Forget the iPhone 5S, let’s talk about the iPhone 6

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

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Sales of Apple’s iPhone 5S have been impressive so far, but an iPhone 6 next year will likely give the company an even bigger boost, according to an analyst report.

(Read more: Apple’s still got it: New iPhones ring up record sales)

Apple’s iPhone 6 will likely be larger than the current models, featuring a display screen that is 4.8-inches, which will prompt more people who are available for an upgrade to purchase the device, said Peter Misek, an equity analyst at Jefferies, in a note. The latest models are 4-inches.

(Read more: Apple, China Mobile deal may be coming soon)

“Also the ecosystem is excited about the iPhone 6, which we feel is warranted. We think the stock will appreciate ahead of the iPhone 6 launch,” he said in his note.

Misek, who recently returned from a trip to Asia where he met with Apple’s suppliers, increased his price target for Apple from USD 425 to USD 600 and increased his rating for the stock to buy from hold.

(Read more: Why an iWatch may not be as big as the iPhone)

Previously, Misek feared Apple’s gross margins would shrink because of increased costs from suppliers, but after his trip he said they have become more lenient on pricing.

“In contrast to earlier this year when suppliers boasted that Apple would not be able to push them around anymore, they are now scrambling to be in Apple’s supply chain as competitor ramps have not gone as planned,” he said in his note.

(Read more: How Apple has changed since Steve Jobs)

Misek estimates that there will be 85 million iPhones eligible for an upgrade by the time the iPhone 6 launches–which he expects to happen next September. In addition, the 5 million to 10 million customers who passed on the iPhone 5S, iPhone 5C cycle may upgrade at that time.

“A poor iPhone 5s/5c cycle means a bigger upgrade opportunity for the iPhone 6,” he wrote. The larger screen and the estimated number of current Apple users expected to upgrade to an iPhone 6 next year will boost the company in 2015, he said.

However, Misek notes that while Apple’s iPhone 5S remains in demand, the company is actually cutting orders for the less-expensive iPhone 5C because of slow sales. He estimates the company is cutting orders from 30 million to between 15 million and 20 million. And he said Apple may cut the price of the device to boost sales.

—By CNBC’s Cadie Thompson. Follow her on Twitter
@CadieThompson

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US debt is as dangerous as … Greece’s?

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

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As the Treasury’s October 17 debt ceiling deadline approaches, the prospects of a default—however unlikely—could be devastating in Europe, John Podesta, White House chief of staff for Bill Clinton, said on Monday.

“If the European regulators decided their European banks need to stress test against their exposure to US default and begin to raise capital requirements in the European banks, it would be disastrous,” Podesta, current chairman of the Center for American Progress, speculated in a “Squawk Box” interview.

(Read more: Could a shaky market get the debt ceiling raised?)

He argued there are precedents to making the banks prove they could withstand a US default.

“They did it with Italy. They did it with Portugal. They did it with Greece. Why not the United States? We seem to be as unable to control our politics as they were,” Podesta said.

The European Central Bank is scheduled to take over supervision of euro-zone banks in about a year. Before that, the ECB plans to conduct an asset quality review, followed by stress tests, to ensure that all banks there enter common supervision in good health.

—By CNBC’s Matthew J. Belvedere. Follow him on Twitter @Matt_SquawkCNBC.

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

When will the next US recession come?

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

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The United States economy may have been one of the first in the world to have escaped the last recession, but economists are already trying to work out when the next one will hit – and the answer is: probably sooner than you think.

The overwhelming majority of mainstream economists predicts that the world’s biggest economy should have atleast another two years before it runs into six months of negative growth (the official definition of recession). After 2015, however, the date for the next recession could be any time between the end of 2015 to 2018, according to economists’ forecasts.

These predictions are based on the assumption that the US manages to avoid the possibility of defaulting on its debt repayments for the first time in its history – the prospect of which looms nearer every day as the government shutdown continues.

(Read more: Washington deadlocked)

The US Treasury warned last week that a default could cause a “catastrophic effect on not just financial markets but also on job creation, consumer spending and economic growth”.

If default is avoided – and markets seem fairly calm about the prospect – then the US is still on track for a recession in 2016, with a 50 percent chance of recession then, according to Charles Robertson, global chief economist at Renaissance Capital, the Russia-focused bank.

