by ilene - April 27th, 2015 9:56 am
Apple Inc.’s IPhone sales in China may have exceeded the U.S. for the first time in the latest quarter, thanks to brisk demand during the country’s New Year celebrations.
Apple will probably show on Monday that earnings jumped by more than 20 percent when it reports results for the second fiscal quarter, which ended in March. While Apple doesn’t break out shipments by country, the company may have sold 18 million to 20 million iPhones in greater China during the period, while U.S. deliveries were about 14 million to 15 million, according to Creative Strategies LLC.
While the USA is busy killing US civilians and terrorists with its drone program, Russia is set to deploy its own Orlan-10 drones in the oil- and gas-rich Arctic region (reportedly to monitor the climate situation). As SputnikNews reports, Colonel Aleksandr Gordeev stated "the drones' task is to maintain impartial control of the situation in the Russian sector of the Arctic, including the ecological and ice situation in the adjoining sea areas and along the Northern Sea Route." So, passive-agressive? However, Russia also chose this week to release rarely-seen images of a US intelligence satellite which as one analyst notes is provocative (but obscure in its intent other than the growing recognition of US space-based surveillance assets).
China Inc. is turning to the stock market for a cure to its unprecedented debt hangover.
As authorities show a newfound tolerance for defaults and debt levels at Shanghai Composite Index members climb to all-time highs, Chinese companies are increasingly tapping the equity market for funds to pay down liabilities and invest in growth. They’ve announced $82 billion of secondary stock offerings in 2015, a figure UBS Group AG predicts will increase to a record $161 billion by December. That comes on top of $10 billion already raised through IPOs.
by ilene - April 26th, 2015 8:34 pm
By Jared Dillian
Do you believe in God? Stay with me.
I’m an armchair philosopher, and I’ve always wished I’d had the opportunity to be a philosophy major, because I can navel gaze with the best of them. But since then, I’ve come to know some actual philosophy professors, and as it turns out, they tend to not get along with other philosophy professors, which makes departmental politics a little toxic.
I can’t remember exactly when it was that I learned about Pascal’s Wager. 17th-century French philosopher Blaise Pascal postulated that it is rational behavior to believe in God.
Why believe in something for which there is no evidence? The answer lies in decision theory.
If you believe in God and you’re right, you go to heaven. Let’s call this “infinite gain.”
If you believe in God and you’re wrong, the only thing you lose is whatever time you spent in church and/or money you donated. It’s a finite loss.
If you don’t believe in God and you’re right, there is no God, you get to be smug. That is a finite gain.
If you don’t believe in God and you’re wrong, you go to hell. Let’s call this infinite loss.
Here it is in table format:
I think most people who understand decision theory will recognize this immediately. So yes, it is indeed rational—meaning in our best interest—to believe in God.
As it turns out, Pascal’s Wager is all over the place in markets.
Best example: Japan in 2012.
There’s this new prime minister, Abe, and this new Bank of Japan governor, Kuroda. They’re going to do this thing called Abenomics. They say they want to print trillions of yen to buy all kinds of assets, which is going to reflate the markets and devalue the currency.
Now ever since the crash of the early 1990s, Japan has had numerous plans to get out of deflation. Japan being Japan, not much changes there, and they end up just getting bogged down in bureaucracy. This has happened at least a dozen times in the…
by ilene - April 26th, 2015 3:10 pm
Courtesy of John Rubino.
As the saying goes, you can know a person by the quality of his or her enemies. This is also true of societies, where moral evolution can be traced by simply listing the things on which they declare war. Not so long ago, for instance, the world’s good guys — the US, Europe’s democracies and a few others — fought existential battles against fascism and communism. Then they went after poverty and discrimination. They were, at least in terms of their ideals, on the side of personal freedom and opportunity and against institutionalized control.
