China’s economic growth more like 4%: Marc Faber

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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China’s economy is probably growing at an annual rate of 4 percent, said Marc Faber, editor and publisher of the Gloom, Boom and Doom Report, brushing aside a recent string of upbeat economic numbers from the world’s second biggest economy.

“I said to an economist I think China is growing at 4 percent per annum and he said do you mean minus 4 percent?,” Faber told CNBC on the sidelines of a hedge fund conference in Singapore on Wednesday.

“I don’t think [China’s economic growth] is minus 4 percent, but we do have to adjust a lot of economic statistics for the credit that has been pushed into the system that is not sustainable in the long-run,” he added.

China’s economy grew 7.7 percent last year and the country has a 2013 growth target of 7.5 percent.

Economists say high credit growth is one of the main risks facing China’s economy and in recent months the central bank has taken some steps to address the issue such as allowing tight liquidity conditions in money markets.

August industrial production, retail sales and fixed asset investment data were all stronger-than-expected, boosting optimism about the outlook for China’s economy.

But Faber brushed aside recent data pointing to a rebound in China’s economy, saying he was looking at other indicators such as trade data from regional neighbors that might provide a better picture of Chinese demand.

“You have to look at other indicators that are more reliable such as export data from Taiwan and South Korea,” he said.

The latest data from Taiwan shows exports rose 3.6 percent on year in August, below market expectations for a 3.9 percent increase.

Faber reiterated his favorable view on gold, saying the previous metal was relatively inexpensive.

“In the long-run, we have a huge bull-market in gold. Between 1999 and 2011, we peaked at USD 1,921 and went down to USD 1,180 and are now slightly above USD 1,300,” he said.

“I think gold and especially gold equities are relatively inexpensive and the S&P [500] is relatively high,” he added.

Copyright 2011 cnbc.com

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

For Apple, mum’s the word on iPhone 5C pre-orders

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Apple`s (NASDAQ: AAPL) iPhone 5C became available for pre-order last week, but the company has been unusually quiet about the number of devices it has sold so far.

The 5C, Apple`s lower-cost smartphone with a plastic casing, became available for pre-order on Friday with subsidized pricing starting at USD 99. The iPhone 5S goes on sale in stores and online this Friday with subsidized pricing starting at USD 199.

In the past, the tech giant has been quick to boast about its high sales during the first few hours its devices became available. The fact that the company has kept mum on the matter so far has lead some to speculate that the early pre-order numbers aren`t as good as they had been for earlier models.

But even if Apple has low pre-orders for the 5C, it may not matter that much because the company`s business strategy is shifting, Alex Gauna, a senior research analyst at JMP Securities, said Tuesday on CNBC`s “Squawk on the Street.”

“Apple is fighting against a law of large numbers, a lot more diversity of competition right now, and I think people have figured out they don`t have to get in line for these new phones. They know if Apple runs out they will build more,” Gauna said. “Right now we can read something into this-there haven`t been as many pre-orders, but what I think is more important for Apple is the global expansion of this story.”

Apple has dramatically increased support for 3G and 4G LTE in its new devices, a hint that the company will be bringing its devices into new markets.

“There`s a very big opportunity for channel-fill out there,” said Gauna, who has a “market perform” rating on Apple`s stock. However, he said, competition from Android has turned it into a zero margin game for Apple right now, so Wall Street is also looking for Apple to reach into new categories to expand its business.

“Investors have figured out it`s not really about the hardware right now. What Wall Street is looking for is something new for the business model like new software and new services,” Gauna said.

He said that because of this his firm is recommending component makers, like Qualcomm (NASDAQ: QCOM) and Skyworks (NASDAQ: SWKS), instead of Apple itself.

While Apple growth in the high-end of the smartphone market may be tapering, new product launches next year could help push the share price back up above USD 500, said Abhey Lamba, a senior equity research analyst at Mizuho Securities.

Lamba, who has a “buy” rating on the stock with a USD 520 price target, said he expects Apple to release the iPhone 6 sometime during the middle of 2014 and for that device to come in with larger screen.

“That will be a key catalyst,” he said. “It will be a much bigger product cycle. There will be a new product category, some watch form. 2014 will be a product cycle for Apple and that will get us out of this range.”

