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JPMorgan Is Promoting Its Charity on NBC Show

December 10, 2011 by Leave a Comment

On Saturday, it might be all of the above.

In a gambit to promote its charitable work — and maybe polish its image, which has suffered since the financial collapse in 2008 — JPMorgan Chase is financing and sponsoring the “American Giving Awards,” which will be televised by NBC on Saturday night. The two-hour show, with Bob Costas as host, will profile recipients of Chase donations, will be book-ended by Chase commercials and will regularly remind viewers that the whole event is “presented by Chase.”

The producers and the network suggested Friday that the awards show was a feel-good holiday season special. Kimberly B. Davis, the president of the JPMorgan Chase Foundation, said it was about celebrating “ordinary people doing extraordinary things in communities.”

But to others, the show has another bottom line. It’s a “‘greed-washing’ campaign to score P.R. points,” countered Lisa Graves, whose publication “PR Watch” investigates company public relations campaigns. The $2 million in donations that will be featured on Saturday “are a drop in the bucket compared to its ultra-lush benefits for bankers who profited richly from the swaps that undermined our nation’s financial security,” she said.

The “American Giving Awards” are part of a broader business world trend. Not content to have the news media cover its good works, many companies are creating their own media, often cloaked as entertainment.

Big banks, in particular, “do a lot of socially driven programs, but they don’t consistently tell people about them,” said Steve Cone, a marketing executive for AARP who formerly worked at Citigroup and Fidelity.

And given the financial downturn, “there’s more pressure now to say, ‘We’re not all evil, here’s the good things we do,’ ” said Allen P. Adamson, a managing director at the brand firm Landor Associates.

For instance, one of Chase’s main competitors, Bank of America, has been running commercials this fall that profile small businesses that have benefited from its financial products.

For companies, the promotion of citizenship efforts “is the topic de jour these days,” Mr. Adamson said.

The five charities to be feted on Saturday have already benefited from Chase’s largess without a television extravaganza. Over all, the bank says it gives away $150 million a year; more narrowly, through a program called Chase Community Giving, it has been giving money and visibility to small charities across the country for the last two years.

Intersport, a marketing agency for Chase, and Dick Clark Productions conceived of a holiday season awards show built around the community giving program, said Carter Franke, the head of JPMorgan Chase corporate marketing. Ms. Franke was interviewed Friday from Los Angeles, where the show was being completed.

Five charities that received money from Chase in the past were selected to compete in public for a new $1 million grant, with voting happening via Facebook. The winner will be revealed on the telecast Saturday; the other four will receive smaller grants.

The goal, Ms. Franke said, was not to burnish the Chase brand per se, but to raise awareness of the community giving program. “It is an opportunity for these charities to become better known and for them to show what they can do with these grants from Chase,” she said.

The show concept was taken to NBC, which otherwise would be running repeats on Saturday, typically the slowest night of the week for network television. Asked if it was an advertisement, an NBC spokeswoman said: “No. It’s a show about charitable giving.”

The network declined to comment on whether or how money was exchanged. But Chase did say that it bought eight 30-second commercials that will run during the show.

Sometimes networks sell blocks of time to outside advertisers outright, but the companies involved indicated that was not the case for the “American Giving Awards.”

Internally at NBC, the show has been compared to the annual “CNN Heroes” awards show on that cable news channel.

Like other awards shows, it will rely on celebrities to rope viewers in; it will feature performances by Will.i.am and Rodney Atkins and appearances by Colin Farrell and Miley Cyrus, among others.

A bank giving away money on prime-time TV might be a turn-off to some viewers, but to date only a few seem to have spoken up about it. One of those few wrote on Chase’s Facebook wall on Wednesday, “It’s humorous how easily you can convince people you are doing something good.”

Asked whether Ms. Franke was concerned about that kind of adverse viewer reaction on a bigger scale, she said, “Hopefully, viewers are going to see that there are some wonderful charities out there doing strong things with the help and support of Chase.”

