What's Important in the Financial World (1/18/2013)

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The Algeria hostage crisis shows how little it takes in the terms of geopolitical events to cause a spike in oil prices. As problems in the Middle East simmer, along with attacks on oil structure in Africa and a new regime in Venezuela, the number of  new uncertainties increases and a sharp rise in crude price becomes more likely by the day. Those taken hostage, some of whom were killed, worked near a gas facility in eastern Algeria. Oil prices quickly rose to $96 from $93 just three days ago. With the crisis unresolved, so is the problem of what will happen to oil prices. More quietly, at least for now, the amount of oil theft that has gone on in Nigeria has increased as rebels and profiteers steal it. And, in Venezuela, which has nationalized foreign oil interests and given oil away to neighbors, president for life Hugo Chavez is about to die after 14 years as the head of government. It was unimaginable just a few weeks ago that oil could trade above $100 soon. It is not hard to imagine now.

Apple’s Best Days Behind It?

Another group of experts has made the case that Apple Inc.’s (NASDAQ: AAPL) best days are behind it. ABI Research says that Apple’s share of the smartphone market worldwide will peak this year at 22% and stay at that level through 2018, as though any estimate could be accurate that many years out. According to the research operation:

Smartphone shipments will account for 50% of all handset shipments by 2014 and become the largest handset segment in the world, according to the latest market forecasts by market intelligence firm ABI Research. By 2018, 2.4 billion handset shipments with smartphones will account for 69% of all handset shipments. LTE handsets will account for 35% of all handset shipments and 50% of smartphone shipments in 2018.

“Barring an unlikely collapse in Samsung’s business, even Apple will be chasing Samsung’s technology, software, and device leadership in 2013 through the foreseeable future,” says senior analyst Michael Morgan.

Sony Sells New York Headquarters

Sony Corp. (NYSE: SNE) needs money to keep up efforts to resurrect itself. It found some as it sold its NYC headquarters for $1.1 billion. According to press reports, the Japanese company made a $685 million. Sony’s management said:

(it) is undertaking a range of initiatives to strengthen its financial foundation and business competitiveness and for future growth. At the same time, Sony is balancing cash inflows and outflows while working to improve its cash flow by carefully selecting investments, selling assets and strengthening control of working capital such as inventory. This sale is made as a part of such initiatives.

Unfortunately, the company remains in deep trouble, and at some point will run out of assets to sell.