The US economy last suffered a recession between the end of 2007 and June 2009, a downturn sparked by the global financial crisis.

“Ben Bernanke may be a remarkable man, but we are asking a bit much to assume he has abolished the business cycle and created the nirvana of never-ending growth,” Robertson added.

(Read more: Pimco Sees 60% Chance of Global Recession in 3-5 Years)

Bernanke, in his capacity as Chairman of the US Federal Reserve, has led an asset purchasing program which has kept US borrowing costs relatively low by buying up government bonds. This has been credited with making the slowdown in growth less severe than it could have been.

However, consumer spending, usually a big driver of growth in the US, has not picked up in the way many economists forecast. In September, banks including JP Morgan and Barclays downgraded their forecasts for US gross domestic product growth in the third quarter, after a worse-than-expected retail sales rise of 0.2 percent in August.

American consumers are facing inflation in the cost of services like medical care, and less job security. In August, consumer prices rose by 1.5 percent annually.

Historical data show a recession in the US on average every 6-7 years since 1947, and double-dips within eight years of big recessions like the Great Depression.

– By CNBC’s Catherine Boyle. Twitter: @cboylecnbc

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How Apple has changed since Steve Jobs

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

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Since Steve Jobs passed away two years ago Saturday, Apple has experienced no shortage of scrutiny.

Investors, the media and the public alike have targeted the company, accusing it of failing to innovate. Critics claim the company has lost its edge, merely updating existing products and not creating new product categories. CEO Tim Cook has also been criticized as lacking vision for Apple and blamed for the company’s fallen stock price.

Just because Apple hasn’t launched a new product category since Jobs’ death doesn’t mean its failing at innovation, said Trip Chowdhry, managing director at Global Equities Research.

“The reason Apple is Apple is because they do things that cannot be done. … We expect the best from Apple,” said Chowdhry, who has a price target of USD 725 on the stock with an overweight rating.
Product innovation

Apple has not lost its grip on innovation, but it has slowed down since Jobs death. If Jobs were still running the company, it’s likely that Apple would have two new product categories by now, Chowdhry said.

“Innovation drives the value of the company, and I think Apple has to prove itself. It’s not enough that they can come up with one product after 10 years or five years, but they need one every year if they want to do well,” he said. “They cannot be complacent, if they become complacent they will become the next Microsoft.”

Even though Apple’s innovation cycle has slowed, the company’s latest products have surpassed expectations, Chowdhry said. The technical innovation in the iPhone 5S demonstrates that the company’s innovation talent still beats the competition by a long shot, he added.

“Apple regained some of its innovation strength with the iPhone 5S and its 64-bit chip. They are probably up to something big,” he said. “We may tend be very critical, but the way I’m seeing Apple now, they probably have their insights into the future intact.”

Chowdhry predicts that Apple will have a big product year in 2014 and will roll out its long-rumored iTV.

Design

Cook has often been criticized by media and investors for not having the design prowess and leadership capabilities that his predecessor possessed. During the short period that he has been leading the company, some critics have even called for him to be ousted.

But Cook, who is a mastermind of operations, has a far better grasp on what Apple needs in order to succeed in the long-term than critics say, said Timothy Lesko, a principal at Granite Investment Advisors.

“Tim Cook recognizes he is not the product visionary Steve Jobs was,” Lesko said. “And with the promotion of Jony Ive to lead both hardware and software and how they interact, Cook is basically letting Jony Ive be the face of design at Apple.”

In some ways, by letting Ive become the lead of design, Cook has mitigated the street’s fear that there is no innovation and no vision, Lesko said.

Ive and Craig Federighi, Apple’s senior vice president of software engineering, have essentially become the “cool factor” for Apple, while Cook does what he is great at, which is global operations, Lesko said.

Ive worked closely with Federighi, in designing the latest version of Apple’s operating system, iOS 7, which was the biggest overhaul of the OS ever.

The redesign of the software marked the end of an era of sorts. Jobs was always a fan of designing software that mirrored real life. But the new OS features a flat interface that is void of any life-imitating graphics.

Wall Street

Under Cook, Apple has also been more open in its relationship with Wall Street.

During Jobs’ tenure as CEO, the company had a notorious reputation for giving very low guidance and then beating expectations by a mile. This caused a lot of confusion on the street, Lesko said.

“Some of Apple’s own media manipulation held the stock back,” Lesko said. “A more consistent earning stream may generate a better multiple.”