But then came the war on drugs, in which the US imprisoned millions of non-violent people guilty only of voluntary transaction. Not long after that we declared war on “terror,” using the enemies created by our own incompetent foreign policy as an excuse for a vast expansion of surveillance and police militarization.
And now, seemingly out of nowhere, comes a new enemy: cash. Around the world, governments and banks are making it harder to save and transact with paper and coin. The ultimate goal seems to be the elimination of private tools of commerce, in favor of transparent (to governments and banks) plastic, checks and online payment systems. The following excerpts are from longer articles that should be read in their entirety:
(Bloomberg) – Could negative interest rates create an existential crisis for money itself?
JPMorgan Chase recently sent a letter to some of its large depositors telling them it didn’t want their stinking money anymore. Well, not in those words. The bank coined a euphemism: Beginning on May 1, it said, it will charge certain customers a “balance sheet utilization fee” of 1 percent a year on deposits in excess of the money they need for their operations. That amounts to a negative interest rate on deposits. The targeted customers—mostly other financial institutions—are already snatching their money out of the bank. Which is exactly what Chief Executive Officer Jamie Dimon wants. The goal is to shed $100 billion in deposits, and he’s about 20 percent of the way there so far.
Pause for a second and marvel at how strange this is. Banks have always paid interest to depositors. We’ve entered a new era of surplus in which banks—some, anyway—are deigning to accept money only if customers are willing to pay for the privilege. Nick
by ilene - April 26th, 2015 1:20 pm
This is discouraging. There seems to be a prevailing attitude, even among very intelligent people (personal observation), that science is just another subject of equivalence to religion, or apparently astrology, in explaining life in the big universe. Or, subjects that are not within the realm of science are imagined to be a science based on a misunderstanding of what science is.
This misunderstanding of science may reflect a failed education system, and unfortunately, we may be traveling backwards. The highest percent of non-skeptics were in the youngest age group where a majority of people think astrology is at least "sort of" scientific.
In China, in contrast, 92% of people polled said they do not believe "in horoscopes." The exact question the researchers asked may in part explain the discrepant results. And I wonder, did some Americans get Astrology confused with Astronomy? Also not good.
By Chris Mooney at MotherJones
"I believe in a lot of astrology." So commented pop megastar Katy Perry in a recentGQ interview. She also said she sees everything through a "spiritual lens"…and that she believes in aliens.
According to data from the National Science Foundation's just-released 2014 Science and Engineering Indicators study, Americans are moving in Perry's direction. In particular, the NSF reports that the percentage of Americans who think astrology is "not at all scientific" declined from 62 percent in 2010 to just 55 percent in 2012 (the last year for which data is available). As a result, NSF reports that Americans are apparently less skeptical of astrology than they have been at any time since 1983.
Picture via Geralt at Pixabay.
by ilene - April 26th, 2015 1:10 pm
We curated a lot of interesting articles for your weekend reading. Enjoy!
A fresh 6.7 magnitude aftershock in Nepal on Sunday hampered efforts to find survivors of a more powerful earthquake the day before that killed more than 2,200 people.
The tremors prompted authorities to temporarily halt flights into Kathmandu, the capital, where thousands of people are camping outdoors. The 7.8-magnitude temblor that struck shortly before noon on Saturday triggered avalanches on Mount Everest, killing at least 19 foreign climbers including a Google Inc. product manager.
LONDON (Reuters) – Most central banks have been easing policy since the start of the year and are set to do more, but it still isn't clear whether that new activism, which has pushed stock markets to record highs, will help the global economy much.
Several meet this week to set policy, including the U.S. Federal Reserve, the Bank of Japan and Sweden's Riksbank, which all have turned to government bond purchases as stimulus after running out of interest rates to cut.
Why North Europeans Are the Happiest People (BloombergView)
Switzerland, Iceland, Denmark and Norway are the world's happiest countries, according to the 2015 World Happiness Report, which is put out by some influential economists. Three of these European states are not members of the European Union. What are they doing right that the rest of the world is doing wrong?