-By Cadie Thompson, CNBC. Follow her on Twitter @CadieThompson.

Copyright 2011 cnbc.com

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Airbus: Industry needs USD 4.4 trn worth new planes by 2032

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Leading aircraft manufacturer Airbus has said that that the aviation industry will need USD 4.4 trillion worth of new jetliners and freighters in over 20 years, revising its growth outlook higher for the sector.

Speaking at a press event in London, the firm outlined its global market forecast covering the period of 2013-2032. It predicts that jet demand will grow by 3.6 percent to 29,2266 aircraft over this 20-year period.

Also read: Why Airbus chose Alabama for A320 assembly line

“Economic growth, growing middle classes, affordability, ease of travel, urbanization, tourism, and migration are some factors increasing connectivity between people and regions and how often they travel,” the company said in a press release.

“Increasing urbanization will lead to a doubling of mega cities from 42 today to 89 by 2032, and 99 percent of the world’s long-haul traffic will be between or through these.”

Demand for wide-body twin-engined jets will increase by 4.3 percent, it said, whilst narrow-body jets will increase by 3.7 percent. Meanwhile, the global air traffic market is set to grow by 4.7 percent a year from 2013 to 2032, it said, with the number of airline passengers set to rise to 6.7 billion in 2032 from 2.9 billion today.

Also read: EADS changes name to Airbus, raises jet order goal

John Leahy, chief operating officer at the customers department for Airbus said that this growth will be mainly led by Asia, with Brazil also experiencing significant growth.

“By 2032, Asia-Pacific will lead the world in traffic overtaking Europe and North America. Today on average, a fifth of the population of the emerging markets take a flight annually and by 2032, this will swell to two thirds,” he said.

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Will Obama shake hands with Iran’s president at UN?

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The oil market will be watching President Barack Obama and Iranian President Hassan Rouhani Tuesday for signs the thawing in relations between the two countries could lead to meaningful negotiations about Iran`s nuclear program.

“With the Iranians putting on a charm offensive, I think a lot of oil traders will be watching to see if there`s anything new that comes out of what happens there,” said Addison Armstrong of Tradition Energy. “I think the rhetoric has to be backed up by some confidence building measures, and we`ll see if any of those are on offer. The ball is in Iran`s court. They`re the ones that have been squeezed and they`re the ones that have to show they`re willing to make some concessions.”

Both presidents speak at the United Nations General Assembly Tuesday, just days after Rouhani said he would be willing to negotiate with the West about the program and that Iran has no intention of pursuing a nuclear bomb. Iran has maintained that its nuclear program is not for weapons making.

“What would be very intriguing is if there`s some sort of gesture. Number one, will they be in the same room. If they`re in the same room, is there a head nod? Or is there a `Hi, how are you?` Is there a hand shake?” said P.J. Crowley, George Washington University Professor of Practice and a former state department official with the Clinton and Obama administrations. “If it appears they seek each other out, or at least don`t resist an encounter, that in itself will have some meaning.”

Tuesday`s events also come ahead of a meeting Thursday on the sidelines of the UN between Iran`s new Foreign Minister Mohammed Javad Zarif and representatives of the six nations trying to curb Iran`s nuclear efforts.

“There`s no question it`s an opportunity,” said Shibley Telhami, the Anwar Sadat Professor for Peace and Development at the University of Maryland. ” Rouhani has been saying publicly he does have a mandate to negotiations on this and make decisions.”

The Iranian supreme leader, Ayatollah Ali Khamenei has in the past controlled nuclear negotiations but under Rouhani, the negotiations have moved to the foreign ministry. Last week, Khamenei said his country should embrace diplomacy over militarism.

“There`s definitely a fighting chance for it. I think it`s going to be tough in many ways. I think the (Obama) Administration would win big if it has a deal that had verifiable mechanisms to assure that Iran isn`t developing nuclear weapons. I personally think that is the bottom line,” said Telhami. “I do not believe that they would agree to any kind of deal that would prevent them in principle to enrich uranium on their soil. The way this is possibly addressed in terms of setting limits on enrichment at 20 percent. There would have to be total accounting that is observable.”

