World Markets Simplified

Verizon Will Suspend Remaining 3G Unlimited Data Plans This Summer
Via FierceWireless: Should Verizon’s current 3G customers decide to migrate toward 4G LTE pastures, their $30 unlimited data plans won’t be going with them. Verizon CFO Fran Shammo announced at a J.P. Morgan conference today that the company’s “grandfathered” 3G customers will have to purchase shared data plans if they upgrade to devices that are compatible with the newer LTE network. Till now, customers have been able to stay on unlimited plans as long as they had signed on before Verizon introduced tiered-pricing last July. The new shared plans will allow customers to connect multiple devices under one data plan, will arrive this summer, but Shammo did not share pricing information.

The announcement comes two weeks after AT&T CEO Randall Stephenson said his company’s unlimited data plan, which it pulled in 2010, was his “only regret.”

As India fails to deliver on its promise of growth, a smaller Asian country Indonesia, finds itself in a position to lure investors away from the third largest economy in the region with higher stock market returns, better fiscal management and lower inflation.

"Indonesia looks like it has hit the sweet spot, whereas India is nursing a headache from its latest boom," says Frederic Neumann, Co-Head of Asian Economic Research at HSBC.

While the two economies aren't similar in terms of size, with India's population of 1.2 billion and Indonesia's at 240 million, the countries share many similarities, leading to comparisons. Both have a burgeoning consumer base and are democracies with an investment grade rating.

India's economy has hit a rough spot with the slowest pace of growth in three years with the government unable to deliver on economic reforms. On the other hand, Indonesia has won favor with investors over the past few years.

That's leading Neumann and others to call for Indonesia to be included in the lineup of top global emerging markets. "The term BRICs really misses out on some of the key developments of our time. Indonesia has solid public finances, strong growth, a burgeoning consumer market, and plenty of resources to keep the economy afloat for many years," says Neumann.

On the other hand, India, according to Goldman Sachs' Jim O'Neill, the man who coined the term in 2001, is the BRIC that has disappointed. Late last year O'Neill said that India's poor record on productivity, foreign direct investment (FDI) and policy reform had made it the most disappointing among the four biggest developing economies - Brazil, Russia, India and China.

For example, India's fiscal deficit target of 5.1 per cent is wider than those of its BRIC peers. Its forecast deficit is more than four times Brazil's estimated 2012 budget gap of 1.2 per cent of output.

"It is difficult to see how India can turn around in the short term. It could in the next couple of years, but that is an eternity from investors' point of view, " says Neumann.

He adds that investors have already voted with their feet taking money out of India. The latest evidence of this was in the month of April when offshore investors withdrew some USD 403 million out of Indian equities and bonds, according to Reuters data.

While it is difficult to estimate how much of India's loss has been Indonesia's gain, market watchers say many investors have been increasingly looking at Indonesia as an alternative to India.

"To a large extent investor interest has moved to Indonesia," Robert Prior-Wandesford, Director, Asian Economics at Credit Suisse told CNBC. "Indonesia's equity market is hugely better than that of India and in part at the cost of India."

While the Bombay Stock Exchange's Sensex was the worst performing major global index in 2011 falling almost 25 per cent, the Jakarta Composite Index gained over three percent.

Besides delivering better returns, Indonesia is also catching up with India when it comes to economic growth. India's gross domestic product (GDP) is expected to expand at just under 7 per cent in the current fiscal year, which began April 1, while Indonesia is expected to deliver 6 to 7 per cent growth over the next couple of years, say analysts.

Even on trade, Indonesia scores over India. According to brokerage CLSA's latest forecast Indonesia's current account deficit in 2012 will be just 0.8 per cent of GDP, while India's will come in at around 3.9 per cent.

Rajeev Malik, Senior Economist at CLSA, says in Indonesia's case, net Foreign Direct Investment (FDI) will offset the current account deficit. In India's case, he points out, an estimated net FDI inflow of USD 15-20 billion will be well short of the current account deficit.

"They are doing better although they are not as big an economy as India," he says.

Credit Suisse's Wandesford says Indonesia reminds him of India three to four years ago, when there was a huge euphoria over the growth opportunity it offered foreign investors and companies. "In 2005-2008 India could do no wrong, now it is Indonesia."

India, which was awarded an investment grade rating by Standard and Poor's in 2007 is now under threat of losing it, with the ratings agency last month downgrading its credit outlook to negative. By contrast, both Fitch and Moody's upgraded Indonesia to investment grade in December and January, respectively.