The company has also become increasingly more shareholder friendly since Cook took the reins.

Likely because Jobs had witnessed Apple on its deathbed more than once, he was extraordinarily wary of debt, Lesko said. But Cook has been more willing to take on debt to return capital to shareholders.

So far, the company has said it will return USD 100 billion to shareholders through share buybacks and dividends by the end of 2015. And there’s speculation they may continue to increase the stock buyback.

“Steve Jobs’ Apple would never ever do a share buyback,” Chowdhry said. But if you can do more things, like a buyback, and you can carry on Steve Jobs’ Apple while also taking on the positive of Tim Cook, it could be good for the company.”

Read more: Apple CEO Tim Cook reflects on Steve Jobs’ life and legacy

Why Apple is still the king of design and innovation

Apple now hoards 10% of US corporate cash

Icahn: I pushed for a $150 billion buyback from Cook

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Airbus deal shows loyalty fading fast in aviation

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

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Japan Airlines’ maiden order from Airbus, eschewing its traditional supplier Boeing, highlights carriers` drive to diversify their plane suppliers, making for tougher competition for orders.

In a significant victory for Airbus, the European aircraft maker has broken into Japan, announcing on Monday a deal to sell 31 A350 aircraft valued at USD 9.5 billion based on list prices to Japan Airlines.

Japan is a strategic Boeing market where the US-based plane maker has an around 80 percent market share.

At the same time, Boeing will “probably make inroads into European-based carriers, which have been historically Airbus-focused. They`re looking into each other`s markets to gain share,” said Timothy Ross, an analyst at Credit Suisse.

Last month, Lufthansa, which traditionally leans toward Airbus, decided to split an order for 59 wide-body jets between Boeing and Airbus. Air France last year also split a 50-plane order between the two.

Both Airbus and Boeing have been jockeying for orders from Japan as JAL and Nippon Airways are preparing to update their fleets.

ANA is expected to purchase around 25 aircraft. JAL currently flies around 214 planes in total. All Nippon Airways, Japan`s largest airline, flying around 230 aircraft, is also considering whether to order Airbus jets and it is expected to announce its decision soon.

Competition for these orders is only likely to become keener as carriers look beyond the initial price discounts they might receive for large orders from a single manufacturer.

When it comes to having more than one make of plane, “there are definitely some costs involved,” including pilot and maintenance qualifications, said Andrew Orchard, an analyst at CIMB.

While carriers may get better discounts from ordering only one type of plane, “if you have another one, then you can go back and forth on negotiations,” he said. “Otherwise, they can charge you whatever they want.”

“You might get a discount on the aircraft, but in the after-sales market, you might pay significantly more. Not getting a good deal on those upfront might be more costly than not getting a good deal on the aircraft itself,” Ross said. “There`s certainly competitive tension between the two airframers when you do operate both.”

Airlines globally are looking to retire aging, less fuel-efficient planes as jet fuel prices, responsible for at least 50 percent of operating costs, rise; the savings can be significant, with Reuters reporting Lufthansa`s new jet purchases should cut the carriers fuel consumption by 25 percent and lower unit costs by around 20 percent compared with older models.

“The higher the jet fuel price goes, the more impetus is added for older aircraft retirement,” Ross said. JAL has a large number of aircraft due for retirement, he noted.

There`s another reason carriers, such as JAL, are looking to diversify their planes.

“They`ve learned their lessons from the 787,” said Shashank Nigam, CEO at SimpliFlying, a Singapore-based aviation marketing strategy firm. Boeing`s 787 Dreamliner model faced a rocky launch, with a number of production delays followed by in-service incidents; early this year, regulators globally grounded all 787s for four months. ANA and JAL are two of the biggest Dreamliner operators.

“It`s critical for the brand. They can tap on both suppliers,” Nigam noted. “It`s almost like an insurance policy.”

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

Lehman-like credit bubble next up for sharing economy?

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

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Peer-to-peer lending is on the rise, led by Lending Club, but what’s a debt market without financial whizzes to figure out how to securitize it? Enter Eaglewood, an asset manager run by Jonathan Barlow, a 35-year-old former Lehman Brothers trader, profiled this past week in The New York Times.