Oil has been drifting lower as Rouhani has been making overtures to the West, but Citigroup (NYSE: C) chief commodities analyst Ed Morse said it`s more a result of an easing of Syrian tensions and the promise of more supply form Libya. Brent peaked Aug. 28 at USD 117.34, and it has fallen 8 percent since then to USD 108 per barrel Monday.

“I actually think there`s no premium for Iran in the market at the moment. There was a Syrian premium that could be understood in terms of what the potential disrupting consequence of Syria might have been,” he said. Morse said there currently is about 3 million barrels of oil off the market due to disruption, and at any point in time, there is at least a half million barrels.

“The peak in August was 3.6 million barrels a day, and now it`s 3 million,” he said. Morse said aside from Iran, he raised his expectations for oil prices in the fourth quarter because of further expectation of disruption in Libya, Iraq and Nigeria. He expects Brent prices to average USD 110 during the fourth quarter, and West Texas Intermediate to average USD 107.

“Rather than thinking that Q4 is going to be under USD 100 a barrel, we think it`s going to be over USD 100.”

Since Libya went offline during its civil war in February, 2011, the US and Canada increased production by 2.5 million barrels a day, and Saudi Arabia is producing 2 million more barrels, while demand is up 2 million barrels a day, Morse said. “If the Libyan government is telling the truth and the market is right, there`s a good 750 to 800 million barrels (of Libyan oil ) off the market.”

Morse said if it appeared negotiations with Iran were successful, oil would move on the rumor but it would take months for compliance to be assured and sanctions to be lifted against the country, which has been barred from selling much of its oil and from dealing with Western financial institutions. “I think there would be a drop in the price in anticipation of that 1.2 million barrels of oil. That would be one of the most bearish facts that one could imagine coming into the marketplace.”

“I think the probability of a combined set of deals involving Syria and Iran unfolding is around 35 percent as opposed to what I would have said in July, at around 10 percent,” Morse said. “So, relatively speaking I think geopolitically all of the major participants – Iran, the United States, Russia, Syria – are finding themselves pressed with options that they don`t find attractive and they`ve had to become more pragmatic than anyone would have thought they would become two years ago,” said Morse. “That`s a far cry from saying this is a highly likely event. It`s unexpected . It could not have been orchestrated and nobody planned it.”

Syria is high on the agenda at the UN this week, after the Obama Administration stood down earlier this month from an attack on the country for using chemical weapons and followed a diplomatic path instead. Syrian President Bashar Assad told Chinese state TV that his government is dedicated to implementing the Sept. 14 agreement reached between Russia and the US to turn over Syria`s chemical weapons to international control. But he cautioned while the weapons are under the control of the Syrian Arab Army, rebels may block UN inspectors from reaching some locations.

Crowley said one olive branch that could be extended by the US to Iran, a close ally of Syria, would be to ask it to participate in a Geneva process. “That would be a huge give,” he said.

“The US has great concerns about the role it`s playing there. The presence of Hezbollah within Syria. Strangely one of the questions facing the international community is whether the potential breakthrough on chemical weapons can create an opening for a negotiation between the Assad regime and the opposition which has been difficult to arrange,” said Crowley. “One of the questions looming…is whether Iran would be invited as an interested party in resolving the conflict.”

-By CNBC`s Patti Domm. Follow here on Twitter @pattidomm.

Copyright 2011 cnbc.com

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

17 years until earth is tapped dry?

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Corporate leaders give themselves a lousy grade on their efforts to develop sustainable supplies of natural resources strained by a growing global population and a rapidly expanding middle class of consumers.

With demand for everything from food and water to rare earth minerals expected to continue to rise, companies and governments are increasingly undertaking a variety of efforts to develop a more sustainable supply chain, one of the topics highlighted at the Clinton Global Initiative`s annual meeting.

Among other projects, the Clinton Global Initiative last year helped launch Sustainable WasteResources International to tackle the health and environmental impact of billions of tons of waste produced worldwide.

This year`s week-long conference will bring together more than 1,000 global leaders-some 60 current and former heads of state, including President Barack Obama, along with NGO and philanthropy leaders from over 70 nations- to brainstorm ways to head off increasing strains on the natural resources that keep the global economy on track.