Size matters

But despite the growing pessimism around India, most experts feel that it is not time yet to write off a country of a billion-plus people, if on nothing else than its sheer size.

Some argue that while there is a case for Indonesia to join the BRICs, it shouldn't be at the cost of India as they both have different comparative advantages. While one is a commodity economy, the other is a services oriented one and an investor, for example, can't completely replicate his menu of Indian stocks in Indonesia, say analysts.

"BRIC investors have a 20-year horizon and India will finally deliver in the long term," says Neumann.

China Mobile, the world's biggest telecom carrier by subscribers, said on Wednesday it is negotiating with Apple to carry the popular iPhone in China.

China Mobile is the only Chinese operator that does not officially carry the iPhone because its homegrown 3G technology is not supported by the chips used in current iPhone models.

Analysts have said next-generation iPhones will likely use a Qualcomm chip that would support China Mobile's network, removing the key technology barrier for a deal.

"We've been actively talking to Apple on how we can cooperate," China Mobile Chairman Xi Guohua, who assumed the post in March, told a shareholders meeting. "I can't give you too many details, but I'd like to repeat that both sides do hope to boost our cooperation," Xi added after the meeting.

He made the comments in response to a question about when China Mobile would sign a deal for the iPhone. Rivals China Unicom and China Telecom have already signed contracts with Apple.

Xi also said China Mobile is trying to expand its services outside mainland China by offering 4G services in Hong Kong this year and is hoping to provide mobile service between the United States and China.

However, media reports have said U.S. authorities might deny its application due to security concerns.

"We want to become a more global company. For that to happen, we are interested in tapping other markets such as Hong Kong and the United States," Xi said.

"We have applied to the United States for a license, but it's not been rejected yet. Rather, it's undergoing the relevant procedure. We hope the U.S. government will give us their approval soon for us to expand our services there."

TD-LTE Trials
China Mobile also said it was expanding tests of its latest generation TD-LTE mobile network. The company has completed initial testing with 850 base stations in six cities, such as Hangzhou in China's east, and expects to complete the next phase of tests by June 2013, executives said earlier this year.

TD-LTE refers to "time division long-term evolution" technology that allows for more voice connections, faster data speeds and easier network upgrades.

China Mobile executives said on Wednesday the trials will be expanded to 10 cities, including Beijing, with the number of base stations increasing to more than 20,000 this year.

There are now 72 LTE operators that have launched commercial services, including 25 networks launched so far in 2012, according to a May report by the Global mobile Suppliers Association (GSA).

Commercial LTE services are already available in Asia in Australia, Hong Kong, India, Japan, the Philippines, Singapore and South Korea, the GSA said.

China Mobile shares are up about 13 percent this year, outperforming the Hang Seng Index's rise of about 5 percent.

The carrier said subscribers in March rose to 667.20 million, more than twice the population of the United States, including 59.56 million 3G subscribers. (Source: Reuters)

Pinterest

For 10 days, jewelry maker Michelle Espinoza thought a single photo on the social website Pinterest was going to ruin her business.

It was an image of one of the pearl cuff bracelets she designs and sells, nestled among snapshots of other coveted items that users display on Pinterest, a virtual bulletin board. Yet anybody who clicked on the picture could end up unwittingly watching pornography or downloading a virus.

“I can’t gauge how many customers I lost,” Espinoza, based in Santa Rosa Beach, Florida, said in a phone interview. “But I did have people messaging me asking, ‘Are you linked to spam?’ I was just distraught.”

When Pinterest debuted two years ago, e-mail was still the favored format for spam messages peddling diet schemes, sexual enhancement and other unsolicited services. Since then, better filters have banished more spam from inboxes, pushing tens of billions of pieces of mass marketing to social-media sites, according to Dan Olds of Gabriel Consulting Group in Beaverton, Oregon.

“Social spam can be a lot more effective than e-mail spam,” said Mark Risher, chief executive officer of anti-spam software provider Impermium in Palo Alto, California. “We see a lot of it, and we see it increasing. The bad guys are taking to this with great abandon.”

Spammers create as many as 40 percent of the accounts on social-media sites, Risher said. About 8 percent of messages sent via social pages are spam, approximately twice the volume six months ago, he said.
Spam Blockades

The looser the controls, the more prevalent the fake accounts. While Facebook Inc. (FB), the world’s largest social network, has matured enough to spot and stop much of the attempted spam, younger entrants like Pinterest have yet to erect effective blockades.