Jeffrey Sachs of Columbia University, Richard Layard of the London School of Economics and John Helliwell of the University of British Columbia have been putting out these reports since 2012. They are intended to remind governments that success is about more than economic growth and other such statistics. Sure, people are happier when they're richer and healthier, as they tend to be in more developed countries, but there are other contributors to perceptions of well-being.
by ilene - April 26th, 2015 12:30 pm
Courtesy of Charles Hugh-Smith, OfTwoMinds
Those angered by the mere question of the viability of this predatory pillaging in the name of capitalism are incapable of even admitting this cultural crisis exists.
by ilene - April 25th, 2015 11:44 pm
Courtesy of John Rubino.
The past few years have been brutal for the gold miners, most of which brought it on themselves by starting new, high-cost mines just in time for the metal’s price to crater. The resulting write-downs and operating losses have made this without question the most unloved sector in the whole market.
The consensus among analysts has been that most miners’ costs are so structurally sticky that only slight reductions will be possible, making the industry a financial basket case until gold starts rising again.
Then Newmont, the second biggest gold miner, reported its first quarter earnings. Among other startling numbers, its all-in sustaining costs to produce one ounce of gold fell nearly 18 percent to $849 and its earnings rose by either 50% or 89% year-over-year, depending on the definition of profit being used (analysts were predicting a slight earnings decline). Free cash flow, meanwhile, soared to $344 million from the year-earlier $52 million.
Over the next week or two these results will get a thorough exam from analysts, and if they hold up they’ll change the game for miners. Specifically, if it’s possible to take this much out of costs without resorting to scams like high-grading (where the miner uses up the best ore to goose near-term results at the cost of future earnings) or fiddling with the timing of revenues and expenses, then other miners may be able to generate some pleasant surprises in coming quarters as well. And suddenly this is a happy, outperforming industry.
One indicator that this may be the case is insider buying: From Acting Man’s Pater Tenebrarum:
In spite of the gold price weakening once again this week and coming dangerously close to breaking an important support zone, gold investors have actually reason to take heart. Readers may recall what we wrote in our most recent update on gold about gold mining margins:
“The market has not yet really given any credit to the fact that mining margins are improving due to strength in the real price of gold. Management boards of gold companies may be coming around to a different view though – after all, they are
by ilene - April 25th, 2015 11:20 pm
Courtesy of Mish.
The inevitable in Greece gets closer and closer. Looking back, I wonder how many rabbits in the hat there were. More importantly, how many still remain?
I believe the answer to the latter question is zero.
Yet, I also point out the propensity of German chancellor Angela Merkel to prolong the "not on my watch" inevitable. Meanwhile, the pot has is far more advanced than "simmering".
Greece Boils Over
The Financial Times reports EU Frustration Over Greece Boils Over at Eurogroup Meeting.
Months of mounting tensions between Greece and its creditors boiled over at a high-level EU meeting on Friday with eurozone finance ministers angrily accusing their Greek counterpart of backtracking on commitments and failing to grasp the deep differences that still divide them.
Athens is running desperately short of cash and many eurozone officials fear that, without an agreement to release some of the remaining €7.2bn in its bailout programme, the government could default as early as mid-May.
Eurozone officials briefed on the closed-door, three-hour meeting said Yanis Varoufakis, the Greek finance minister, specifically warned that cash was so tight that government coffers might run dry in a matter of weeks.
The antagonism between Mr Varoufakis and other ministers became so severe during the eurogroup session that Slovenia’s finance minister suggested if bailout talks did not progress more quickly the eurozone should prepare a “Plan B” to deal with a Greek default.
The contentious session undermined claims by Greek officials that a Thursday meeting in Brussels between Alexis Tsipras, the Greek prime minister, and Angela Merkel, his German counterpart, had narrowed the differences. The claims briefly sent the euro rallying in morning trading, but those gains evaporated after news of the differences emerged.