Article source: http://feeds.nytimes.com/click.phdo?i=4c81a638454ddc6abe39b1ac12c33138

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Bankruptcy Rarely Offers Easy Answer for Counties

November 11, 2011 by Leave a Comment

Harrisburg, the capital of Pennsylvania, filed for bankruptcy last month. The tiny city of Central Falls, R.I., filed in the summer. Hamtramck, Mich., tried to declare bankruptcy last year but was stopped by the state. From coast to coast, cities have had to cut services, lay off workers and raise taxes as the downturn has lingered.

Municipal bankruptcies remain extremely rare, and each of these cases can be viewed as unique, a one-off: Jefferson County was undone by a major sewer project marred by corruption, Harrisburg by borrowing more than it could repay for a disastrous incinerator project, Central Falls by pension problems, and Hamtramck by the woes of the auto industry. Viewed another way, though, they show how the downturn has left the nation’s most distressed cities with few options for papering over huge problems, and left some desperate elected officials placing their hopes in bankruptcy judges.

Their desire for simple solutions may be in vain, though: for constitutional reasons, the part of the federal bankruptcy code that municipalities use, Chapter 9, sharply limits the power of bankruptcy judges to intervene in local governance.

“Chapter 9 really puts the judge more in the position of being a referee than somebody who can really run the county,” said Paul S. Maco, a partner with the firm of Vinson Elkins who led the Office of Municipal Securities at the Securities and Exchange Commission during the bankruptcy of Orange County, Calif. — the nation’s largest municipal bankruptcy until this week. “Chapter 9 doesn’t take away the difficult political decision-making needed to address a financial credit problem.”

Jefferson County has been plagued by distrust for years. The state, under Gov. Robert Bentley, had tried to broker a deal to avert bankruptcy. It fell apart, county officials said, over a failure to reach agreements with creditors. County officials decided that the county’s credit was so bad that filing for bankruptcy risked little.

By any measure, Jefferson County, home to nearly 700,000 people and to the city of Birmingham, is an extreme case. The seeds of its fiscal collapse were planted more than a decade ago when the county was ordered to rebuild its dilapidated sewer system, which had been sending raw sewage into rivers. The county, which had long sought to avoid paying the true cost of its sewer system, signed off on a series of complex financial deals that officials barely understood. The deals had hidden risks, and they went bad.

Several officials were convicted of taking bond-related bribes, including a former county commission president and Birmingham mayor. Two bankers are fighting federal accusations that they made secret payments. And in 2009, J. P. Morgan Securities forfeited $752 million to settle a fraud complaint by the S.E.C.

The complicated bond-and-derivative structures did not work out for the county: they failed during the financial turmoil of 2008, leaving the county with a $3.2 billion debt, to be repaid faster than planned.

The debt crisis was then compounded by a budget crisis when one of the county’s biggest sources of revenue, an occupational tax, was struck down in court and Alabama’s Legislature balked at letting the county replace it with a new tax. That forced Jefferson County to slash its budget by nearly a third: it laid off more than 500 workers, closed several court houses, and stopped maintaining its roads.

Now officials say they will have to come up with an additional $40 million in cuts by Jan. 1. Given that the sheriff’s department is no longer responding to car accidents on county roads, county officials said, there seems little left to trim.

“All of the areas that are not constitutionally mandated are next to be cut,” said James A. Stephens, a county commissioner, mentioning senior citizen services, building inspectors and economic development expenditures. In other words, he said, Jefferson County, home to the largest city in the state, will have the bare-bones services of a sparsely populated rural county.

Many in the county are pinning their hopes on the bankruptcy: by the time the county filed this week, faith that the various players could arrive at a fair deal had sunk as low as ever.

Campbell Robertson reported from Birmingham, and Mary Williams Walsh and Michael Cooper from New York.

Article source: http://feeds.nytimes.com/click.phdo?i=0a39094bd698bd7563361134c68cdfc4

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News Analysis: Even if Europe Averts Crisis, Growth May Lag for Years

September 29, 2011 by Leave a Comment

What is going on?

The problem, say close watchers of both the subprime financial crisis in 2008 and the European government debt crisis today, is that many investors think there is a quick and easy fix, if only government officials can come to an agreement and act decisively.

