China’s Statistics Bureau reported that in July new home prices rose in 49 of the 70 cities measured. According to MarketWatch, that was the broadest advance in 14 months. At first blush, it would appear to be good news, but the markets judged otherwise. One of the reasons for the home price improvement may be that China’s banks have been encouraged by the government to ease rates. That, in turn, apparently made housing more affordable. The consensus among economists is that the central Chinese government will see this data as proof that it has done enough to help a recovery and stop its easing measures. That, in turn, may cause the slowing gross domestic product of the People’s Republic to slow more.
Greek Prime Minister Heads to Germany
Greek prime minister Antonis Samaras will visit Germany this week with hat in hand. Ahead of his meeting with Angela Merkel and other senior Germany officials, the core purpose of the meetings is already clear. Samaras needs more time, and perhaps more money, to fix his economy. It has lost 20% of its gross domestic product in five years, and Samaras along with his financial advisors reason that the drop will only worsen without government stimulus of some kind. That is in direct opposition with Germany’s desire to force austerity on governments that cannot raise money on reasonable terms because of, among other things, high debts and deficits. The New York Times reports:
But top German officials signaled that Greece could face opposition in its bid for concessions. Wolfgang Schäuble, the German finance minister, expressed reluctance to grant more aid to Greece.
“It is not responsible to throw money into a bottomless pit,” Mr. Schäuble said in Berlin on Saturday, Reuters reported. “We cannot create yet another new program.”
What If Apple Wins?
Speculation has grown about what will happen to the smartphone industry if Apple Inc. (NASDAQ: AAPL) prevails over Samsung in an intellectual property trial. Both sides have rested their cases and said they cannot reach an agreement outside of court. In a conversation with the New York Times:
“I think what we’ll see is a diversification of designs in the marketplace if Apple wins,” said Christopher V. Carani, an intellectual property lawyer for McAndrews, Held & Malloy in Chicago.
That could mean development of new products will be substantially slowed as smartphone companies with products that have iPhone-like features go “back to the drawing board” to avoid suits. Planned launches of some products may be delayed for months. Samsung, with its strong balance sheet, could suffer a setback. It is the leader in the smartphone industry worldwide. The effects on smaller firms like HTC could be devastating.
Douglas A. McIntyre