They have a lot of work ahead of them, based on the main finding of a recent survey conducted for the UN Global Compact, the world`s largest corporate initiative to develop a more sustainable global economy. The survey of more than 1,000 CEOs across the world-the largest of its kind ever conducted- found that two-thirds believe the global economy is not on track to meet the demands of a growing population.

Despite wider awareness of the need to adopt sustainable practices “business efforts on sustainability may have plateaued,” according to the report, conducted by Accenture and released Friday.

In the short term, the tough economic climate has made it more difficult for businesses to justify these investments. But the long-term outlook hasn`t changed, according to Craig Hanson, director of the People and Ecosystems Program at the World Resources Institute.

“The outlook does look dire for many types of natural resources if we continue on the status quo,” he said. “The tough issue is that many of the places that face those resource constraints don`t have the technical or human capacity to adjust and deal with an acute shortage.”

But corporate CEOs report that they`re having a harder time justifying the investment in overhauling their supply chains to promote sustainability. “Signals from consumers are mixed” and “investor interest is patchy,” according to the UN Global Compact study.

The CEOs also say that for these efforts to succeed, both businesses and governments need to collaborate better to apply solutions across industries and sectors. Both also need to better share the financial impact.

Global businesses may also feel less urgency to advance sustainability at a time when sluggish economic growth has eased the upward pressure on supplies of raw materials and commodity prices. Ongoing advances in supply chain management also may have sparked hopes that future technologies may help head off looming resource crises.

German software giant SAP, for example, is among a broad range of companies helping businesses and governments apply new processes and technologies to squeeze more efficiency out of a variety of resource supply chains. Rapid advances in data analytics, for example, are helping track down and reduce waste.

“There is always the hope that you`ll find more,” said Peter Graf, chief sustainability officer at SAP, one of the companies participating in the Clinton Global Initiative conference. “Mankind has become more and more sophisticated as over the last 100 years to go and exploit those resources. The problem right now is that demand is outgrowing our ability to find new resources. The risk is that we`re outgrowing out ability to find new stuff.”

The relentless growth of human population in the modern world has brought dire warnings of resource shortages ever since British economist Thomas Malthus more than 200 years ago predicted that overpopulation would bring a catastrophic famine.

Since then, tight supplies of raw materials and commodities have typically spurred investment in new production, and research in efficiency and substitution of cheaper materials have helped head off shortages. As a result, for much of the last century, the global economy was fueled by a seemingly endless supply of cheap, abundant raw materials.

But the rapid expansion of the global pool of middle-class consumers is straining the world`s supplies of natural resources-from energy and minerals to water and food-at a pace that would make Malthus say “I told you so.”

“It`s not the total number of people, it`s the number in the consuming class,” Fraser Thompson, a senior fellow at the McKinsey Global Institute, co-author of a 2011 report on resource sustainability. “That`s where the real transformational change is happening.”

The numbers are stark. While the current world population of about 7 billion is projected to top 8 billion by 2030, almost all of that growth is expected to come in the developing world. That means the current population of consumers- people with more than USD 10 a day to spend- is expected to more than double from 1.8 billion to 4.8 billion.

Still, experts in sustainability say the story of the human race doesn`t have to end badly.

After dire predictions of “peak” oil a decade ago, for example, rising energy prices spurred investment in new production. New technologies prompted a boom in production of “unconventional” shale deposits. Consumers have switched to higher efficiency cars, bending the demand curve for gasoline, which has been in decline since 2007.

But the solutions to energy shortages are more difficult to apply to resources like water or food, especially in the developing world where demand is expected to grow even more rapidly than at any time in history.

As Thompson explains, much of the resources that exist are in harsh geographic locations with limited access to infrastructure. And much of the supply is in countries fraught with political risk. That makes sustainable resource development more difficult.

One solution is to use a much larger share of resources more than once. But while it`s easy enough to recycle an aluminum can; it`s a lot harder to reuse the raw materials used to make cars or shoes.

“The only way out of that is the way we design products (for recycling) in the first place,” according to SAP`s Graf. “Because a lot of what we do right now ends up on landfills.”