Erica Billups, a spokeswoman for Palo Alto-based Pinterest, declined to make executives available for interviews.

“As a growing service, Pinterest is not immune to challenges faced by sites across the Web including spam,” she said in an e-mailed statement. “Our engineers are actively working to manage issues as they arise and are revisiting the nature of public feeds on the site to make it harder for fake or harmful content to get into them.”

Some 50,000 people may open a spam message on Facebook within one hour, Chester Wisniewski, senior security adviser in Vancouver for anti-spam vendor Sophos Ltd., said in an interview. Spammers can make money by advertising goods for vendors, selling their own products, stealing personal information through surveys, or installing viruses that can grab consumer data.
‘Con Artists’

“For an average Facebook scam, it’s easily on the scale of e-mail scam,” Wisniewski said. “It’s a rather mature economy of con artists.”

Facebook and Twitter Inc. -- social media’s old guard -- have bulked up on programmers and security specialists to deflect spam. When that fails, they go to court.

In January, Facebook sued Adscend Media LLC, accusing the company of running scams on fraudulent pages designed to bait users into visiting other websites. A typical lure cited in Facebook’s suit: “You will be SHOCKED when you see this video. Simply “Like” this page to see the video.”

At least 280,214 users were tricked into interacting with spam set up by the defendants in the case, Menlo Park, California-based Facebook said, calling the practice “Likejacking.”
Canceled Accounts

About 80 percent of Adscend’s monthly revenue of $1.2 million came from Facebook scams at one point in time, the social network said. Adscend said this month it settled the case for $100,000 without admitting wrongdoing.

Twitter last month sued Skootle Corp., JL4 Web Solutions, a man affiliated with TweetBuddy.com and four other individuals, claiming that they were responsible for spam that had caused some users to cancel accounts. Twitter said it spent more than $700,000 to combat spam attacks by the defendants.

TweetBuddy.com created software to automate the creation of fake accounts and mass distribution of tweets, Twitter said in the suit. TweetBuddy.com also sold Twitter accounts to spammers, according to the court filing.

“We hope this suit acts as a deterrent to other spammers, demonstrating the strength of our commitment to keep them off Twitter,” the company said in a blog posted the day it filed the lawsuit. The Tweet Buddy site now says its products have been pulled from the market and urges users to comply with Twitter’s terms of service.
‘Integrity Systems’

Twitter, based in San Francisco, also set up software to analyze links posted on the site and shut down any containing malware or malicious content, which helped eliminate hundreds of thousands of abusive accounts.

“Tens of millions of dollars are spent on our site integrity systems including hundreds of full time employees,” Facebook spokesman Frederic Wolens said.

Facebook has been expanding its URL blacklist system, which uses data from partners including Intel Corp.’s McAfee to detect and block known threats. Facebook Immune System inspects every action on the site, using the reputation of the cookie or IP address involved to halt any suspicious action.

Pinterest encourages users to form a virtual neighborhood watch and report spam before it spreads. Last month, Pinterest posted a blog suggesting that consumers use a “Report Pin” button to identify spam.
Pinterest Spam

On Pinterest, spam often lurks in the embedded links attached to photos, making it tricky for users to spot. Espinoza, the 40-year-old jewelry maker, said she contacted the company at least 10 times in as many days before the fraudulent links tied to images of her bracelets were banished.

Lauren Williamson, a 31-year-old in suburban Chicago, didn’t even sign up for Pinterest to get spam from the site. After somebody else used her e-mail for a Pinterest account, she now gets several spam messages each week. She said she e-mailed Pinterest twice attempting to fix the problem and then gave up when she got no response. She says the messages keep coming.

“I get e-mails from mortgage brokers and online retailers,” she said in an interview. “It’s an annoyance.”

Hunsader is the CEO of a Chicago-based market analytics firm that specializes in high-frequency trading—super fast trades executed at the speed of light that can alter asset prices faster than human beings can react to the changes.

Based on his own analysis, Hunsader has come to a startling conclusion: Markets today are even more susceptible to sudden failure than they were two years ago during the “flash crash,” which brought the stock market down by about 1,000 points in mere minutes.