In reality, one might not exist. A best case in Europe is a bailout of troubled governments and their banks that keeps the financial system from experiencing a major shock and sending economies worldwide into recession.

But a bailout doesn’t mean wiping out the huge debts that have taken years to accumulate — just as bailing out American banks in 2008 didn’t mean wiping out the huge amount of subprime debt that homeowners had borrowed but couldn’t repay.

The problem — too much debt — could take many years to ease.

”Everybody has been living beyond their means for nearly the last decade, so it is an adjustment that will be painful and long, and it will test the resilience of societies socially and politically,” said Nicolas Véron, a senior fellow at Bruegel, a research organization in Brussels.

This isn’t to say that the discussions in Europe are moot. If governments can’t agree on how to rescue Greece from its debilitating government debt, some fear the worst case could happen — a collapse of the financial system akin to 2008 that would ricochet around the world, dooming Europe but also the United States and emerging countries to a prolonged downturn, or worse.

Just like the United States, Europe built up trillions in debts during the past decades. What is different is that while in the United States more of the borrowing was done by consumers and businesses, in Europe it was mainly governments that piled on the debt, facilitated by the banks that lent them money by buying up sovereign bonds.

Now, just as the United States economy is held back by households whose mortgages are still underwater and won’t begin to spend again until they have run down their debts, Europe can’t begin to grow again until its countries learn to live within their means. That means running down their debts during years of austerity and tax increases.

In short, it still means years of painful adjustment.

“We have adjust to lower growth,” said Thomas Mirow, president of the European Bank for Reconstruction and Development, referring to Europe as well as the United States. “It is of course going to be very painful. But leaders have to speak frankly to their populations.”

The uncertainty about Europe’s future has been driving the gyrations of financial markets since the summer. Earlier this week, stocks rallied on euphoria that a new and more powerful bailout was near, but the rally fizzled Wednesday when cracks began to appear among European nations over the terms of money being given to Greece.

On Thursday, markets were mixed after the German Parliament approved the 440 billion euro ($600 billion) bailout fund aimed at keeping the crisis from hurting large European countries.

The trouble is that even this fund, which requires the approval of all 17 nations in the euro currency zone, is already seen as inadequate for the scale of Europe’s woes. Instead, a new idea is to bolster the fund by allowing an institution like the European Central Bank to use it as a guarantee for much greater lending, perhaps up to a couple of trillion euros.

This is the cause of the new optimism in markets, but some worry that even that idea may not fully address one of Europe’s most dangerous problems: fully recapitalizing its banks.

“We’re not seeing any real acknowledgment of the scale of the banking sector problem,” said Simon Tilford, the chief economist at the Center for European Reform in London. And even if the fund were enhanced with a couple of trillion euros of firepower to buy up troubled government debt from the financial system, that would still only shift the debt from European banks to taxpayers and do nothing to pay it off.

“Clearly something is cooking, but the markets will eventually choke on the taste,” said George Magnus, an economist at UBS in London. “It is about getting banks off the hook, but the darker side is it’s not doing anything real.”

Josh Brustein contributed reporting.

This article has been revised to reflect the following correction:

Correction: September 29, 2011

An earlier version of this article used an incorrect unit in converting Europe’s 440 billion euro bailout fund to dollars. It is $600 billion, not $600 million.

Article source: http://www.nytimes.com/2011/09/30/business/global/even-if-europe-averts-crisis-growth-may-lag-for-years.html?partner=rss&emc=rss

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U.S. Durable Goods Orders Decline

September 28, 2011 by Leave a Comment

The Commerce Department said durable goods orders dipped 0.1 percent after a 4.1 percent jump in July.

Economists polled by Reuters had forecast durable goods orders unchanged last month. Orders were held back by an 8.5 percent drop in bookings for motor vehicles, the largest decline since February last year.

The drop in orders came despite a 23.5 percent rise in orders for civilian aircraft last month. Boeing received 127 orders for aircraft, according to the plane maker’s website, up from 115 in July. Delta Airlines placed an order for 100 aircraft.

Excluding transportation, orders slipped 0.1 percent after rising 0.7 percent in July. Economists had expected this category would also be unchanged.