Eaglewood has packaged Lending Club loans and sold them in a securitization — allowing investors to buy bonds backed with a type of financial asset. Since the financial crisis showed the risks of securitizing riskier loans, investors have avoided anything too experimental, but Eaglewood raised USD 53 million in its deal. “We believe this transaction will be the first of many for Eaglewood,” Barlow told the Times. Uh-oh?

Meanwhile, a Lending Club clone in Hong Kong

Hong Kong has its first peer-to-peer lending company, WeLab, which so far has received USD 6 million in loan applications, according to a TechCrunch report. In mainland China, prominent peer-to-peer lending platforms include CreditEase, SinoLending and PPDai. Despite Hong Kong’s status as an international financial center, however, there were no peer-to-peer lending platforms before WeLab launched. Simon Loong, founder and CEO, told TechCrunch the start-up is currently focused on educating potential borrowers about WeLab’s services.

Read more: 11 ways your daily routine will never be the same

The incandescent light bulb isn’t going away

Patented babies?!

A patent recently granted by the United States Patent and Trademark Office to consumer genomics company 23andMe is for a system to let prospective parents choose the traits of their offspring. The designer baby-making system era has begun, according to Wired. The company said it’s much ado about an idea the company doesn’t even plan to pursue. “When we originally introduced the tool and filed the patent there was some thinking the feature could have applications for fertility clinics,” said Catherine Afarian, a 23andMe spokeswoman. “But we’ve never pursued the idea, and have no plans to do so.”

In any event, patent number 8543339 states, “Gamete donor selection based on genetic calculations.” Among the traits listed in the application as examples of possible choice are: height, weight, hair color, risks of colorectal cancer and congenital heart defects, expected life span, expected lifetime health-care costs and athleticism.

 Airbnb’s charm offensive

Airbnb just got a big win in New York City court. Now, co-founder and CEO Brian Chesky has published a blog post describing the company’s values and even saying the start-up is will work with governments to figure out how to pay taxes and also how to deal with Airbnb-ers who rent out apartments to throw massive, ear-splitting parties—or in the least, noisy renters.

Meanwhile, learn a little more about the man who could be the most important Airbnb employee when it comes to tracking noisy neighborhoods: its lone cartographer. Zach Walker has helped slice and dice more than 70 big cities into 4,500 distinct neighborhoods with their own personalities, according to a profile in The Verge.

School supplies … in 3-D

Makerbot announced this week the winners of its back-to-school 3-D printing contest. Among the 3-D printed innovations coming to a backpack near you: the Retro Rocket Pencil Case, a drafting kit that includes two 30-6-90 degree triangles, a four-scale ruler, a protractor that doubles as a pencil case handle and a pair of pencil toppers that can snap together to make a compass. Though maybe best of all: the Test Obliterator X800 Eraser Thief Yard Wand, which MakerBot called “a downright awesome example of engineering.” It features a pencil reloading gauntlet which fits over a user’s arm and pops out new pencils when twisted clockwise. The Eraser Thief tool can be used to gouge out and shape eraser material from block erasers to fit it on top of a pencil. You can learn more about these designs in PC Magazine.

Is Etsy selling out?

Etsy, the popular online marketplace for crafting entrepreneurs, is under fire for updating its policies to allow sellers to hire staff, use shipping services and apply to have their products made by manufacturers.

The company held a webcast this past Tuesday for its 1 million active sellers to convince them its wasn’t “selling out,” or would start to allow large corporations like Ikea to sell items on the site, according to a report from The Washington Post.

Others wonder whether the changes will turn Etsy into eBay?

And in this week’s edition of ‘Couldn’t happen without Kickstarter’

Part 1

Dutch duo Haas & Hahn gained fame in 2005 for painting a few houses of Rio Janeiro’s favelas in a palate of bright hues. Now they’re back with a Kickstarter campaign to raise the funds to paint the rest of the favela in the hopes of further transforming this crime-ridden community. Donated money will go to supplies and salaries for the residents. For more information, visit their Back to Rio Kickstarter page.

Part 2

Painting with Purpose, a team of artists working on murals around the world, hopes to raise USD 7,500 to help a homeless man known as “Clean-up” write a book. After spending more than 15 years on the street in one Oakland, Calif., neighborhood, he will share his story of “hope and perseverance” as well as survival secrets for living on the street. So far, the artists have interviewed Clean-up and painted his portrait on a wall, according to a report on Mediabistro.