That’s because a new breed of trader armed with hundreds of millions of dollars to deploy is trading so fast—and with such spikes in volume—that he can dry up liquidity in an instant, causing severe price swings.

To explain to a lay person, Hunsader offers up two examples of the kinds of trades he’s seeing. The first happened less than a minute before the April Jobs report was released by the Department of Labor in Washington.

That report is traditionally one of the most dramatic market-moving events of each month. As a result, traders tend to lie low in the minute or so before the number comes out at 8:30 a.m. on the first Friday of each month, so they don’t get caught when the market changes.

But Hunsader argues that he’s seeing a small group of high speed traders who aren’t lying low. In fact, they’re taking advantage of the regular and predictable lull in the market to pop high speed trades in order to intentionally create a several hundred millisecond burst of volatility, and then execute follow-on trades to profit from that.

To understand what happens, you have to go inside just one second of trading and look at the way markets move at speeds that can be almost imperceptible to human beings.

On May 4, Hunsader says, he spotted those traders just before the April number was released. At 8:29:20 and about 200 milliseconds, he says, someone — he has no way of knowing who — executed a trade in the five year T-note futures market worth about $150 million.

A chart of that single second in the market shows that prices are relatively stable until the trade. And just after that, for the rest of the second, prices spike, and gyrate up and down as other automated high speed computers react to the trade.

Hunsader says he doesn’t know exactly how the traders make money off the volatility that they create, but he suspects they’re making other trades in the milliseconds following their market moving trade that take advantage of the relationships between this market and others that are impacted by it.

The traders that move first, and fastest, win, he says.

“It’s like two guys running in the woods, and they see a bear and one guy drops down and puts his shoes on and the other guy says, ‘what are you doing that for, you can’t outrun a bear,’” Hunsader says. “And the guy goes, ‘I don’t have to outrun the bear, I just have to outrun you.’”

On another occasion, Hunsader says he saw traders taking advantage of something as fundamental as the speed of light.

Because trades are executed by fiber-optic cable, the fastest they can travel—and the fastest anything in the universe can travel—is the speed of light. But even at that speed, it takes about 11 milliseconds for information from exchanges based in New York to get to exchanges based in Chicago. And that provides an opportunity for arbitrage for those who can move fast enough.

“Recently, they put in this new high speed line between Chicago and New York,” Hunsader says. “Essentially (they) drilled through mountains to shave a few milliseconds — thousandths of seconds—off, getting it down to 11 milliseconds. But I think somebody’s figured out how to get it to zero milliseconds.”

And the way they do that, in effect, became clear on May 3, Hunsader argues.

At 9:59:11 and about 620 milliseconds, someone executed a trade in Chicago, purchasing about 1,300 ES contracts for about $70 million. That happened to come in a lull just before two economic indicators were to be released at 10 a.m. that day.

At the exact same millisecond, 9:59:11 and about 620 milliseconds, Hunsader says, another trade was executed: Somebody bought 260,000 shares of a closely correlated product, SPY, for about $36 million.

Hunsader has no way of knowing for sure it was the same person executing both trades. But he says he sees same millisecond trades happening in both cities in related products often enough that he doesn’t think it can be pure coincidence.

In fact, he says, someone placing big orders in related products in both cities would gain a valuable advantage: for 11 milliseconds, they would be the only ones in the world who knew what happened in both markets.

By the time Chicago received the information about what happened in New York, and New York received the information about what happened in Chicago, Hunsader says, the traders who execute such trades would have a relatively long time to position themselves for the predictable fallout. And that’s a profit opportunity.

“The speed of light is fast,” Hunsader says, “But it’s not as fast as the high frequency traders would like it to be.”

The trick is, you have to have a super-fast computer and $100 million in deployable cash to make it work.

Hunsader says he sees these trades happening so frequently, in fact, that he advises individual investors not to make any trades at all between 9:58 and 10:02 a.m. Eastern, since many economic reports are released at exactly 10 a.m.

The high speed, high volume trading he’s seeing can cause asset prices to gap by small increments — so that if you’re executing a trade at that minute and a high speed trader is jamming data lines at the same time, you might not get the deal at the price you thought when you pressed the button to process the trade.

What’s more, Hunsader says, this kind of trading is causing market instability—to the extent that the right set of circumstances could set off a cascade much worse than the flash crash of 2010.