But non-defense capital goods orders excluding aircraft, a closely watched proxy for business spending, increased 1.1 percent last month after a revised 0.2 percent fall in July.

This suggested that businesses, sitting on about $2 trillion in cash, had not responded to the recent financial market volatility by curtailing spending on capital goods. Economists had expected a 0.3 percent rise after a previously reported 0.9 percent decline in July.

Manufacturing, which has done the heavy lifting for the fragile economy recovery in the United States, has slowed in recent months, but August’s durable goods report pointed to underlying resilience and offered hope that a another downturn might be avoided.

Outside of transportation and primary metals, which fell 0.8 percent, details of the durable goods report were relatively strong. Orders for machinery edged up 0.1 percent, while computers and electronic products rose 1.3 percent. Demand for capital goods increased 4.2 percent and electrical equipment and appliances rose 1.3 percent.

Shipments of non-defense capital goods orders excluding aircraft, which go into the calculation of gross domestic product, increased 2.8 percent after rising 0.4 percent in July.

Article source: http://feeds.nytimes.com/click.phdo?i=82b212a35255f066c29424e6e45482c4

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In Granholm Book, Cautionary Economic Lessons From Michigan

September 18, 2011 by Leave a Comment

After all, years before the rest of the country fell into recession, Michigan, so vested in the automobile industry, was wrestling with a single state downturn — and one that just kept going until the rest of the country unhappily caught up. And years before the rest of the states found themselves trying to patch state budget holes because of falling tax revenues, Michigan was staring at gaps to fill.

And yet, Jennifer M. Granholm, the former Democratic governor of the state, who led it through much of its rocky last decade, says she sees a key lesson from Michigan — a warning, perhaps, more than a model — for the rest of the nation as it tries to create jobs and emerge from an economic funk.

“Everything that is hitting the country hit Michigan first,” Ms. Granholm said in an interview, reflecting on eight years in office in which the state’s economic crisis overshadowed all else. Her response to the crisis, she said, was to cut spending, cut government jobs, cut taxes — the very approach now being promoted elsewhere, particularly after Republican victories in statehouses around the country in 2010.

“We tried all of those prescriptions, too,” said Ms. Granholm, whose final term ended with the start of this year. “We did everything that people would want us to do, and yet it didn’t work.”

She added: “Laissez-faire, passivity, tax cuts, hands-off does not work. And, really, that’s the lesson from this laboratory of democracy which is Michigan.”

The only approach that showed glimmers of success, she said, came when the federal government stepped in — to bail out the auto industry, for instance, and to send stimulus funds that encouraged companies like the ones in Michigan now creating lithium-ion batteries for electric vehicles.

In a state where Republicans took over the governor’s seat in the 2010 election and control both chambers of the legislature in Lansing, Ms. Granholm’s critics say they are unconvinced both by her conclusions and by her claims that she pared back taxes and spending as far as one might; had she truly cut the tax burden and big government, some Republicans said, the state’s picture might now be utterly different.

In truth, even Ms. Granholm, who, along with her husband, Dan Mulhern, has laid out her conclusions in a new book, “A Governor’s Story: The Fight for Jobs and America’s Economic Future,” expressed disappointment in her own ability to fix the state’s limping economy. When Ms. Granholm, a former state attorney general, was elected the state’s first female governor in 2002, she was seen as a rising political star.

“As the person who was in charge of the state at the time and who campaigned on trying to fix it, it was very hard for me to accept myself that I didn’t have the tools to be able to wave a magic wand and fix the loss of manufacturing jobs and the loss of market share of the auto industry and the bankruptcies,” said Ms. Granholm, who is now teaching at the University of California, Berkeley, and says she is “absolutely not interested” in some future political office. “It was hard for me as somebody who’s always been able to succeed at stuff to be able to accept that and move on.”

Ms. Granholm was unwilling to comment on the performance of Rick Snyder, her successor as governor, who this year has approved measures aimed at cutting business taxes.

“The question is for the nation: Is there something that can happen now to prevent it from happening to the whole country and having a prolonged recession in the way that Michigan did?” Ms. Granholm said. “I think there are ways to stop it but it can only happen with a partnership with the federal government, because individual states simply do not have the tools to compete against China or the globe.”