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

Gold bulls may face austere Indian festive season

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

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Last week’s two percent decline in spot gold prices is not discouraging gold bulls who’re turning their sights on Asian demand, which they say remains resilient and is set to strengthen on seasonal buying from India.

However, softer economic growth from Asia’s third-largest economy, a depreciating Indian rupee and limits placed on gold imports aimed at reducing US dollar outflows in a bid to improve the trade gap and narrow the current account deficit may mean the tone of celebrations – and gold purchases – from the world’s biggest gold consumer are a little less extravagant this season.

“Indian wedding season demand will support the trade but it is likely to be much more subdued in terms of price impact this year,” said Victor Thianpriya, Commodity Strategist at ANZ Research in Singapore. “Import restrictions remain in place and dealers are likely to source more from the scrap market.”

(Read more: As lengthy shutdown looms, why isn’t gold rallying?)

India will celebrate the Hindu festivals of Dussehra in the third week of October and Diwali in the first week of November, a period when buying gold is considered auspicious. The traditional wedding season in the autumn is also a key time for gold purchases.

US gold futures for December delivery settled at USD 1,309.90 on Friday, down USD 7.70 an ounce, or 0.6 percent. The market notched a loss of over 2 percent on the week.

Sentiment is evenly split in CNBC’s latest poll of gold market sentiment with 40 percent, or 6 out of 15 respondents, forecasting prices will fall this week and an equal number predicting price gains. Three respondents, or 20 percent, are ‘neutral’ and expect prices to trade around current levels.

(Read more: Gold edges up as US shutdown drags on, debt limit looms)

Although partial safe-haven buying may have propped up the overall market marginally last week, gold bulls maintain a prolonged US government shutdown, together with the risk of a breach of the debt ceiling, cements the case for gold as an alternative to a depreciating US currency which has borne the brunt of the budget impasse.

“Gold has not been seen as a safe-haven… a lot has to do with the complacency of investors this time round,” said Kelly Teoh, a Singapore-based strategist with IG Markets. “There’s a belief the shutdown will be for a short period of time. Nobody has really priced in the adverse effects of this political mess yet. Downside for the equity markets and upside for gold can be a very real situation next week if this doesn’t come to any conclusion.”

(Read more: Is the crucial China support for gold fading?)

Gold is “worth a bet on the upside with a tight stop just below USD 1,300 although the downside bias is there,” Teoh said.

— By CNBC’s Sri Jegarajah. Follow him on Twitter @cnbcsri

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

3 Mins Read

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

Moody’s CEO: US default ‘extremely unlikely’

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

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The CEO of credit rating agency Moody’s ruled out the chance of a US government default, even if an agreement over raising the debt ceiling is not achieved by mid-October.

As the US government shutdown looked set to continue for a sixth day on Monday, concerns that the ongoing political stalemate will cause the Treasury to miss its October 17 deadline for raising the USD 16.7 trillion borrowing limit, remained at fever pitch.

If the US government defaults on its debt, it could have negative consequences for financial markets worldwide.

(Read More: US Treasury: default could cause huge economic crisis)

“It is extremely unlikely that the Treasury is not going to continue to pay on those securities,” Moody’s CEO Raymond McDaniel said in an interview with CNBC.

“Hopefully it is unlikely that we go past October 17 and fail to raise the debt ceiling, but even if that does happen, then we think that the US Treasury is still going to pay on those Treasury securities,” he added.

Thus far, financial markets have displayed a relatively muted reaction to the government shutdown, which began last Tuesday after Democrats and Republicans failed to renew the federal budget into a new fiscal year. Wall Street’s S&P 500 has only shed 0.8 percent since the beginning of the shutdown to Friday’s close, for example.

McDaniel attributed the markets’ seemingly complacent reaction to the relatively fresh memory of the 2011 political stalemate over the debt ceiling issue, which was ultimately resolved.

“[It] feels a lot like we’ve seen this movie before,” said McDaniel.

“Ironically because we have had this experience in the recent past [it] gives people more of a sense of calm than perhaps they should have.”

(Read more: Debt default would be catastrophic: Erskine Bowles)

“The fact that the market is reacting more calmly is good, but to the extent that policy makers are going to act when stress or distress reaches a certain level, the market can play a role in indicating that,” he added.

US Treasury Secretary Jack Lew gave a much less calm depiction of the scenario in an interview with NBC’s Savannah Guthrie.