Those technologies have the potential to substantially alter the projections of looming shortages, according to Fernando Miralles a hydrologist at the Inter-American Development Bank (IAB).

“What people fail to consider is that these trends will drive the development of different approaches and different technologies that will help solve the problem,” said Miralles.

“Trying to say that you`re doomed because you`re not going to be able to solve it with today`s technology is a self-defeating premise.”

The IAB, for example is helping officials in Argentina develop new water infrastructure, introduce more efficient agriculture practices and spur conservation in the northern part of the country where both urban residents and farmers face a projected 20 percent decline in water supplies by 2050 because of climate change, he said.

Many of the world`s major cities lose as much as 50 percent of their waiter supply to leaks; rebuilding aging infrastructure could go a long way toward heading off shortages. Improved efficiencies in agriculture-the biggest source of water demand-could stretch supplies by substituting drop irrigation for sprayers or lining irrigation ditches with plastic.

As Graf sums it up: “We can sit here and hope and wait that research or someone will come along and figure it out and let us continue to do what we`ve done in the past, or we can take the bull by the horns and optimize our use of resources today.”

-By CNBC`s John W. Schoen. Follow him on Twitter @johnwschoen. .

Copyright 2011 cnbc.com

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Retirement homes are no longer a taboo in Asia

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Asians have traditionally cared for aging parents in the family home, but the influence of Western culture and the rising number of elderly dementia patients are driving the emergence of retirement villages and assisted living centers in the region.

Asia`s population is graying; the proportion of people over the age of 65 is currently around 14 percent, according to data from the CIA Factbook, double that of 2010. By 2050, that number will nearly double again, rising to 25 percent according to UN estimates.

Similar demographic issues in Western countries have spurred a well-developed industry of retirement villages and assisted living centers, but they remain few and far between in Asia, where multiple generations traditionally live under one roof and live-in domestic helpers are widely affordable.

But as life expectancies lengthen, populations become more urbanized, living spaces get smaller and disposable incomes rise, lifestyles change.

Having seniors move in with their adult children is “over,” said Chris Comer, CEO of property developer Castlewood Group, based in Singapore. “The world is becoming more and more Western.”

“I`m not saying the Asian values of the family unit have been compromised. It`s just not under one roof,” he added.

Caring for the elderly can be a touchy subject in Singapore, an aging nation with around 8 percent of the population over the age of 65 and another 10 percent between the ages of 55 and 64.

In 2009, a Singapore minister set off a local outcry when he suggested Singaporeans consider sending elderly parents to cheaper nursing homes in Johor Bahru in Malaysia, just across the channel separating the two countries. Comer noted many Singaporeans view the Johor Bahru area, which is subject to periodic crime waves, as unsafe.

But building sizable care homes and retirement villages in land-strapped urban areas such as Singapore is simply too expensive, Comer noted. “The natural need is for the elderly to move into an affordable scene in a climate that`s friendly and close to the grandkids,” Comer said.

In many Asian cities, “property prices have gotten to such a level that the option to liquidate the family home is gone,” as the leftover cash from buying a downsized apartment isn`t enough to retire on, Comer said.

“More people will look overseas, but in close proximity” to their home countries to ensure they can afford their retirement, but still see their families, he said.

Castlewood is planning retirement villages, one near Thailand`s Chiang Mai, a mountainous area known in part for its strawberry farms, and another near Phuket, near the ocean; the projects, located around two hours from Singapore by plane, are targeted toward middle-class Singaporeans.

Daughters-in-law

In China, the retirement village concept is really taking off as it becomes less common for seniors to live with their children, said Tony Wang, managing director at Belmont Village Senior Living (Hong Kong).

Daughters-in-laws, especially among the newly-weds, are increasingly reluctant to stick to tradition and live with their husbands` families, he said. “It`s really about their relationships,” he noted. “It`s becoming common that they don`t always have the same background or living habits.”

In Beijing and Shanghai, about 50 percent of seniors are empty nesters, with their children living either elsewhere in the city, in other Chinese cities or even abroad, he said. About 9.4 percent of China`s population is over the age of 65, with another 11 percent between 55 and 64 years old, according to the CIA Factbook.