Article source: http://feeds.nytimes.com/click.phdo?i=33eb1b8a518448e17fbfee3eeda3ccf8

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First Drop in Number of Problem Banks in U.S. Since 2006

August 23, 2011 by Leave a Comment

The number of banks on the government’s list of institutions most at risk for failure fell in the second quarter, the first drop since before the financial crisis began.

Twenty-three lenders came off the list of so-called problem banks during the second quarter, bringing the total to 865, according to data released Tuesday by the Federal Deposit Insurance Corporation. Not all the troubled lenders will inevitably fail, but the F.D.I.C. considers them most at risk, making the quarterly update one of the clearest measures of the banking industry’s health.

It was the first decrease in the number of problem banks since the third quarter of 2006. 

The report also contained other signs of improvement. There were 48 bank failures in the first half of 2011, far fewer than the 86 failures in the first six months of 2010. Last year’s total of 157 collapsed banks was the highest since the last severe recession, in the early 1990s.

 And the F.D.I.C. insurance fund that protects the nation’s depositors showed a surplus for the first time in two years. It stood at $3.9 billion, compared with a negative $1 billion balance at the end of the first quarter.

Still, the magnitude of problem banks — roughly one of every nine lenders — remains relatively high. And the number could rise again if the economy suffered another downturn, a prospect that seems increasingly likely amid all the grim data that has surfaced in the weeks since the list was compiled at the end of the June.

Martin J. Gruenberg, the acting F.D.I.C. chairman, played down that risk in some of his first public remarks since being nominated to run the agency in June.

“Banks have continued to make gradual but steady progress from the financial turmoil and severe recession that unfolded from 2007 and 2009,” Mr. Gruenberg said in a statement.

Beyond the drop in problem lenders, there were other signs that the industry was getting back on its feet. The nation’s 7,513 banks and savings institutions reported a total profit of $28.8 billion in the second quarter, up nearly 38 percent from a year ago and the eighth consecutive quarter that earnings have increased. Bank losses continued to ease, while loan balances rose — albeit slightly — for the first time since the second quarter of 2008.

Much of the uptick in lending could be attributed to loans made to businesses and other financial institutions. Real estate lending continued to be very weak.

Total revenue fell for the second quarter in a row. Fee income declined as more stringent regulations curbed overdraft charges and other penalty fees, while interest income was lower because of an increase of money in low-yielding accounts at Federal Reserve banks. The pressure on revenue could increase in the second half of the year, especially if lending margins collapse because of the Fed’s recent pledge to keep interest rates near zero for the next two years.

The recent market turbulence stemming from the debt crises in Europe and the United States continues to weigh on the industry. Deposits increased by almost 3 percent during the second quarter, with the bulk of the cash flooding accounts at the nation’s largest banks.

“Recent events have reminded us that the U.S. economy and U.S. banks still face serious challenges ahead,” Mr. Gruenberg said in the statement. “The F.D.I.C. will remain alert to the challenges going forward.”

Article source: http://feeds.nytimes.com/click.phdo?i=3a3a55c29fd5f2fa587f9963c5c60b95

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First Drop in Number of Problem U.S. Banks Since 2006

August 23, 2011 by Leave a Comment

The number of banks on the government’s list of institutions most at risk for failure fell in the second quarter, the first drop since before the financial crisis began.

Twenty-three lenders came off the list of so-called problem banks during the second quarter, bringing the total to 865, according to data released Tuesday by the Federal Deposit Insurance Corporation. Not all of the troubled lenders will inevitably fail, but the F.D.I.C. considers them most at risk, making the quarterly update one of the clearest measures of the banking industry’s health.

It was the first decrease in the number of problem banks since the third quarter of 2006. 

The report also contained other signs of improvement. There were 48 bank failures in the first half of 2011, far fewer than the 86 failures in the first six months of 2010. Last year’s total of 157 collapsed banks was the highest level since the last severe recession in the early 1990s.

 And the F.D.I.C. insurance fund that protects the nation’s depositors showed a surplus for the first time in two years. It stood at $3.9 billion, compared to a negative $1 billion balance at the end of the first quarter.