Reiterating his previous statement that by October 17, the Treasury will have only USD 30 billion left in the coffers, he warned that US politicians were playing with fire.

“USD 30 billion is a dangerously low level of cash. And we’re on the verge of going into a place we’ve never been, not having cash to pay our bills,” he said.

Lew said the US Government actually hit the debt ceiling limit in May, forcing him to use “extraordinary measures” to create additional headroom. He said the capacity to use these measures had now expired and said he had “nothing else in the drawer.”

“So the reality is that if we run out of cash to pay our bills, there is no option that permits us to pay all of our bills on time,” he added.

(Read more: Short-term US debt under pressure on default fears)

Meanwhile, House Speaker John Boehner has warned that the US is on the path to the credit default in an interview in ABC’s ‘This Week’ on Sunday.

“My goal here is to have a serious conversation about those things that are driving the deficit and the debt up. The President’s refusal to sit down and have a conversation about this is putting our nation at risk of default… it’s the path we’re on,” he told ABC.

President Barack Obama has refused to negotiate over raising the debt ceiling out of concern that it would give credence to the Republicans’ tactic of threatening default whenever their demands are not met.

Moody’s holds a triple-A rating for US government debt with a stable outlook. S&P meanwhile, stripped the US of its triple-A rating in August 2011 and now holds a AA-plus rating with a stable outlook. Fitch rates the country AAA with a negative outlook.

— By CNBC’s Katie Holliday: Follow her on Twitter
@hollidaykatie

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

3 Mins Read

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

As shutdown lingers, federal workers try to make quick cash

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

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Furloughed since Tuesday, Mekayla Coleman needs some fast cash.

To make a few bucks, Coleman, who works in IT at the Department of Defense’s Defense Acquisition University, turned to Craigslist in hopes of selling some baby items she no longer needs.

“Prices can be negotiable, but please serious offers only, I really need the money,” says the listing, which advertises about USD 300 worth of items.

Coleman’s in a bind because she recently spent all her savings to get her house ready for sale and hadn’t saved up for the partial government shutdown.

Read more: Boehner blasts impasse: ‘This isn’t some damn game’

“It’s not looking good,” she said. “My husband works, but I make the most money so it’s going to be tough.”

Coleman is far from alone.

With no end in sight to the shutdown, many government workers have taken to resale sites, such as Craigslist and eBay, to sell sporting tickets, designer clothes and more.

Platforms such as TaskRabbit, which allow people to perform household errands and other tasks in exchange for money, also are seeing a boost in interest.

“A few dozen government workers have applied and some are already running tasks,” said Johnny Brackett, TaskRabbit’s senior manager of marketing and communications. “The backgrounds vary from male to female, from government agencies, to other jobs.”

“What’s very interesting is this week we saw an all-time high in TaskRabbit applications—over 13,000 in a single day,” Brackett added. “To put that in perspective, we currently have just over 15,000 active TaskRabbits total, across all of our 15 markets.”

While the company doesn’t know what percentage of these are furloughed workers, Brackett said it’s “safe to assume a significant percentage are.”

‘Scouring coupons like crazy’

Just eight months ago, Richard, a federal contractor who asked to be identified only by his first name, paid USD 1,200 for a Yamaha custom five-piece drum set. Now he hopes he can get USD 500 for it on Craigslist.

As his unpaid days multiply, Richard is getting nervous. As a federal contractor for eight years and a federal employee for the previous 17, he’s not new to congressional wrangling.

Read more: Here’s how Obama could sidestep Congress

“If this goes too much longer, I may have to leave the industry,” he said. “I’ve been working in the industry 25-plus years. … It’s very stressful. I had open-heart surgery in 2008, and stress is not good for me.”

So far, he’s turned to online surveys to earn money, and he and his wife have cut their spending.

“Normally we get one night out a week,” he said. “We had to stop that. We’re pinching pennies and scouring coupons like crazy. We’re going to have to cut back on what we normally pay on our bills.”

 A big question mark

For many, including Natalie S., who has worked for the government since graduating from college six years ago and requested that her last name not be published, the uncertainty about the duration of the shutdown is what’s causing nerves to rattle.

“I’m a worrier to begin with,” she said. “I don’t know if I’m going to have to weather it for a couple weeks or a couple months.”