“There`s great potential for the senior living center as a strategy. A lot of investors and insurance companies are making a lot of investments in retirement communities,” Wang said, noting it`s one of the few segments foreign companies are allowed to invest in.

Wang`s company is developing a project with a Chinese partner, which Belmont would operate.

Dementia

The surge in the number of elderly with dementia is also driving the mainland`s interest in assisted living homes. Quality dementia care is currently a “void” in China, Wang noted.

The prevalence of dementia doubles with every five-year increment in age after 65, the UN`s World Health Organization said in a report. It noted around 6.3 percent of people over the age of 60 in Asia have dementia.

Caring for a loved one with Alzheimer`s can be overwhelming, and many individuals and families are unprepared to deal with the consequences, financial and otherwise. In addition to memory loss, symptoms of dementia can include depression, aggression, hallucinations and difficulty controlling behavior.

“Parents who have dementia are quite a burden to the whole family,” Wang said.

An assisted living setting offers better care for dementia patients, Wang said. He noted while dementia can`t be reversed, the progress can be slowed by some programs, including daily organized activities.

Even younger countries seek new options.

In the Philippines, the tradition of caring for aging parents in the home isn`t really changing, but career paths are, said Alma Goodwin, CEO of Life Care, an independent and assisted living center in Cebu in the Philippines.

“There used to always be people in the household to care for children and parents. But now people have graduated, they have careers,” leaving the parents at home with just the household help during the day, she said. Retirement villages “are places where their parents can enjoy themselves.”

The development of larger scale retirement village and assisted living centers in the Philippines is just beginning, she said.

The industry`s nascent state in the archipelago may be due in part to its much younger population compared with other parts of Asia; only around 4 percent of the population is over the age of 65, according to data from the CIA Factbook.

Copyright 2011 cnbc.com

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Blackberry buyout: Time for investor to ‘take money & run’?

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Following a takeover announcement for troubled tech firm Blackberry, analysts have advised investors to “take their money and run” as they doubt the firm will get a better offer.

Blackberry agreed in principal on Monday to be acquired by its largest shareholder, Canadian insurance company Fairfax Financial, for USD 9 a share, in a USD 4.7 billion deal that would see the firm go private. Blackberry has now entered a shop period where it can solicit, receive and enter into negotiations with other interested parties for about six weeks.

But Scott Redler, chief strategic officer at T3live.com, told CNBC’s Asia Squawk Box on Tuesday that he doubted investors would get a better deal than this.

“I think they should take their USD 4.7 billion offer and run,” said Redler. “At this point if you were in it, sell it here, don’t wait for higher bids and look at better opportunities,” he added.

News of the potential buyout comes just after the firm announced a massive restructuring on Friday, which included slashing 4,500 jobs and a revised second-quarter earnings forecast.

The company said it expects a second-quarter loss excluding items of 47 cents to 51 cents per share, more than the 27-cent per share loss it posted in the same quarter last year. It also expects revenue to decline to USD 2.6 billion from USD 3.1 billion a year ago.

The news savaged the company’s stock value, with shares tumbling 17 percent on Friday.

“[The takeover] is the best thing that could have could have happened to you [as an investor in Blackberry],” said Dan Niles of Alpha One Capital Partners.

“When was the last time you saw a company of Blackberry’s size cut revenue forecasts by almost 50 percent in a pre-announcement?” he added.

Blackberry’s fortunes have certainly deteriorated in recent times. The firm, which was valued at USD 80 billion in 2008, is now valued at less than USD 5 billion, according to Forbes. Shares have declined around 90 percent from over USD 80 per share in mid-2009 to around USD 8.82 per share as of Monday’s close.

T3live.com’s Redler said Blackberry was on its way down and the move to go private was unlikely to change the firm’s fortunes.

“The writing has been on the wall. [Blackberry has] been trapped in a downtrend [since] well before 2013… They are lucky to get USD 5 billion. If they didn’t it could be bankruptcy in six months or less,” he said.

“[You] can’t be a one trick pony… you can’t survive. They had no apps or ecosystem, just like Dell, except for email etc. Then they were late on the iPad-type product,” added Redler.

However, some investors must have viewed Monday’s potential takeover positively, as the stock jumped nearly 5 percent before retreating slightly.