Still, the magnitude of problem banks — roughly one of every nine lenders — remains relatively high. And the number could rise again if the economy suffers another downturn — a prospect that seems increasingly likely amid all the grim data that has surfaced in the weeks since the list was compiled at the end of the June.

Martin J. Gruenberg, the acting F.D.I.C. chairman, played down that risk in some of his first public remarks since being nominated to run the agency in June.

“Banks have continued to make gradual but steady progress from the financial turmoil and severe recession that unfolded from 2007 and 2009,” Mr. Gruenberg said in a statement.

Beyond the drop in problem lenders, there were other signs that the industry is getting back on its feet. The nation’s 7,513 banks and savings institutions reported a total profit of $28.8 billion in the second quarter, up nearly 38 percent from a year ago and the eighth straight quarter that earnings have increased. Bank losses are also easing and loan balances grew for the first time since the second quarter of 2008. Bank losses continued to ease, while loan balances rose — albeit slightly — for the first time since the second quarter of 2008.

Much of the uptick in lending could be attributed to loans made to businesses as well as other financial institutions. Real estate lending continued to be very weak.

Total revenue fell for the second quarter in a row. Fee income declined as a result of more stringent regulations curbing overdraft charges and other penalty fees, while interest income was lower because of an increase of funds in low-yielding accounts at Federal Reserve banks. The pressure on revenue could get ratcheted up in the second half of the year if lending margins collapse in light of Fed’s recent pledge to keep interest rates near zero for the next two years.

Meanwhile, the recent market turbulence stemming from the debt crises in Europe and the United States continues to weigh on the industry. Deposits increased by almost 3 percent during the second quarter, with the bulk of the cash flooding accounts at the nation’s largest banks.

“Recent events have reminded us that the U.S. economy and U.S. banks still face serious challenges ahead,” Mr. Gruenberg said in a statement. “The F.D.I.C. will remain alert to the challenges going forward.”

Article source: http://www.nytimes.com/2011/08/24/business/first-drop-in-number-of-problem-banks-since-2006.html?partner=rss&emc=rss

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Dip in Mobile Shipments to Western Europe Causes Concern

August 21, 2011 by Leave a Comment

BERLIN — The euro zone crisis has mobile users hanging on to their phones a little longer.

With fewer consumers buying, the Continent’s big mobile retailers have been keeping inventories low, which has brought the first-ever quarterly decline in cellphone shipments in Western Europe, said Gartner, the research firm.

The downturn has not hit the United States, where business over the past few years has grown side by side with that in Europe. Worldwide, Gartner said, it expected shipments to grow 12 percent for the year, to a record 1.8 billion phones.

In Western Europe, International Data Corp. is forecasting the number of cellphones shipped will grow 6 percent in 2011 to almost 207 million units, with smartphone shipments expected to rise 44 percent to more than 103 million.

Nevertheless, the dip is causing consternation.

“There is caution around what’s been happening,” Anurag Gupta, the president in Europe of Brightpoint, a U.S. company that handles mobile phone supply, distribution and logistics for operators like Vodafone and Deutsche Telekom. “The euro zone nations are totally consumed with the debt situation. People have been cautious, whether it is the wireless carriers or the retailers, all the way down to the end user.”

The market in Europe for cellphones tightened in the second quarter, according to Gartner, with shipments falling 0.5 percent in Western Europe to 43.57 million from 43.77 million in the first quarter. Carolina Milanesi, a Gartner analyst in London, said sellers of mobile phones were using “channel management” to keep inventories lean and to reduce risk.

“In a normal situation, you might have 100 phones in the back room,” Ms. Milanesi said. “Now you have 50.”

She added that consumers were “fatigued” and holding back on upgrades.

Mr. Gupta, who is based in Barcelona, said mobile operators and other big retailers were keeping three to four weeks’ worth of inventory, whereas, 18 months ago, it was four to six weeks.

The European market is also being weighed down by the restructuring at its longtime market leader, Nokia. In the second quarter, Nokia fell to No. 2 in total shipments in Western Europe, behind Samsung, and to No. 5 in smartphones, where it had a 10.8 percent share, according to International Data Corp.

