Greece got its 130 billion euro bailout. Most media outlets and economists made the same observation about the deal. Greece’s economy continues to contract at a rate of about 6%. Unemployment is above 20%. Greece says it can get its debt-to-GDP ratio below 120% by 2020. Very few people believe that, and the International Monetary Fund apparently has issued a report that states as much. There is another Greek bailout coming or, alternatively, it will be pushed out of the eurozone.
Apple Picks China Telecom
Apple (NASDAQ: AAPL) has added China Telecom as a partner in the People’s Republic. The U.S. company needs the help. Apple’s iPhone market share dropped in the world’s most populous nation last year. It is also in the midst of a trademark dispute with local company Proview. Apple does not have a deal with China’s largest wireless carrier — China Mobile (NYSE: CHL). The company has more than 500 million customers, so it is critical to Apple’s success. But China Mobile does not have a system that is compatible with the iPhone specs. Apple has similar problems in the U.S., where its iPhone and iPad do not run on growing 4G networks. Apple may be involved in trademark and IP challenges, but its products do need to run on the most popular carrier technology.
Brent Crude at $121
Brent crude prices moved to about $121 on news of more trouble with Iranian exports. Some economists and the International Energy Agency say that a sharp drop in supply and increase in prices may happen without badly damaging the economy, particularly in Europe. That is unlikely to be the case for two reasons. The first is that the European Union is a huge net importer of oil. The second is that the region’s gross domestic product is already flat or contracting. Individuals and companies are not in a good position to withstand the inflation that would accompany increases in gas and oil prices.
The Fight for TNT
The fight over the ownership of European shipping firm TNT may only be in the early stages. U.S.-based UPS (NYSE: UPS) made a bid of $6.43 billion. Although this is above the market value of the company, its board rejected the offer. The company must think its can make more money for shareholders on its own, or that there will be at least one more offer. The stock market favors the second theory. FedEx (NYSE: FDX) may think it cannot let a prize as valuable as TNT’s network go to its primary rival.
Douglas A. McIntyre