s chief marketing officer didn’t respond to requests for comment about the campaigns. Advertising expert Prahlad Kakkar noted that The Hindu’s “necessary” counter campaign has positioned the newspaper as “aggressive, competitive and informative.” The Times of India is the most widely read English-language newspaper, with a daily readership of 7.4 million, while The Hindu ranks third.
11 Biennale in Kochi (Wall Street Journal) If town twinning is still a done thing, a few months down the line someone may want to place a request to twin Venice and Kochi. Consider the following: both are port towns that made their fortunes in the spice trade and both, to different extents, sit on networks of canals. And soonish, if all goes to plan, Kochi will have its own art biennale, too. The start date has been set: a prophetic 12/12/12. That’s when the city in India’s southern state of Kerala is set to host a three-month long exhibition of Indian and international contemporary art. Modeled on Venice’s Biennale, a century-old art show that takes over Italy’s lagoon city for several months every two years, the idea behind Kochi’s biennale is to provide a platform for contemporary art in India that is neither a gallery nor a trade fair.
The biennale would take place across venues in Kochi. Among them is the newly-restored Durbar Hall, a 19th century court that originally belonged to the Maharaja of Kochi. Potential venues also include dockyards, heritage buildings and warehouses, which are somehow reminiscent of Venice’s Arsenale, a historical shipyard that functions as a vast exhibition space. Kochi would not be the first city to have a biennale inspired by Venice: Berlin, Liverpool and Dakar, among many others, already boast one each. For India, which first participated at the Venice Biennale only last year – the art show’s 54th edition — an event of that scale would be a major leap.
12 India’s trade deficit widens (Wall Street Journal) India's trade deficit in December widened to $12.7 billion from $8.0 billion a year earlier as export growth slowed due to falling global demand. But imports, specially in the non-oil segments, continued to grow. For the April-December period, the trade gap was $133.2 billion, compared with $96.2 billion a year earlier. India's merchandise exports in December grew 6.7% from a year earlier to $25.0 billion while imports rose 19.8% to $37.7 billion.
2 P&G to lay off 1,600 since Facebook can do the job (San Francisco Chronicle) Reality appears to have finally arrived at Procter & Gamble, the world's largest marketer, whose $10 billion annual ad budget has hurt the company's margins. P&G said it would lay off 1,600 staffers, including marketers, as part of a cost-cutting exercise. More interestingly, CEO Robert McDonald finally seems to have woken up to the fact that he cannot keep increasing P&G's ad budget forever, regardless of what happens to its sales. He said he would have to "moderate" his ad budget because Facebook and Google can be "more efficient" than the traditional media that usually eats the lion's share of P&G's ad budget. In the digital space, with things like Facebook and Google and others, we find that the return on investment of the advertising, when properly designed, when the big idea is there, can be much more efficient.
3 More QE in the offing (The Guardian) The prospects of fresh action by the Bank of England to boost growth increased on Tuesday after Threadneedle Street released figures showing a contraction in the money supply and weak borrowing by both companies and households. News of a drying up of credit left City analysts confident that a fresh round of quantitative easing would be announced by the Bank's nine-strong monetary policy committee when it meets next week.
Data from the Bank showed that consumers repaid credit card debts in December, while borrowing by the corporate sector fell at its fastest rate since the summer of 2009. The broad measure of the money supply – which includes notes and coins in circulation and bank balances – dropped by 1.4% in December, the biggest one-month decline on record. Howard Archer, UK analyst at IHS Global Insight, said: "The sharp drop in underlying money supply growth in December makes at least another £50bn of quantitative easing by the Bank of England look even more of a racing certainty at their February policy meeting next week." Threadneedle Street announced the first wave of QE in early 2009, buying £200bn of government gilts over the next 12 months.
4 Sizing up Facebook and Google (The Guardian) Bankers, bloggers, stock market traders and internet entrepreneurs are holding their collective breath. Facebook's record-breaking stock market listing, the largest ever for a technology company, is imminent. The world's leading social site, with 800 million members worldwide, is expected to sell off a 10% stake for between $7.5bn and $10bn, implying an overall value of $75bn to $100bn.
The multiples are on a par with those achieved by Google when it joined the Nasdaq in 2004. By then, Google's superior engineering had allowed it to secure an unassailable position in search, a utility without which the web would be impossible to navigate. Seven years on, and Google is making more than $10bn a quarter with a market capitalisation of $188bn. Does Facebook have the same potential? The bulk of Facebook's income will be from advertisers. WPP, the world's biggest marketing services group, already spends $200m a year with Facebook, an eighth of the $1.6bn it pays to Google.
The experience of Myspace, Britain's Bebo and Friends Reunited would suggest these forums can be passing fads, whose users are quickly drawn to other novelties. The social network founded eight years ago in Zuckerberg's Harvard dorm room has soared in membership while rivals melted away, but Google is biting at its heels. The search giant recently pegged staff bonuses to the success of its own social offering, Google+, and the effect has been dramatic. Its membership ramped up to 90m users in January, having doubled in three months.
5 India’s battered toddler (BBC) For close to two weeks, the distressing story of a two-year-old toddler has grabbed India's attention. A teenage girl brought the battered toddler to a hospital in Delhi and left her there. Doctors found she had serious injuries - human bite marks all over her body, broken arms and a partially smashed head. They said they had not seen abuse of this level on such a small child.
We still do not know who the toddler's parents are, why she was abandoned and why she suffered such brutality. The story is, sadly, not unusual and mirrors the neglect, abuse and social bias that girl children suffer in largely patriarchal India. India has one of the highest female infant mortality rates in the world. Unchecked illegal sex selection abortions have led to a skewed sex ratio - 112 boys are born for every 100 girls in India, against the natural sex ratio at birth of 105 boys for every 100 girls.
6 Hong Kong sees difficult year (BBC) Hong Kong has unveiled measures worth $10bn to help local residents and businesses prepare for a "difficult year." The measures, announced in the annual budget, include tax rebates, loan guarantees, and subsidies. Hong Kong's financial secretary said the package would boost the economy by 1.5 percentage points in 2012. John Tsang warned that "bleak" economic prospects for the US and Europe would lead to slower growth in Hong Kong. "I am not optimistic about Hong Kong's export performance in the first half of the year," he said.
7 Eurozone unemployment at 10.4% (BBC) Unemployment in the eurozone hit a record high at the end of last year, the Eurostat agency has said. The jobless rate in the 17 countries that use the single currency was 10.4% in December, unchanged from November's figure which was revised up from 10.3%. Some 16.5 million people were out of work in the eurozone in December, up 751,000 on the year before. The highest unemployment rate remains in Spain (22.9%), while the lowest is in Austria (4.1%).
8 Spanair’s abrupt collapse (BBC) Spain's fourth-largest airline Spanair has collapsed, leaving more than 20,000 passengers stranded across Europe and Africa. The Barcelona-based firm stopped operating on Friday and more than 200 flights were abruptly cancelled. In 2010, Spanair reported an operating loss of 115m euros. The collapse comes after Qatar Airways stopped takeover talks, ending the prospect of further financing, and also reflects weak demand for air travel in Spain. The airline was seen as a flagship of the regional government of Catalonia, which had helped it stay afloat with more than 150m euros of subsidies.
9 $3.8bn net loss for Sharp (Straits Times) Japanese electronics maker Sharp said on Wednesday that it expected a full-year net loss of $3.8 billion, blaming falling prices, a high yen and the global economic slowdown. The firm expects a net loss of $4.8 billion for the year to March.
10 Battle of newspaper brands in India (Wall Street Journal) A battle of brands between two of India’s leading English dailies is brewing, with The Hindu newspaper launching an advertisement campaign suggesting that The Times of India contains trivial news that leaves its readers unenlightened on issues that matter. A senior official at The Times of India declined to comment, while the company’s chief marketing officer didn’t respond to requests for comment about the campaigns. Advertising expert Prahlad Kakkar noted that The Hindu’s “necessary” counter campaign has positioned the newspaper as “aggressive, competitive and informative.” The Times of India is the most widely read English-language newspaper, with a daily readership of 7.4 million, while The Hindu ranks third.
11 Biennale in Kochi (Wall Street Journal) If town twinning is still a done thing, a few months down the line someone may want to place a request to twin Venice and Kochi. Consider the following: both are port towns that made their fortunes in the spice trade and both, to different extents, sit on networks of canals. And soonish, if all goes to plan, Kochi will have its own art biennale, too. The start date has been set: a prophetic 12/12/12. That’s when the city in India’s southern state of Kerala is set to host a three-month long exhibition of Indian and international contemporary art. Modeled on Venice’s Biennale, a century-old art show that takes over Italy’s lagoon city for several months every two years, the idea behind Kochi’s biennale is to provide a platform for contemporary art in India that is neither a gallery nor a trade fair.
The biennale would take place across venues in Kochi. Among them is the newly-restored Durbar Hall, a 19th century court that originally belonged to the Maharaja of Kochi. Potential venues also include dockyards, heritage buildings and warehouses, which are somehow reminiscent of Venice’s Arsenale, a historical shipyard that functions as a vast exhibition space. Kochi would not be the first city to have a biennale inspired by Venice: Berlin, Liverpool and Dakar, among many others, already boast one each. For India, which first participated at the Venice Biennale only last year – the art show’s 54th edition — an event of that scale would be a major leap.
12 India’s trade deficit widens (Wall Street Journal) India's trade deficit in December widened to $12.7 billion from $8.0 billion a year earlier as export growth slowed due to falling global demand. But imports, specially in the non-oil segments, continued to grow. For the April-December period, the trade gap was $133.2 billion, compared with $96.2 billion a year earlier. India's merchandise exports in December grew 6.7% from a year earlier to $25.0 billion while imports rose 19.8% to $37.7 billion.
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