“You might hear, ‘we’re doing fine, now,’” Hunsader says. “Well, yes, everything will be just fine as long as, as the news is sunshine-y happy. If you get a shock to system, you’re going to see very quickly just how undercapacity we are.”

Not everybody sees high speed trading as dangerous, of course. CNBC spoke to Jim Oberdhal, a vice president at NERA Economic Consulting, who argued that high frequency trades are an important tool for professional traders.

“I think the bottom line argument on the benefits of high-frequency trading: it’s a risk management tool for professional traders,” Oberdhal said. “It allows them to quickly revise their quote and offer better quotes because they’re able to manage the risk of being picked off by better-informed trader sort readers with superior information about order flow or market moving news.”

Sachin Tendulkar

Thought: Sachin can't be nominated for Rajya Sabha, because he has a good public image. Only those, who can change it, can get into Indian Politics.

News:

The Delhi High Court has issued a notice to the Centre on a PIL challenging Sachin Tendulkar's Rajya Sabha nomination. The Delhi High Court has asked the Centre to reply by July 5.

The petition claims that Sachin's selection was unconstitutional as only people from art, science, literature and social services could be nominated and the sports does not fall under any category.

However, the court refused to restrain the cricketer from taking oath as a Rajya Sabha member.

A bench of Acting Chief Justice AK Sikri and Justice Rajiv Sahai Endlaw dismissed the application for stay of Sachin's oath ceremony, but asked Additional Solicitor General (ASG) A S Chandhiok to seek instructions from the government and inform the court by the next date of hearing on the PIL.

"How is this sports category covered while nominating a sportsperson to the Rajya Sabha?" the bench queried and asked the ASG to reply on this issue.

Chandhiok argued that the power has been exercised by the President of India and the court cannot interfere in the matter.

The petitioner Ram Gopal Singh Sisodia, a former Delhi MLA, had challenged the nomination on the ground that Sachin does not possess any of the qualifications prescribed under Article 80 of the Constitution for being nominated to the Rajya Sabha.

Appearing for the petitioner, advocate RK Kapoor submitted that the Constitution allowed the government to select from only four categories - arts, science, literature and social science. The selection of a sportsperson was unconstitutional, he said.

On May 14, the Supreme Court had refused to quash 39-year-old batting maestro's nomination to the Upper House and had asked Sisodia to rather approach the high court with his plea.

A NEW INHALABLE ALCOHOL CALLED WAHH PRODUCES A VODKA-FLAVORED BUZZ THAT PASSES IN SECONDS.

Humans have been inventing weird (and often unsavory) ways to get themselves embarrassingly drunk for centuries. But the makers of Wahh, a new inhalable alcohol mist, say their product is designed to do just the opposite.

Wahh is the invention of David Edwards, the Harvard professor whose inhalable caffeine and smokable chocolate have appeared on this site before. Edwards’s line of “breathable food sprays” (yum!) called Quantum Sensations includes Aeroshot, a vaporizing caffeine inhaler that received over $8.5 million in venture funding earlier this year. Edwards collaborated with French designer Philippe Starck to bring us the latest Quantum Sensation, Wahh, which debuted last week in Paris.

About $26 will buy you a Wahh canister, which contains around 25 “puffs” of vaporized alcohol. Hold the lipstick-sized tube up to your mouth, breath in, and a burst of Vodka-flavored mist delivers a dizzying sensation. The feeling fades within seconds, leaving you sober enough to pass a breathalyzer test.

The science behind the vaporizer is pretty simple. Each puff of vapor contains only .075 milliliters of alcohol--the equivalent of about 1/1000th of a shot of liquor. Edwards explains that by vaporizing a single drop of alcohol, Wahh “increases its surface area by approximately 1,000 times.” In other words, the vapor tricks your brain into thinking that you’re inhaling a thousand droplets of alcohol, rather than one.

“Everyone has an occasional need of light-headedness, distraction, and another place,” says Starck, but we tend to use alcohol as a “social placebo.” The idea behind Wahh, explains the duo, is to enjoy “the sensation of lightheadedness, without the risk of utter drunkenness.” And yes, if you were wondering, the name Wahh was chosen for the sound users make after using it.

The duo say that Wahh is mostly meant for use on food (there’s a spicey flavor called Demon), but the canisters will undoubtedly be popular for the “buzz” they produce. The real question, of course, is whether or not such a product perpetuates our collective misuse of alcohol.

According to their website, Wahh will appear in design stores in the U.S. sometime this summer.