Read more: 143-year-old law stirs fears during shutdown

In part due to uncertain finances and not having “much else to do,” she turned to Craigslist to unload a bookcase with books, ironing board, rain boots, down blankets and a USD 15 sign reading “Bienvenue,” French for “welcome.”

“I still have at least a month or month-and-a-half in reserve,” she added. “My parents have called and said they’re happy to lend me some money.”

Lisa Braswell, a management analyst at the National Institutes of Health, said she’s giving herself two weeks before she “pulls the panic alarm.”

Since the furlough, Braswell listed 28 items on eBay, mostly high-end evening gowns, with an estimated value of USD 15,000 to USD 20,000 to clean out her closet.

“It’s the unknown that’s concerning,” Braswell said. “A week or two—I probably won’t think about the money, but it’s that question of not knowing when it’s going to end, particularly with the holiday season coming up.”

(Read more: Shutdown threatens holiday sales, NRF says)

A government worker for five years, Braswell never expected negotiations in D.C. to unravel into a shutdown even after she and her co-workers were urged Monday to take their plants home.

“We were all looking at each other as if we saw a ghost because we’d been through the drill a few times, but it had never happened,” Braswell said. “And I really don’t believe the majority of my co-workers expected a shutdown—I know I didn’t.”

—By CNBC’s Katie Little. Follow her on Twitter @KatieLittle

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Will cheaper rivals keep stealing champagne’s fizz?

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

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Champagne`s long association with luxury gives it premium pricing, but it may also be taking the fizz out of sales. “Champagne is the first casualty of a recession,” said Spiros Malandrakis, senior analyst for alcoholic drinks at market researcher Euromonitor International.

“The problem with champagne is first the perception of luxury and higher-end consumption. It doesn`t fit with the zeitgeist of Europe right now.” Western Europe still pops the cork on the lion`s share of champagne, buying around 169.9 million liters in 2012, or more than 70 percent of the year`s total sales of 232.3 million liters, according to data from Euromonitor.

A standard bottle of wine and champagne is about 0.75 liter, while a magnum contains 1.5 liters. “Western Europe will remain gripped by recessionary forces, high unemployment and austerity for the foreseeable future,” likely weighing on sales there for quite some time, he said.

The industry is still reeling from the financial and Eurozone crises, with global champagne consumption down more than 5 percent in 2012 from its 2007 level, although it has come off its 2009 trough, according to the data.

By comparison, the still grape wine category`s 2012 sales were up more than 6 percent from 2007 levels at 21.76 billion liters, the data show. The champagne industry is conservative and has been slow to target new markets, Malandrakis said.

“They stick to what they know and tradition plays such a big part that they are afraid to move away,” he said. But he noted, “an extreme focus on luxury is not speaking to the needs of Western Europe at the moment, but it could become a big selling card in some emerging market nations where bling is still relevant and accepted.”

Unlike cognac, which has made inroads into China for the last 20 years, champagne has only recently started targeting that market, he said. Despite a booming wine market on the mainland, champagne is facing headwinds, he noted.

Only 1.5 million liters were sold in China in 2012.

Although that was up from 600,000 in 2007, it is dwarfed by the 2.07 billion liters of still wine sold there in 2012, the data show. “Champagne or sparkling wine doesn`t translate in Chinese. It creates problems on the marketing side,” he said.

The industry also faces a hit from the generally less-expensive sparkling wine category, he said. “It`s hot on champagne`s heels,” he said, as some sparkling wine offerings, if not in the luxury category, are flirting with the higher end.

“They are converging slowly,” he said. In contrast to champagne`s declines, the category saw 2 percent volume growth in Europe in 2012 and more than 6 percent in North America, he said.

To be sure, some champagne producers are seeing a slow recovery.

LVMH owner of the Moet Hennessey brand, sold 21.2 million bottles of champagne in the first half of this year, up from 21.1 million in the year earlier period. The 56.8 million bottles sold in 2012 is still down from the 62.2 million sold in 2007.

But while in 2007, around 37 percent of LVMH`s spirits sales were concentrated in Europe, with only around 16 percent in Asia ex-Japan, by the first half of this year, only 21 percent were in Europe, with 35 percent in Asia ex-Japan.

– By CNBC.com`s Leslie Shaffer. Follow her on Twitter @LeslieShaffer1

Copyright 2011 cnbc.com

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