One year earlier, Nokia led the European smartphone segment with 39.5 percent. Now the Finnish company trails Samsung, Apple, HTC and Research In Motion, the maker of the BlackBerry, which have 22 percent, 21 percent, 14.3 percent and 13.9 percent, respectively, according to I.D.C.

Francisco Jeronimo, an I.D.C. analyst in London, said consumers were shying away from committing to Nokia’s phones using the Symbian operating system, which Nokia plans to phase out in favor of Windows Phone as part of an alliance with Microsoft announced in February.

Stephen Elop, the Nokia chief executive, said then that the company expected to sell 150 million Symbian phones during the transition to Windows. Mr. Jeronimo said he expected Nokia to sell only 100 million such units. Nokia began cutting prices on Symbian devices in the second quarter, Mr. Jeronimo said.

In North America, where Nokia has less than 5 percent market share, the mobile market is still growing, fueled mostly by the iPhone and phones with the Android operating system by Google. Smartphone shipments by Apple rose at an annual rate of 62 percent in the second quarter, according to I.D.C. At HTC, one of the leading makers of Android phones, shipments grew at an annual rate of 125 percent. Over all, shipments to North America rose 3.7 percent to 47.2 million in the second quarter, according to Gartner. Smartphone shipments rose 9.2 percent to 24.7 million, Gartner said.

“The situation at Nokia is affecting the broader market in Europe,” Mr. Jeronimo said.

Nokia said it planned to present its first Microsoft phones this year and ship significant volumes in 2012. The company released a statement saying that the Microsoft transition was progressing well, as were sales of its high-end N9 smartphone and N500 auto navigation device.

“Clearly we are going through a transition,” Nokia said in the statement. “We’ve been very transparent about the challenges we face and the strategy we are implementing to regain global smartphone leadership. The only real measure of progress is delivering truly great products that people around the world want to use.”

Mr. Jeronimo said it might take Nokia two to three years to climb back to being among the top three smartphone makers in Europe. But the European mobile market, with or without Nokia, will keep growing, said Rajeev Chand, an analyst in San Francisco at Rutberg, an investment bank. Smartphone penetration in the European Union is still only 31 percent, he said, so “smartphones still have a long way to go.”

Qualcomm, which makes processors and other components for mobile phones, said it expected the Western Europe market to grow 16 percent this year to 180 million Internet-enabled devices. In July, Qualcomm, based in San Diego, said that Eastern Europe markets remained strong, but “we continue to monitor Western Europe because of the ongoing economic challenges.”

In Europe, at least for a while, the market is likely to remain fluid, tied in part to Nokia as it seeks traction with Microsoft. Ms. Milanesi, the Gartner analyst, said the first Nokia Microsoft phones were likely to be solid devices, but not so different from what is already on the market.

“The new, first Nokia-Microsoft phone is unlikely to blow away the public because the company hasn’t had time to differentiate its line from the competition,” Ms. Milanesi said.

Article source: http://www.nytimes.com/2011/08/22/technology/dip-in-mobile-shipments-to-western-europe-causes-concern.html?partner=rss&emc=rss

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Stocks End Week With New Losses Worldwide

August 19, 2011 by Leave a Comment

Turmoil swept through Asian and European markets and then carried over into the United States, where the broader market wavered between gains and losses on Friday before closing down more than 4 percent for the week.

Concerns lingered on Friday about the economy and about the euro zone’s debt troubles, much as they had in previous weeks. But some of the downturn on Wall Street was attributed to technical reasons. Friday, for example, was a day when options contracts expire, an event that can fuel volatility or market moves.

Analysts were also quick to point out that on a day before a summer weekend, low volumes could unfold into a “bleed” toward the end of the trading session — and indeed, what had been a relatively placid trading session in New York turned downward in the final hours.

“Just as importantly, any important policy makers that can come up with anything constructive are on vacation,” said Seth Setrakian, co-head of United States equities at First New York. “So what good news can come over the weekend?”

“So everyone is playing much lighter and much tighter,” he said. “It is very simply the data that has been coming out economically has not been constructive.” At the close, the Standard Poor’s 500-stock index was down 17.12 points, or about 1.5 percent, at 1,123.53. The Dow Jones industrial average was down 172.93 points, or 1.6 percent, at 10,817.65. The Nasdaq was down 38.59 points, or 1.6 percent, to 2,341.84.

The three indexes closed lower for the week. The S.P. was down 4.6 percent, the Dow fell 4 percent and the Nasdaq slid 6.6 percent in the five-day trading period. The steepest declines were on Thursday, when the indexes slipped as much as 5 percent on persistent worries about the economy and Europe’s debt problems. Stocks of companies most susceptible to slow growth and those related to banks have been hit. Technology, financials, and industrials were among the sectors down more than 1 percent on Friday.

“You are still seeing a lot of the economically sensitive names leading us on the way down,” Mr. Setrakian said.

Europe’s major stock indexes ended the day lower. The FTSE 100 in London fell 1 percent and the Euro Stoxx 50, a  barometer of European blue-chip stocks, pulled back 2.2 percent. Asian markets were also firmly down.

On Friday, gold continued the sharp ascent it has seen over the last months, demonstrating that nervousness remained intense. Gold futures for August delivery settled at $1,851.50 an ounce, up $32.60.

The Nikkei 225 index in Japan closed down 2.5 percent, and the major market indexes in Singapore and Hong Kong closed down more than 3 percent.

The losses during the day reflected an accumulation of bad news, including feeble economic data in the United States and Europe and signs that some banks were having trouble borrowing on the interbank market. Tension on money markets, which some analysts said was overblown, awoke unpleasant memories of the seizure in interbank lending that followed the collapse of Lehman Brothers in 2008.

“Everybody is taking risk off the table,” said George Rusnak, national director of fixed income for Wells Fargo. “This is probably going to be a trend over the next several weeks. There is not a lot of robust trading going on right now.”

Mr. Rusnak and other analysts again noted that concerns have mounted related to the banking sector, especially with respect to the exposure of American banks to European counterparts.

One drag on the American markets, and specifically the tech sector, on Friday was Hewlett-Packard, which is considering plans to spin off the company’s personal computer business into a separate company and is spending $10 billion on Autonomy, a business software maker. It fell 20 percent, to $23.60.

The benchmark 10-year Treasury bond yields, staying in the same range all day, was virtually unchanged at 2.062 percent.

It had touched record lows below 2 percent in intraday trading on Thursday.

“The growth outlook being hurt in Europe, and the ongoing sluggish data we have seen in the United States is the underlying issue the stock market is trying to grapple with,” Robert S. Tipp, a managing director and chief investment strategist for Prudential Fixed Income, said.

He said the crisis of confidence was evident as investors parked money in cash and into short-term fixed-income assets.

One thing to worry about next week will be whether the European Central Bank can continue to hold down yields on Italian and Spanish bonds. If not, Italian and Spanish borrowing costs might reach the point where they became too expensive, raising the risk of default.

On Friday, Italian bonds and Spanish bonds dipped to 4.96 percent.

Jack Ewing, Julia Werdigier, Bettina Wassener and Hiroko Tabuchi contributed reporting.

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Room For Debate: A Chance to Reshape the Economy

August 17, 2011 by Leave a Comment

Introduction

shopping frenzySpencer Platt/Getty Images

With all the volatility last week, it can feel as if the economy is collapsing around us. Maybe it is. Maybe we’re on the second downhill slide of a double-dip recession. But eventually the worst will be behind us, and we’ll face the question: What’s ahead?

Is this dragged-out downturn a chance for big changes in our economy, like Warren Buffett’s proposal to narrow the rich-poor divide through higher taxes on the very rich? As the U.S. recovers, should it be less dependent on consumer spending? Or could unemployment push the American work force toward shorter workweeks, like the European norms?

 Read the Discussion »

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Topics: Economy, recession, unemployment

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Article source: http://feeds.nytimes.com/click.phdo?i=f0458860ae46aa5ddc8c6bbc0a28138f

Filed Under: Business News Tagged With: , ,
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