The owner of Fairfax Financial, Prem Watsa, is considered by many to be the ‘Warren Buffett of Canada,’ and a well-established value investor, which could have helped boost sentiment.

Sanjeev Kumar at Delamore Consulting said earlier this month that if Blackberry were to go private, it could unlock “serious value” in the firm.

“As a private company Blackberry can focus on unlocking value from various parts of its business including the research and development driving the overall growth in revenues and profits going forward… In about two years’ time the new BlackBerry will potentially look like a very different company and could provide a very juicy exit for the new owners. In short, there is serious value in Blackberry,” he said.

Fairfax Financial is not obligated to follow through on the agreement, and is currently trying to raise financing from Bank of America Merrill Lynch and BMO Capital Markets.

Read more: BlackBerry bought private jet months before layoffs

BlackBerry deal disappoints pro traders

BlackBerry buyer Prem Watsa an old hand at value investing

(Also watch this: Can BlackBerry sort itself out?)

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Will the rupee reprieve be over soon?

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The Indian rupee – one of the world’s worst performing currencies this year – has pulled back from record lows in recent weeks, but analysts say a fresh record low of 70 to the dollar is not off the table.

“I’m hesitant to suggest the worst is over for the rupee,” said Mitul Kotecha, head of foreign exchange strategy at Credit Agricole.

“Eventually this near-term consolidation will give way to a resumption of downward pressure,” he said, adding that he forecasts the rupee to breach the 70 to the dollar level in the first quarter of next year.

Also read: India’s August trade deficit shrinks as exports rise

“In the first quarter [of 2014] there will be uncertainty around the elections in India, tapering will also be likely to have taken effect and then there’ll be concerns about capital flows,” he added.

The rupee saw a sharp selloff this year after the Federal Reserve first started talk of tapering in late May, sending it spiraling to a record low of 68.8 to the dollar on August 28. In the weeks since, India’s domestic currency recovered some of its losses as tapering fears abated and investors anticipated rupee-boosting measures from new Reserve Bank of India governor Raghuram Rajan.

Also read: Foreign investors ignore panic gripping India

However, at his first meeting on Friday, Rajan surprised markets with his 25 basis-point hike in the benchmark lending rate to 7.5 percent together with a scaling back of earlier measures meant to support the currency, which prompted a slight dip in the rupee’s value of around 0.4 percent.

Macquarie bank’s head of fixed income and currencies, Nizim Idris, said he was pleasantly surprised by the action taken by the Reserve Bank of India, but said ultimately monetary policy moves would not be enough to curb weakness in the currency anyway.

“I don’t think monetary policy is the burden of the currency at the moment. We have a target of 70 to the dollar, but a lot of that depends on the [structural] reform, which is a long-term thing, and also Fed tapering,” he said.

Idris added that the Fed’s decision last week not to taper would give the rupee some short-term “breathing space,” but policy makers would need to use the time wisely.

Also read: India’s crisis a ‘wake-up call’: Stephen Roach

“If [Indian policy makers] were to take [the decision not to taper] as an opportunity to push forward reforms then that’s good. But if they don’t, then tapering will eventually come… and if the situation hasn’t changed in India, then the rupee could go back to 70 [to the dollar],” he added.

Other analysts, however, were less convinced that a rupee at 70 to the dollar was on the cards.

“The initial panic is over. I think the speculators who ran riot with the currency over the last few months have looked to take the profits off the table,” said Sajiv Dhawan, managing director of JV Capital Services.

“That’s not to say we can’t slip back to 63 or 65 sort of levels if some nervousness creeps in. But to see a level of 70 would require another major crisis of confidence here and maybe a sovereign downgrade and that looks unlikely at the moment,” he added.

Also read: RBI’s Rajan takes a deep dive to save the rupee

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‘Dr. Doom’ Roubini makes case FOR the US economy

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Nouriel Roubini may have made his name foretelling doom and gloom, but his tone has changed enough to reflect an improbable belief in a stronger US economy.

In fact, the word “crisis” or any of its synonyms was missing almost entirely from a speech the head of Roubini Global Economics delivered Monday at IndexUniverse’s Inside Commodities conference.

