What's Important in the Financial World (6/8/2012)

Gallup has released results of a poll about the attitude of the Chinese toward pollution. Experts have long believed that the People’s Republic cares little about clean water or air when those are balanced against industrial growth. The only public example of a crackdown on pollution was during the Beijing Olympics, when the country wanted to show it was something more than a cesspool. Residents of China view the problem from another angle, one that has to do with their health. The government has managed to trump this, but that may not last for long. The number of severe cases of disease related to pollution continues an alarming rise, according to the World Bank and other research. Gallup reports:

Fifty-seven percent of Chinese adults surveyed in 2011 — before the country’s economic slowdown grabbed headlines — prioritized protecting the environment, even at the risk of curbing economic growth.

Add that to the problems of the central government that already has begun to contend with a drop in GDP growth.

Facebook App Store

The Apple (NASDAQ: AAPL) App Store and Google’s (NASDAQ: GOOG) for Android face new competition. Facebook (NASDAQ: FB) has opened an app store of its own. Most of the software available at the Facebook store does not directly compete with Apple or Google product. That could change quickly. App developers have every reason to look at Facebook’s nearly one billion members as a lucrative market for the revenue that many of these software products bring in.

PC Magazine reports:

In total, the App Center launched with 600 social apps, including Nike+ GPS, Ubisoft Ghost Recon Commander, Stitcher Radio, Draw Something, and Pinterest.

A Bailout of Spain

Reuters has reported exclusively that Spain will turn to its neighbors as early as Saturday as its inability to raise money and the damage to its banks spreads rapidly. Most experts believe that the banks are the more serious problem, but outside investors are unlikely to take the risk involved in putting money into private enterprises. And, money raised by Spain may, by necessity, go into these firms. A rescue of Spain almost certainly will trigger the expected panic in the markets about whether eurozone members and the International Monetary Fund have the capital to bail out the fourth-largest economy in the region.

Reuters reports:

Two senior EU officials said finance ministers of the 17-nation single currency area would hold a conference call on Saturday to discuss a Spanish request for an aid package, although no figure had yet been set.

Google vs. Europe

The top antitrust official in Europe said in a speech that Google has run out of time to cure what the European Commission sees as rampant monopolistic behavior. EU Competition Commissioner Joaquin Almunia said, “I want to give the company the opportunity to offer remedy proposals that would avoid lengthy proceedings.” He expects a response by July. Google has the choice of relenting in a way that could hurt its revenue in the region or to begin a long legal fight not unlike the one Microsoft (NASDAQ: MSFT) began with the same body nearly two decades ago. The goal posts do belong to a sovereign entity, which means it can move them almost as it pleases. The open issue is whether Google sets practices that give it advantages over other search products, much like Microsoft did for its browser. As everyone knows, Microsoft lost.

Douglas A. McIntyre