Default Necessary but Grexit Not?
Financial Times writer Wolfgang Münchau says Default Necessary but Grexit Not.
Until last week, discussions with Greece did not go well. That changed when the circus of international financial diplomacy moved to Washington for the spring meetings of the International Monetary Fund and the World Bank. Then it became worse.
My hunch is that this show will go on for quite a while. The Greeks want to merge the talks on the extension
by ilene - April 25th, 2015 10:43 pm
Courtesy of The Automatic Earth.
DPC Clam seller in Mulberry Bend, NYC 1904
After the high-level EU summit on the migrant issue, hastily convened after close to a thousand people drowned last weekend off the Lybian coast, Dutch PM Mark Rutte was quoted by ‘his’ domestic press as saying ‘Our first priority is saving human lives’. That sounds commendable, and it also sounds just like what everybody knows everybody else wants to hear. One can be forgiven, therefore, for thinking that it’s somewhat unfortunate that the one person tasked by Brussels with executing the noble ‘saving lives’ strategy, doesn’t seem to entirely agree with Rutte:
The head of the EU border agency has said that saving migrants’ lives in the Mediterranean should not be the priority for the maritime patrols he is in charge of, despite the clamour for a more humane response from Europe following the deaths of an estimated 800 people at sea at the weekend. On the eve of an emergency EU summit on the immigration crisis, Fabrice Leggeri, the head of Frontex, flatly dismissed turning the Triton border patrol mission off the coast of Italy into a search and rescue operation.
He also voiced strong doubts about new EU pledges to tackle human traffickers and their vessels in Libya. “Triton cannot be a search-and-rescue operation. I mean, in our operational plan, we cannot have provisions for proactive search-and-rescue action. This is not in Frontex’s mandate, and this is in my understanding not in the mandate of the European Union,” Leggeri told the Guardian.
To refresh your memory, the Triton border patrol mission took the place late last year of Italy’s Mare Nostrum mission, which ended in October 2014. For good measure, the budget was slashed from the €9.5 million per month Italy had been putting in, to €2.9 million per month. Saving lives can be simply too expensive when you think about it in your high rise office in that brand new €1 billion+ EU building. These are hard economic times, and we all need to make sacrifices and to cut costs wherever we can.
by ilene - April 25th, 2015 8:20 pm
The "War On Cash" Migrates To Switzerland (Acting-Man)
Banks Increasingly Refuse Cash Withdrawals – Switzerland Joins the Fun
The war on cash is proliferating globally. It appears that the private members of the world’s banking cartels are increasingly joining the fun, even if it means trampling on the rights of their customers.
Yesterday we came across an article at Zerohedge, in which Dr. Salerno of the Mises Institute notes that JP Morgan Chase has apparently joined the “war on cash”, by “restricting the use of cash in selected markets, restricting borrowers from making cash payments on credit cards, mortgages, equity lines and auto loans, as well as prohibiting storage of cash in safe deposit boxes”.
Xiaomi is one of the hottest smartphone companies out there. Just five years old, it has rapidly grown to become the world's most valuable tech startup, worth about $46 billion (£30.9 billion), which is more than Uber, Snapchat, or SpaceX.
Xiaomi, founded by CEO Lei Jun, is often referred to as the "Apple of China," not least because of the famed devotion of its fans. The company holds worldwide flash sales for its customers and throws them parties in expensive nightclubs — and they love the company for it.
To be sure, we’ve had our share of laughs at the expense of China’s margin-fueled equity mania. First there was the realization that more than 4 million new stock trading accounts were created in China last month alone — the country is now adding nearly that many each week. Then we discovered that if statistics are to be trusted, around one in three of those millions of new accounts likely belongs to someone with an elementary school education or less. Finally, we learned that the rally has minted an army of day trading housewives, security guards, and most recently, banana salesmen who last Monday traded so much that they literally overwhelmed the Shanghai Exchange’s volume-tracking software.