Roubini did use the term “anemic” on multiple occasions to describe the global economic recovery.

But he maintained that the US will be better positioned than most of its global competitors, leading to an appreciation in its currency, no bond market crash and only a gradual increase in interest rates.

Also read: Fed in ‘monetary roach motel’: Schiff

“The dollar is likely to become stronger rather than weaker,” Roubini said. “The thing about the US compared to other advanced economies…the fundamentals for the US are much better.”

Among the advantages he cited are growth in productivity and technology as well as continued easy money policies from the Federal Reserve, even though he expects the central bank to begin cutting back on its monthly bond-buying soon and to raise rates starting in 2015.

As for investing implications, he said he would be “overweight US equities” and made a case for a stronger dollar as well.

Also read: When your USD 100 bill is worth USD 1,000 (or more)

“The US is much more advanced and has much more success than other economies. The growth in the US is going to be much faster than Europe, the UK and Japan,” Roubini said. “Gradually the dollar is going to increase in value rather than collapse the way some dollar doomsday folks believe.”

On a global perspective, he did caution against banking on a strong recovery in emerging markets, reasoning that China’s growth is slowing and the so-called commodity supercycle is winding down, while US central bank easing, and the liquidity it provides, is going to start evaporating.

On that score, Roubini maintains a bearish view on gold, believing that it is on its way down to USD 1,000 an ounce as inflation, for which gold is a traditional hedge, fades as a threat.

Also read: Despite reputation, gold is no safe haven: Gartman

“Those worried about inflation worry about all the money printing leading to that inflation,” he said. “Inflation in advanced economies is going to be the least of problems developed economies will face in the next two or three years.”

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Apple’s still got it: New iPhones ring up record sales

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Apple said Monday that sales for its new iPhone had set a record, with consumers snapping up nine million smartphones within the first few days of its launch, prompting the company to hike its revenue guidance.

The tech giant said in a statement that the iPhone 5s and 5c’s sales were accompanied by more than 200 million downloads of the iOS 7 platform, Apple’s new iteration of its operating software.

As a result, Apple said company revenue for the fourth fiscal quarter would be “near the high end” of its previous guidance of USD 34-USD 37 billion. Gross margins would also check in near the top of its prior guidance of 36-37 percent.

Also read: Apple’s device exhaustion?

The numbers defied some of the market’s low-ball estimates, and suggest the technology giant still has cachet with consumers as it fends off a stiff challenge from Samsung.

Apple fanatics snapped up the new 5c and 5s models in droves, with lines snaking around Apple’s iconic retail stores last week. Some ebullient fans even camped out overnight, in order to be the first to get a hold of the new device.

Watch: Paid to stand in line

“The demand for the new iPhones has been incredible, and while we’ve sold out of our initial supply of iPhone 5s, stores continue to receive new iPhone shipments regularly,” Apple CEO Tim Cook said in a statement.

The market’s estimates were off for Apple sales because the tech company combined sales of the 5c and 5s models, Gene Munster, an analyst at Piper Jaffray, told the “Fast Money Halftime Report.”

“The way they announced that number was a little bit different than they typically do. When you back out that channel fill of the 5c, the number was pretty much right in line with about 5.5 million, which is positive because it’s up from 5 million a year ago. But you need to kind of put that 9 million into context and I don’t think the Street was as off as maybe it looks at first blush,” said Munster, who is currently has an ‘overweight’ rating on the stock with a price target of USD 640 a share.

Apple’s shares, listed on the Nasdaq, rose 3.6 percent in afternoon trading.

Shares in Pandora, the online radio service that faces competition from Apple’s new iTunes Radio, fell more than 10 percent.

To pro traders Stephen Weiss and Jon Najarian, Apple’s sales and shares alike could continue to rise should consumer support for rival BlackBerry wane. Weiss thinks the stock could trade to USD 550 a share, but will likely remain range-bound until the company produces a “truly new,” innovative product to the marketplace.

Joe Terranova, chief market strategist at Virtus Investment Partners, an asset management firm with more than USD 25 billion under management, said it all comes down to the technicals for Apple

If the stock is able to push through resistance of USD 500 a share, he thinks more investors will start a position in the stock, sending shares even higher.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow